Wednesday, October 29, 2008

The Canadian public is exposed to an unending barrage of statements in the media that Medicare isn't functioning well and that we need more private medical clinics to reduce waiting times for various medical procedures. The argument looks good on the surface, but do private clinics really reduce waiting times in the public sector ? The following item from the Nanaimo Daily News suggests that they do not, and it gives the reasons why.

Pundits of the neo-conservative variety expound endlessly on the virtues of the market, and they do so as well when it comes to medical care. No doubt they will be a little less self-confident (at least some of them will) in the wake of the recent banking crisis and market meltdown. Still, in regards to medicine the proponents of a "free market" have always had to ignore a lot to make their case. Their model- the American system- has resulted in the highest per capita outlay on health care related expenses on Earth, and the results have been less than stellar when compared to other jurisdictions. A lot is indeed done. Americans are the most medicated and most surgically treated nation on the planet, but all this busywork has failed to produce the outcomes that less profligate systems have.

Part of the reason for the overmedicalization of the American populace is dealt with in the article below. private practitioners are in an inherent conflict of interest, and it is highly likely that they will err on the side of the most expensive and invasive course of action. This is not to say that they are deliberately dishonest at all. It just that self interest often helps, quite often unconsciously, to weigh the scales when inherently difficult decisions have to be made.

Another reason why market fundamentalism often fails to describe the real world is the lack of recognition that what is being described is an imaginary abstraction where all other things are held constant while either supply or demand change. In the real world prices usually fail to respond to the signals of supply and demand in the rapid fashion that seems academically predictable. This is called the stickiness of prices.

In the case of medicine what is sticky is the supply- of trained medical personnel and their time. The reason that private clinics actually increase waiting times in the public sector is that physicians withdraw their services from the public sector, producing an even greater shortage in that area. It takes many years to train a doctor, and supply is essentially held constant. what goes into one box has to be taken from another. A market cannot respond in a timely fashion in such a situation as the good to be produced- physicians- takes far too long to make to respond to increasing demand. This is also dealt with below.

There is, of course, another model of medical service delivery separate from both the state provided and the private clinic model. The cooperative model is actually an alternative that marries the best of both systems and is superior to both. It's unfortunate that it is rarely mentioned in debates about medical services in Canada. I'll return to this model at the end of this post, but first, the article.

Private clinic, public cash:
Surgical centre sees 62% more business from VIHA between 2006 and 2008
Dustin Walker, Daily News
Published: Wednesday, October 22, 2008
The number of publicly funded surgeries performed at a private clinic in Nanaimo has more than doubled in the past year, as the local hospital grapples with a growing waiting list for procedures.

There were 238 surgeries done at the Seafield Surgical Clinic in 2006-07 at a cost of $148,000 compared to 620 procedures for 2007-08.

The sharp increase is due to Nanaimo's growing population of older people who require a more complex level of care, said Vancouver Island Health Authority spokeswoman Anya Nimmon.

VIHA signed a five-year deal with a number of private clinics, including Seafield, in late 2006 in an effort to reduce waiting lists for day procedures, and to free up hospital operating rooms for longer, often more complicated inpatient procedures, such as cancer and hip and knee replacement surgeries.

Procedures to treat cataracts or hernias are among those performed at the clinic, said Nimmon.

But a year-long study of the effect of private clinics on Canada's public health care system released earlier this month says wait times are longest in areas where private clinics take personnel from the public system.

"We haven't seen any evidence that private clinics are making any contributions to reducing waiting times," said Colleen Fuller, a health policy researcher with the B.C. Health Coalition, who worked on the report entitled Eroding Public Medicare: Lessons and Consequences of For-Profit Health Care Across Canada.

"Although they may feel they are alleviating pressure on the public system, in fact they are piggy-backing on the public system."

Fuller said because there are a limited number of medical professionals, when they choose to work in private clinics wait times increase at public facilities. "It's not a criticism to say they have to get a return on their investment, that's the way the market works, but it's not supposed to be the way the health care system works."

She added that there are also questions around conflict of interest and whether allowing clinics to perform publicly funded procedures influence a doctor's judgement about where or even if a patient receives surgery.

Fuller said there is a movement worldwide to provide more procedures on an out-patient basis rather than in hospital. This creates a stronger market for private clinics looking to pick up work from the public sector.

Nanaimo seniors advocate June Ross thinks Nanaimo Regional General Hospital needs to find other ways to manage their waiting lists instead of relying on the private sector.

"You've got to improve the existing system, and not do it by using private clinics," she said. "It erodes our existing system."

But the Ministry of Health says health authorities purchase services from private clinics in order to ensure patients receive timely access to needed surgeries. Less than 2% of publicly funded surgeries performed in 2006/07 were at private clinics.

"Using the private sector to enhance the province's capacity to deliver timely surgical services makes sense as the demands on our health system continue to grow," reads a statement from the ministry.

B.C. Health Minister George Abbott told Canwest News Service that the Canadian Health Coalition study is the work of unions and the NDP who don't want the health-care system to modernize.

Repeated calls to Surgical Centres Inc, which operates Seafield, were not returned.
As I said above there is a third way besides the state controlled public hospital system and the private clinic model. The cooperative or community clinic model is associated in the Canadian mind with the province of Saskatchewan, but the earliest cooperative clinic was in fact set up in Québec. At the present time that province is still far more advanced than other Canadian provinces with the majority of cooperative health clinics in the country. There are even other services provided by other "medically related" coops in Québec such as ambulance coops, home care coops and even funeral coops. People in that province have seen the coop model as being useful and timely, and they have joined in far greater numbers than elsewhere. In many ways this is reminiscent of earlier times, before the welfare state, when ordinary people insured themselves against the vagaries of life via a network of mutual benefit societies. As the limits of statist welfare become more apparent people are returning to the cooperative model.
Not that the model is restricted to La Belle Province. As a recent (August 2008) report from the federal Cooperatives Secretariat titled Canada Health Care Cooperatives says this system is becoming gradually more popular across the country. This report gives snapshots of the movement from across the country,from PEI, Québec, Manitoba, Alberta, Saskatchewan and BC. What this shows is that the move to cooperative health care is growing, and there must be reasons for this.
The cooperative model is quite simple. A group of people form a non-profit coop, paying a membership fee that entitles them to the services of the coop. The organization hires personnel and either rents or constructs facilities. The members have open access to the services provided by the facility. What are the reasons why this is attractive ? Here are a few that come to mind.
***Cost savings. As the article from the Nanaimo Daily News points out there is an increasing move away from hospital facilities to outpatient treatment for many procedures due to the rising costs of hospital treatment. Many procedures are far less costly when done outside of a hospital, and cooperative clinics are just as good as private offices for delivering such services.
Coop clinics have a further advantage over private medical offices in terms of cost savings in that the physicians and other staff are usually on salary rather than being paid on a fee for service basis. In the end this means that fewer unnecessary procedures are done as there is no incentive for such things. The government report mentioned above makes the observation that cooperative clinics are better at saving revenue than not just hospitals but also private clinics as well. Coop clinics also often offer a range of services, depending upon the economics of scale, that only the largest group practices in the for-profit sector could offer.
***Convenience. Modern medicine is highly fragmented, and entry into the system often involves multiple visits to multiple offices and other facilities. The cooperative model often hires not just physicians but other health care professionals as well, and dealing with a problem in a cooperative will more often be "one-stop shopping" than it is in either the private or public systems. The economy of scale afforded by the cooperative model also means that high patient volumes can be shared out amongst several physicians, and waiting times are thereby reduced without the detrimental tendency to push patient volume at the expense of detailed attention that can occur in a fee-for service private clinic.
***Patient control. Entrance into the public system means a massive surrender of personal autonomy, and even private clinics demand a great degree of deference to the doctor/owner. While one can "vote with one's feet" in a private system the available options may be either quite limited or even non-existent. For the ordinary citizen the details of the publicly owned medical system are, given their inherent size and centralization, far beyond any democratic control whatsoever. Problems with the system have to be addressed through a lengthy and opaque political process. In the cooperative system the patients are the owners, and the scale of the organization means that democratic control is far easier than elsewhere. Problems can more easily be corrected. It is also a fact that the concerns and needs of patients are not necessarily those of either a private practitioner nor,especially a medical bureaucracy and their political masters. The cooperative system puts the patient/owner in the centre of policy setting.
***Community Empowerment. Neither the public nor private sector puts the needs of a community front and centre. It is the case that cooperatives are often formed to provide the services that both private and public sectors think are not "cost-efficient" but that a local community thinks have priority. The location of a medical facility is not just a benefit to the patients involved but also to the surrounding community in general. This is especially true when the team approach of the clinic leads it to address collective social problems in the neighbourhood, problems that are automatically ignored by both public and private sectors. The existence of a coop also builds community just by getting people together, and this sort of benefit shouldn't be downplayed.
***Quality of Medicine. As previously mentioned coops can provide the sort of team approach that only the largest of private group practices can provide. By their informal nature they are also less bureaucratic than the public sector, and poor outcomes and practices can be more easily identified and corrected without the petty politics involved in large organizations such as the public medical system. As also previously mentioned the cooperative model frees the physician from the pressing need to increase patient volume at the expense of good medicine. This means not just greater attention to detail and diagnosis but also far fewer unnecessary interventions. All of which makes good outcomes more likely.
There are undoubtedly many other advantages to the cooperative model that I haven't mentioned above.What is plain is that the limitations of both the welfare state approach and the free market "alternative" are becoming plainer and plainer in the case of medical services, and the cooperative model offers a reasonable alternative that combines the best of both systems.

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