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How provinces have experimented in the private sphere

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Canada's provinces have experimented with various forms of private, for-profit health care. In doing so, they have learned some important lessons: expected cost savings do not always bear fruit, regulation can be difficult and turning medicare over to commercial interests is not a panacea.

British Columbia: All priviate, all the time

Few, if any, facilities better illustrate the growth of private health care in Canada than the False Creek Healthcare Centre in Vancouver.

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What began as a modest, private surgical clinic in 1996 has evolved into a comprehensive operation providing a vast array of procedures.

Besides surgery, the centre offers state of the art diagnostic imaging, an "urgent care centre" promising service akin to hospital emergency rooms, and expensive, all-in-one health packages for families and executives.

President and medical director Mark Godley says the False Creek centre is the first, vertically integrated, private health care facility in Canada.

"Somebody can come in with an undiagnosed health care issue, go through our clinic, then work their way through advanced diagnostics, see specialists and proceed to receiving treatment, all within a very compact time frame."

And the province's Medical Services Plan is billed for none of it.

"That's where we are different from other private surgical clinics," says Dr. Godley. "None of our surgeons has ever billed MSP. We cover their costs, not the public health care system."

Although surgeons used by the centre remain enrolled in MSP for their outside, non-private work, the facility's two, full-time family physicians have opted out of medicare entirely. That allows Dr. Godley's clinic to charge patients up front for access to a GP without coming into conflict with the Canada Health Act.

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The centre offers yearly health packages priced as high as $5,000 for a family of four. It currently has 400 patients who have paid for its family health plan.

"What people are paying for is really access. We cater to individuals who don't have time to wait," says Dr. Godley.

Alberta: The cautionary tale

For the past six years, the Health Resources Centre in Calgary derived most of its revenue from a multimillion-dollar contract with the province to perform more than 900 hip, knee and foot surgeries a year.

But the government has terminated its contract with the centre, reigniting a heated debate in the province over the place of private, for-profit medical clinics in the publicly funded health-care system.

On Friday Nov. 12 the clinic will close its doors as part of an out-of-court agreement with the province. Alberta Health Service, which oversees health-care delivery in Alberta, will transfer the centre's orthopedic surgeries to a new publicly-owned medical clinic.

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Health Resource's Centre's financial woes began earlier this year when the government began taking steps to terminate its contract. The government injected $2-million into the clinic to keep it operating.

If a private centre can deliver care that's better, faster and cheaper and its covered by public health care dollars, said the centre's medical director Dr. Stephen Miller, it shouldn't matter who delivers it.

"There's nothing holy about a public delivery model," he said. "People don't care where they get their services. They just want good care."

Saskatchewan: The risks of overpaying for medical services

When the Saskatchewan government set out earlier this year to clear up a backlog of patients waiting for surgeries and diagnostic tests, it turned to the private sector.

But the strategy was called into question last month after a labour arbitrator ruled that the Regina health region cannot contract out dental surgery and knee arthroscopy to a private, for-profit clinic past 2013, because, in the long run, it is more cost effective to perform the work in the public system. The matter went to arbitration after a union representing health workers objected to the contract with the private clinic.

Both sides in the dispute claimed partial victory. The union said the arbitrator had restricted the use of profit making clinics in the region. Michael Higgins, vice-president of human resources at the Regina Qu'Appelle Health Region, said the province can continue contracting out selected services for the next three years.

"We're quite pleased," he said. "It gives us three years to get our feet wet and see just how successful this contract can be."

Michael Rachlis, a physician and expert witness for the union, said the ruling highlights the risk of over paying for services and diverting scarce health-care dollars into shareholders' pockets instead of patient care.

As for the private clinic, Omni Surgery Centre, it derives most of its revenue from performing cosmetic surgery and treating patients with workplace injuries.

"The health region is something we're doing almost as a good citizen," said president Rob Mitchelson.

Manitoba: Shooting fish in a barrel

Wayne Hildahl has been on both sides of the private-public divide. He founded the Pan Am Clinic in 1979 as a private, for-profit sports medicine centre and 22 years later, it became an arm of the Winnipeg health authority.

When the clinic was private, he had the advantage over government officials negotiating contracts to provide medical services, because he knew his costs right down to the penny. He likened the process to shooting fish in a barrel.

"We knew exactly what our costs were, right down to how much water we used and how much we paid for it," said Dr. Hildahl.

Pan Am specializes in bone and joint surgeries. Private, for-profit clinics offering the same services cannot compete against it because they have to build in a profit, he said.

Dr. Hildahl has first-hand experience doing just this. He "cut corners" to boost the clinic's profits when it was private, he said. While patient safety was never jeopardized, the clinic's equipment wasn't always state of the art.

After the government acquired Pan Am, the clinic's payments for cataract procedures fell to $700 from $1,000. And any surplus these days is plowed back into patient care.

"I don't think private for profit care is the way to go," he said. "It's a short game strategy, not a long game strategy."

Ontario: On both sides of the public-private divide

Don Copeman, founder of a medical clinic in Vancouver, is puzzled about the Ontario government's stance on for-profit, health care. When he looked at opening a clinic in Ontario in 2006, George Smitherman, health minister at the time, threatened to use the full force of provincial law against Copeman Healthcare Centre.

"We have a law in Ontario that says we're not going to stand idly by and see patients charged a fee in order to be able to access an insured service," he told reporters.

Mr. Smitherman objected to Copeman Healthcare's one-time enrolment fee plus annual dues.

Mr. Copeman put his expansion plans on hold. But he notes that another clinic, Medcan in downtown Toronto, charges patients a membership fee.

Medcan opened in 1987. Its most popular service is a comprehensive health exam, also known as the "executive medical," that costs $2,395. It consists of a five-hour head-to-toe medical exam, including an ultrasound, chest X-ray, blood testing, nutritional analysis and fitness assessment.

The provincial Commitment to the Future of Medicare Act says companies can be fined for charging a fee for a service covered by the Ontario Health Insurance Plan.

Physicians at Medcan also bill OHIP but Bronwen Evans, a vice-president at the clinic, said most of its services are not covered by OHIP.

"I don't get how the Medcan model is surviving under the legislation," Mr. Copeman said.

Quebec: Public standards in private care

Early on the morning May 23, 2008, Valérie Castonguay, arrived excitedly at the private clinic operated by Montreal plastic surgeon René Crépeau. The young woman had saved up for a rhinoplasty - a "nose job" in common parlance - she hoped would improve her breathing and her looks.

After the surgery, which was done under general anesthetic, Ms. Castonguay was hooked up to an oxygen tube to assist her breathing. But the oxygen was badly calibrated, giving the patient a massive dose of oxygen that caused extensive damage to her lungs and brain. When the problem was discovered, Ms. Castonguay was rushed to hospital where she was declared brain dead.

Paul Dionne, the coroner who investigated the death, issued a scathing report, saying the clinic did not meet basic safety standards. But he noted that while the standards of practice are the same for health professionals in privately- and publicly-funded health facilities, there is actually no oversight and inspection in private clinics and they are not required to have the same equipment and safety standards as hospitals and public clinics.

The provincial government, in part because of the publicity surrounding the case, responded with legislation. Under Bill 34, private clinics must now undergo an accreditation process similar to public institutions and appoint a medical director responsible for all aspects of care.

Nova Scotia: A military solution

Two years ago hernia patients at Nova Scotia's Capital District Health Authority were waiting more than six weeks for surgery. To break the backlog the health authority moved some patients out of Halifax and struck a ground-breaking deal with the local military hospital.

Procedures were done by civilian doctors at Canadian Forces Health Services Centre - Atlantic, popularly known as Stadacona Hospital. The health authority provided doctors and anesthetists. The military paid other staffing costs, as well as facility maintenance.

It was a first in the country and so effective that last year the experiment ceased to be necessary.

"We used the space and we achieved our goal," said Capital Health spokesman John Gillis. "We've been able to clear the backlog so there's little or no wait for hernias."

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