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Annual Payments to For-Profit Clinics in B.C. Increased 57 Percent: Report

“It reflects a troubling entrenchment of corporations in health care."

Annual Payments to For-Profit Clinics in B.C. Increased 57 Percent: Report
Photo credit: Martha Dominguez de Gouveia/Unsplash.

Written by Alex Cosh

A new report published today reveals that for-profit medical clinics in British Columbia received $393 million in government funds to deliver publicly covered procedures over the past six years, highlighting the increasing influence that private players wield over the public health system.

The report from the Canadian Centre for Policy Alternatives - BC Office (CCPA-BC) and the BC Health Coalition (BCHC) finds that some of the for-profit clinics that received the funds have been engaged in unlawful extra-billing practices, whereby patients are charged for medically necessary and publicly covered procedures. Experts warn the practice allows wealthier patients to pay for access to care faster than everyone else, creating a “two-tier” health system.

Overall, annual government payments to private clinics in B.C. increased by 57 per cent from 2015/16 to 2020/21, according to the report. The largest annual increase, 21 per cent, occurred in 2016/17, the year after the previous B.C. Liberal government unveiled its plan to increase privatization.

The report’s author, Andrew Longhurst, a CCPA-BC research associate, told The Maple that while this kind of outsourcing does not mean regular patients using the public system incur payments for medically necessary procedures, it ultimately damages the public health system by pulling professionals from the public system into the private system.

“We are pulling from the same limited pool of health workers at a time when we don't have any room to give,” he explained. “We need to maintain safe staffing levels in our public system to be able to provide scheduled care, and, increasingly, acute and emergent care.”

As well, said Longhurst, outsourcing comes with cost inefficiencies inherent in the for-profit system – due to profit margins and capital costs – draining government resources that the public system badly needs to work with. “We also have evidence around quality concerns in for-profit care and better outcomes in public, not-for-profit, health-care delivery,” he added.

The report notes that health authorities in B.C. regularly contract private clinics for the provision of publicly funded day surgeries and diagnostic medical imaging, such as MRIs, and CT and ultrasound scans.

In some cases, for-profit clinics engaging in extra-billing received millions in public funds. For example, False Creek Healthcare Centre, which had previously been found by the B.C. government to be engaging in extra billing, received $12.2 million in health authority payments between 2015/16 and 2020/21.

Similarly, Kamloops Surgical Centre received $15.4 million in health authority payments between 2015/16 and 2020/21, despite having been found to be engaged in unlawful extra-billing.

By increasing outsourcing to clinics that had been found to be engaging in extra billing, the report states, the provincial government sought to rein in the unlawful practice by making the contracts between health authorities and the clinics subject to compliance with the B.C. Medicare Protection Act and Canada Health Act.

However, the report states, this practice amounts to substituting one form of privatization – i.e., extra billing – for another, and further entrenches the influence of private healthcare corporations.

“If we give public contracts to these private clinics, and ask them not to extra bill and engage in unlawful activity, [and] that's how we're hoping to keep a lid on this problem of extra billing, I think that's quite troubling,” said Longhurst.

“What this suggests is that these corporations think that they can continue to engage in the practices that suit them, and that the public sector will continue to fund them.”

Email correspondence obtained via a freedom of information request and documented in the report shows False Creek Surgical Centre’s owners and Deputy Minister of Health Stephen Brown discussing the for-profit clinic’s partnership with the province.

After a meeting in 2019, Sid Sharma, the centre’s outgoing owner, wrote to Brown:

“It was encouraging to hear that the Government is looking to continue on the path of Public-Private Partnership for delivering health care for the British Columbians. I found it most encouraging that there is an option for a long term, volume guaranteed contracts which will enable us to make an informed decision on long term sustainability of this business model.”

Longhurst said the correspondence illustrates the influence that for-profit health clinics and their investors wield over the health system, and the extent to which they want to be a permanent fixture of publicly funded healthcare.

“It reflects a troubling entrenchment of corporations in healthcare [that] is really taking us away from the focus on the improvements, and building the capacity that we need to see in the public system,” he explained.

Solutions?

Longhurst said the current B.C. NDP government has made some strides towards increasing public-sector MRI capacities, and as a result, public funds going specifically towards privately delivered diagnostic imaging services declined slightly between 2019 and 2021. Still, he noted, the province still relies heavily on the private sector for those services.

The province’s increase in outsourcing of publicly funded surgeries, meanwhile, is in part due to pressures caused by the COVID-19 pandemic and efforts to work down backlogs.

According to the report, the heavy reliance on outsourcing to deliver care is also the result of government spending cuts – largely driven by the federal government in the 1990s – that reduced public healthcare capacity.

“The capital spending really got squeezed starting in the mid-1990s, and we never recovered in B.C.,” Longhurst explained. The previous B.C. Liberal government, which was first elected in 2001, then implemented even more spending cuts, he noted.

Despite these longstanding problems, both B.C. NDP leadership contestants, Anjali Appadurai and David Eby, who are each vying to become premier, have so far had little to say about doing more to meaningfully reverse this trend.

“I have only heard them focus on the primary care crisis,” said Longhurst. More generally, he added, “we're not really seeing evidence of the kind of interventions that are needed to help alleviate the strain.”

In terms of solutions, the report states:

“Investing in staff, scaling system efficiencies and investing capital dollars in infrastructure that is part of a public system are all required for the long-term success of our health-care system, and should be government priorities as they wean BC off its growing reliance on corporate health-care delivery.”

Longhurst added that more careful management of the spread of COVID-19 is needed to alleviate pressures on the health system.

“Overall, we need to reduce disease burden, including with COVID, and how we do that is through effective evidence-based strategies, like universal masking, that help protect our health services,” he explained.

“If we're not going to be using any of those tools come fall and winter, we are most certainly going to be exacerbating challenges in delivering timely surgical and access to diagnostic imaging.”

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