Consultants Are Paid Way Too Much

While researching medical laboratory services in Australia I came across a significant error that I had seen before.  The error was in a report prepared by Price-Waterhouse-Cooper for the Australian government on international laboratory services.  The report stated that half of Canada’ medical laboratory services are delivered by the private sector. This was an incorrect figure that appeared in the Carter Commission, a report to the Ministry of Health in the United Kingdom, which was the source cited by Price-Waterhouse. The correct figure is approximately 25% delivered by for-profit corporations.

It is not clear how Carter arrived at this figure.  He refers to a couple of sources from Canada who provided information on Calgary’s Laboratory Services (CLS) and services in Oshawa, Ontario.  But the figure, fifty per cent private, to my knowledge is not published anywhere nor is it likely that either of these sources would have said it.  My guess is that Carter confused Ontario, where 50% of lab services are delivered by for-profit corporations, with Canada. An easy mistake considering that many people in Ontario regularly confuse the two.

A second point highlighted by Price Waterhouse is that there is a national cap on pathology expenditures in Canada.  This also is incorrect.  There is no national system of spending on specific clinical services. The federal government transfers money to the provinces albeit with some strings attached but none that directly relate to pathology services.  The provinces make the clinical allocation decisions and the federal money only accounts for about 25% of health care spending. Only four of ten provinces in Canada use for-profit laboratory corporations  and only two of these have a hard cap on private laboratory expenses.  Once again the province of Ontario may have been conflated with Canada.

But when using other national examples to help make informed decisions, especially when the information is provided by professional researchers and high-priced consultants, mistakes like this are shoddy and unescusable: an “F” for a first year health policy paper.  They are also mistakes which overstate the role of the private sector, encouraging further privatization.

Carter also made a couple of other errors.  In his report Calgary Laboratory Services was identified as an independent service provider: which is a British term for a for-profit provider.  Even when the CLS had private sector partners it was always 50% controlled by the public sector and since 2006 it has been wholly within the public sector.   This misinformation was also carried over into the Price-Waterhouse report. The real story from Canada on public-private laboratory partnerships is that all of them have ended and the work reverted back to the public sector.

Price-Waterhouse also create a false impression of the low-cost of Australian laboratory services.  In their per capita comparison table they use an expense figure for Australia which is only for community, or outpatient tests (maybe 60% of Australia’s laboratory tests) and compare it to expenditures for Canada and Britain which are total expenditures on all laboratory services:  inpatient,  outpatient and community.  It is little wonder that Australia’s per capita costs come out lower.

The surprising fact is that in the written description Price-Waterhouse’s consultants acknowledge that Australia’s costs do not include inpatient care and the figure they use for Britain is similar to the one in the Carter Commission, a report they’re familiar with.   Granted the data is confusing because the OECD figures are misleading, but a small bit of critical thinking would have exposed this glaring inconsistency. Rather than making a weak statement like, the national systems may not be comparable, some thought may have inspired a bit more intellectual rigour with a statement like, Australia’s numbers are apples compared to Canada’s and the United Kingdom’s oranges, and the per capita costs as calculated are not comparable.  Better yet, this table should have just been left out.

There are other less significant errors in both reports which systematically paint a rosier picture of for-profit corporations delivering public health care than is deserved.  Price-Warehouse’s data, specifically the per capita cost comparisons, is used in subsequent government documents to support polices favoring private delivery.

This is the paper trail to ill-informed policy in Australia.  The Carter Commission in Britain does a poor job of researching Canada’s laboratory system, probably using a hired consultant, publishes its incorrect findings, which a private consultant in Australia reads and uses, apparently uncritically, in a report which is then used to formulate government policy. It is a tangled ill-informed web that these consultants have woven: but it is very lucrative.

Explore posts in the same categories: Australia, Funding-Cost For-profit Delivery

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