Archive for the ‘Funding-Cost For-profit Delivery’ category

“There should be a law”: One Patient Pays $ 13,245.85 in Drug Dispensing Fees

June 11, 2014

I work in an addiction treatment clinic. Some days I think there is little that would shock me, but then there is always the pharmacy industry.

Recently we had a patient transfer to our clinic. Unlike most of our patients he was a “private pay” patient with insurance. Also, unlike most of our patients he was taking a new drug, buprenorphine, or suboxone, to help treat his addiction.

We continued his drug treatment and found him a pharmacy close to his home in a small town near Kingston. A couple of days after starting treatment he called to see if there was anything we could do about his dispensing fees. He was going broke paying for his medication.

A call to the pharmacy established that he was paying $26.31 a day of his own money in dispensing fees for the one drug.  On top of that the pharmacy was collecting a further $9.98 from the insurance company for a total income to the pharmacy of $36.29 per day. The cost of the drug is paid separately to the pharmacy and covered by insurance.

Put a bit more grossly, the pharmacy was collecting $13,245.85 a year to dispense this one drug to one patient. Think about the member of patients and number of prescriptions and this is an even more jaw-dropping figure: but one backed up by patient receipts and phone call discussion with the pharmacy.

For the patient, 26.31 dollars a day is nine thousand six hundred and three dollars a year to treat his addiction. Even if he was working, which he is not, this would be completely untenable, precluding any possibility of treatment.

With this one example it is easy to see how pharmacies, not just big pharmaceutical manufacturers, are “cash cows” lusted after by large corporate conglomerates. Indeed most community drugs in Ontario are dispensed by large chain pharmacies and we increasingly use these for-profit corporations to provide more essential health services, such as, immunizations and prescription renewals.

How is this barrier to access for a medical treatment permitted in our health care system? The pharmacy in question is a Shoppers Drug Mart; part of chain currently owned by the multibillion dollar corporation, Loblaw. Maybe it is time to put pharmacists on salary and prohibit large corporate ownership of pharmacies, or, simply have all medications dispensed from public non-profit community pharmacies building on the expertise and supply chain already available in our hospital system.

Failing these solutions, this person’s troubles accessing needed drugs is a strong argument for a universal pharmacare program.

Laboratory Services Expanded in Huntsville and Bracebridge Hospitals: Point of Care Testing Fails to Meet Expectations

March 27, 2014

Muskoka Algonquin Healthcare (MAHC) has restored a regular night shift in its medical laboratories at the Huntsville and Bracebridge hospitals. This is a victory for viable community hospitals. It is also another example of the chaos caused by the government’s artificial prohibition on hospital labs performing medical laboratory work for community patients, for example, patients of family doctors.

The Huntsville and Bracebridge sites were on the cusp of a mini trend among small hospitals in Ontario replacing some in-hospital laboratory services with point-of-care-testing (POCT).* After two years’ experience the MAHC is reversing this policy and reinstating a regular laboratory night shift removing the need for most POCT.

MAHC’s Executive Officer for Diagnostic and Ambulatory Services gave two reasons for expanding their laboratory hours: 1) the savings from the switch to POCT were less than anticipated; and 2) the physicians complained about a decrease in quick accurate lab results with the reduced laboratory hours.

The recent increase in hospital mergers, regionalization and budget cuts has accelerated the trend to reduced laboratory hours in small and rural hospitals. Laboratories are often put at the top of the list when hospitals consider what services to cut.

Underlying these pressures is the reduction in laboratory volume, and income, faced by many hospitals due to the government’s decades long drive to ensure that all laboratory work for patients outside of hospitals is done in private for-profit labs. As harmful as this policy has been for all hospitals it is particularly devastating and irrational in smaller communities.

When community lab work is shipped out of these communities to centralized for-profit laboratories many of the smaller hospitals find it hard to justify full laboratory hours and a broad range of tests. As well as reducing access for community patients, cut backs in hospital laboratories have reduced services for inpatients and increased the cost to the overall health care budget.

MAHC was very much at the center of this misguided and ideological Ministry of Health policy. The Bracebridge and Huntsville hospitals were part of a pilot project program that funded small hospitals to process community work. A review of this program found that they performed the work for twenty-two dollars per community patient while the for-profit laboratories cost thirty-three dollars. Yet the government ended the pilot projects in 2007. The main reason given was to bring all hospitals into compliance with the government policy that mandated community work be processed by for-profit corporations. (Reference: RPO Management Consultants, “Laboratory Pilot Projects Review: Final Report,” Ontario Ministry of Health, March 31, 2008.)

It was after the ending of the pilot project program that MAHC attempted to meet decreased revenue by shifting some of the hospitals laboratory work to more POCT testing. It is now clear that that change did not improve patient care or save money.

The message in this story is that vital accessible small and rural hospitals need to maintain necessary medical services. The government needs to fund these services and allow communities the flexibility to maximize their use of health care resources. In this case, it means allowing hospitals to process community lab work, but it extends to all medical services.

Congratulations to MAHC for providing more comprehensive laboratory services to its patients. It is now time for the Ministry of Health to fund this needed hospital program and to change its policies to allow integrated, accessible, cost-effective medical laboratories.

*Point of Care Testing (POCT) is medical diagnostic testing performed outside the clinical laboratory in close proximity to where the patient is receiving care. POCT is typically performed by non-laboratory personnel, usually nurses, and the results are used for clinical decision-making. POCT devices are often ‘hand held’ or may be small portable analyzers. POCT is generally more expensive than in lab testing and quality assurance requires through protocols and skilled maintenance. POCT tests available include blood glucose, urine dipsticks, blood gases, chemistry, hematology, coagulation, cardiac markers, and pregnancy tests.

Ontario Budget Debate Ignores Taxes and Billions Transferred to For-Profit Corporations

March 2, 2014

Ontario’s budget debate may be high profile, but it misses two essential points.

With the NDP signaling NO TAX INCREASES (on the middle class) a serious discussion about taxes, particularly the need to increase corporate and wealth taxes, will not take place. It is hard to have any serious budget discussion without considering the income side. Many commentators have made this point.

At the same time, the expanding use of for-profit companies, often multinational conglomerates, to deliver and finance public services, is being ignored. The negative impact of private delivery on cost, quality, accessibility and democratic control of public services has been well documented and may be the most destructive government expense.

The exact amount transferred to for-profit corporations is unknown. This secrecy, by itself, is a strong democratic argument against the use of private companies. Yet, a quick look at the public accounts for the Ministry of Health shows well over one quarter of that budget is paid directly to private for-profit companies. The easy pickings for large payments to for-profit providers in health care are:

Pharmaceuticals – 4.6 Billion Dollars

Only about 2% of the Ontario Drug Programs budget is used for administration. The rest is transferred to large drug store chains and then much from there to the pharmaceutical conglomerates. The $4.6 billion figure includes $414.5 million that is paid to hospitals, Cancer Care Ontario and the Trillium drug plan which is also primarily transferred to ‘Big Pharma’.

Long Term Care (LTC) – 2 Billion Dollars

The Canadian Union of Public Employees estimates that in 2010 fifty-three percent of LTC beds were in for-profit facilities. $2 billion is low because some of the non-profit homes contract services like food preparation, cleaning and maintenance to private health care conglomerates.

Capital expenses – 1.3 Billion Dollars

Most of the $1.46 billion in the Health Capital account to build, finance, maintain, operate and/or renovate hospitals will be transferred to consortiums of multinational companies or to large private contractors.

Home care – 1.2 Billion Dollars

The Ontario Association of Community Care Access Centers says that 91.3% of the home care budget is spent on direct patient care of which the Ontario Health Coalition estimates 58% of nursing care and 64% of personal support services are provided by for-profit companies.

Medical laboratories – 680 Million Dollars

Over 93% of the medical laboratory services outside of hospitals in Ontario are provided by three multinational corporations. Ontario based for-profit companies provide the rest.

Independent Health Facilities (IHF) – 396 Million Dollars

97% of IHFs in Ontario are for-profit companies.

Physiotherapy, Assisted Devices and Home O2 – 598 Million Dollars

Community physiotherapy services, the Assisted Devices Program and home oxygen providers are primarily for-profit.

eHealth – 291 Million Dollars

The 2010-11 eHealth Annual Report says that 80% of their budget is transferred to public-private-partnerships, in other words paid to large for-profit companies.

Hospitals, Primary Care and Multimillion Dollar Incidentals

Hospitals and primary care are still nominally non-profit. However, significant portions of both their expenses go to for-profit corporations (usually very large ones). Hospitals often contract out cleaning, security, food services, information technology and maintenance. Temporary agencies supply nurses. Consultants and management services are regularly hired.

For-profit chains increasingly provide urgent care services and physician offices. These chains are paid from a percentage of the physician’s billings to the government. Management companies, IT firms and temporary help agencies also receive money from the primary care budget.

Then there are a variety of isolated payments from the Ministry of Health to private corporations: for example, the $56 million paid to IBM and the $35.6 million paid to Sykes International. The Community and Priority Services Program, with a $638 million budget, uses a number of private corporations. And the list could go on – the Ministry of Health’s budget is large and complicated.

In addition to the $11.1 billion itemized above, hospitals, primary care and incidentals probably account for billions more public health care dollars transferred annually to for-profit companies.

The use of for-profit companies is not a small problem even in this single case of the Ministry of Health. Two provincial budget provisions would increase accountability, limit further damage and require no party to directly confront the existing problem of for-profit provision.

1) Detail and publish all payments to private-for-profit corporations, and,

2) Prohibit new use of for-profit providers.

A serious debate on these suggestions would help bring the current budget bargaining back to the big issues facing Ontario’s finances: taxes and private delivery of essential services.

Edmonton’s Medical Laboratory Proposal: A Private Insanity

November 4, 2013

I wrote the following post as an op-ed in the Edmonton Journal, October30, 2013. I hope it plays a part in halting the privatization of Edmonton’s medical laboratories.

The Alberta government is proposing to give the private sector a 15-year contract to run medical laboratory services in Edmonton. This policy meets the popular definition of insanity: a condition where you do the same thing again expecting a different result. The government proposal has been tried many times before, twice in Alberta, and it has not worked.

In 1996, premier Ralph Klein sought a private-sector provider to deliver all laboratory services in Calgary. The trouble was that none of the companies wanted the work. In the end Klein cajoled MDS and Kasper Labs into partnering with the regional health authority to form Calgary Laboratory Services. The public sector put up more than 50 per cent of the funding, provided the administrative back up and all of the work. Even so, by 2006 all of the private-sector partners had left and Calgary Laboratory Services continues as an integrated fully public non-profit medical laboratory provider.

In Edmonton, Klein forced three local private-sector labs to join forces with the giants, Gamma-Dynacare and MDS, to form Dynacare-Kasper Medical Laboratories (DKML). DKML was given the contract for most of Edmonton’s laboratory services. All hospital laboratories, except at the University of Alberta, were turned into rapid response laboratories and managed by DKML.
It did not work. By 2005, all of Edmonton’s in-patient laboratory services were back under hospital management. DKML transformed into DynaLIFE, a partnership wholly owned by LifeLabs, the fourth largest laboratory company in the world, and Gamma Dynacare, a subsidiary of LabCorp, the second largest laboratory company in the United States. DynaLIFE continues to provide community laboratory services and run the laboratory in the Fort McMurray Hospital.

In the mid-1990s, MDS (now LifeLabs) and the Toronto General Hospital (now part of the University Hospitals Network), also tried a similar public-private partnership to serve both community patients and in-patients in downtown Toronto. The for-profit company gained access to public investment and the hospitals provided all the space, the staff and the administrative backup.The partnership was dissolved in 2009. The hospitals took over all laboratory work and the stand-alone community laboratory closed. Serious attempts to integrate hospital and community laboratories under a private-sector provider have also failed at Toronto’s Sunnybrook Hospital and in eastern Ontario.

These failed projects illustrate that commercial companies are hesitant about taking on the risks inherent in hospital care. Hospitals, by their nature, have fluctuating volume requirements and more individualized testing while private providers prefer a more predictable routine. Large hospitals need large, comprehensive in-house laboratory services to reduce turnaround times. This fact limits what can be effectively moved off site.

To compensate for these higher risks, private companies demand excessive payments to assure a reasonable profit return – an arrangement that has proved unsustainable for regional health authorities and provincial governments. Laboratory medicine is also evolving rapidly making long-term contracts difficult, if not impossible, to negotiate.

On the one hand, too many tests are currently ordered and, hopefully, with better protocols and changing health-care delivery organizations the number of tests will drop, in some cases dramatically. To ensure their profit, private companies would need to build capacity for the current volume and would, in a contract, rightly expect payments to reflect that volume for the life of the contract. This means if we meet the desirable goal of cutting unnecessary tests, we would end up paying for tests that are not done.

On the other hand, as our medical understanding grows, high quality care we will mean new tests and procedures. These tests cannot be anticipated and we will end up negotiating their adoption with a sole-source private provider for the length of a 15-year contract – a very serious problem for a system wishing to provide the best care at the best price.

Few governments could be more effective at bullying the private sector into an agreement than Klein’s and ultimately his solution did not work. Why repeat those mistakes? Alberta needs cost-effective, integrated, quality laboratory services. The sane choice would be to build on the public non-profit approaches that have been proven to work.

Private Hospitals in Specialty Clinic Clothing

September 6, 2013

The provincial government’s mid-summer announcement that regulations under the Independent Health Facilities (IHF) Act will be drafted to permit “specialty clinics” raises some serious concerns. Changes in the LHINS enabling legislation will also be required. While the details are sparse the government’s stated goal is to permit the LHINs, Ontario’s regional health authorities, and Cancer Care Ontario to establish and fund clinics to provide services currently delivered in public hospitals. The government is committing that these new clinics will not harm a hospital’s ability to deliver services.

The official proposals are this general. Some best-guess inferences are: the IHF administration will be responsible for licensing and quality of the new clinics, and they will be paid under some form of global budget-facility-fee-fee-for-service hybrid probably determined through a competitive request for proposals (RFP) process. This is how democracy works these days: in lieu of accountability and transparency, the public has to read the tea leaves.

The proposal for specialty clinics continues trends that move services out of hospitals and shift planning to the regional organizations. These developments have been slow and erratic but seem destined to cut health care expenses, especially for publicly protected services, expand the power of the Ministry at the expense of both doctors – good – and the community – bad, and increase for-profit delivery and market competition in Ontario’s health care system.

These specialty clinics require new regulations because, unlike other IHFs which also take work from hospitals, they will be established and funded by organizations other than the Ministry of Health. The LHINs and Cancer Care Ontario will then be in a position to decide if they should use their money to fund hospital based services or community clinics, some of which will look like private hospitals.

There is reason to be skeptical of the claim that these clinics will only be set up if they do not harm a public hospital’s ability to deliver a service. Currently, in Ontario, there are over 900 IHFs all of which perform work that could be done in hospitals. Not all of it should be done in hospital’s but there are many instances, especially in smaller communities, where centralizing laboratory work and diagnostic services in hospital facilities would increase the hospital’s ability to provide care for its in-patients, increase access for community patients and cut overall costs. The government has opposed all proposals that would help achieve these goals.

The intent of the government to dogmatically limit the scope of all hospitals is reinforced by the 2006 changes to the definition of a hospital in the Public Hospitals Act. Formerly hospitals were institutions to improve the health of the community, under the new definition hospitals are only to provide services to acute care in-patients. This change in definition has already been used in many smaller communities to cut back or close hospital laboratory and radiology services often limiting access to community patients where is limited or no community alternatives. Almost all this previous hospitals work, to the extent that it is still done, has gone to private corporations. Unless the government’s one-size-fits-all limited approach to hospitals, symbolized by the new legal definition, is changed any commitments to safe guard hospital care need to be taken with a grain of salt.

The most reasonable interpretation of how the new speciality clinics will work is that the LHINs and Cancer Care Ontario will decide which ambulatory hospitals services will be moved to IHFs which are primarily for-profit. The decision on who should provide services will be primarily determined through a competitive RFP process, which is the method enshrined in the IHF Act: public hospitals will end up bidding against private speciality clinics/hospitals to deliver services. This outcome is a logical extension of the competitive approach the government has been using between hospitals for some services. The LHINs and Cancer Care Ontario will pay for these new services primarily by taking money from hospital budgets further increasing the threat to hospitals and public health care.

There are some potential positive benefits from the Specialty Clinics proposal. Following the recent physiotherapy changes it seems likely that these new clinics will be paid on something other than simple fee-for – service, which is helpful. Similarly moving some work in some communities to stand-alone community clinics and shifting more services to the regional planning process could make for a more sustainable and accessible health care system. To achieve these desired goals, these new clinics would need to be public non-profit and preferably run under existing hospital or Community Health Centers administrative structures. This formal linking will allow for better use of staff, greater integration and permit the government to achieve its formal goal of expanding non-profit public health care. The capital expenses required would come from the public purse making them part of the overall public planning process and reducing cost.

These new specialty clinics can only benefit our public health care as non-profit entities within a non-profit system. For these regulations to gain public support they need these guarantees as part of the proposals. Unfortunately the government’s pig-headed commitment to increasing for-profit delivery and market competition will only increase cost, and undermine integration, accessibility and quality.

Will That Be Raspberries With Your Rectal?

December 10, 2012

The changing face of primary care is on special at Loblaws’.  Primacy, a for-profit chain of primary care clinics, has 112 outlets in Loblaw Stores. Most Loblaws’ also have in-store pharmacies.  The synergies are obvious.  Primacy’s web site says, “an on-site pharmacy provides expert advice and services to our patients.”  A recently signed preferred pharmacy agreement organized by international professional services company Towers Watson is also designed to boost pharmacy sales; and presumably traffic to the Primary clinics, and Loblaws’ vegetable aisles. The preferred pharmacy agreement aims to reduce drug plan costs for the companies covered.  A win-win for Towers Watson, Loblaws’ and the Companies’ benefit costs. Employees using the drug plans get convenience, if they go to Loblaws’, and “enhanced services” offered by the Loblaws’ pharmacies.

Rounding out their current suite of health services many Loblaws’ include a GoodLife fitness center. GoodLife is a different service in that it receives little, if any, public money for its primary business.  Mind you it did just receive a very generous tax credit for a 5 million dollar donation to the University Hospital Network’s Peter Munk Cardiac Center in Toronto.

The existence of the Primacy chain and its association with Loblaws’ is what caught my attention.  In days past, a physician, or a small group of doctors, would rent, sometimes buy, an office space and run their practice.  There were many problems with this model.  Doctors ran the show, there was limited integration of other health professions in patient care, and it was hard to provide after hours or 24 hour primary care.  But at least the public money trail was fairly obvious. Doctors received medicare payments, ran the practice, and paid staff, suppliers and landlords.  Community Health Centers are a non-profit alternative that improves primary care access and local  community control.

Chains like Primacy change some fundamental elements of this service provision. Primacy, with annual revenues of 3 million dollars, has 450 physicians providing services to 3.5 million patients per annum (from company media release).  It was recently purchased by Calian Technologies Ltd. (TSX:CTY). Calian is a diversified Canadian company with a high yield dividend – a good match with Primacy’s assured payments from public insurance.  Primacy is part of Calian’s  Business and Technology Services division which primarily provides staff outsourcing, consulting and contracted management services.

Is there something wrong with these changes?  The Doctor still runs their medical practice and Primacy just makes it easier? Good questions, and since we just starting to see the emergence of these significant for-profit incursions into primary care, the concerns are more extrapolation from past experience and reasonable assumptions until we obtain more information. We don’t even know the extent of for-profit primary care  and no one is monitoring it.

The lack of knowledge is a concern in itself. No matter how you cut it the bulk of the money funding these developments is public money going to provide a core service for Canadians.  And these changes are no longer trivial.  There are many primary care chains all across Canada, employing thousands of doctors and serving millions of individual patients. If nothing else, control is shifting to corporate boardrooms.

Since it is primarily public money providing an essential service, as a minimum we need to know the contractual arrangements between the companies, and between the companies and practitioners.  In the United States, where interlocking corporate structures governing various aspect of care are common, there have been many reports of misuse: over-referring being a central one.  In Canada there has been a long history of for-profit laboratories exchanging various perks, like cheap rent and subsidized staff, for increased or monopolistic referral patterns.

Then there is the cost.  What percentage of this public money is now being used for advertising, profit, and multiple layer of administration?  And what if Calian mandates the use of a proprietary technology in the clinics, or engages its clinic staff in labour practices which the health care providers are worried might affect care?  Are their confidentiality clauses?  Are their restrictions on staff employment patterns, like the one imposed by a private methadone clinic? Are their benefits to staff for referrals to the Loblaws’ pharmacy?

These questions are just the tip of the iceberg of concerns.  The initial step is to shift our gaze onto this changing landscape and determine what these changes mean for access, quality, cost and democratic control of primary care.  Is it really useful to have the long-term stability of frontline medicine determined by the success of the raspberry futures market?

Privatising Preventive Care – the For-Profit Flu Fight

November 9, 2012

Flu season is upon us, and it seems that the for-profit-health-care bug is infecting primary and preventative care.  The yearly campaign to increase the number people vaccinated against the flu is coordinated by the public sector though the Ministry of Health and Public Health Units.  After that it gets a bit murky.

Large multinational pharmaceutical companies produce the vaccine.  GlaxoSmithKilne Inc. is Canada’s largest supplier.  Putting the vaccine in the people’s arms has been primarily done by small family practice professionals or public health nurses.  To meet the challenge of increasing immunization rates – over 40% of Ontarians are not receiving the vaccine – the wide network of family practices and community health centers could be given more resources to, as one possibility, hire part-time nurses and nursing students to go into malls, set up tables and administered flu shots. Instead the focus seems to be shifting to for-profit providers.

The for-profit pharmacy chains recently got the nod to administer vaccines.  Also, in malls we have an expanding network of private urgent care clinics and for-profit fee-for-service primary care chains like, MCI: The Doctors Office, which are happy to administer flu shots.  A percent of each shot payment, $4.50 for the vaccination plus an administrative fee-per-visit premium of $5.10, go into the coffers of this for-profit health care management corporation.

The circle is now complete with private multinational corporations producing the vaccine and corporate chains injecting patients.  The yearly repeating cycle provides the opportunity for more and more for-profit involvement.

As a society we make decisions about how we want to organize our affairs.  The policies we adopt develop their own power. There is a political theory, called path dependency, which is based on this phenomenon.  But we really do not need a theory to recognize the strength of existing processes.  The NIMBY syndrome, or the common argument ‘we have always done it this way’ are daily experiences. More profoundly, we have a society based on using fossil fuels and moving to more sustainable energy sources is a major problem.  This does not mean that change cannot happen, it obviously does, but it is much harder when certain structures exist.

The same goes for how we deliver health care. As we allow more private provision the more we are inclined to use it, or for-profit corporations impose themselves on public policy in a way which expands their presence and makes us more reliant on their services. It can be a powerful self-reinforcing spiral.

The muddying of the health care waters with private-profit providers also has implications for reasoned discussion on the benefits of vaccinations. I believe that mass immunization programs have been very important to improving public health, but involving the profit motive in this valuable public policy opens up the programs to legitimate criticism that the need and claims of efficacy come from the drive to make profit and not improve health.  These arguments are at least partially correct and undermine public decision-making. The following post is one of many that make illustrate this muddying of the water: http://www.healingcard.com/politics-profits-pandemic-fear-mongering-national-vaccine-information-center/

Increasing for-profit corporate provision of primary care is a matter of significant concern as we move more services into the community and place more emphasis on prevention programs. Unfortunately we do not even know the extent of these changes, their public cost or their effect on quality or access: and the government, to the extent that it is tracking these developments, is not talking. If nothing else, placing larger swaths of primary care under corporate control removes valuable information from public discourse – business confidentiality – and limits both community control and physician control of primary care.