Private firms thrive as NDP ‘reinvents’ medicare

By David South

Today’s Seniors (Canada), August 1993

Many of today’s seniors fought for Canada’s internationally-admired public health system. But more and more people are becoming worried that the combination of health care reform, funding cutbacks and free trade is fuelling the growth of a second tier of private medical services serving the well off. 

The provincial government sees things differently, arguing Ontarians no longer expect government to pay for everything and rather than eroding medicare, the NDP is reinventing it. 

Whichever way one looks at it, private insurance companies, homecare providers, labs and other services designed to make money are becoming more and more involved in the health care business. 

Operating in the territory outside the guidelines of the 1984 Canada Health Act - which sets out the principles of medicare for the federal government to enforce - the private sector has room to expand, at the same time as OHIP coverage is scaled back from more and more services. 

Janet Maher, whose Ontario Health Coaltion (OHC) represents doctors, nurses and other health care workers, worries for the future of medicare. 

“A number of things like accomodation services - laundry, food services - are in the grey area of the Canada Health Act,” says Maher. “So with all these fees that are being introduced, by the strict letter of the law, there is no way to stop them. But as far as we are concerned the spirit of the Act isn’t being observed.”

In its current reforms, the government of Ontario is emphasizing paramedical professions like midwives who fall outside the CHA and aren’t covered by OHIP. The turn to community-based services means that people have to rely more on services and providers that aren’t covered under the CHA. 

Maher says privatizing accomodation services is a recent phenomenon, the result of hospitals finding creative ways to trim their budgets. 

“It’s a new area that hospitals are taking bids on,” she says. “The other thing around the accomodation services is that because they are not categorized, strictly speaking, as health care services, none of this is exempted in the Free Trade Agreement from U.S. competition.”

A recent report by two British Columbia researchers tries to put together this complex puzzle. Jackie Henwood and Colleen Fuller of the 7,500-member Health Sciences Association of British Columbia recently charged that a combination of free trade and budget-slashing governments is eroding the universality of medicare and ushering in a two-tier system. 

Fuller and Henwood identify the Free Trade Agreement as the culprit. While the health care industry created more jobs than any other sector of the Canadian economy between 1984 and 1991, they point out the job growth has been concentrated in the private sector since free trade was implemented in 1989. And they expect worse under the proposed North American Free Trade Agreement (NAFTA). 

“NAFTA will accelerate trends towards a privatized, non-union and corporate-dominated system of health care in Canada.”

One provision of the Free Trade Agreement has also made it possible for U.S. companies to compete against Canadian firms in health care. Chapter 14, “health-care facilities management services”, allows wide-open competition. 

Under NAFTA, provisions will bind all levels of government to consider for-profit health care companies on both sides of the border on equal footing with public providers when bidding for services, and entitles them to compensation if they can prove to an arbitration board they’ve been wronged. 

“That represents a substantial encroachment on the democratic right of local, provincial and federal governments to make decisions,” says Cathleen Connors, who chairs the national wing of OHC, the Canadian Health Coalition. 

It’s this plus health care cutbacks - federal and provincial - that’s resulting in service and job cuts and bed closures in the public sector and an increase in privatization, say Henwood and Fuller. These opportunities have not gone unnoticed by private companies south of the border. 

One such company is American Medical Security Inc. (AMS) of Green Bay Wisconsin. After hiring Canadian pollsters Angus Reid to do a survey, AMS saw a profitable market in offering American hospital insurance to frustrated Canadians awaiting surgery. Sixteen per cent of those polled said they wanted this service; that was enough for AMS. 

“One thing that comes across loud and clear is that Canadians for the most part are happy,” says spokesperson Carrie Galbraith. “They know they are taken care of during an emergency. But they are willing to pay a little extra if they need care.”

So far, AMS offers its plan to Ontario, B.C. and Manitoba, with Toronto its best market. Galbraith says plans are in the works to expand to all of Canada except the territories. 

Unfortunately, like most private health plans, AMS cuts its losses by avoiding what Galbraith calls “adverse selection” - anybody with a known serious health problem need not apply. 

Here in Ontario, private for-profit home care services take in close to half of all OHIP billings. Many clients pay out of their own pockets for additional services. 

The Ontario health ministry doesn’t keep statistics on the extent of the private home health care sector, says spokesperson Layne Verbeek. But the Ontario Home Health Care Providers’ Association, a trade group, estimates private homecare companies now employ 20,000 and serve more than 100,000. 

“It’s a market situation,” says Henwood. “If the services aren’t available to people within the public sector, they will go outside of it. We’ve seen this in other countries like England, where they had a public system and now have a parallel private system. If you erode a system enough that people get angry, they are going to start to look for alternatives, and the people with the greatest liberty are those with money.”

But in a recent interview, health minister Ruth Grier was adament this scenario wouldn’t be allowed to take place in Ontario. She strongly disagreed that medicare is being weakened due to recent changes, and said the government has actually “reaffirmed its commitment to medicare.”  

Elect Peace

By David South

The Canadian Peace Report, Summer 1993

More than 80,000 people swarmed Parliament Hill on May 15 at an Action Canada Network and Canadian Labour Congress rally against free trade and other federal policies. In a paper issued just before, the Canadian Centre for Policy Alternatives criticizes Canadian military spending as “carried over from a cold war that no longer exists. At the same time, our assistance to poor nations is actually falling.” 

When a federal election is called, peace groups across Canada plan to be heard. They see the defence department’s $11.3-billion yearly budget - amidst cuts to social programs and calls for even more restraint - as ripe for a hot election battle over government priorities. 

A recent Gallup poll conducted for the Canadian Peace Alliance found broad support across all political allegiances for cutbacks to military spending. The CPA also wants daily life demilitarized, with duties like search and rescue turned over to civilian agencies. 

Local groups are mostly awaiting a date for the election, expected about late October, but national groups are already planning. Some groups will fight the Conservative Party’s backing of the North American Free Trade Agreement (NAFTA), which they fear will lead to further military integration of Canada and the United States. 

The Peace Alliance is working on action and information kits targetting military spending versus social needs, and is developing an election logo. It’s also building up to a national action day. 

The idea is to stimulate local and regional activity, coordinator Gideon Forman says. “Kits will help member groups organize actions during the election campaign. They will have information on, among other things, the plan to buy deluxe helicopters, military spending in general and the cost of social needs. 

“We will give local groups suggestions for local events and assist with media work.”

Project Ploughshares has produced a short booklet of questions to ask candidates, “but not a repeat of the Election Priorities Project” of the 1988 election, says researcher Bill Robinson. The booklet suggests calling for cuts in military spending, cancelling the EH-101, limiting Canada’s participation in military operations, and abolishing nuclear weapons. 

Also nationally, the Action Canada Network (to which the Peace Alliance belongs) met with groups from across the country in Winnipeg in mid-June to finalize election plans, which may include a radio ad campaign. National chair Tony Clarke would like local activists to dog the party leaders across the country, as progressive groups did to Ontario’s Liberals during the province’s 1990 election. 

“We will definitely make the link between a range of issues and the (Canada-U.S.) Free Trade Agreement and NAFTA, which we have to get rid of,” says Clarke. “We will be working very hard on jobs and arguing for a job strategy.”

Responding to the Gulf War two years ago (Action Canada Dossier #30), Clarke warned that Canada is “tied in closer than we have ever been before to the permanent war economy” of the U.S.. With a quarter of its output related to the military, the U.S. used militaristic diplomacy to justify maintaining defence budgets, he says. The trade agreements’ guarantees of U.S. access to Canadian energy resources confirm that “we are locking ourselves into what can only be described as Fortress North America.”

Maude Barlow of the Council of Canadians, a network ally, denounced the helicopter purchase during the Peace Alliance’s March 8 lobby of Parliament. Soon after, then defence minister Kim Campbell appeared to waver on the number of helicopters to be bought, but succeeded in winning the Tory leadership without it becoming a major issue. However, Liberal leader Jean Chretien promises to cancel the contract.

At CUSO’s national office, Marc Allain says the development agency will work with the CPA around military spending and the ‘copter purchase. 

To Peter Davison of the Halifax Peace Action Network, the stakes are clear and the passion to fight the issues simply awaits a polling date. 

“Never has the guns-or-butter issue been more prominent in our society,” says Davison. “Conservative economic policies have been collapsing around the globe. We’re seeing desperate restraint and universal trusts being violated - health care, education, pensions.

“It’s bizarre that we can still conceptualize $6 billion for helicopters to fight submarines - an absurd twist away from meeting human needs.”

Terry Gardner says Science for Peace’s mandate bars entering the election fray, but says the group is planning a high-level panel in the fall on NAFTA and militarization of Canadian culture. 

“We’re going to be asking candidates in our area for conversion and reduction in military spending,” says J.J. Verigin of the Doukhobour peace and disarmament committe in British Columbia. He says his MP has been supportive of chopping the choppers. 

Verigin found fact sheets helpful and says the CPA does a good job of getting out beyond the urban areas. But he would like the Alliance “to propose something that engages the electorate’s intellect as the gut.”

“We have a general intent to intervene in the election, but we’re not quite clear exactly how,” says North Bay Peace Alliance organizer Brennain Lloyd. “We’re considering a regional information package, something like the Election Priorities Project, that our groups could use.”

Being armed with the facts helps reach the public and pins down candidates, Lloyd says. She applauds the CPA’s idea of producing action kits that her group could integrate into its own. 

Toronto’s ACT for Disarmament won’t be working specifically on the election, but may participate in actions, says organizer Maggie Helwig. “Groups have certain things they focus on, and certain ways of operating. Other people do better at elections.”

In Montreal, Judith Berlyn of Westmount Initiative for Peace says, “We will be doing locally what has been developed by the Canadian Peace Alliance as a whole - go to all-candidates meetings, get the mike and ask the questions. We will be raising issues. Last time our candidate had never heard of low-level flying.”

Berlyn feels many people, including activists, often think they don’t know enough to speak publicly. But with information kits, “we know more than the candidates do.”

While approving the CPA’s focus on military spending, Berlyn says it would be a mistake to over-emphasize the helicopters. “Everybody has [already] picked up on that; it’s a good concrete example of insane military spending.”

She also finds the public receptive to informative and succinct pamphlets advocating alternatives to a militarized economy. A Coalition to Oppose the Arms Trade pamphlet is a good model, she says. 

“It has four concrete proposals of what the government can do to convert military industries - money that now goes to subsidizing the manufacturing of weapons can be turned into conversion subsidies.”

Continental Drift And Military Complexities

By David South

The Canadian Peace Report, Summer 1993

A cornerstone of the Conservative government since 1984 has been the Free Trade Agreement (FTA) between the United States and Canada, soon to be followed by a North American version (NAFTA), which adds Mexico. 

Peace researchers differ over how much the deals could further militarize Canada’s economy. 

Under the Canada-US deal, articles 907, 1308 and 2003 immunize trade that fosters “national security” from charges of unfair subsidies. A free trade tribunal could deem subsidies to farmers or toilet-seat manufacturers as unfair competition - but not subsidies to weapons manufacturers. Articles 1018 and 2102 of NAFTA maintain the exemptions. 

CPA membership coordinator Gary Kaye argues that FTA, and NAFTA even more so, bind Canadian governments at all levels to military regional development. The United States has relied on investment in military industries as a regional development tool more than any other Western country, he says. 

“The Canadian government can invest in any military-related pursuit without fearing the U.S. or Mexico will say it is an unfair subsidy,” Kaye says. 

Ken Epps, a researcher with Project Ploughshares in Waterloo, Ont., agrees one reason the government insists on buying $5.8 billion helicopters in the face of overwhelming public opposition is that it’s a regional development program protected under the FTA. 

“Any other [subsidy] program of that size could well be protested by the Americans. The whole thing has been set up with new plants being built in different parts of Canada to build parts for the helicopters.”

But Epps disagrees that the trade agreements will integrate Canada much further into the U.S. war machine. De facto free trade in arms has existed since Canada and the U.S. signed the Defence Production Sharing Agreement in 1959, he points out, following the scrapping of Canada’s Avro Arrow jet plane. There-after Canada specialized in making military components rather than complete systems.

Epps and others say Ottawa’s high-tech hardware binge - including the 50 high-ticket EH-101 helicopters - and the Canadian military industries’ desire to sell to booming Pacific Rim and Middle East markets would exist even without the trade agreements. Epps sees the U.S. favouring its own defence industry at the expense of Canadian suppliers, which will increase Canadian businesses’ desire for foreign sales. 

Retired U.S. admiral Eugene Carroll, director of the Washington-based Center for Defense Information, says every nation is interested in boosting its own national prestige throught the military, and Western industrialized countries are looking to sustain exports by selling weapons to the Third World. 

“That’s just plain old profit-driven commercial activity,” says Carroll. “I don’t think trade agreements extend control onto military-related activities.”

Kaye, however, stresses that NAFTA will ensure the bilaterial agreements between Canada and the United States on military trade will continue untouched. “Under those agreements, we are committed to balance military imports and exports with the United States. 1992 figures show a $4-billion deficit; therefore we will be buying much more in the way of arms than anyone could imagine would be needed for Canada’s direct security.”

Many peace groups are worried about the implications. 

“NAFTA reveals an agenda for the military and the transnational corporations that binds the Canadian economy more to the U.S. military machine,” Marion Frank wrote for the Peace Alliance in Action Canada Network’s Action Dossier (Dec. 1992), drawing on a position reached by the CPA Steering Committee last fall.

“Under NAFTA, as under FTA, the only areas where government subsidies are allowed are in the military and energy sectors … Wide-ranging expansion of ‘intellectual property rights’ in NAFTA increases monopoly product protection for the transnationals here in Canada, and aids in the privatization of high-tech capacity, all of which ties us more closely to the U.S. military-industrial complex …

“In the U.S., trade strategy is linked to security strategy,” Frank adds, “The military tells U.S. industry what equipment to plan for and buy in order to meet U.S. strategic objectives. As we become more integrated into the North American [trading] bloc, our ability to develop our own strategies will disappear.”

Recommendations from the Peace Alliance-facilitated Citizens’ Inquiry into Peace and Security would be difficult to implement under NAFTA, contends Darrell Rankin of the Ottawa Disarmament Coalition. “Canada could no longer help developing countries by giving them better access to the Canadian market through preferrential tariffs.” Assisting military factories to produce civilian goods would be prohibited - but grants to develop weapons would not.

Last February, Science for Peace brought together labour, peace and other activist groups to make the connection between free trade and defence production and the weapons trade. “Both agreements are bound to cause in Canada what exists in the U.S.: a poweful military-industrial complex,” says S4P’s Terry Gardner. “It represents the loss of control of the institutions of government.”

Then prime minister Mulroney’s “unquestioning support” of the U.S. in the Gulf War “removed political roadblocks to Canada’s involvement” in U.S.-Mexico talks, recalls John Dillon of the Ecumenical Coalition for Economic Justice. Despite widespread Mexican opposition to the war, he adds, President Salinas increased oil production and exports to the U.S. during the build-up to it. 

The Ottawa Disarmament Coalition calls NAFTA “a vehicle for militarism without brakes.” It would create legal inducements for companies seeking government contracts to couch their bids in national security terms, a coalition brief to an Ontario cabinet committee on NAFTA argues. 

NAFTA would also hinder conversion of military to civilian industries and environmental protection above “generally agreed” standards, the coalition said.

The Ontario committee on NAFTA, which held public hearings in the spring, received briefs from: Northwatch (Brennain Lloyd, Sudbury), Voice of Women for Peace (Ann Emmett and Elizabeth Davies, Oshawa), Oshawa Peace Council (Doug Wilson), Ottawa Disarmament Coalition (Rankin), the CPA (Kaye), Science for Peace (David Parnas), Michael Polanyi, Allan MacIssac (Toronto Disarmament Network) and Veterans Against Nuclear Arms (Toronto). 

While recommending that Ontario oppose NAFTA, the committee’s report did not directly mention peace concerns. 

Abuse of resources

“The U.S. needs our resources and us to put together components for their military,” says J.J. Verigin of the Doukhobour peace and disarmament committee in B.C. He criticizes “any agreement that locks us more into a country wired to massive consumption and abuse of resources at the expense of Canadians and other countries.”

In the United States, the Women’s International League for Peace and Freedom opposes NAFTA as a stage in “the neoliberal economics of intervention” that particularly victimize women (Peace and Freedom, July/August 1992). 

At CUSO’s national office, Marc Allain wants to end the notion that NAFTA is about improving the living standards of people in developing countries. “What we’re seeing is quite the contrary,” says Allain. “Low wages, no health and safety - we’re already seeing in Mexico job losses as they move to the maquiladoras (Mexico’s free trade industrial zones).”

(In a trade advisory, Ottawa tells Canadian companies that the defence market in Mexico, a notorious human rights violator, “is not readily identified … Commercial/industrial security, however, is an expanding market.”)

Allain says CUSO is working with the Ecumenical Coalition for Economic Justice to produce education kits on NAFTA and distribute them to unions and community groups. 

US health care businesses chasing profits into Canada

Some fear corporate health care will kill equality of treatment

By David South

Now Magazine (Toronto, Canada), April 8-14, 1993

American-style private health care is slipping across the Canadian border under the noses of three provincial NDP governments, say researchers representing an association of health care workers.

Jackie Henwood and Colleen Fuller of the 7,500-member Health Sciences Association of British Columbia charge in a recent report that a combination of free trade and tightfisted government spending is undermining the universality of medicare and ushering in the beginnings of a two-tier system.

While the health care industry created more jobs than any other sector of the economy between 1984 and 1991, they point out, things have changed dramatically since the Canada-US free trade agreement came into effect in 1989. Now much of this growth is clustering in the private sector.

And they expect that this trend will continue under the forthcoming North American free trade agreement.

“NAFTA will accelerate trends towards a privatized, nonunion and corporate dominated system of health care in Canada,” says the report.

Binding provisions

Chapter 14 of the Canada-US free trade agreement opened competition for health-care facilities management services to US companies. Certain NAFTA provisions will bind all levels of government to consider for-profit health care companies on equal footing with public providers when bidding for services, and entitles them to compensation if they can prove to an arbitration board that they’ve been wronged.

“That represents a substantial encroachment on the democratic right of local, provincial and federal governments to make decisions,” says Cathleen Connors, who chairs the Canadian Health Coalition, which includes labour activists, nurses, doctors and other health-care workers.

This, in combination with health care cutbacks – both federal and provincial – is resulting in service and job cuts, bed closures, increased drug costs and an increase in privatization, the report says.

In the area of home care, for example – visiting nurses, physiotherapists, homemakers and other services – private firms now take in close to half of all OHIP billings. Many of their clients pay out of their own pockets for services.

The Ontario ministry of health doesn’t keep statistics on the private home health care sector in the province, but the Ontario Home Health Care Providers’ Association, a trade group, estimates that private firms in the industry now employ 20,000 people.

The industry is dominated by a small number of large firms, including Paramed, Comcare and Med+Care.

“It’s a market situation,” says Henwood. “If the services aren’t available to people within the public sector, they will go outside of it.

“We’ve seen this in other countries like England, where they had a public system and now have a parallel private system. If you erode a system enough that people get pissed off, they are going to start to look for alternatives, and the people with the greatest liberty are those with money.”

Connors says that because the Canada Health Act only covers the provision of hospital and physician services, the prinicples of universality and comprehensiveness don’t extend down to community-based services like home care.

The study also found that giant US private health insurers are positioning themselves to reap profits in the fertile Canadian market.

Last week, Wisconsin-based American Medical Security Inc. announced it will begin offering American hospital insurance to Ontario residents this month, citing a demand in Canada to bypass lengthening waiting lists for medical treatment.

Giant US west-coast insurer Kaiser Permanente declared in the March 1992 issue of Fortune magazine that they have targeted Canada as the next growth market. And American Express membership now offers the privilege of health insurance.

With private health care services sprouting up like spring weeds, says Henwood, provinces are placing yearly limits on the number of private services covered under provincial health plans, thus preventing people shopping around for services, no matter what their income.

Sheila Corriveau, corporate relations coordinator at Toronto-based Dynacare, Canada’s largest full-range private health care company – which operates labs, retirement homes, homecare services and consulting services – is enthusiastic about expansion plans, and says that removing patients from hospitals into their homes has been a boon for private health-care services.

“I think the health system will benefit, because what you are really doing is off-loading the cost from the public sector and from the treasury to private enterprise,” says Harry Shapiro of Dynacare. “Private enterprise depends on its own ingenuity for survival and its own levels of efficiency.”

But advocates of the public system say the free-market option now looming is being ushered in by the very parties that Canadians have come to rely on to defend medicare.

Medicare stance

Ontario’s new health minister, Ruth Grier, however, denies her government is jeopardizing medicare.

“I want to disagree with that as profoundly as I can,” she says, fidgeting with an ashtray during a recent interview. “Our government has reaffirmed its commitment to medicare. Over the last decade, under conservative and liberal governments, health care costs have increased in double-digit figures. The system would have collapsed at that rate of growth.

“I guess I haven’t found a way of blaming free trade for failures of the health care system at this point,” she says.

But critics say in the last year alone, Ontario’s ministry of health has capped health coverage for travellers abroad, removed coverage for physical exams requested by employers, chopped hospital beds and cut back the number of drugs covered on the provincial drug plan.

Grier says that the government’s vision relies on a new view of medical care seekers as consumers who are going to take more responsibility for their own health care

“Government can’t do it all,” she says.

"US health care businesses chasing profits into Canada": Now Magazine April 1993

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