In a campaign speech on March 28, UCP leader Jason Kenney announced his party’s plans for dealing with what he characterized as excessive surgery wait times in Alberta, pointing out that wait times have increased in the province since 2014. His prescription for dealing with the problem included two key components.
The first part of his promised solution is to conduct an “Administrative Performance Review” to find savings in admin and management of health care. Kenney’s claim is that other jurisdictions have conducted similar reviews and been able to identify between 1% and 2% savings that could then be redirected to front lines to help ease wait times. In Alberta, he estimates, that would be about $200 million.
Kenney’s assessment is at odds, however, with recent data from the Canadian Institute for Health Information, showing that administrative costs in Alberta’s health care system are already the lowest in the country, having come down from 3.7% of total health expenditures in 2012-2013 to 3.3% in 2016-2017.
Given that other jurisdictions have conducted reviews of administrative expenses, and implemented cost savings since that time, and that Alberta’s administrative costs still remain the lowest in the country, it seems quite unlikely that a review of administration in Alberta would yield anywhere near the savings that Kenney claims. In fact, given the costs involved with conducting this type of review, critics may wonder whether the process would result in a net loss of funds rather than in any gains through savings.
It is also questionable whether the system needs another audit. The Auditor General of Alberta has conducted over 40 audits of different aspects of the Alberta health system since the early 1990s, resulting in 41 recommendations that governments have still not acted upon, 19 of which have remained outstanding for more than three years. What seems needed is not another expensive audit of the system, but rather for governments to commit to taking action on the audits that have already been done.
The Auditor General’s latest report on Alberta’s health system, Better Health Care for Albertans, published in May 2017, identifies three underlying root causes preventing the achievement of an integrated system that will provide the best quality care possible in Alberta. None of those causes has to do with administrative costs or the need for more money on the front lines. Instead, the AG suggests that the areas that need focus are the system’s structure, better integration of physicians with AHS and other providers, and improved clinical information systems. It is worth noting that the NDP government has been taking small steps over the last two years to seek improvements in all of those areas, with specific progress in the areas of structure and clinical information systems over the last two years.
Kenney’s second promise is that a UCP government would follow the example of the 2010 Saskatchewan Surgery Initiative (SSI), which saw government allow private for-profit clinics to perform publicly funded surgeries in order to reduce wait lists and wait times. In his speech, however, he neglected to mention two things.
The first is that, just as in Alberta, surgical wait times in Saskatchewan have also been increasing since 2015, with the number of people waiting longer than the three-month target for surgery increasing by more than 7,000 in the last four years. The SSI was not renewed by the Saskatchewan Government after it ended in 2014, as they were unwilling to keep up with cost increases resulting from increased demand.
Kenney also neglected to mention that the Saskatchewan Initiative was largely based on a previous project from Alberta: the 2004 Alberta Hip and Knee Replacement Project. The Alberta project was based on creating a better care path for patients: one that saw stronger coordination and information-sharing among all parts of the system, and the establishment of clear practices and protocols for treatment. The goal of the project was to reduce wait lists, wait times, and provide better overall care. As with Kenney’s proposed plan, the project also included public and private-for-profit providers (in the form of Calgary’s Health Resources Centre, or HRC).
The project proved to be a complete success in that it reduced wait times and wait lists, and also improved recovery times for patients involved in the study. Increased coordination and streamlining of the treatment path also reduced overall costs to the system on a per-patient basis. The evidence shows, however, that these achievements were not attained because of the participation of private clinics, but rather despite it.
A 2012 report by the Parkland Institute found that despite HRC being allotted only the least complicated cases and surgeries involved in the project, every single procedure performed by them cost more money than the same procedure conducted in one of the public facilities participating in the project. On average, procedures cost about $500 more in the private clinic than in the public clinic, with the costs for one foot and ankle procedure costing a whopping $1,800 (32%) more to deliver at HRC than through Alberta Health Services.
Despite building a healthy profit margin into their costs, and despite receiving numerous other contracts from their friends in government, HRC applied for bankruptcy in 2010. Due to its heavy reliance on HRC at the time for a high proportion of the province’s orthopedic surgeries, AHS was forced to intervene in order to maintain the volume of surgeries. The province ended up paying for an interim receiver and purchasing HRC’s debt and security. In other words, not only did surgeries at the private provider cost more, the inclusion of a private provider in the project resulted directly in extraordinary costs borne by the province’s taxpayers once that provider went broke. Public debate of the issues is ill served by references to only the Saskatchewan experience and not that of Alberta.
Despite Kenney’s focus on private providers, however, the key lesson from both the Alberta and Saskatchewan examples is that what reduces costs and wait times is increased coordination, planning, and collaboration by all players within the public system, NOT padding the profit margins of private providers. Perhaps the greatest proof of this is that the Alberta project continued to bear fruit in terms of shorter wait times, shorter recovery times, and greater efficiency even after HRC went bankrupt and the project continued as a fully public project.
Evidence from around the world highlights that any initiative that puts patients at the centre of the system and seeks to develop an integrated and coordinated care strategy will yield positive results. At the same time, evidence from the recent Saskatchewan and Alberta experiences demonstrates, yet again, that including private-for-profit providers in the mix increases costs, risks patient care, and risks costing the public purse millions of dollars.