Privatization Pressures in Alberta Health Care

This report explores contemporary pressures to expand private participation in three areas of Alberta’s public health care system: diagnostic laboratory services, home care, and telehealth. I focus on these topics because they are highly contested areas of the health care system. As I outline in this report, they are also parts of the health care system where patient and worker experience could significantly change due to proposed and enacted policies from the current provincial government.

After winning the 2019 provincial election, the newly elected United Conservative Party (UCP) government moved quickly to implement sweeping reforms in the province, and based on the direction signaled in its election platform and the policies enacted in its first year of government, the UCP government is on a path to dramatically transform the health care system in the province.

I begin by describing the UCP’s approach to health policy through the lens of key documents, including annual provincial budgets, the MacKinnon/ Blue Ribbon Panel report, and the AHS review prepared by Ernst & Young LLP. There is, perhaps unsurprisingly, close alignment between the UCP’s 2019 policy platform and the findings of these reports. In the “health care privatization” section of this report, I outline how these government documents set the stage for further privatization in Alberta’s health care system. These tendencies align well with long-term neoliberal health care policymaking that increases space for private participation in public services in order to reduce the size and scale of the public sector. As described by Graff-McRae (2017) and even the Ernst & Young AHS review (2020), Alberta already has diverse private health care services, including private membership clinics and non-hospital surgical centres that provide publicly funded surgeries. Within health care, privatization has negative impacts for both patient outcomes and working conditions for staff.

Diagnostic laboratory services

Decades of dramatic public policy changes for diagnostic laboratories serve as an example of the ways in which political changes have real-world impacts on the health system. I outline how the Alberta government’s experimentation with cuts to diagnostic laboratory spending in the 1990s led to laboratory restructuring, job losses, deskilling, and an exodus of pathologists. Between 1994 and 1998, private and public sector diagnostic laboratories responded to funding cuts by consolidating and centralizing their operations. Microbiology labs that restructured during this period to perform more complicated testing without hiring specialists had an increase or lower decrease in error rates compared to those that did not (Church, Don-Joe, & Unger, 2000).

Lessons from laboratory restructuring in the 1990s have ongoing relevance today. In 2020, the Ernst & Young AHS review recommends increasing the proportion of laboratory technicians in diagnostic laboratories, and doctors threaten to leave the province due to funding cuts, much like the situation leading up to the widespread loss of laboratory pathologists beginning in 1994. Cost savings associated with increasing public or private participation in diagnostic laboratory services are difficult to calculate due to differences in the kinds of work done by each type of lab, and assumptions about how savings would be spent (e.g., on shareholder dividends and equipment upgrades for private labs, or on increased volume for public ones). In the 2020 Alberta budget and the Ernst & Young AHS review, the provincial government demonstrates an intention to decrease the role of the public sector in diagnostic laboratories, a change that will have long-term implications for the universal health care system.

Home care

Like diagnostic laboratory services, home care is a dynamic landscape for public and private service providers. With improved health interventions leading to longer life with more comorbidities, more Canadians, particularly older ones, require home care services. Most home care is provided informally by friends and family, but this responsibility has profound personal and economic consequences. Professional, formalized home care can alleviate burdens on loved ones, and improve patient outcomes at a lower cost than residential care.

Long-term home care is not an insured service under the Canada Health Act (CHA), so eligibility for publicly provided home care services depends on what each province is willing to provide. Private home care providers, particularly for personal care services (in contrast with professional services like registered nurses and physiotherapists), fill the gaps in public provisioning both by accepting private pay clients, and as contract providers for publicly funded services.

The low cost of home care rests on several inequities within the health care system, namely reliance on informal care providers; rationing of care by health authorities that leaves people who cannot pay privately with unmet care needs; and low pay and poor working conditions for home care workers. The benefits of formal home care services, along with documented gaps in care, show that Albertans would benefit from expanding home care programming. However, the UCP government’s projected increases to the home care budget do not account for inflation and population growth, likely meaning that more Albertans will have fewer of their home care needs met, and a disproportionate burden of care will continue to fall on friends and family.

Telehealth

Although forms of distance care using telecommunications technology go back decades, and most provinces have phone advice helplines and remote care from clinical settings, modern incarnations of telehealth through apps are a relatively recent arrival in Canada. A handful of private companies provide access to physicians and other health care professionals through virtual platforms in some Canadian jurisdictions. In some cases, patients pay directly, and in others, the businesses that own the apps have agreements with governments, health authorities, or insurance companies to provide a suite of services to eligible individuals. Recently, the UCP government received negative attention for promoting Babylon, a TELUS Health product. Babylon entered into an Alternative Relationship Plan with the Government of Alberta to provide physician services outside of the standard fee-for-service model. The Alberta Privacy Commissioner is currently investigating Babylon due to privacy concerns with the app. Telehealth app usage is likely to grow in the future because the apps are fast, convenient, and avoid contagion risks present in in-person clinical settings—an advantage that has become particularly important during the COVID-19 pandemic. Although rural and remote patients stand to save significant travel time, evidence from Sweden shows that urban, relatively young patients are the most likely to use telehealth apps (Blix & Jeansson, 2018). To realize the most benefits from expanding telehealth prevalence, Albertans and Canadians more broadly need to ensure that telehealth services uphold the values enshrined in the CHA, and that they reduce, not exacerbate, health inequities.

I conclude the report by describing the challenges patients and workers face in turning the tide on health care privatization. The current pandemic shows the value of a high-quality public health care system that is resilient, modern, and grounded in the values of the CHA. Alberta Precision Laboratories, a publicly owned and operated lab, does public health testing, including for COVID-19. Home care for acute, post-hospital and palliative patients is a universal insured service under the CHA. Services like 811 and virtual care within the public health system lower barriers to accessing care. Underfunding and privatizing put such initiatives at risk by removing capacity and infrastructure from the public system. Patients and workers should work together to enshrine these services and improve equitable access to high quality care. With these considerations in mind, I end the report with 20 recommendations that foster a strong vision for universal health care that leaves no one behind.

ISBN: 978-1-894949-75-0

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