The Fourth Way |
Even if governments won’t expand the role of private health care, would-be providers, patients and the courts will. Here’s how it’s happening in Alberta
By Bruce Weir
When visitors and patients step out of the elevator and onto the hospital floor of Calgary’s Health Resource Centre (HRC), they find themselves standing between a nursing station and a storage room. While the nursing station, with its bustling staff, ringing phones and flashing lights, is inarguably the nerve centre of the operation, the storage room, which houses sterile surgical instruments, might have more to tell about recent changes in medical practice and the way health care is delivered in Alberta.
When the private health care facility opened in 1996 the room was used for physiotherapy, but advances in surgical techniques have had implications for post-operative care. “Today physio can be done in the hallway or at the bedside,” says Bernie Simpson, the HRC’s chief operating officer. “We want to get you up the same day [as the operation] with a new knee; the following day with a new hip. It’s all about mobility.”
The HRC’s business model is based on specialization – “we do nothing but orthopedics,” Simpson says – meaning that several sets of surgical tools are needed. That’s why a room once used for physiotherapy is now used for storage. The instruments sit on wire shelves, all neatly labelled and wrapped to prevent contamination. Simpson points out that some are triple-wrapped to ensure safety, and while he doesn’t say it, this gives the instruments and Simpson something in common: a thick skin.
The HRC occupies the third floor and a portion of the main floor of the former Salvation Army Grace Hospital, one of the public hospitals closed by the Klein government in the mid-1990s. This location, combined with its business model, means that the facility has long been controversial. “We were the Darth Vader of health care,” Simpson says, recalling public reaction and heated exchanges in the legislature.
The curious thing about private health care in Alberta, however, is that it is well established, if circumscribed. Health regions have long contracted out day surgeries – ear, nose and throat procedures, dental surgery, cataract removal, abortions – to private entities. The private delivery of these publicly funded services is a fact of life in the province. What stirs the debates that have become a fixture of Alberta politics are services that seek to expand on these long-standing offerings.
In this context, HRC, the only private facility in the province offering surgeries (including hip and knee replacements) that require overnight stays, has attracted a lot of attention. For opponents, it represents the beginnings of two-tier health care. For Simpson, far from being a Death Star, the HRC represents a modest change to the system already in place.
The facility is not free to operate on anybody who can pay. The number of surgeries it can do is specified by the government, which allows the HRC to perform insured services under contract to the Calgary Health Region and privately funded procedures. This last category includes surgeries performed on out-of-country residents, people covered by Workers’ Compensation, employees of the federal government, members of the military or RCMP, and prisoners in the federal system. (Under the terms of the Canada Health Act, surgeries paid for by these third-parties are considered uninsured. As a result, the third parties are allowed to pay fees directly to doctors and hospitals.)
In Alberta, recent debate has centred on the now-abondoned Third Way health reforms put forward by the Klein government, which, among other things, proposed that patients be permitted to pay for surgeries and that doctors be allowed to work in both the private and public systems. The Friends of Medicare led the opposition to these proposals, calling them an attempt to undermine Medicare. “The Third Way is about private insurance, private doctors and private delivery,” Harvey Voogd, co-ordinator of the lobby group, said when the government announced its Third Way reforms. “Alberta’s plan to expand private insurance will only lead to more out-of-pocket expenses for individual Albertans and patients.”
In the face of public and federal opposition – the Harper government threatened fines for violations of the Canada Health Act – Klein backed off his Third Way proposals last year. Currently, doctors who wish to practice privately must opt out of the public system; in Alberta none have. Much depends on new Premier Ed Stelmach, but for now it seems that change in the province won’t be spurred by government actions, but by court decisions and aggressive entrepreneurs.
The most ambitious of the entrepreneurs set to arrive in Alberta in the near future is Don Copeman, founder of Vancouver’s Copeman Healthcare Centre. Opened in November 2005, the centre offers private, primary care for an annual fee, and Copeman has bold expansion plans. He is set to open downtown clinics in Edmonton and Calgary this April and eventually wants to be operating in most major Canadian cities. Copeman’s conservative road map calls for a minimum of 12 centres across the country within five years. His aggressive business plan envisions up to 37.
The Alberta clinics will follow the same model as the original facility: enrolment will be capped at 4,000 patients who will be served by nine doctors and a range of health professionals, including nurses, kinesiologists, dietitians and psychologists. Patients will pay $3,500 for the first year and $2,300 in subsequent years. (The difference in fees is due to what Copeman calls “the get-to-know-you phase,” which involves screening for cancer and chronic diseases and the creation of a personalized health plan.)
“I suspect we’ll do a booming business in Calgary,” says Copeman, noting that his Vancouver clinic already counts some Albertans among its clientele. The Calgary clinic will follow the Vancouver model but will offer expanded services in mental health and a specialized fitness centre for cardiac rehabilitation that Copeman calls “Canada’s first medically managed fitness facility.” A big part of the private business will be devising and supervising executive health programs, an area that Copeman says is both well-established and growing. “This is a very big opportunity. We plan to be a big player.”
Physicians at the centre will receive an annual salary of $225,000, and will work in what Copeman calls a “mixed model.” That means the centre will offer both insured services (visits to the doctor) and uninsured services (visits to the nutritionist). Doctors will bill Alberta Health and Wellness for the medically insured services. According to Copeman, the fee generally works out to another $50,000 annually for each physician.
The result is that doctors with a nice annual salary (in 2003-04 Alberta Health and Wellness reported that the average payment to family physicians was $193,346, a sum from which they must also pay salaries and overhead) no longer need to see a lot of patients to generate income.
According to Copeman, doctors at his facility see about 10 patients a day as opposed to the 50 or 60 a busy Calgary doctor might see. “The biggest value proposition we offer is time,” Copeman says. “That’s what people don’t get with doctors.”
Nor do people get pampered at doctors’ offices, which tend to be utilitarian, stocked with piles of dog-eared magazines. In contrast, the brochure for the Copeman clinic depicts a waiting area featuring polished hardwood floors, freshly cut flowers, sleek furniture and a modernist wood-and-stone reception desk.
By charging only for uninsured services, the Copeman Healthcare Centre does not violate any laws. “Not a nickel of public funds come to us,” Copeman says. Still, he knows that his arrival in Alberta will provoke opponents. “We provide way better care, but all some people see is the fee,” he says. “The fact that we are compliant with all legislation is academic to some people.”
Copeman is no stranger to public fights and he may well subscribe to the old maxim that there is no such thing as bad publicity. Certainly he is no slouch at stirring the waters. “Standing in the way of people getting better care is shortsighted and I think morally wrong on some level,” he says. “We don’t stand in the way of people who want to buy alcohol, pornography or a flat-screen TV.”
One still developing fight that both sides in the private health care debate are watching centres on Bill Murray, a Calgary chartered accountant who has filed a lawsuit in the Court of Queen’s Bench. Murray alleges that the Alberta government denied him access to health care based on his age, and that his Charter rights to “life, liberty, and security of the person” were violated.
Unlike Copeman and the HRC’s Simpson, who both argue that their efforts support public health care, Murray is not interested in preserving the current system. “My view is that the government shouldn’t be delivering health services,” he says, “because they couldn’t even deliver the mail.”
On first meeting, Murray, a solidly built, vigorous 59-year-old, it is hard to believe that he has two artificial hips and, as a consequence, extensive, first-hand knowledge of the health-care system. Murray’s first surgery – a “Birmingham resurfacing” performed on his left hip – was done at the HRC in October 2004. The procedure was fairly straightforward (it was done on a Tuesday and Murray was home by Friday) but negotiating the system was somewhat more involved. Murray waited 10 months to see an orthopedic surgeon after his family doctor gave him a referral. The surgeon said Murray was a candidate for the Birmingham, but that the province, citing changes in bone density that happen with age, was not funding the procedure for those over 55.
In a Birmingham procedure, the head of the femur is scraped clean and capped, or resurfaced, with a piece of metal, whereas in a total hip replacement that portion of bone is cut off. For a resurfacing to be successful, then, the patient must have sufficient bone density, a factor closely related to age. “Bone density changes in the 50s, especially in women,” says Tracy Wasylak, vice-president of the southwest portfolio for the Calgary Health Region. The region is currently in the midst of a three-year study to determine whether it will make the Birmingham a publicly funded procedure. It is allowing 125 of the operations this year, all on patients younger than 55.
Back in 2004, the HRC determined that because Murray, who was then 57, was not allowed to have the surgery in the public system, it was an uninsured service and, therefore, one he could pay to have done. He was asked if he was prepared to pay $22,500 and his answer was immediate: “I said, ‘Where do I send my cheque?’”
Murray was scheduled to have the same procedure on his right hip the following spring. A week before his surgery, the HRC informed Murray that it had received a letter from Alberta Health and Wellness stating that it was not allowed to perform the surgery on anyone over 55, regardless of whether the patient or Alberta Health paid for the procedure. “Needless to say, I was kind of pissed off,” Murray says.
Murray began exploring his options, largely by scouring the Internet for information and advice. He found a website known as Surface Hippy that offers T-shirts with drawings of new hips and the catchy slogan, “Don’t Lose Your Head! Resurface Instead.” More importantly for Murray, the site serves as an support group, with people sharing experiences and answering questions.
He briefly considered travelling to Birmingham, England (where the procedure was developed in the mid-1990s), or Belgium, but decided to have his second surgery in Montreal in October 2005. Murray and his lawyers are seeking to extend the Supreme Court’s 2005 Chaoulli decision to Alberta. In that case, the court ruled against Quebec’s ban on private health insurance and allowed for private services. The Supreme Court did not say that its decision was applicable in the rest of the country, however.
Murray’s lawsuit was filed last August and is moving slowly through the courts. If the court sides with him, it would have dramatic implications for health care in the province. Bernie Simpson chooses his words carefully when he assesses the potential impact of such a decision on the HRC: “It would not hurt us.”
Murray’s experiences point out a somewhat surprising fact about private health care in the province: It is not as widespread here as it is in other provinces. “We are nowhere near B.C., Ontario or Quebec,” Murray says, “but we’re the ones the feds shoot the guns at because we’re easier to shoot at.”
That “shooting” was often in response to statements made by former premier Ralph Klein, rather than to any actual changes he made to the system. Prior to the Third Way, Klein’s most recent attempt to reform the health system was Bill 11, a.k.a. the Health Care Protection Act, which became law in 2000. By the time it was proclaimed, however, the bill had, in the face of public protests, been significantly amended and included a promise not to violate the Canada Health Act. Among the reforms introduced by Bill 11 was one that allowed private clinics to perform some hip, shoulder and back surgeries requiring overnight stays.
This provision had a dramatic impact on the HRC, although Simpson says it was a long time coming. When the clinic first opened in 1996, it offered a range of uninsured services. “We were doing podiatry and cosmetics,” he says. “We needed business. ”
The Calgary Health Region signed its first contract with the HRC in 2004. According to Tracy Wasylak, the contract will see the facility perform 1,000 procedures on behalf of the health region this year. Under the terms of the Health Care Protection Act, the contract is reviewed by Alberta Health and Wellness and must show a “net public benefit.” In this case, Wasylak says, that benefit is simply that “without those procedures our current waits and delays would be extended in the system. We’re using them because our ORs [operating rooms] are full.” The health region pays a 10% premium to the HRC, which Wasylak says “covers their margin and the costs of meeting standards set by the College of Physicians and Surgeons of Alberta.”
Besides the procedures contracted by the Calgary Health Region, the provincial government permits the HRC to perform 505 “uninsured inpatient orthopedic procedures” a year. These cases involve Workers’ Compensation Board claims, employees of the federal government, members of the military or RCMP and prisoners in the federal system.
Although Bill 11 allowed the HRC to change its business model to focus solely on orthopedics, Simpson still considers it to be “draconian.” Among other provisions, the act prohibits Canadian citizens from buying services in Alberta. “I send people all the time – every day – to Vancouver for their care, principally to the Cambie Surgery Centre,” he says. “An Albertan can go to B.C. and buy their care but someone from B.C. can’t come to Alberta to buy their care.”
This is a situation that’s familiar to Calgary-based Surgical Centres Inc. SCI was founded in 1988 by three anesthesiologists and now offers insured and uninsured day surgeries at two offices in Calgary as well as clinics in Victoria, Nanaimo and New Westminster. Dr. G. Mohamed Nanji, a founder and CEO of the company, says Bill 11 has served to limit his options in Alberta. “If you need to have your knee scoped, for example, you can’t pay us to have it done,” he says. “You could fly to any of our facilities in B.C., and we could organize for you to pay and have your surgery done at a time that is convenient. And Alberta Health will pay the professional fees, for the anesthetist and the surgeon, and you pay the facility fee.” Nanji adds that while his company sees growth opportunities, they are largely in B.C.
The Health Resource Centre is also content to take things slowly. Simpson says that with a population that is both growing and aging, the challenges for the province’s health system will only increase. “There is tremendous demand on health care in Alberta, still,” he says. “There is lots of growth opportunity here, and we will expand our services when the time is right.”
The frustrating part of that assessment for the Health Resource Centre and its parent company, Calgary-based Networc Health Inc., is that it does not control that timing. Last August, when its agreement with Alberta Health and Wellness was up for renewal, the HRC applied to increase the number of procedures it could perform on out-of-country residents from nine a year to 300. That request was rejected. A spokesman for the ministry said via e-mail, “Given the length of the Alberta wait lists for insured procedures at the time of the request, it seemed reasonable that if HRC had excess capacity to perform surgical procedures, that capacity should be contracted by Alberta RHAs [regional health authorities]… to perform insured procedures for Albertans, thereby reducing wait lists.”
That caution, motivated as it is by political concerns, has some working in private health taking a wait-and-see approach. “You don’t know what is going to happen in the next three or six months,” says Nanji. “If you asked anyone today if they would set up another facility the answer is a big no.”
