Privatization of Canadian healthcare is touted as innovation—it isn’t.

Debbie Moehnke is a name I’m unlikely to forget anytime soon. I first read about her healthcare story a few years ago. At the time, Ms. Moehnke was 59 years old. While waiting to see a doctor in a Washington medical clinic, she suffered a medical emergency. She was rushed to a local hospital where she was stabilized. She was later transferred to a Portland, Oregon hospital for urgent cardiac care. Her treatment consisted of bypass surgery, a heart valve replacement, and a second valve repair. Postoperatively, she developed a serious infection requiring IV antibiotics. She required a month’s stay in hospital including time in an ICU.

After she was discharged, the Moehnke’s were issued medical bills that totalled a jaw-dropping $454,000. Since they had health insurance, the bill was issued to the family’s insurer, who only covered about half the cost, leaving Ms. Moehnke with an outstanding balance of $226,591.35. So what went wrong? If your healthcare system is dominated by private insurers the answer is nothing. Such ''balance bills'' occur when the patient’s insurer and either the hospital or physician disagree on the cost of treatment. When this happens, insurers pay the patient what they deem to be fair. Providers then bill the patient for what they feel is still owing. This is much more common when the patient’s hospital or physician are not within the insurer’s network. Ms. Moehnke later found out that she could have been transferred to an in-network facility far sooner, saving her tens of thousands of dollars. In the Moehnke’s case, no one ever mentioned in or out-of-network costs until after the bills started rolling in.

The U.S. healthcare system is one of the most costly in the world and it has a long list of very serious issues. Despite this, some Canadian policymakers seem intent on pulling Canada in the same direction. Pundits promoting private-public, hybrid or parallel systems will tell you that this type of arrangement has little to do with U.S. style healthcare. They assert that the move towards public-private partnerships will take the load off the public system, reduce wait times, and improve access. Some have even gone as far as to call these initiatives "innovation." But does the move toward more private clinics really help the public system? This claim is unsupported by evidence.

According to health policy researcher Andrew Longhurst, data from Alberta demonstrates that increased privatization of surgeries has not reduced public hospital wait times, that it has actually diverted scarce health human resources from the public system, and has led to a 6% decline in surgical volumes across the province.

In 2019, Alberta introduced the Alberta Surgical Initiative (ASI) in an attempt to move surgeries from public hospitals to for-profit facilities. A 2023 Parkland Institute report indicates that since the ASI’s implementation, wait times for hip replacements have actually increased. In addition, patients meeting the national benchmark for wait times fell from 65% to 38% between 2019–2022. The same holds true for knee replacements, where the share of patients meeting the benchmark fell from 62% to just 27%.

In 1997, Australia moved to a hybrid system. This allowed private hospitals to flourish and more surgeries to be done in private settings. A 2019 research paper by Dr. Bob Bell and Stefan Superina illustrates the negative effects the move had on public hospital bed utilization and surgical wait times in the public system. Private hospitals in Australia are now typically reserved for elective, scheduled surgeries, as well as childbirth (more stable, lower-risk, and therefore profitable cases), with private beds now accounting for a third of total beds in the country. Despite the clear degradation to Australia’s public system since the introduction of a hybrid model, Canadian proponents of two-tier continue to assert that following their example will reduce wait times for public surgeries and free up public hospital beds. These claims are akin to climate-denial in their absurdity, given the mountain of evidence contradicting them.

In Australia, there is now a worrying trend of older, private-pay patients using their health insurance to access public beds. These patients presumably have more complex issues requiring admission to public hospitals where there are ERs and ICUs. The proportion of private patients taking up public hospital beds has doubled in the last thirteen years leading to them occupying 40% of the beds in some public hospitals. This translates into significantly increased wait times for public surgeries. Average public wait times for cataract surgery, coronary bypass, hip, and knee replacements are now longer in Australia than in Canada.

In addition to adversely affecting public wait times and access, let's look at how the move to for-profit clinics affects government health system costs. Recently, journalists set out to find whether the taxpayers of Ontario were paying more, less, or the same for identical surgeries performed in public hospitals that are now also being contracted out to a private surgical clinic. The data showed that surgeries done in a private clinic are costing taxpayers up to 3.5 times more than identical procedures performed in public hospitals. Payments to the private clinic for knee arthroscopies were $4,037 per surgery, while the cost of this procedure in public hospitals ranges from $1,273–$1,692.

The rhetoric around private diagnostic clinics reducing public wait times is also not supported by evidence. In 2016, Saskatchewan gave the green light to for-profit MRI clinics to operate in the province. The move was ostensibly to help reduce MRI wait times in the public system. The private clinics entered into a one-for-one agreement with the province. For every MRI done in a private clinic, the clinics agreed to do an MRI from the public list. Nine months later, Saskatchewan’s Auditor General released a report saying the arrangement was not working as intended. In April of 2015 there were 5,005 people on the public waitlist for an MRI. Four years later, the public waitlist had doubled to 10,018.

In terms of the safety of for-profit clinics, proponents are quick to point out that private clinics will be accredited and held to the same standards as Canada’s public hospitals. Many of them deal mainly with lower-risk patients, operate on a 9–5 basis, and do not have emergency departments or intensive care units. Data on safety in these settings remains sparse.

In a 2022 report in The Lancet, researchers sought to evaluate the impact of outsourced spending to private providers in the UK. They concluded that, “Private sector outsourcing corresponded with significantly increased rates of treatable mortality, potentially as a result of a decline in the quality of health-care services.”

Private clinics are structurally required to generate profit, and through their incentives, are likely to try and maximize it. Costs related to operation and overhead continue to escalate annually, which means the amount of tax dollars required to keep sending public patients to private settings will escalate in-kind. Across the country there is a critical shortage of doctors, nurses, and allied health professionals. The proliferation of private clinics, with their preferred hours of operation and lower acuity patients, will continue to draw vital health human resources out of the public system. Reducing staffing levels within public facilities further stretches wait times, creates more backlogs, and leads to service interruptions like rural ER closures. It isn’t just nurses and surgeons that are being pulled from the public system. Anesthesiologists, medical clerical staff, physiotherapists, and other scarce personnel are all being aggressively lured to work at private clinics.

When doctors work within public hospitals they agree to other duties as well. Surgeons and anesthesiologists are often required to cover call for emergencies, and mentor younger doctors. The same holds true for nurses who do overtime or share their expertise between units. Pulling professionals from public hospitals is more complex than simply ‘losing a staff member.’ Currently, most private surgery clinics continue to cherry-pick low acuity patients. Their approach leaves older patients with more complex needs to be managed within the public system, in turn creating more stress in the public system as staffing levels continue to dwindle. It’s a vicious cycle.

Being young and healthy doesn’t always preclude one from suffering a complication. Private clinic patients suffering complications or emergencies, particularly after hours, must be seen at public ERs. They may need urgent surgery in a public hospital, to be admitted to a public bed, or possibly require admission to an ICU. Tethering Canadians to investor-owned, for-profit facilities will not add value or robustness to patient care capacity in the long run.

Parallel privatization is not innovation. It is spin. If the existence of private, for-profit clinics within the public system does not alleviate public wait times, isn’t cost-effective, is possibly less safe and is known to hollow out the public system, why then, is it touted as innovation?

Privatization is not innovation. It is regression. Prior to the inception of Medicare in Canada, our healthcare system was basically a privatized model. Services were paid out-of-pocket or through private insurance plans. In 1929, approximately 60% of Canadians were not earning enough money to afford adequate healthcare. Privatization is what Canadians transitioned away from many decades ago.

Privatization produces and amplifies health disparities. For decades, Americans have sought ways to escape from their market-driven healthcare system. The U.S. system, with its lacklustre performance, dismal outcomes, and life-ruining costs is a privatization nightmare.

Having a universal, single-payer healthcare system does not mean Canada is averse to innovation. Canadians invented the Ebola vaccine, pacemakers, insulin, and the first child-resistant medication containers. Canadians discovered the first cystic fibrosis genes, the first clonal method to identify stem cells, and in 1984 Canadian scientist Dr. Tak Wah Mak discovered T-cell receptors, a major step in cancer immunology. Many of these groundbreaking innovations were funded by public dollars and occurred in public facilities. All of these breakthroughs went on to change the lives of patients around the world.

The erosion of Canadian healthcare has followed the prototypical privatization playbook. The first step in privatizing any public entity is to defund it and allow it to be mismanaged, throwing it into chaos. As the system struggles, the public is persistently bombarded with horror stories that repeatedly demonstrate how the system is no longer able to function. Public outcry ensues. Privatization is then presented as the remedy. If the system is allowed to fall hard and long enough, public support for privatization will increase. Opening the door to more privatization will further erode Medicare. As the system disintegrates, this clears a path for various monied interests to step in and pick up the pieces. Privatization accelerates.

Debbie Moehnke and her husband Ken have been married for over 32 years. They live in a 47-year-old mobile home in rural southwestern Washington. Shortly after his wife’s brush with death, Ken Moehnke developed his own health issues and is unable to work. The couple survive on a social security income of $1,884 a month. 

When asked about her “balance bill” of $226,591.35, Ms. Moehnke said, “I wish I would have known. I would have said ‘no’ to life support.”

As Canadians it is our responsibility to ensure that Debbie Moehnke’s story doesn’t become the story of our children and grandchildren.

Catherine MacNeil is a Registered Nurse and author of Dying to Be Seen: The race to save Medicare in Canada