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  • 标题:Health reform and privatization in Alberta.
  • 作者:Church, John ; Smith, Neale
  • 期刊名称:Canadian Public Administration
  • 印刷版ISSN:0008-4840
  • 出版年度:2006
  • 期号:December
  • 语种:English
  • 出版社:Institute of Public Administration of Canada
  • 摘要:Over a period of seven years, from 1993 to 2000, the Government of Alberta responded to the issue of privatization of health care service delivery through a variety of policy instruments, culminating in 2000 with the passage of legislation to create a regulatory framework. The choice of relatively narrowly construed legislation allowed the government to deal with several unresolved policy issues relating to privatization through a single policy instrument, while at the same time addressing overarching considerations about increased accountability in the health care system. In addition, the policy choice addressed long-held concerns by both the federal government and local public interest groups that some form of legislation was required to regulate private clinics.
  • 关键词:Bills, Legislative;Health care reform;Legislative bills;Privatization;Privatization (Business)

Health reform and privatization in Alberta.


Church, John ; Smith, Neale


Introduction

Over a period of seven years, from 1993 to 2000, the Government of Alberta responded to the issue of privatization of health care service delivery through a variety of policy instruments, culminating in 2000 with the passage of legislation to create a regulatory framework. The choice of relatively narrowly construed legislation allowed the government to deal with several unresolved policy issues relating to privatization through a single policy instrument, while at the same time addressing overarching considerations about increased accountability in the health care system. In addition, the policy choice addressed long-held concerns by both the federal government and local public interest groups that some form of legislation was required to regulate private clinics.

This case study is one of six developed in Alberta as part of a cross-provincial examination of the determinants of health reform in Canada. Collectively, these cases cover four policy categories: setting out governance and accountability arrangements, establishing financing arrangements, making program delivery arrangements, and defining program content. (1) Privatization is an example of the third category, where the policy issue relates to changes in how health care is delivered.

Pertinent documents and public records (e.g., government reports, the media, Hansard) were reviewed to establish the background for the case study. These sources were complemented by thirty-two semi-structured interviews with key informants. The data were analysed using a coding framework developed from the literature that focused on key institutional, idea, and interest group concepts, as well as important external events that may have impacted on or shaped the policy-making process. After providing an historical overview of events, we will examine the case in greater detail within the context of the conceptual framework. (2)

Historical overview

Over the past decade, Alberta has pursued a combination of health reforms, including the creation of a legislative framework to regulate contractual arrangements between private providers and regional health authorities. The decision to introduce legislation was the culmination of several years of heated public debate, intergovernmental wrangling and a gradual movement towards more aggressive policy instruments.

Historically, Alberta has favoured a residual approach to social policy, including a significant role for the private sector in the delivery of services. (3) The province has allowed and even encouraged a steady growth since the 1980s in the number of private clinics providing some form of health service. (4) In efforts to secure their economic success, these clinics have frequently tested the boundaries of the Canada Health Act (CHA), the federal legislation meant to prevent providers from directly charging patients for publicly funded services.

Interpretation of the CHA was a constant underlying question for Alberta policy-makers throughout the 1990s. It became a political football that was tossed back and forth by federal and Alberta politicians when political flashpoints arose from impending or actual policy decisions taken by the Government of Alberta.

During the early 1990s, health care privatization gained public visibility when a private members bill, the Gimbel Foundation Act (Pr-06), was introduced in the Alberta legislature on 9 March 1994. The purpose of this legislation was to allow an eye clinic to merge with an existing charitable organization (the Gimbel Eye Foundation). Clinic profits would then be invested, tax free, into the charity to support ongoing education and research. The eye clinic, which had been around since the early 1980s, both billed Alberta Health and charged patients an additional "facility fee" while offering "enhanced services packages." The legislative proposal was swiftly met with opposition from consumers' and seniors' advocates, academics, and some professional groups, such as nurses. They argued that it was a step toward privatization and the creation of a two-tier health system and might allow such clinics potentially to charge patients directly for insured services. (5) With the emergence of the Gimbel Foundation Act in 1993, the issue changed from being strictly about user fees to being about the nature of ownership.

While the Gimbel Foundation Act was voluntarily withdrawn, federal concern about proliferation of private clinics and the use of facility fees (direct charges to patients meant to meet overhead and other costs) for insured services became evident following the election of the new Liberal government in October 1993. In the fall of 1994, a consensus on regulating private clinics was reached through federal/provincial/territorial meetings, although Alberta abstained from supporting this initiative, pending its own review of private clinics. From this near consensus, the federal position, as expressed in a letter from the federal minister of health, was that private clinics as a means of health service delivery were not illegal according to the CHA, but that they should be regulated within a framework that ensured that the principles of the CHA were preserved. However, facility fees were treated as a violation of the act, requiring the provinces to comply by 15 October of that year, or face financial penalties. (6)

In the midst of this federal-provincial dust-up, the newly elected Klein government announced 20 per cent across the board expenditure cuts, simultaneous with the creation of Regional Health Authorities (RHAS). The cutbacks also resulted in decreased staffing levels, decreased physical plant (especially in Calgary) and eventually increased wait rimes for major surgical and diagnostic procedures. Ultimately, this shortage of resources made contracting out for the delivery of some surgical and diagnostic procedures more desirable for some regions. The Calgary Health Region emerged as a focal point for efforts to privatize.

Alberta responded to the federal ultimatum on 11 October 1995 with a request for further consultations. The federal government refused, and penalties were subsequently imposed. Alberta ultimately suffered $3.6 million in lost transfers. (7)

At the time, the Alberta minister of health requested that policy options be developed to respond to the federal imposition of financial penalties. The idea of incorporating contracts into RHA budgets occurred as a result of discussions with the federal government about facility fees and diagnostic services. Contracting was seen as a viable option because it did not contravene the Canada Health Act (and thus ensured continued access), while not unnecessarily impeding on the ability of private clinics to continue to operate.

While the federal-provincial impasse continued, the RHAS were beginning to explore the possibility of contracting out for the delivery of certain services. Once this began to happen, Alberta Health realized that they needed to develop some sort of policy framework in order to address concerns of the federal government, RHAS, private operators, and the public. Through several months of consultation with major stakeholders, a 12-principles policy statement was crafted that had something for everyone, particularly the RHAS (see Appendix).

Once the framework was drafted and made public, Health Canada identified six of these policy principles (nos. 1, 3, 4, 5, 9, and 11) that were potentially of concern without further clarification. The federal government singled out principle 11 as a particular sticking point, which was also of concern to local interest groups.

Alberta's response was that an medically necessary services would be insured. From the province's perspective, principle 11 was intended to deal with the existing reality of physicians who perform some services that are insured through the fee schedule and some that are not. (8)

With the 12 principles in place, Alberta did not immediately consider additional legislation. However, the federal government would not be satisfied until it saw some form of legislation that would entrench the compromises that had been agreed to and expressed in the principles. In January 1996 Alberta Health notified RHAS that the province intended to have arrangements in place to end facility fees (9) beginning 1 July, although charges for non-insured services and voluntary service enhancements would continue to be permitted. As a transitional measure, the province agreed to pay all facility fees itself, at existing rates, for three months. After 1 October any such fees had to be negotiated by contract between private clinics and RHAS. (10)

While the two levels of governments continued to focus on facility fees, the immediate impacts of expenditure cuts on Alberta's health care system had made access to health care services an overarching concern. Since the advent of regular annual public surveys in 1995, public ratings on ease of access have shown a consistent decline. In late 1996, with an election looming, public pressure against maintaining expenditure reductions mounting, and revenues from oil and gas rebounding significantly, the government announced a major "reinvestment" in health care. Yet the perception of crisis persisted.

In particular, the sense of crisis was exacerbated in Calgary for a number of reasons. By mid-1997, three of the eight hospitals in Calgary had been closed. One, the Holy Cross, was sold to private investors in 1998; another, the Bow Valley Centre, was demolished. Overall reductions in staffing and exponential population growth also contributed to the lingering sense of crisis. In the midst of this, a number of private providers began to emerge. Of these, the Health Resources Group (HRG) would become a political lightning rod for the debate around health care privatization.

After its incorporation in 1996 and the rental of space in the former Grace Hospital (the third hospital to be closed), HRG began lobbying the College of Physicians and Surgeons to certify it to provide surgery involving overnight stays. While initially the group was interested in third-party payer markets (e.g., WCB, RCMP, Defence, and Aboriginal Affairs), it was also interested in the potential market provided by resource-strapped health regions. The HRG was soon lobbying the Calgary RHA to contract out for the provision of orthopedic surgery. (11) Just as the "eye business" in Calgary had boomed since contracting with the health region had begun, so orthopods and other surgeons saw the possibilities of an emerging private market. The emergence of HRG once again raised the spectre of private health care in the minds of public interest groups.

Two pieces of legislation, bills 21 and 37, emerged from the conclusion that a policy statement was insufficient to resolve lingering concerns among the various parties. Bill 21, the Alberta Health Care Insurance Amendment Act, was intended to address the issue of physicians or groups of physicians choosing to opt out of medicare (principle 11). While opting out was permitted under the CHA, the act did not specify guidelines under which this might occur. In addition to outlining this process, the bill prohibited the charging of user fees/facility fees by opted-in physicians for publicly insured medical services. (12) Again pressure from the federal government and a coalition of consumer and labour groups was a major impetus for this decision. Bill 21 effectively addressed the facility fee issue, but the federal government, RHAS, public interest groups, and the College of Physicians and Surgeons continued to be concerned about how public safety would be maintained, since the ministry's guidelines on contracting out were not seen as being strong enough.

Bill 37, the Health Statutes Amendment Act, was intended to require private contractors to obtain the approval of the minister before they could offer inpatient health care services. More specifically, the bill was intended to formalize the existing policy regarding "non-surgical hospital facilities" contracting with RHAS; allow private insurance coverage for the cost of standard ward coverage in auxiliary hospitals as was the case for nursing home care; and enable the minister to regulate private treatment facilities. (13)

At the heart of the legislation was the establishment of a clear definition of what constituted a hospital as opposed to a non-hospital surgical facility. However, faced with what for Alberta was an almost unprecedented level of organized resistance and continued public discontent with health reforms generally, the government withdrew the legislation.

In the wake of this political failure, a blue ribbon panel was struck in December 1998 to determine whether Bill 37 would safeguard the public health system and meet the requirements of the CHA. The panel was also to determine if the absence of the bill would prevent the minister from regulating private health facilities. In its final report, the panel determined that the legislation did not offend the principles of the CHA or jeopardize the public health system. Failure to pass such legislation would result in a legislative gap that would allow a treatment facility to be accredited through the College of Physicians and Surgeons, while offering unregulated surgical services without ministerial approval.

The panel recommended that the distinction between a hospital and non-hospital facility should be based on being able to discharge safely a patient within twelve hours of surgery. This was consistent with the new College of Physicians and Surgeons by-law (section 43(2)(k). The panel also recommended that procedures, whether provided in an "approved hospital or non-surgical facility" be provided under contract with an RHA, subject to approval by the minister. Such approval would require applicants to meet four criteria: serve the current and future patient needs in the geographic area to be served; have no major negative impact on the publicly funded health system in Alberta; be in the public interest; and satisfy any other factors the minister and the Department of Health considered relevant. (14)

As a result of the panel's recommendation on the 12-hour stay rule, Alberta Health and Wellness recommended that the term "treatment facility," which was a new category proposed by the panel, was in fact "a private hospital offering uninsured services. (15) Based on this recommendation, internal terminology appeared to shift. Both the terms "private hospital" and "legislative gap" emerged in internal discussions:

If private hospitals are prohibited, public focus will likely shift to scrutiny of the private clinic policy as embedded in Bill 37. There are several issues related to the policy. The overriding issue is a legislative gap that leaves the Minister with no mandated course of action regarding insured diagnostic, medical or rehabilitative services when the services are provided outside a hospital in a private clinic. (16)

Three possible policy options were identified: introducing legislation prohibiting private hospitals; introducing an interim prohibition on private hospitals until a thorough public consultation could be undertaken; or introducing legislation to allow private hospitals as per the draft policy statement and gain public support. (17)

On 16 November 1999 Alberta released a policy statement on the delivery of surgical services that proclaimed Alberta's commitment to the principles of the CHA. Regional health authorities were identified as being accountable to the minister of health for assessing the needs of the population, allocating resources, and ensuring reasonable access to quality services. As part of this responsibility, regions were responsible for the delivery of all insured surgical services. Accordingly, they could contract with a private provider for the provision of surgical services, subject to ministerial approval. Private coin tractors could not charge any fee (beyond the established fee schedule) for insured services or allow queue jumping. The statement declared that "there will be no private hospitals; there will be no parallel health system." Health regions would make their recommendations based on the criteria suggested by the blue ribbon panel. This policy statement became the basis for the development of Bill 11, the Health Care Protection Act.

The legislation was introduced in March of 2000. It met with fierce opposition from the Friends of Medicare, a public interest group. Armed with a response from the blue ribbon panel and compelled by a certain political urgency to resolve the issue, the government chose to move forward with new legislation. Amendments were brought forward in April and by September the legislation had been passed and regulations drafted. As with its predecessor, Bill 37, the Health Care Protection Act required all surgical facilities to be accredited by the College of Physicians and Surgeons and approved by the minister of health. Insured surgical services could only be provided through contracts with health regions in which facility fees paid by the health regions to private contractors would be tied to performance expectations and measures.

When considering an application, the minister was required to take into account the CHA and the public interest and any possible adverse impacts on the publicly funded or administered system. The rationale for approving a contract was to be made public. The legislation also contained provisions to protect patients from being forced to purchase "enhanced" services. Finally, the bill prohibited queue-jumping for insured surgeries.

Analysis

The role of technology

Undoubtedly, the emergence of an increasing number of private clinics in Alberta (and elsewhere) was a result of advances in medical technology that facilitated the delivery of an increasing range of health services outside of hospital settings. By the late 1980s Alberta Health was aware of the issue. Concern was expressed through the Watanabe Report and a subsequent discussion paper on ambulatory care. (18) While the Watanabe Report approached the issue as one of utilization management, the later discussion paper identified issues that would emerge around the Gimbel Foundation Act:

Innovations in medical technology are changing the way medical services are delivered and expanding the range of locations in which they can be provided. Hospital stays are no longer required for many procedures that can now be performed on an ambulatory basis ... One result has been a steady growth in the volume of outpatient services delivered by hospitals. Another has been the development of free-standing clinics and surgical centres. The new technology presents an opportunity to provide some services safely and cost-effectively outside the hospital or inside the hospital on an out-patient basis ... The risks include concerns about the quality of care and about the overall costs to the health system ... Some of these charge facility fees to patients for overhead costs which are not covered by the Alberta Health Care Insurance Plan ... Fears exist about the possibility that facility fees might impair access to some services if they should move entirely from the hospital setting." (19)

The role of ideas

The initial resistance by the Government of Alberta to regulate private clinics was underpinned by a long-held "residual" view of the state. In this view, personal responsibility and self-reliance were desirable human attributes. Individuals were first and foremost responsible for their own well-being, and accountable for their actions. Where individuals were not able to take care of themselves, responsibility fell to other family members. Failing this, the local community became responsible for the well-being of the individual. Only as a last resort would the state provide relief and then only on a short-term basis. The private market was seen as the preferred means of addressing social policy issues.

The coalition of consumer and labour interests challenging the government position favoured a limited or restricted role for the private sector in health care and a commitment to the principles of the Canada Health Act. They wanted an open debate and argued that policy should be based on sound evidence. Fear was expressed that private clinics would be less accountable for performance than the public sector. (20)

The role of federal-provincial relations

Historically, relations between Alberta and the federal government have often been conflict-based. From the Depression experience of eastern bankers foreclosing on western farmers to the raiding of Alberta coffers during the National Energy Program, Alberta political elites have exploited a mythology of political persecution as a means of galvanizing local political support on intergovernmental issues. The current political elite in Alberta have been particularly predisposed to challenge publicly the federal Liberals on any policy impinging upon provincial jurisdiction. In the case of health care privatization, while other provincial jurisdictions were pursuing policies that might have violated the CHA, Alberta seemed to attract federal attention, due in part to the province's overt challenges to Ottawa.

At the federal level, the Liberal Party has had publicly funded health care as a major plank in its political platform since 1919. In more recent times, it introduced the Canada Health Act as a means of garnering political support. (21) The elevation of the CHA to iconic status has allowed all governing federal parties to portray themselves as the defenders of publicly funded health care.

The desirability to single out Alberta was further complicated by a perceived lack of consistency in federal interpretation of the CHA. As early as 1994, the exclusion of diagnostics (MRIS) was seen by Alberta as a major error by the federal government, in terms of handling the privatization issue. However, from the federal perspective at the time, there were relatively few MRI clinics in operation and they were not a priority concern. Facility fees and somewhat later the HRG initiative were of greater concern in relationship to the provisions of the CHA.

By the time Bill 11 was being debated, the federal government position was perceived to be increasingly unclear. From Alberta's perspective, Ottawa seemed to vacillate over what limits it wanted to see on private clinics or cataract surgery. For Alberta government officials and proponents of private clinics, this lack of consistency served to delay or block interesting reforms. Within a broader intergovernmental context, the provinces were pushing the federal government to establish some sort of mechanism to remove the arbitrary and unilateral nature of interpreting the CHA. (22)

The role of interests

Politicians. Ai the federal level, the change from a Progressive Conservative to Liberal political regime in 1993 triggered a reinterpretation of the Canada Health Act. Where the Conservatives had been willing to tread lightly around enforcement of the CHA, the Liberals chose to take a stronger position on compliance with the act. The Gimbel Foundation Act and the subsequent focus it drew from local interest groups provided a public opportunity for the federal government to demonstrate its resolve.

At the provincial level, the relationship between bureaucrats and elected officials in Alberta had undergone a significant change. During the late 1980s and early 1990s, particularly during the tenure of Nancy Betkowski, the relationship of Health Department officials and the minister was largely positive. With the arrival of Ralph Klein as premier, a growing level of distrust by the political executive of the motives of bureaucrats generally, and health bureaucrats in particular, surfaced. In part, this fed into the general thinking at the time that bureaucrats and other "knowledge workers" had become too powerful and needed to be reined in by the politicians, who, after all, had been elected to make decisions on behalf of the public. (23) This sentiment was institutionalized in two ways: the use of MLA-led policy committees or outside consultants to provide advice (as opposed to ministry officials in a number of key policy areas, especially health reform; and centralization of the communications apparatus of government. (24) The depth of mistrust of Alberta Health officials became increasingly apparent throughout the 1990s, as the department constantly found itself in hot water with the Premier's Office over the policy advice it offered. The increasingly unfavourable environment was punctuated in 2000 with the dismissal of the entire level of senior management because of a failure to provide evidence in support of private health care during the Bill 11 debate.

The impetus from within government for privatization in health care seemed to come from a core of government MLAS, including the premier and a number of key cabinet ministers. (25) As for the broader government caucus, they were sceptical about Bill 11 because of what they were hearing from their constituents. Ultimately the caucus and the premier saw eye to eye on a larger issue--the need to save political face after previously backing down on Bill 37. The premier took a personal interest in the health file and was quietly supportive of initiatives such as HRG. He was frustrated by the status-quo thinking of his colleagues and their reluctance to think outside of the box. None of them had brought him a plan for health reform that he could sell. Nor was Klein averse to publicly contradicting his health ministers. One of the suggested reasons for revisions to Bill 11 was the confusion caused by contradictory statements coming from the Health Department and the premier.

Klein also used the privatization issue as a means of highlighting the tendency of the federal government to make unilateral decisions affecting the provinces/territories. To remedy this problem, the provinces/territories were pressuring the federal government to agree to an arbitration process for grievances related to the Canada Health Act. Klein's personal relationship with Prime Minister Jean Chrtien was important to developing consensus around the Social Union Framework and in relieving pressure on Alberta over the privatization issue. (26)

Civil Servants. The capacity of the Health Department was significantly reduced during the 1990s through expenditure reductions, external health system restructuring, rolling internal departmental restructuring, and constantly shifting departmental leadership. The department had been created in 1988 through the amalgamation of the former Hospitals and Medical Care Department with the Community and Occupational Health Department. Between the date of its creation and the onset of health reforms in the early 1990s the department was engaged internally in sorting out roles and responsibilities.

Subsequently, the launch of health reforms in 1993 had a major impact on its policy capacity. First, the devolution of responsibility for service delivery to health regions and the subsequent significant reduction or elimination of staffing in many program areas left the department without expertise about the day-to-day workings of the health system. (27) Between 1994 and 2004 a total of eight deputy ministers were rotated through the department. Several reorganizations also ensued, leaving the department with little policy capacity. Therefore, when combined with the general political mistrust, department officials increasingly found themselves left out the loop on the privatization issue. In the case of Bill 11, the decision was taken at a political level and caught the ministry by surprise. For their part, Health Canada officials faced a somewhat similar quandary to their provincial counterparts. Federal health ministers were given to making policy statements that contradicted the advice of department officials.

Having said this, communication between Alberta Health officials and Health Canada officials was continuous from the initial foray around facility fees to the passage of Bill 11. At each stage in which the Government of Alberta was contemplating policy action, Alberta Health officials were interacting with their federal counterparts in a cooperative fashion to ensure that contemplated action did not contravene the Canada Health Act.

Physicians. Physicians were involved in the health care privatization issue through various formal and informal channels. Although the Alberta Medical Association (AMA) was not particularly vocal on the issue because of internal divisions, the organizational continuity of the association and its formalized interaction with provincial bureaucrats ensured that organized medicine was consulted on major policy developments (for example, the 12-point policy statement). On Bill 11, the AMA voted to oppose the legislation unless it was amended. The doctors disputed the province's claims that the bill would ease wait list pressures, noting it did nothing to increase the supply of trained providers--a more pressing issue, in the profession s view. (28)

As the organization responsible for the regulation of organized medicine, the College of Physicians and Surgeons of Alberta played a key role during the Bill 11 debate. With a mix of public and provider representation, its board was divided on the issue of privatization. The idea of increasing the presence of private providers in the delivery of surgical services in principle did not appeal to the public members of the board. However, to the extent that private providers met the quality standards established by the college, the board supported the HRG proposal.

One of the early sticking points for the college was its perception that HRG by definition was a "hospital" and so beyond its jurisdiction. Determining what was a hospital was by legislation the prerogative of the minister of health. The response from Alberta Health was that HRG was a "non-hospital surgical facility." With increased public pressure and close scrutiny of the college, it was stuck with determining what constituted a reasonable stay in a non-hospital surgical facility. However, on the issue of how initiatives such as HRG should be defined and how these organizations should be regulated, the college deferred to the government.

Within the Calgary Health Region, a number of physicians with senior decision-making authority also had significant ties to private service-delivery interests. Dr. Steve Miller, chief of orthopedic surgery at Calgary Foothills Hospital, was a member of the HRG board of directors. Dr. Kabir Jivrag, who became chief medical officer for the region in 1999, was also one of the owners of Surgical Centres Inc., which had received a significant acute-care service contract with the health region only six weeks prior to his appointment. (29)

At the individual level, a number of entrepreneurial physicians with close political ties to the political executive continually lobbied the government to expand the role of private providers in health care. Prominent among these physicians were Howard Gimbel (eye), the HRG physician group (joints), the Huang brothers (throat and eye), and Dennis Modry (heart). With the exception of Modry, who was based out of Edmonton, an of the other physicians were Calgary-based, and had a direct business interest.

Through their company, Enterprise Universal Inc., the Huangs purchased the Holy Cross Hospital from the CHR at what appeared to be an unusually low price. "At the time Peter Huang was the head of ophthalmology for the health region and had been awarded a contract to do all Foothills Hospital's cataract surgeries." (30) Peter Huang was also a major contributor to Premier Klein's political campaigns.

Dennis Modry appeared to be tied into the policy inner circle as a source of ideas about the potential role of the private sector, and financial contributor to the provincial Progressive Conservative Party. As president of the Cardiovascular and Thoracic Surgeons of Alberta he came out on behalf of his colleagues in support of Bill 11, in opposition to the official AMA position. At the time, the medical specialists were attempting to derail attempts to redistribute fees among specialist groups that would have seen them have their fees cut while other specialists saw an increase.

Regional Health Authorities. Most regional health authorities were not enamoured with the notion of privatizing service delivery. The real push appears to have come from the provincial government political executive. Having said this, Calgary was more predisposed to pick up on the suggestion of the political executive for several reasons.

Historically, the political culture of Calgary has favoured a free-market, entrepreneurial ideology that closely aligns with the core ideology of the current provincial government. The city boasts a significant population of expatriate Americans, many of whom are senior executives with the oil and gas industry. In essence, within Alberta, Calgary is viewed as the centre of large corporate interests, whereas Edmonton is viewed as the centre of public sector activity.

Senior decision-makers within the Calgary Health Region were also ideologically-aligned and well connected. For example, Bud McCaig, a successful Calgary businessman and personal friend of the premier who was appointed as the first chair of the board for the Calgary Health Region, had previously benefited through significant financial support from the provincial government. (31) Jim Saunders, who was chief operating officer, was recruited in 1997 by HRG to become its chief executive officer. In the run-up to the introduction of Bill 11, McCaig was replaced by Jim Dinning, the former provincial treasurer, often seen as the mastermind behind the fiscal crisis message that underpinned the first wave of government reforms. Following closely behind Dinning was former deputy minister of health and deputy to cabinet, Jack Davis, as regional CEO. Rod Love, former executive assistant and long-time political confidant to the premier, was hired to coordinate regional communications. In the end, Calgary was publicly touted by government as an exemplar of how private contracting worked to provide cost-effective care.

Health Resources Group. This group was formed for a variety of reasons. First, its founders believed that certain health care services could be delivered through a cooperative partnership with the public system--private contracts within the publicly funded system. Related to this sentiment was a belief that the broad range of services covered under public health insurance was probably inappropriate. Dr. Steve Miller, a prominent Calgary orthopedic surgeon who ran an ambulatory rehabilitation program that served primarily Workman's Compensation Board (WCB) patients, was frustrated by the lack of operating time in Calgary. The radical reduction in capacity in Calgary because of expenditure cuts and regionalization made the idea even more feasible. Moving from delivering services in an ambulatory clinic to an inpatient facility seemed like a good way to address the issue.

HRG'S business plan identified four target markets or potential client groups: those seeking uninsured services, out of country patients, those with third party insurance (such as WCB), and patients seeking insured services under an agreement between HRG and a public payer. According to this document, "start-up priorities will concentrate on clients of third party insurers and those seeking uninsured health services. Marketing of services to out-of-country clients and the persual [sic] of contracts and services agreements with funding agencies such as Regional Health Authorities will be phased-in, in the future." (32) The closure of the Holy Cross and the Grace hospitals and the subsequent sale of those facilities to private investors added to the feasibility of pursuing contracts with RHAS.

The costs for these procedures would be higher than through the publicly funded system, but for organizations like WCB, the faster turnaround meant faster return to work and thus an overall cost savings. HRG had access to three operating theatres devoted to doing WCB procedures and elective day procedures such as face lifts, liposuction, and breast implants. While the above mix of procedures provided a break-even scenario, the greatest potential profit was in procedures requiring overnight stays. HRG had thirty-seven beds that could be filled at a profit. Strategically, surgeries listed by the College of Physicians and Surgeons as requiring a stay of less than two days were the target market.

When HRG opened in 1998, the initial response from the Calgary Health Region was lukewarm. To enter into a contract with a high-profile private provider would have been to admit that the public system had failed. Also, the region was still running large deficits because of the failure of provincial funding to keep pace with exploding population growth in Calgary. Although waiting lists were climbing, the province was not responding. Thus, the RRA did not have the financial resources to expand its capacity, either through public or private means.

While a process was in place through which the region could get approval from the College of Physicians and Surgeons to contract with HRG, at the time the region was not interested in sitting down with the group to look at the numbers. One of the sticking points was that Dr. Miller wanted to do full hip replacement surgery, which by its nature would have required on average a nine-day stay after surgery.

Public Interest Groups. A variety of public interest groups coalesced around the issue of health care privatization. Working both individually and collectively, these groups were successful in influencing the legislative outcome of the Bill 11 debate. During the early 1990s, the Consumers' Association of Canada became aware that clinics were charging patients for certain services. While the Alberta government framed the issue at the time (and arguably subsequently) as one of facilitating choice and access, the Consumers' Association saw the issue as one of impeding access through direct user charges. At the time the federal government seemed either unaware or unconcerned with the issue. Repeated efforts by the association to provide the federal and provincial health ministers with information were met by a lack of concern or silence. The federal government did not wake up to the issue until the association met with the federal health minister during a visit to Edmonton. Subsequently, the research on private clinics that the association undertook, which clearly documented the increased costs of contracting out for ophthalmology services, became a major source of information for opponents of increased health care privatization both within Alberta and across Canada. (33)

The Friends of Medicare (FOM), which had emerged in the mid-1980s during the debate over the CHA, became actively engaged in the privatization debate in the spring of 1996 when private initiatives began to spring up in local communities around the province, From this point forward, FOM became a rallying point for a variety of interests concerned about perceived government intentions to privatize health care. While the organization was primarily concerned about the impact of privatization on access and quality of services, a variety of labour unions expressed concerns about quality, the ability to advocate on issues of safety and job losses. A general concern among members of the coalition surfaced around the commercialization of health care within the context of the North American Free Trade Agreement, and neo-conservatism internationally.

The coalescence and overlap of concerns among major public interest groups and major labour organizations created a capacity to raise public awareness and attract the attention of the federal government to the issue. This capacity to mobilize quickly and effectively was repeatedly demonstrated and took provincial politicians by surprise. Support for the locally organized opposition to health care privatization also came from the national network of health policy experts. Several evidence-based critiques of health care privatization were released at strategic times during the debate. The Consumers' Association's own report on the proliferation of private clinics received national recognition during a abc interview with Dr. Michael Rachlis.

Conclusion

Despite the ideological preference for market solutions in social policy, the Alberta government was compelled to choose an interventionist policy instrument for several reasons.

Perhaps the main driver was changes to technology during the 1980s that allowed an increasing number of medical (surgical) procedures to be performed outside of traditional hospital setting. When coupled with government resistance to intervention in the market, a robust, unregulated, private health clinic market emerged in Alberta during the 1980s and early 1990s.

A change of leadership with the election of Ralph Klein as Conservative Party leader and premier accelerated the pace of change. In an effort to clearly distinguish the new Conservative regime from the previous unpopular government, Klein embarked on a radical program of fiscal austerity aimed at eliminating the provincial deficit and debt. Part of this program involved carving out a larger role for private providers in health care. The reduced capacity in the health system created by radical expenditure reductions and restructuring created an opportunity to put political ideology into practice. In this environment, local health service entrepreneurs found business opportunity and political receptivity.

Private medical entrepreneurs such as Gimbel and HRG acted as a lightning rod for all those opposed to health care privatization. Initial policy responses from Alberta were directly related to media attention focused on these entrepreneurial activities in Calgary. Conversely, the ideological alignment of private interests in Calgary with the views of key government MLAS and cabinet ministers likely constrained the speed with which the government responded to the issue. Thus, the policy responses, the 12-point policy statement, the rolling of facility fees into health region contracts, and the adoption of a regulatory framework represented a gradual progression in the selection of policy instruments from less to more coercive.

The pattern of policy instrument choice was driven largely by pressure from a broad coalition of interests in Alberta, which alerted the federal government to potential violation of the Canada Health Act. Ultimately, the effectiveness of this coalition was essential in forcing the government to pass legislation that was far more restrictive than originally anticipated.

As the chosen policy option, the Health Care Protection Act served a number of useful purposes for government. Being a single piece of legislation, as opposed to the amendment of three existing acts proposed through Bill 37, the legislation was easier to administer and to amend. Government was able to roll all existing, unresolved policy issues related to privatization into the single bill. The legislation also addressed the overarching concern about increased accountability in public expenditures by extending this accountability to some private providers outside of public hospital settings. Finally, the legislation responded to the long-held federal government and local interest groups concern that a legislative framework was required to regulate private clinics.

In this respect, Alberta's response was consistent with the response of most other provinces, although not as quick. When forced to choose a policy instrument that it didn't favour, the province construed this instrument in relatively narrow terms to affect only the most controversial, and most visible of private sector activity in health care.

Appendix: Public/Private Health Services: The Alberta Approach

1. Ensure reasonable access to a full range of appropriate, universal, insured services, without charge at the point of service.

2. Alberta retains the authority and responsibility to manage the publicly funded health care system in the province.

3. Recognize the demands from both the public and health professions for an approach to health services that is consistent with long term sustainability and quality.

4. Ensure a strong role for the private sector in health care, both within and outside the publicly funded system.

5.) The public and private sector should work together to provide patient choice, quality of service, and effective outcomes as the first priority.

6. Regional Health Authorities assess health needs in their regions and be funded to provide appropriate health services in accordance with the health needs assessment.

7. Consumers have the right to voluntarily purchase health services outside assessed need.

8. Maintain the restrictions on the role of private insurance, while introducing measures to expand the opportunities for the private sector to deliver services within the single-payer envelope.

9. Private clinics should have the option of becoming completely private (patient pays), or allowing them to enter into a variety of funding arrangements with the public sector to cover the full costs of insured services.

10. There is a place for medical training in both public and private settings, however, care must be taken to ensure there is no deterioration in the world class training physicians currently have.

11. Recognize that physicians can receive payment from both the publicly funded system and fully private sources. *

12. The province must at all times be able to demonstrate "reasonable access" to insured health services with no fee at point of services or penalties would apply. An understanding is necessary on the mechanisms to determine and measure "reasonable access".

Source: Alberta Health, 16 October 1995. The original principles are cited in full Cathy Scott, Tammy Horne, and Wilfreda Thurston, The Differential impact of Health Care Privatization on Women In Alberta (Winnipeg: Prairie Women's Health Centre of Excellence, 2000), p 42.

* Principle 11 was subsequently reworded to read: "The same physician can practice in both the public and private systems if he/she is offering insured services which are fully paid for by the public system and the non-insured services which are paid for privately." Alberta Health/Canada Joint Document, 17 May 1996, cited in Richard Plain, The Privatization and the Commercialization of Public Hospital Based Medical Services within the Province of Alberta: An Economic Overview from a Public Interest Perspective (Edmonton: Medicare Economics Group, Department of Economics, University of Alberta, 2000), p. 10.

Notes

(1) John N. Lavis, Suzanne E. Ross, Jeremiah E. Hurley, et al, "Examining the Role of Health-Services Research in Public Policymaking," Milbank Quarterly 80, no. 1 (2002), pp. 125-54.

(2) For purposes of this analysis, ideas refer to underlying values and information contributing to policy choices. Interests refers to the various actors--interest groups, politicians, bureaucrats, and policy entrepreneurs--who influence policy choices. Institutions refers to the formal and informal structures and processes involved in public policy decision-making.

(3) Dennis Guest, The Emergence of Social Security in Canada, 3rd ed. (Vancouver: University of British Columbia Press, 1997).

(4) Wendy Armstrong, Canada's Canary in the Mineshaft: The Consumer Experience with Cataract Surgery and Private Clinics in Alberta (Edmonton: Consumers' Association of Canada, 2000).

(5) A. Johnson, Robert Walker, "Medical foundations backed," Calgary Herald, 26 October 1994, p. A1.

(6) Canada, Health Canada, 1995, letter to provincial premiers, 16 October 1995, http:// www'hc-sc'gc.ca/hcs-sss/medi-assur/interpretation/index_e.html.

(7) Sujit Choudhry, "Bill 11, the Canada Health Act, and the Need for Institutions," in Timothy Caulfield and Barbara von Tigerstrom, eds., Health Care Reform and the Law in Canada (Edmonton: University of Alberta Press, 2002), pp. 37-84.

(8) The example of the dermatologist who will do a biopsy for skin cancer, but also do something cosmetic that is not covered.

(9) Alberta, Alberta Health, letter to RHAS, 8 January 1996.

(10) Through this process, the provincial government was able to substantially reduce the facility fee and to control the volume of services. This did not make all private providers happy.

(11) Kevin Taft and Gillian Steward, Clear Answers: The Economics and Politics of For-profit Medicine (Edmonton: University of Alberta Press, 2000).

(12) Alberta, Hansard, 2 April 1998.

(13) Alberta Health, "Agenda and Priorities Briefing Materials," 17 June, 1999.

(14) Panel, Executive Summary, p. 4.

(15) Alberta Health and Wellness, "Agenda and Priorities Briefing Material," 17 June 1999.

(16) Ibid., "Current Private Clinic Policy," 28 October 1999.

(17) Ibid., "Policy Options," 28 October 1999.

(18) Alberta, "Report of the Advisory Committee on the Utilization of Medical Services," 1989.

(19) Alberta Health, "Discussion Paper: Ambulatory Care Services in Alberta," 14 February 1991, p. xx.

(20) We acknowledge that government probably shard some of these concerns, but had to seek a balance between competing values.

(21) Stephen Heber and Raisa Deber, "Banning Extra-Billing in Canada--Just What the Doctor Didn't Order," Canadian Public Policy 13, no. 1 (1987), pp. 62-74.

(22) Thomas A Hockin, Government in Canada (Toronto: McGraw-Hill Ryerson, 1976), pp. 58-60.

(23) David Taras and Allan Tupper, "Politics and Deficits: Alberta's Challenge to the Canadian Political Agenda," in David. M. Brown and Judith Hiebert, eds., State of the Federation 1994 (Kingston: Queen's University, 1994), pp. 61-83.

(24) Shannon Sampert, "King Ralph, the Ministry of Truth, and the Media in Alberta," in Trevor Harrison, ed., The Return of the Trojan Horse: Alberta and the New World (Dis)Order (Montreal: Black Rose Books, 2005), pp. 37-51; Don Martin, King Ralph: The Political Lire and Success of Ralph Klein (Toronto: Key Porter Books, 2003), pp. 185-86.

(25) Interestingly, no health minister had publicly expressed strong support for increased privatization.

(26) Martin, King Ralph, pp. 212-14.

(27) For a discussion of this, see John Church and Tom Noseworthy, "Health Care Reform in Alberta: Market Rhetoric and Reality," in Thomas Sullivan and Daniel Drache, eds, Globalization and Health Reform: Public Success, Private Failure, (London: Routledge, 1999), p. 192.

(28) Rick Pedersen, "Doctors vote against Bill 11," Calgary Herald, 11 March 2000, p. A3.

(29) Kevin Taft and Gillian Steward, Clear Answers: The Economics and Politics of For-profit Medicine (Edmonton: University of Alberta Press, 2000), pp. 67-75, 90-91.

(30) Ibid., p. 90.

(31) Ibid., pp. 42-48.

(32) HRG Health Resource Group, Inc., "A plan for the organization and delivery of complementary health services In Canada," May 1997.

(33) Armstrong, Canada's Canary in the Mineshaft.

(34) Martin, King Ralph, p. 210.

The study on which this paper is based was funded through an operating grant from the Canadian Institutes of Health Research and a grant from Health Canada. We thank members of the Cross-Provincial Comparison of Health Care Policy Reform in Canada project, which includes Harvey Lazar, Pierre-Gerlier Forest, John Lavis, Alina Gildiner Aaron Holdway, Stephen Tomblin, Tom McIntosh, Claudia Sanmartin, Marie-Pascale Pomey, Elisabeth Martin, and Vandna Bhatia. Josh Marko, David Schaaf and Kevin Wipf provided research support for Alberta.

Last, but not least, we thank the seventeen individuals who agreed to be interviewed for this paper.

John Church is associate professor, Centre for Health Promotion Studies and Department of Political Science, University of Alberta, Edmonton. Neale Smith is a Research Coordinator in the Faculty of Health and Social Development at UBC (Okanagan).
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