Clear Answers: The Economics and Politics of For-Profit Medicine; Kevin Taft, Gillian Stewart (2000)
Code Blue: Reviving Canada’s Health Care System; David Gratzer (1999)
It is sometimes useful to read two similar type books at the same time in order to contrast them and see different angles. This book review is part of a series looking at books in the technology, health services, and innovation domains.
Clear Answers by Kevin Taft is a book written mainly on the Ralph Klein healthcare reforms that occurred in Alberta, Canada in the mid and late 1990s.
This is when regionalization first took effect in Alberta, where independent functioning hospitals were integrated into larger functioning health services and the decision of privatized medicine re-emerged.
This book is an easy read, consisting of only about 110 pages, and has several chapters specifically on the Calgary Regional Health Region (CRHA), the characters involved, and the decision making process.
Taft explains why for-profit hospitals are not good for healthcare and hits mainly upon the fact that these for-profit companies need to make a profit. So, an additional surcharge is placed on top of the operations and delivery of healthcare. Costs such as share owners returns, executive compensation, marketing, lobbying, etc. which make up an additional 15-20%.
It seems as if the need for for-profit healthcare narrative often presented is that there are so many inefficiencies in the public system and that for-profit facilities can drive the costs out and make the system more efficient.
Where I think Taft misses a major point in addressing the economic argument of for-profit hospitals is addressing that innovation does not really occur with the take-over of an existing public resource. The facility and workflow remain very much the same, constrained by factors like regulation and existing systems and processing. Even the workers in the new for-profit centers will be the same as the public health systems – as that is where they were trained and where they come from.
For true innovation to happen you need disruption. You need where new technologies and processes are established and in my opinion this means a complete re-design starting the facility itself. So selling existing facilities, often at very favorable terms to the buyer, and doing the same thing, with the same people, will not drive the efficiencies promised.
The book references names like Libin, Hotchkiss, McCaig, Gimbel, King, Huang and others. These names should be familiar to many Albertans and especially people at the University of Calgary where large donations have been made. Taft tells several stories of how many of these people used their influence to benefit from the healthcare reforms being made. It would be interesting to read more about this and evaluate it critically – but many of these stories are probably lost to time now.
Reading this book twenty years after it was written, you can see many of the same decisions and actions being taken by the current Alberta (Kenney) government in reforming healthcare. I think I would also want to re-read and contrast the current Ernst and Young Alberta Health Services Review (2019) with the Price Waterhouse report in the mid 1990s.
If I was to sum up this book (2000) in relation to modern day (2020) – I would probably say “short memory”.
Taft’s book references “Code Blue” by David Gratzer several times – so this will be a good book to read in contrast.
More to come….
Code Blue by David Gratzer was a very good book to read. Written in 1999 the book was right leaning mentioning Stephen Harper, the future/past Prime Minister of Canada (depending if you take the 1999 printing of the book or the 2020 read of the book), including as a reviewer of the book.
I would strongly recommend this book as part of your reading about the Canadian Health System. It is an excellent and rare book coming from a right-leaning angle. One should not only read left leaning books when it comes to healthcare as you then become part of a bubble. Also, Gratzer is an excellent writer.
As I often do, whenever I come across people I know mentioned in the book – I identify them. Dr. Tom Noseworthy was quoted early in the book (p27) for saying “Shame on you for saying there’s a crisis”. This was interesting as 15 years later as part of a locally organized TED Talk my former PhD supervisor (and mentee of Tom) gave a talk about how the health-care system was not in crisis and ended the presentation by saying “crisis schimish”. I always thought that it was a strange topic for a TED talk as TED talks are usually about identifying or solving important problems — not about pacification or trivializing important issues.
I like David Gratzer think that healthcare is in constant crisis and we should do our best to try to improve it on a continuous basis. Later in the book he references “Appropriate, Effective, and Efficient” which I think is our goal.
Gratzer covers in the book the issues facing healthcare from increasing costs, sustainability of the healthcare system and the poor healthcare that many patients received – such as in the effects of having long waiting lists.
Some of the points that resonated with me were the following; that people often say the alternative is the US system – ignoring Europe and Asian models (p59); the small amount of R&D that Canada actually spends on healthcare (p94); HMOs face competition, while provinces are monopolies (p111); does physician pay actually increase after a monopoly is formed – even if it is pitched as to save costs (p129); incentives of a public funded sector is to over-use – such as with patient, physicians and even hospitals (p133); Gratzer even provides a Cynical list of perverse incentives in the system (p143).
The quote that I like the best from the book was “it isn’t reform that will bring about the demise of medicare but the absence of it” (p163).
The 2nd last chapter was where Gratzer presents a solution to healthcare. Medical Saving Accounts (MSA). Taking from the United States Insurance industry it is basically presented as the public has a yearly MSA account that they can purchase health services from. Anything over $2,000 (catastrophic events) are then covered by the public. This is an attempt to improve utilization, and improve customer choice, by allowing the individual to ration themselves what healthcare resources they use. Several of my friends have yearly health benefits (funds) from their companies that allow them to buy exercise equipment and the like (note: the public sector, even in the healthcare space, does not have this benefit). And finally, this is the mechanism that Singapore uses.
Overall, I would strongly recommend this book as part of the series of reading about the Canadian health care system.