The Okanagan Sunday, December 28, 2014

A8MANAGING EDITOR: Ross Freake, 250-470-0741 email: ross.freake@ok.bc.ca

But there are risks in apublically-funded system

By STEPHEN DUCKETTSpecial to Okanagan Sunday

If you look at an old map of Canadianhealthcare policy, just nearPrivatization Island is a big warning:“Here be dragons.”

So it proved for Alberta Health Serviceslast month when a seemingly innocuous de-cision — to swap the tender for laboratoryservices from a United States-basedtransnational corporation to an Australianone — provoked a furore of discontent.

Part of the problem is that ‘privatization’has two meanings. One is about increasingprivate funding of healthcare, which in theCanadian context is unequivocally bad.

It breaks the compact between Canadiansthat they are all in the same boat in terms ofaccess to healthcare and strikes at one ofthe key differences between the U.S. —where the spectre of bankruptcy or no carelooms, even under Obamacare — andCanada, where people can sleep easy know-ing they are protected against the costs ofhealthcare.

But Alberta’s controversy over lab con-tracts is about a different sort of privatiza-tion. It is about who delivers care in a publi-cally funded system. Opponents wronglyevoked images of the Americanization ofthe health system and bemoaned profit-making in healthcare.

Of course, swapping one private corpora-tion for another doesn’t change incentives.Nor is this the first excursion of profit mak-ing into healthcare: linen, food, securityservices are all provided by profit-makinggroups across Canada.

In fact, most medical services are provid-ed by private physicians — often structured

as professional corporations — who maketheir income from billing provincial gov-ernments. Some provinces have contractswith private corporations to provide directcare such as cataract procedures or residen-tial aged care.

Privatization of health delivery can workin a publically-funded system, but it is notfree from risks, as I experienced in my timein Alberta. I inherited a number of privatecontracts, many of which were poorly speci-fied. My departure contract precludes mydetailing all their problems but some gener-al lessons can be drawn from what is in thepublic domain.

First, negotiated contract prices may betoo high. A contract for elective orthopaedicprocedures in Calgary paid higher pricesthan what it cost in Calgary’s public hospi-tals.

Second, the contracting arrangementsmay be exposed to political meddling andprovide no incentive to deliver the publicsector the best price. Alberta’s cataract contracts were the best example of this.

Third, the contracts often have built inprice and volume escalators which don’tgive public managers the control they needin times of financial cutbacks.

Facing an effective billion dollar cut bythe provincial government, I couldn’t lookfor the same savings from lab services inEdmonton we found in Calgary and the restof the province because of the nature of existing contracts.

Poor specification of contracts and lock-inarrangements constrain future administra-tions, yet private providers often requirelong-term contracts, especially where theyneed to build facilities to meet the contractterms and these facilities can’t be used forany other purpose.

Another risk stems from poor costingprocesses in Canadian hospitals where few

hospitals undertake routine costing of pa-tient care with proper allocation of over-head costs.

Poor contracts are endemic in the healthsector partly because it is often difficult tospecify adequately the product being pur-chased. Although advances in patient classi-fication systems have improved our abilityto describe the volume of patients or nurs-ing-home residents who are to be treated orcared for under a contract, quality meas-ures are still in their infancy.

The quality metrics included in a contractshould be clear and public. What is the stan-dard of care expected? How will the pur-chaser know it is being delivered? Is therearms-length separation of patient assess-ment and provision?

Finally, contracting will only yield sav-ings if there is a market — where providerscompete for best value in terms of price andquality. Absent a market, even a local one,purchasers could be hostage to monopolyproviders or exposed to protect local ineffi-cient suppliers for political reasons.

The response to privatization of health delivery should not be a knee-jerk one, thatthis is a no-go area for Canada. Rather, pub-lic purchasers should be held to account forthe nature of the contracts they sign andshould not be able to hide behind confiden-tiality clauses.

They should disclose the prices being paidfor services and demonstrate that they havenegotiated a good deal for the public taxpay-er. Transparency won’t solve all the issuesof private sector contracting in healthcare,but without it, the risks will almost certain-ly outweigh the benefits.

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One sure way to assure a B movie is a hit these days... tick of the NorthKorean government.

It seems almost bizarre, almostHitchcockian, that The Interview hascaused such a commotion.

The comedy, directed by Vancouver-born filmmaker Seth Rogen, is about apopular talk show host scoring an in-terview with Kim Jong un, which laterleads to an assassination attempt onthe dictator.

Since the film’s completion (much ofit was shot in Vancouver in 2013),there’s been a cyber-attack, threatsfrom the North Korean government

that theatres that showed the filmwould be attacked, two delays in the release date of the film and even reac-tion from U.S. President BarackObama.

Gee, Pineapple Express never got thatkind of exposure.

After pulling the movie from majorrelease, many independent theatresshowed the movie in the U.S. and theend result was long line-ups onChristmas Day.

This happens from time to time. TheLast Temptation of Christ, a 1988Martin Scorsese film, likely wouldn’thave drawn an audience outside of the

New York City art house crowd had theCatholic church not protested its release.

It’s surprising the reaction consider-ing a decade ago, Team America WorldPolice parodied the father of Jong-unand very little was said.

As journalists, we applaud all in-volved for sticking up for freedom ofspeech and expression by releasing TheInterview.

But, at the same time, is it worth therisk to public safety over a comedywhich apparently isn’t even all thatfunny?

—— PPeennttiiccttoonn EEddiittoorr JJaammeess MMiilllleerr

Protests create a hit

Terry ArmstrongPublisher

The Okanagan ValleyNewspaper Group

Published every Sunday at 550 Doyle Ave., Kelowna, B.C., V1Y 7V1 by Continental Newspapers (Canada) Ltd.Offices in Penticton at 101-186 Nanaimo Ave. West, V2A 1N4

Private healthcare can work

It’s been quite a year for theOkanagan. America’s largest dai-ly newspaper, USA Today, namedthe Okanagan the world’s second

best wine region to visit. The $35-million technology incubator

project, the Okanagan Centre forInnovation was approved for down-town Kelowna and many developersare reporting a good year in homesales, indicating a steady demand forthe Okanagan.

This good news demonstrates theOkanagan isheaded in theright directionas it is emerg-ing as a globalcompetitor intourism, com-munity build-ing and tech-nology.

Good thingas out-of-province mon-ey is a huge

contributor the Okanagan economy. InKelowna alone, tourism contributes$653 million annually in direct econom-ic output for the area.

In addition, the real estate market ishealthy as the Okanagan MainlineReal Estate Board reported sales im-proved by 23.8 per cent year-to-datecompared to 2013. (7,993 units com-pared to 6,455 during the same period –January through November.

Our company, dHz Media, has beenpromoting the Okanagan since 2005and one of our clients, Skaha Hills, anew residential community on thesouthwest slopes of Penticton overlooking Skaha Lake, is benefiting fromthe increased interest in the Okanaganas it has nearly sold out its first phaseof 47 homes in under four months.

If all goes as planned, technology pro-fessionals will be coming to theOkanagan as well to participate in theemerging economy and valley lifestyle.The announcement this summer of theInnovation Centre opening up raisedawareness with media articles acrossCanada and in the Globe and Mail.

The emergence of the OkanaganSilicon Valley is an incredible successstory. During the past three years, thetech industry, led by AccelerateOkanagan, has created 300 jobs andhelped companies raise $10-million instart-up funding.

“Since we announced the plan for theInnovation Centre, we have had inter-est come in from across the countrywho want to get into the space,” saidJeff Keen, a spokesperson for theOkanagan Center for Innovation.

Creating a sustainable knowledgebased economy is key to building theOkanagan, says Keen.

Our company works with theOkanagan Chapter of the UrbanDevelopment Institute (UDI) whosemandate is to promote wise and effi-cient urban growth while generatingjob opportunities to provide for theneeds of British Columbians today andin the future.

The UDI works with the public andgovernment to achieve balanced, well-planned and sustainable communities.The Innovation Centre is a great exam-ple of what can be achieved when pub-lic and private stakeholders work to-gether. Building a tech-incubatormakes good growth sense.

Examining the reasons why tech pro-fessionals would want to move to theOkanagan explains why it is able tocompete globally. There is a welcomingbusiness community, A-list post-sec-ondary institutions, world-class sum-mer and winter recreational opportu-nities, and direct flights in and out ofKelowna International Airport to major centres across the continent andtop-notch wineries.

While these great reasons are sound,a much simpler question demon-strates why the future of theOkanagan is bright and why it will besuccessful in building its technologysector: If you could work anywhere inthe world, like technology profession-als can, why would you not choose theOkanagan?

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