Privatized home care in Ontario

An expensive role model to avoid

By: Ross Sutherland

  In 1996, the Ontario Government radically changed the delivery of home care in Ontario. They mandated that all direct patient care services had to be contracted out through a competitive bidding process. The process would be overseen by 43 Community Care Access Centres (often called Access Centres or CCACs), which would be responsible for coordinating these services. CCACs would provide 'one stop shopping' to patients for their home care needs.
  How practical has this been for the people who depend on the care or for Ontario taxpayers, for that matter?
 

Changing to a community-controlled, public home care program, would save Ontario 21% of the home care budget, or $247 million per year

  Say you were a building contractor working on a very important renovation and someone suggested that if you changed the way you organized the work it would be done 10% faster. You would be tempted to hear more, especially if you had more jobs than time. If the time saved was 15% or 21%, in all good conscience, you would have to give the alternative serious consideration.
  This is the offer that, we, front-line home care workers, made to the Ontario government in a report recently published by the Canadian Union of Public Employees (CUPE). The report, "The Costs of Contracting Out Home Care: A Behind the Scenes Look at Home Care in Ontario," examines the current competitive bidding and contracted-out system of delivering community health care. It argues that changing to a community-controlled, public home care program, would save the government 21% of the home care budget, or $247 million per year.
  Even the government acknowledges that the system needs more resources. The report suggests why not start by better assigning the resources we already have. This will not solve the under funding problem, but it will be a start. Resources could be better used to increase the pay and working conditions of home care workers in order to attract qualified personal. Some of the 11,000 patients currently on waiting lists could be given the care they need. And services could be restored to the thousands who were cut off when the rules were tightened.
  The 21%, wasted in duplication, excess administration and profit taking is typical of extra administration costs that result in any contracted-out situation. Jonas Prager, in a 1997 article in The Journal of International Affairs, while stating that no reliable data is available on the extra costs, estimates that between 3% and 40% of the value of the contracted out service goes to additional administrative costs.
 

Ontario's current home care system does not use resources to benefit patient care

  One example in the report illustrates the source of these extra costs, and where additional resources could come from to improve patient care. There are 43 home care regions in Ontario. Each has an Access Centre that has a computer system to track all the patients and the visits. Each region could have as many as six to seven agencies involved in direct patient care. Each agency, in turn, has computer system tracking the same patients and the same visits. This duplication represents a multitude of extra costs in hardware, software, staff, consultants, office space and other carrying costs that could be re-allocated to improved services.
  But the waste gets worse. For example, a patient, Mrs. Olivera wants the cancel her visit this week because her daughter is in town and move it to a different day next week after her daughter leaves. This change has to be phoned in by the nurse to the support staff in her agency who enter it into the agency's computer. This ensures that proper scheduling will take place. The nurse then phones the Access Centres staff who enter it into their computer. For chaos to ensue, all that is required is one slip anywhere in this process and the computers will not agree. Most communities have 1,500 to 2,000 home care visits per day so a few times every day different computers will receive different information on the same patient.
  When the computers do not agree billing does not take place. Now the extra work really begins. Messages go back and forth about the mismatch, support staff have to call the direct care provider, the information has to be relayed back to the Access Centre staff, who then decide whether or not to approve the change in visit (as if it makes any difference). All this work is completely peripheral to providing care to that patient. It only relates to the billing and monitoring inherent in a contracted out, fractured home care system.
 

When the government mandated this experiment in home care, they said it would divert more funds to patient care. Five years later, the opposite has happened.

  This is just one example of the way Ontario's current home care system does not use resources to benefit patient care. CUPE's report also details many other similar practices. Medical supplies are separated from service providers forcing many extra steps in an otherwise simple process. Home care contracts divide workers into different agencies by job classification, and divide similar types of workers between agencies. The result is increased difficulty communicating and coordinating activities, and inefficient use of staff. Multiple separate agencies involved in community care mean excess administration. All these problems create added cost in a system already short of money.
  These costs are exacerbated by the growing involvement of the profit sector. The CUPE study estimates that in the first three years of competitive bidding the for-profit home care corporations expanded their market share from 15% to over 50%. This increased share means approximately $42 million must now go to pay for profit. Instead, all these public health care dollars could be used to improve the patient delivery system.
  The idea of splitting the provider, the government, from the delivery of service is not new. It is central to neo-conservative ideology. The argument is that this allows the government to focus on policy directions and the free market to provide the best service at the lowest price.
  We can also see this ideological perspective in some of the back ground documents of the FTAA, which call for opening up all services, including health care, to competitive bidding. Ontario's Conservative government has mused about introducing a similar program for all municipal services and expanding it in health care.
  CUPE's report from frontline home care workers is an on-the-ground response to the government's orthodox theoretical positions. When, without public consultation, the government mandated this radical experiment in Ontario's home care system, they said it would divert more funds to patient care. Five years later, the opposite has happened. The system is in chaos and needs less, not more private for-profit health care.
  The example of competitive bidding and contracting out in Ontario's home care system should be considered as a powerful negative example when governments try to impose similar models here or in the hemisphere.

Ross Sutherland is a registered nurse who works for the VON in Kingston, Ontario. He chairs the Community Care Committee of CUPE Ontario.

Posted: March 26, 2001

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