Business in Calgary
September 2009
The Future of Health Care
How private health companies are filling in the gaps for an ailing health-care system
BY DEREK SANKEY
Ken Wilson seems befuddled. When he contemplates the vigorous debate back and forth about public medicare, the public health-care system and private health-care providers, it all seems so emotionally charged.
Talk of billion-dollar health-care budget deficits seems to have become routine recently in Western Canada. As the aging population continues to swell, spending on health care is not keeping pace with the demand on the system. Private health-care service providers have begun to pick up the slack and are increasingly filling the roles that the public health-care system either cannot, or will not, cover.
“What’s happened is there has been a growing awareness of the need to manage your own health because your doctor isn’t going to do that,” says Wilson, managing director of Foothills Health Consultants in downtown Calgary. “They are trained to fix you when you’re ill. You don’t go into an urgent care centre or call your doctor when you’re healthy.”
Private health companies, such as Wilson’s, have been growing exponentially in recent years, offering everything from home care for the elderly to physiological, biometric health assessments and preventive health management services. But the private health management industry has been thriving for a long time.
The Fraser Institute released a 2006 study that showed Canadians spent a minimum of $10 billion a year on private health services. More than $5.6 billion is spent on alternative therapies, such as naturopathy. Another $2.6 billion is spent on vitamins, herbs, supplements and nutritional consulting. At least $1 billion – some estimates peg it as high as $10 billion – is spent on the fitness and spa industry, a number that likely falls toward the higher end of that spectrum, depending on how you define it.
Either way, private health services are nothing new, and they’re growing rapidly. So what’s at the heart of the issue?
“We grew up with the inherent right to health care and it’s been part of our value system as being a Canadian,” says John DeHart, co-founder of Vancouver-based private home-care provider Nurse Next Door, which has locations across Canada including Calgary. “Even though as Canadians we feel we have this inherent right to walk in anywhere and get all of your health care paid for, the cold, hard reality is that has to change.”
Private health providers are growing – fast. The public system handles disease management – when you’re sick, it is there to make you better and move you back, ideally, into the healthy end of the spectrum. It helps you manage your own health by giving you information about how to do that effectively. Private providers are offering another choice. People are choosing to get services beyond what the public system provides, taking a more proactive, health management perspective to managing their health.
“It comes down to choice,” says DeHart. “We can’t keep up this spending.
“The problem with people talking about private health care is that they relate private health care to the U.S., and that’s completely the wrong thing to do because that’s at the far end of the spectrum,” he says. “The U.S. system does not work and everybody knows it.”
DeHart sees a slow, societal change occurring as the scope of health care broadens and more private companies begin to fill in the gaps left by what the public system cannot handle. The demographics are just starting to accelerate, posing big questions over the next five to 10 years. “We really do have to make systemic change in our health-care system to start addressing these shortfalls because we’re going to keep lurching from budget to budget with big deficits and they’re only going to get worse,” says DeHart.
There is controversy, but that hasn’t changed the fact that Nurse Next Door has grown its client base by 25 per cent in the past six months. Or that it’s expanded to 25 locations across Canada with more growth planned each month. Yet other organizations seem to come under more controversy than others.
When the Copeman Healthcare Centre opened its doors in late 2008, critics said it violated the Canada Health Act. The private centre, which charges patients an initial fee of about $4,000 in the first year and about $3,000 annually thereafter, assigns the client a team of workers, including a doctor, a nurse, a kinesiologist and a dietitian. They conduct assessments and design a preventive health plan.
The company has a similar clinic in Vancouver and operates within the law because doctors don’t charge patients for medically necessary services. There are other companies in Calgary, such as Preventous Collaborative Health and many others, that provide similar or additional services.
“People vote with their wallets,” says Wilson. “All of that (private health spending) is discretionary money by individuals to try to maintain or improve their own health.” It’s about people choosing to be more proactive about managing their health instead of relying on the public sector “disease management” system when they do get sick.
It’s not that a wealthy individual has the right to better health services than anybody else. Some people simply choose to access a wider range of services that go above and beyond what our public health system can afford to offer. These clients want to avoid using the public system by improving and maintaining optimum health.
DeHart envisions a government savings program, similar to an RRSP, to help people save for their future health-care needs. Just as RRSPs addressed a shortfall in the public pension system’s lack of sustainability when introduced, this could help people have more choice and be more proactive in managing their families’ health needs beyond the public system’s abilities.
“A third component will be … the corporations stepping up and shouldering some of the responsibility,” says DeHart. If you look at the typical demographics in a company, many of them are boomers who are looking at their own health issues and struggling with elder care for their parents.
“At some point within the next five years, there’s going to be big pressure on the corporations in Canada because of elder care,” he says, pointing to examples such as Ernst and Young and other progressive firms that have begun offering some form of elder care benefits.
Wilson says doctors, frustrated at seeing patients who they know could have likely avoided illness if they had been more proactive about preventive health management, are increasingly turning to companies like Foothills Health Consultants to devote at least part of their time to this increased level of service beyond the public system’s capabilities.
Some of his physicians work in the emergency room or urgent care centres most of the week, and work one or two days a week in his clinic downtown. There is a wider range and scope of health services available now – registered exercise physiologists with kinesiology degrees, registered dietitians, naturopaths, massage therapists and many others available to people who want to seek them out, often at their own expense.
“The private part of our health-care system will fill in the gaps,” says DeHart. “It’s really to give choice and access, which our system currently isn’t delivering. We can battle for the next 20 years on whether that’s right or wrong, but the reality is our system can’t be everything to everyone all the time.”
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