Expanding private healthcare provision in Ontario

Ontarians face a historically challenging period with respect to healthcare. Waitlists have grown steeply, with the number of “long-waiters” (patients whose surgeries are delayed longer than maximum clinical guidelines) more than doubling since 2019.  

In January 2023, the Ontario government responded by announcing plans to use “community centres” to reduce surgical and diagnostic backlogs as a ‘permanent’ policy initiative. Compared to Ontario’s non-profit, public hospitals, these centres are mostly private, for-profit organizations. 

Anticipating potential criticism from opponents of private sector provision, Premier Ford was quick to point out that the policy’s aim is to increase surgical capacity and reduce wait times. He also clarified that Ontarians would “use their OHIP card to get the care they need, never their credit card.” In doing so, Ford distinguished between healthcare delivery and healthcare funding – a point often overlooked amidst debates. A recent comprehensive analysis of European healthcare systems confirms this distinction: “Private provision is neither a guarantee of – nor a barrier to – universal healthcare provision”.  

Some services in Ontario are already privately operated, such as dental and pharmaceuticals. Even doctors working in Ontario’s public hospitals are ‘quasi-private businesses’ as they earn a financial return for their services.Nonetheless, the announcement unsurprisingly received criticism from opponents of private sector provision who fear Canada’s strong welfare foundations are being undermined. 

So what are the concerns with for-profit provision and what does the evidence reveal? 

For-profit provision has various criticisms. It may entice staff away from public hospitals and exacerbate workforce shortages. This fear of public staff migrating to private clinics is reasonable given Ontario’s high nurse vacancy levels and evidence that nurses respond to higher wages. Also, there are concerns that providers are less scrupulous in ‘up-selling’ extra services to patients and there is less regulation around quality-of-care and data-sharing. A UK study shows that private providers and pro-competition policies undermine the financial sustainability of non-profit hospitals by cherry-picking low-risk patients. Academic research, generally, has found that private sector outsourcing is associated with higher treatable mortality, Furthermore, private costs can be higher than public services due to greater financing costs, shareholder dividends and borrowing costs. As a result, the profit motive can compromise care quality. 

International health system comparisons give support to critics of for-profit, private sector provision. In the Commonwealth Fund’s Health Care System Performance Rankings, an independent research organization dedicated to the study of international healthcare systems, the top two countries, Norway and the Netherlands, have relatively few for-profit hospitals. In contrast, the US – a predominantly for-profit system – ranked last with very high healthcare expenditure per capita. 

It is important to discuss the counterargument because this issue arouses polarised debate. Pro-market supporters assert that competitive for-profit services incentivise efficiency and improve quality, and some academic research supports the case for private sector provision. Analysis of the UK found instances where competition improved quality and efficiency, whilst further research found that increasing competition and choice generally improved quality and costs. 

In Canada, several provinces already utilise private sector delivery. In 2021, Alberta undertook 20% of surgeries in private clinics. British Columbia expanded for-profit delivery in the 2010s, although criticism (including evidence of unlawful extra-billing) led the government to recently revert back to public provision by buying private clinics. 

Some assessments of this debate - from academics and research organizations - are more nuanced. Scholars have found that optimal delivery models depend on national context and that national health systems are path dependent, illustrating the importance of social context. For example, after two decades of pro-market policies, the UK recently refocused on public delivery, with politics and public sentiment being the key influences. Canada is similarly attached to a public model, with strong social welfare roots and an emphasis on universal coverage, meaning that an expansion of private-sector provision will inevitably face some public, political and media opposition.

To conclude, there are three takeaways.  

Firstly, despite polarised perspectives, the evidence is inconclusive. On balance, it slightly favours a public sector approach in Canada, given the national social context and noting British Columbia’s recent experience. That said, with large waitlists, Ontario is right to prioritise patients’ needs by exploring all options to expanding capacity. 

Secondly, Premier Ford’s assertion that this policy is ‘permanent’ strikes of over-confidence or, at the very least, political opportunism. A more considered and evidence-based policy approach would be a ‘temporary’ expansion combined with ongoing evaluation.  

Finally, we must not miss the forest for the trees. How healthcare is delivered is important, but with Canada’s aging population and severely strained health budgets, how Ontario funds its growing and potentially unsustainable healthcare costs in the years ahead is the bigger question.