Alberta Politics
Health Minister Tyler Shandro, Alberta Health Services President Verna Yiu and Ernst & Young spokesperson John Bethel at the release of the AHS Review Report on Feb. 3 (Photo: Government of Alberta).

If COVID-19 proves anything, it’s that Ernst & Young was out to lunch when it recommended privatizing Carewest and Capital Care

Posted on May 15, 2020, 2:07 am
7 mins

Does anyone remember the $2-million “review” of Alberta Health Services by Ernst & Young launched a year ago by the United Conservative Party Government?

Health Minister Tyler Shandro and Alberta Health Services President and CEO Verna Yiu were both on hand to ensure we understood it was an important matter when the initial report of the multinational management-consulting firm based in London, England, was released on Feb. 3 this year.

AUPE Vice President Bonnie Gostola (Photo: Facebook).

The report recommended a broad swath of health care privatization, pay cuts and asset sales that would supposedly save the government of Alberta $2 billion a year.

Quoting discredited sources like the Fraser Institute, Ernst & Young delivered what the government that hired it had clearly wanted: 57 recommendations including privatization of many surgical services, elimination of coverage for others, pay and benefit cuts for public health care workers, and a selloff of publicly owned assets.

In other words, the usual neoliberal mayhem designed to finance huge tax cuts for foreign corporations and local billionaires while degrading public services to the point even more privatization can be justified.

Among the recommended “long-term strategies” on the consultant’s list was elimination of support for surgical “procedures of limited value.” Upon examination, quite a few of these turned out to be “procedures of value to women.” This should have been no surprise, really, given the worldview of the UCP and its leader, Premier Jason Kenney.

Privatization targets included hospital housekeeping, food preparation, security, home care, and — most significantly — the sell-off of two large public long-term care providers, Capital Care in Edmonton and Carewest in Calgary.

Alberta Premier Jason Kenney (Photo: David J. Climenhaga).

The government didn’t like every idea Ernst & Young came up with, however. It rejected out of hand the suggestion AHS should close or repurpose many rural hospitals, among the biggest cost items in Alberta’s health care budget. This too was no surprise given the addresses many of the UCP’s most reliable voters.

The government announced on Feb. 3 that AHS would have 100 days to figure out how “to develop a comprehensive implementation plan that will be submitted to the Minister of Health for approval.”

That time was up yesterday, although no announcement was forthcoming.

Well, something has obviously changed since last February — the arrival on our shores of a teeny-tiny virus that causes huge problems wherever it goes. There’s talk the requirement for AHS to produce its plan has been delayed until mid-August, perhaps while the government polls frantically to see what it can still get away with.

If ever there was a time to come to our senses and recognize that privatization of health care services, in particular public sector long-term care, is a bad idea, this is that moment!

The COVID-19 catastrophe in Alberta’s and Canada’s private, for-profit nursing homes alone tells you everything you need to know about the wisdom of this idea.

Alberta premier William Aberhart, elected in 1935 (Photo: Public Domain).

The COVID-19 death rate across Canada in private long-term care facilities is reported to be roughly four times the rate in public facilities. Alberta has had its share of these needless deaths, which can be traced back to corporate cost cutting and irresponsible, ideologically motivated policy decisions.

“Nowhere has the contrast between public and private care been starker than in our continuing care system,” said Alberta Union of Provincial Employees Bonnie Gostola in a news release yesterday. “We need the government to make it clear that they will not sell off Capital Care and Carewest. The focus of our continuing-care system needs to be on residents, not shareholder dividends and bonuses for millionaire CEOs.”

She noted that of the 35 COVID-19 outbreaks in supportive-living and long-term-care facilities in Alberta, only six have occurred in publicly run facilities. Private facilities make up the remaining 29 centres affected, 83 per cent of the continuing care outbreaks.

“In the 100 days since this report has been released, we’ve had a clear case made for keeping our health care system public,” Ms. Gostola said. “Patients and workers deserve better than to have our system sold off to profiteers. We cannot put vulnerable people at risk of inferior private care after we make it through this pandemic.”

Of course, it would be naïve to think the most ideological Alberta government since William Aberhart’s Social Credit government was elected in 1935 is going to change its tune, although it may not whistle its discordant notes quite so loudly as it used to before the coronavirus arrived in Canada.

Indeed, even the Socreds, once they’d calmed down after Ernest Manning became premier in 1943, sensibly banned private-sector nursing homes.

The UCP may delay for a while, perhaps even until after the next election. But don’t expect anything to change but the timing of the announcements.

Then again, these are guys who don’t mind fighting an all-out War on Doctors in the middle of a global pandemic.

What they do next probably depends on how strong the public reaction is.

19 Comments to: If COVID-19 proves anything, it’s that Ernst & Young was out to lunch when it recommended privatizing Carewest and Capital Care

  1. Sam Gunsch

    May 15th, 2020

    More privatization of care for seniors would be the modern day equivalent of medieval ‘blood-letting’.

    If the Kenney-UCP-Harper govt continue to double-down on privatization of healthcare, they might as well announce straight up, that they’re certain that more ‘blood-letting’ privatization is necessary to cure the patient, already bleeding and dying at the higher rates in private care.

    Reply
  2. Brian Gibbon

    May 15th, 2020

    As the UCP war on doctors rages on, and doctors are forced to remove their services from rural hospitals, those hospitals themselves will be closing as they will no longer be able to provide appropriate levels of care for their communities. Kenney and Shandro will once again blame doctors for this, even though it’s entirely a situation of their own making.

    Reply
  3. tom

    May 15th, 2020

    “Of course, it would be naïve to think the most ideological Alberta government since William Aberhart’s Social Credit government was elected in 1935 is going to change its tune, although it may not whistle its discordant notes quite so loudly as it used to before the coronavirus arrived in Canada.”

    Nailed it.

    Reply
  4. Bill Malcolm

    May 15th, 2020

    I cannot escape the simple basic idea:

    Private health care equals front line workers, administration, insurance companies and/or billing and collection departments, plus government funding as required under the Canada Health Act and a bunch of civil servants to oversee quality control, public disbursements and provide public health direction and directives. That’s two layers of greedy private hands making free money off actual workers and doing NOTHING to earn it. Pure parasites on society.

    Public health care equals front line workers, admin part of provincial health ministry to include public health and regional admin, and government money. No grimy profiteers to skim off commissions in layers, mere parasites who not only do not add value, they suck it away and fill up private purses. It’s madness writ large to go that way. If “government” is baaaad, then do the right thing and improve it. Politicians of all stripes tend to forget they represent people.

    What part of greater efficiency for a helth system meant to cover everyone living in a province being publicly run as a natural “monopoly”, does kenney and Ernst and Young not understand? Ernst and Young no doubt are revving up to reduce England’s NHS to shreds for Boris the Bozo’s (as they now call him) rich pals to get even fatter on the public purse. Management consultants my foot – they give only one side.

    It’s so patently ridiculous to privatize health care, all it can possibly mean is that some people will get no care whatsoever, just like in the USA, which is distinguishing itself as having the most egregiously badly run response to Covid-19 in the entire bloody world! A more incompetent country on public health matters cannot be imagined.

    What nonsense to aspire to!

    kenney and his woof woof supporters? Devious and egregiously greedy bloodsuckers. Plain as the nose on your face, and to hell with the UCP’s “subjects”, regular Albertans. There’s money to be made off the common rube with clever misdirection.

    Reply
    • Sue

      May 17th, 2020

      Well said! Thank you.

      Reply
    • September 16th, 2020

      Very well said, indeed! And it points to the fact that the UCP do not care at all about the public good. Their goals seem to be to enable corporate profiteering off Albertans to the greatest extent possible.

      Reply
  5. J.E. Molnar

    May 15th, 2020

    There are huge differences and compelling arguments against private, for-profit residential long-term care facilities that results in that inferior care mentioned in Climenhaga’s excellent piece.

    Private, for profit long-term care facilities that house mom and dad or grandma and grandpa are inferior for a number of reasons:
    • Maintaining their profit margins are a priority, so private residential care facilities must pay their workers the least amount of money they can get away with and often provide reduced hours and benefits to staff. These workers, in turn, must work at multiple locations to earn enough to survive.
    • Training is often seen as an added expense; thus, training is kept to the minimum.
    • Chronic understaffing results in low resident/worker ratios, reducing residential care.
    • Providing personal protective equipment (PPE) for staff in the privately operated facilities is seen by the owners/CEOs as an added expense to be minimized.
    • Adhering to provincial guidelines is seen as adding costs, and only the bare minimum should be done to follow them.

    Anyone who stills believes that private long-term care facilities, not only in Alberta/Canada but in the U.S., are the answer, especially after the proliferation of deaths in these privately-run facilities during the coronavirus pandemic, must be an owner, a shareholder or a myopic UCP politician.

    Reply
  6. tom in ontario

    May 15th, 2020

    “….must be an owner, a shareholder or a myopic UCP politician.”
    Who wouldn’t want to join the ranks of former politicians who can bring down as much $237,000 a year for plunking their arses down on boards of corporate owned retirement homes. Has your premier has cast an eye on a comfy sinecure after his privatization wrecking ball is done with public healthcare in Alberta?

    Reply
    • Lars

      May 15th, 2020

      He has a honking big indexed government pension to look forward to. Still, you may be right, this might not be enough for him. Certainly other UCP MLAs will be looking towards securing a lucrative future once they leave politics.

      Reply
      • tom in ontario

        May 16th, 2020

        The Toronto Star reports on May 16, 2020
        “Three of the largest for-profit nursing home operators in Ontario, which have had a disproportionately high number of COVID-19 cases and deaths, have together paid out more than $1.5 billion in dividends to shareholders over the last decade, the Star has learned.

        This massive sum does not include $138 million paid in executive compensation and $20 million in stock buybacks (a technique that can boost share prices), according to the financial reports of the three biggest publicly traded long-term-care home companies, Extendicare, Sienna Senior Living and Chartwell Retirement Residences.”

        Did the research beagles at Ernst and Young miss the same company reports the Star was able to find?

        Reply
  7. Dave

    May 15th, 2020

    I think you are correct, unexpected events have thrown the UCP for a loop, but they (at least some at the top) are very committed ideologues so they will try continue on what they have decided years ago is the right path and ignore any more recent evidence to the contrary.

    I don’t think when the UCP won the election they imagined oil prices falling to record lows or a pandemic. I believe Kenney imagined a Ralph Klein scenario, which would have been familiar to him from the last time he really lived in Alberta – initial cuts then recovering oil prices that allowed him to pull back on the cuts to mitigate possible electoral damage while still reducing or eliminating the deficit. Well unfortunately for Mr. Kenney, history does not always repeat itself and he does not have any of the folksy charm of Mr. Klein to sell austerity, short term or otherwise.

    In any event, I suspect after the pandemic is over Mr. Kenney will resume with his ideological approach to health care. In some respects he never stopped – his war with doctors has barely paused. He is more aggressive than Mr. Klein, who could at least take a hint when his “third way” pseudo privatization plan met with a very rocky public reception and then backed off. I think it will take as much, if not more, push back from the public to force the determined Kenney to change course.

    Reply
  8. Bruce Turton

    May 15th, 2020

    Funny that you mention Aberhart. My father, who would be 100 this year if alive, waited for 76 years for the “$$” from the SocCreds which never arrived. Wonder if we can wait for a few months for the Cons of this era to deliver the goods for our benefit. ‘Like my father before me’, I can wait the rest of my life!!!

    Reply
  9. Scotty on Denman

    May 15th, 2020

    COVID19 sets the stage.

    It entered stage-left in BC when, as is said to be the ideology of the left, the government took over a number of private longterm care homes in 2019 which had failed to operate to a safe standard. In retrospect, it made the BC NDP government look prescient and wise, except political rivals on the right might ascribe it churlishly to blind, shithouse luck that makes the capitalistically incorrect ideology look good in an anomalous circumstance—which, remind, wasn’t quite on the horizon at the time of these seizures of enterprises which all too freely cut sanitary corners in order to maximize profit.

    Still, it’s hard to discern whether the commandeerments were largely ideological or simply prudent management which doubtlessly minimized the impact of COVID19 at BC longterm care homes—that is, it most likely would have been worse than it was had these homes been free to operate unsafely as the virus moved into BC. Most citizens, regardless partisanship, approve, nevertheless, and the NDP government is inclined to hail its success as due to prudence rather than its supposed ideology.

    COVID19 entered, stage-right, in Alberta whose newly-elected neo-right government announced its intention to make deep cuts into the health system in 2019. From the right’s perspective, the pandemic is making what the UCP claims is a prudent policy—and only coincidentally ideological-looking-ish—look bad, an illusion and, as it usually says, a ‘distortion of the free market’. Of course to prove this would require a period of optimal economic conditions that can be captured in the rhetorical narra-net and used to clog the cogs of history until it finally stops at the right time. Rapture is the corollary in this Neverland—and, alternatively, it’s just sour grapes.

    Ideologies and happenstances aside, the two approaches to the pandemic can be compared more revealingly: although, granted, it was a lucky thing COVID19 happened to make a social policy look good in BC, it was still the prudent thing to do then and still would have been by now whether the pandemic hit or not. It’s a good thing to do anytime.

    The UCP approach, however, can only be correct under optimal economic conditions which, in perspective, have been getting rarer and are forecast to be progressively shorter-lived, not only hide-binding the party to an ideology which looks extreme and imprudent as a result, but totally messing up when applied at this, the very least optimal time epidemiologically. In the first case, the policy can hardly ever happen at the right time (and now it, seems, not much ever), and in the second, during the pandemic it’s the worst timing (and now, it seems, it will be forever).

    Perhaps in the circumstance it’s unfair to weight the two ideologies, the distortions and all. But there’s always later.

    Stay safe, my friends!

    Reply
  10. Just Me

    May 15th, 2020

    Seniors are most at risk to being a COVID-19 fatality. They also represent a substantial block of reliable UCP voters.

    The rationale to privatize or end public health care services targets this sensitive group the most.

    Either UCP has a death wish or they know that this constituency is too stupid to not vote for them.

    I call the latter.

    Reply
  11. alan

    May 15th, 2020

    Ernst & Young and the Fraser Institute, a marriage made in UCP ‘heaven’ and nuttier than last years whisky soaked fruitcake. And you should be mindful of the smoke, mirrors, and the the gigantic qualifying ‘hedge’:

    “Recommendation 21: AHS should reconsider LTC facility ownership in cases where private delivery may
    be more efficient and appropriate.”

    Because, on the other hand, ‘private delivery may not be more efficient and appropriate.” For example,

    1. “It’s actually the fifth time that provincial health services have seized a seniors care home owned by the same parent company — Retirement Concepts, which was controversially bought by a Chinese company a few years ago and operates homes in B.C., Alberta and Quebec.”–https://www.cbc.ca/news/canada/calgary/millrise-calgary-seniors-covid-pandemic-von-scheel-1.5554991

    2. “A recent study by the Institute for Clinical Evaluative Sciences (ICES) found that for-profit seniors’ homes have a 16 per cent higher death rate for seniors within six months of arrival, and that there is a 33 per cent greater likelihood that they’ll end up in hospital.”–https://www.ctvnews.ca/health/seniors-in-private-nursing-homes-more-likely-to-die-within-6-months-study-1.2626416

    3. “We reviewed the link between ownership and care quality in a recently published study and concluded that contracting out care to private, for-profit facilities is likely to result in inferior quality of care compared to care delivered in public and non-profit facilities.”–https://vancouversun.com/opinion/opinion-private-vs-public-residential-care/

    But we have already seen this movie before and it was lousy the first time around:

    https://www.cbc.ca/news/canada/edmonton/opinion-mackinnon-report-cuts-1.5269337

    Reply
    • jerrymacgp

      May 16th, 2020

      Let’s be careful while assailing private, for-profit ownership of continuing care faciles, that we don’t overlook the fact that hundreds of thousands of Canadians have an ownership stake in these facilities through their employer pensions. Revera, Inc., one of Canada’s largest chains in the sector, is a wholly-owned subsidiary of PSP Investments, which is the investment arm of Canada’s federal public service employee pension plan, which includes not just federal bureaucrats but RCMP & the Canadian Armed Forces.

      Reply
  12. Dawna Haslam

    May 15th, 2020

    Dear Prime Minister Justin Trudeau,
    [email protected]

    https://www.facebook.com/notes/dawna-haslam/improve-our-canada-health-act/10154406624711229/

    I am 80, a lifetime resident of Alberta and

    I AM TERRIFIED OF BEING PLACED
    IN A LONG TERM CARE HOME
    THAT HAS BEEN CONTRACTED
    TO THE PRIVATE SECTOR.

    WE CANADIANS NEED TO
    STRENGTHEN OUR CANADA HEALTH ACT
    AND STOP PRIVATIZATION OF
    LONG TERM/HOME CARE, RESPITE CARE,
    PALLIATIVE CARE, PRESCRIPTION DRUGS AND DENTAL CARE.

    WE CANADIANS MUST STOP POURING
    OUR PUBLIC $
    INTO THE PRIVATE POCKETS OF
    ENTREPRENEURS, BUSINESS AND CHARITIES.

    WE CANADIANS MUST STRENGTHEN OUR ECONOMY
    AND GREATLY IMPROVE OUR HEALTHCARE

    When we strengthen our Canada Health Act all long-term care/home care workers (mostly women) will be government employees same as hospital workers are now.
    These workers will receive reasonable pay and benefits and have good working conditions that result in good caring conditions.
    These workers will contribute to our Canadian Economy by paying more taxes as well as by buying more goods and services.
    https://www.facebook.com/notes/dawna-haslam/improve-our-canada-health-act/10154406624711229/

    Respectfully,
    Dawna Haslam BSc BEd
    Calgary
    T2R 0K3

    https://www.facebook.com/349561555109272/posts/2978869215511813/

    https://www.facebook.com/621025219/posts/10163722844270220/?d=n

    Reply
  13. theo

    May 15th, 2020

    Given the revealing statistics of private versus public LTFs, why are the private institutions not being sued in class action lawsuits for negligence? Is it a category that is not sue-able?

    Reply
    • ema

      May 16th, 2020

      The former MLA Jonathon Denis (Solicitor General, Attorney General, and Minister of Justice) has already jumped up to the plate a few days ago, by announcing a $25-million class-action lawsuit against the operators of the McKenzie Towne Continuing Care Centre, in Calgary.

      Reply

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