THE BLOG

The Area Where We Could Save Millions in Health Care Costs

06/19/2014 12:42 EDT | Updated 08/19/2014 05:59 EDT
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This is the last blog post on solutions for limiting rising health-care costs. So far, we have proposed overhauling how doctors are paid, improving the organization of the care team and establishing an entire public drug insurance plan. I would now like to turn to the organization of support services in the health and social services system. Huge savings could be made in this area. Costs for support services have exploded while total payroll went down. How can these costs be brought under better control?

A first example for understanding runaway costs: skilled workers

Les ouvriers spécialisés du secteur public: des métiers qui doivent être reconnus from FSSS-CSN on Vimeo.

En raison des écarts grandissants entre les salaires octroyés aux ouvriers spécialisés dans le secteur public et le secteur privé, les établissements d'éducation, de santé et de services sociaux peinent à recruter cette main-d’œuvre. Ils doivent aujourd'hui se rabattre vers les entreprises privées, à grands frais pour les contribuables.

We can start with the proliferation of contracts (many of them secret) for maintenance work on infrastructure. The system's work force includes many skilled workers (though a lot fewer than there used to be) who are capable of doing extraordinary work.

There are countless examples of complex jobs done by these public-sector workers. Unfortunately, the public system is less and less able to attract and retain qualified workers. When rates of pay for skilled workers in the public system are compared with what prevails in other sectors, it's easy to understand why the public system is less and less attractive for them. In some cases, the gap in overall remuneration (pay and benefits) is as much as 30 per cent -- that is, 30 per cent more in other sectors of employment.

Furthermore, in addition to paying higher rates of pay, a contractor who wins a contract with a public institution has to charge enough to make the profit he wants. In many cases, this profit margin is as much as 50 per cent of labour costs. As a result, costs for renovating and maintaining public infrastructure spiral upward at a dizzying pace.

Many employers in the system are aware of the problem. But the solution requires the Conseil du trésor to get involved. If nothing is done, there won't be any expertise left inside the system. Losing this expertise amounts to losing control over maintenance costs in our public institutions. Just take the example of the Ministry of Transport, where this loss of expertise led to insane increases in the costs of projects.

A second example for understanding runaway costs: procurement

A second example of runaway costs driven by the growing place of private enterprise in our public health and social services institutions is the growth in procurement contracts awarded to private firms in the mega-structures that our CSSSs have become.

Procurement of hospital supplies is work that is often invisible for the public, but it is indispensable. Surgeons each have preferences when it comes to gloves and specific tools for their work. Each trade or occupation has orders that are specific to each profession or department. The same goes for medicines in various departments. Furthermore, technological developments mean that devices and machines are changing and being replaced faster and faster. And when the device changes, the accessories (e.g., ink cartridges) change too. Keeping up with catalogues for all the various supplies requires unbelievable expertise. When a specific scalpel is missing in an OR, you can't just pop out to the hardware store to buy another one. All the goods have to arrive at the hospital, on time. Once they arrive on the loading dock, they have to be delivered to the right floor and the right department.

The stubborn insistence of the CHUM and the MUHC on getting rid of this public expertise is very worrisome. Once the expertise is gone, recovering or rebuilding it will take a long time. And there's another problem here: the rare private firms that can oversee procurement soon find themselves in a conflict of interest. A firm like Cardinal Health is getting more and more procurement contracts in the health-care system. But in addition to managing procurement, it turns out that it's one of the biggest producers of supplies. So it's free to supply its own products, at hefty prices. These firms can quickly acquire a monopoly position, which certainly doesn't bode well for the public system. No decision-maker has the courage to step in and take action on these issues at the CHUM or the MUHC, and certainly not the government. You don't need a crystal ball to see that a few years down the road, this privatization of procurement will cost us an arm and a leg. And then the workers in the system will be asked to do even more with even less, to make up for a lack of money.

I could cite other examples in support services in the health-care system, notably for the services referred to as "hotel" or "accommodation" services and administrative services. But with just the two examples I've discussed, millions of dollars could be saved without affecting services to the public. The current government seems to prefer the option that is most expensive for citizens, i.e., the private solution. Premier Philippe Couillard has promised an open, transparent debate on the management of public finances. Let's hope he real hears and listens to our proposals for ensuring the future of the public health and social services system.