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P3s are a pox on the public purse: Allyson Pollock

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In December 2012, Great Britain’s Parliament effectively repealed national health care when it passed the Health and Social Care Act 2012.

The 500-age Bill "abolished the National Health Service in England," said Allyson Pollock, a professor at the Queen Mary School of the University of London, by ripping out the Secretary of State’s duty to secure and provide health care for all, she said. "Now we’re watching accelerated privatization, with catastrophic results." 

Pollock is the Founder and, between 2005-2011, co-ordinator for the Centre for International Public Health Policy University of Edinburgh. Public Interest Alberta (PIA) brought her to Calgary and Edmonton, to talk about privatization in the UK. PIA's Bill Moore-Kilgannon introduced her work as being of special interest to union members, such as members of the four organizations (AUPE, UNA, Health Sciences and the Alberta Teachers Federations) that largely support PIA. 

Pollock began her talk with a historical reference to the "Beveridge report," which many Britons revere the way many Canadians revere the sacred obligation to care for war veterans. In December 1942, a committee headed by economist William Beveridge identified five "Giant Evils" in society: squalor, ignorance, want, idleness and disease, and went on to propose widespread reform to the system of social welfare to address these. Thus began Britain’s "Welfare State," with government providing public housing, education, job creation and health care.

"Europe was crippled and divided, but there was a political will to rebuild, and consensus on a social contract," said Pollock. "We got the National Health Service in 1948 and it was the model for most of the Western world." In fact, subsequent governments expanded the NHS’s coverage to include more and more services, as well as pharmaceuticals and medical equipment. Then everything changed in the 1980s, when Margaret Thatcher introduced the concept of privatizing public services.

Investors are the main beneficiaries of privatization's vaunted "private sector advantage,"  said Pollock. "The move to 'centralize' lab services is a code word for privatizing them. The private sector wants to unbundle services, in order to price each service separately -- for example, hospital laboratory services. So let’s say hemotology is unbundled and put out to market place. Then the blood analysis has to be done off-site, and in some cases we know that means it’s done in India."

Keep in mind that government-run public service jobs are usually unionized. On the other hand, usually the first step private sector entrepreneurs take in order to submit low bids is to slash wages and recruit non-union workers. In health care, cleaning, lab and laundry services went private first, then technical and pharmaceutical, and now in the UK all the services are open to doctors and some patients to "choose" market rates instead of base rates. 

Dividing up work to be done as cheaply as possible has to affect the quality of the work, though. With everything outsourced, the health care system loses efficiency, workers lose wages and respect for their skills -- which means, Pollock charged, the patient is the big loser.  

"How can all these services competing be in the best interests of the patient?" she demanded. "The patient wants integrated services, with people talking to each other." For example, outsourcing blood work eliminates or at least complicates the doctor’s ability to get a stat result in a worrisome case.
“No country in the world delivers universal health care or universal education through the market,” said Pollock. "All the evidence goes the other way. The market is inefficient and very expensive in fields like health care and education."

Indeed, she went on:

The inefficiencies of the private system are legion. First, markets create winners and losers, which is illustrated nowhere better than US health care system. That system excludes huge sector of the population.

Also, the market introduces huge costs public services don’t have, such as service, billing, invoicing, and tracking costs. In the NHS, our administration costs were six percent. In the US, administration eats up 30-50 percent of all costs. 

The US National Institutes of Medicine report last year calculated huge inefficiencies in US system, including overdiagnosis and overtreatment, which are as common as underdiagnosis and undertreatment. There was a Florida doctor who performed heart surgery on a patient who didn’t need it, so he could bill Medicare.      

In thanking Pollock for her talk, Alberta Union of Public Employees VP Susan Slade confirmed that Alberta’s privatization efforts have not always succeeded. She noted that Edmonton’s medical laboratory work has been put out for tender but that although Calgary services were at one time tendered out, "now they’re back in-house."
Mair Donnelly, from Social Workers for Social Justice, said that "Canadians in their heart are proud of their health care but the changes are couched in language like 'choices in health care' which fools the public."

Another way to fool the public is to build privatization right into any new programs. In mid-February, the Harperites unveiled a New Building Canada Fund, a continuation of a ten-year $53 billion infrastructure rebuilding plan that includes $10 billion to support cities and provinces in rebuilding their own infrastructure, such as roads, schools and hospitals. 

Though $53 billion may seem like a lot of money, Opposition critics quickly noted that most of the funding had already been announced previously, and Canadian municipalities responded with "muted enthusiasm."

The main difference in this package is, as Canadian Press reported, "projects with capital costs of more than $100 million which apply for the fund will be screened to see if they might be appropriate for public-private partnerships, something Harper said he wanted to see more of." 

In 2012, Parkland Institute ED Ricardo Acuna reported in Straight Goods News: "In the spring of 2012 the federal government essentially bullied the City of Edmonton into proceeding with the southeast LRT line as a P3, making it clear that would be the only way the city would get any federal money at all for the project. At that point, city council, behind closed doors, voted to accept the terms from the feds and proceed with the project as a full P3."

As with other forms of privatization, Allyson Pollock said, "P3s are the means of transferring public wealth to private owners, through a private contract. P3 projects are very expensive, because private sector borrowing is more expensive than public sector funding. So P3s fuel further privatization, because costs go up, and the government gets into a financial hole."

Worse, she said, privatization erodes citizens' ability even to find out what current standards are, for example in long term care for the elderly. With P3s and privatization, just as with international trade deals, "The government is moving away from public law and putting more agreements into private commercial law. The result is that government will try to hide behind commercial confidentiality when any problems arise. Meanwhile, public money, our money, is being diverted away from essential services and jobs like nursing and teaching, to line the pockets of investors."
"The question is, what kind of society do we want to live in?" said Bill Moore-Kilgannon, Executive Director of Public Interest Alberta, which organized Pollock’s presentation. Despite Edmonton's transit experience, he said Albertans don’t have to accept government policies just the way the provincial government announces them. 

"We have the ability to articulate and to challenge," he said, noting that first plan for the massive new South Calgary Campus involved a P3 arrangement. "We [PIA] fought back, working together with Friends of Medicare, and it’s not P3," he said. "At the end of the day, these things are political, and we can’t be afraid to get political." 

— ---- — — ---- —

Not surprisingly, the Alberta Federation of Labour is also opposed to P3 projects, which it defines thusly: "Under a P3, a government signs a contract with a private partner who agrees to design, build, maintain, and sometimes operate, the project over a period of time. That private company finances some or all of the project, and the government repays the company, with interest, over a set term of several years..."

Alberta Federation of Labour president Gil McGowan said he was disappointed that Alberta, like the Harperites, is promoting P3s as a way to stretch out infrastructure payments. McGowan believes P3s do not provide better value for taxpayers.

"We now have more than three decades of (international) experience with P3s and what that experience shows us is that P3s are a shell game that almost never works for citizens and taxpayers," McGowan said.

"P3s are helpful to politicians in the short run because it allows them to move upfront costs for large infrastructure projects off the books in the short term, but over the long term we end up paying at least as much, if not more."

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