The Problem with Profit-Driven Health Care

Canadian Doctors for Medicare

What does the evidence say about private, for-profit health care? It’s not what you think.

Having more private, for-profit clinics reduces access to care

Private for-profit clinics drain the limited supply of doctors and other health professionals from the rest of the health care system, lengthening waiting lists and reducing access[1

Private for-profit clinics also use up needed resources scheduling unnecessary procedures, reducing the services available to other patients requiring medically necessary procedures.[2]

Private, for-profit clinics contribute least where the need is greatest

Private, for-profit clinics often “cherry-pick” the healthiest patients, who are easiest, and cheapest, to treat. [3]

Patients, who are very sick, and no longer profitable to treat, are often referred back into the public system, putting added stress on public resources.[4]

For-profit clinics tend not to serve unprofitable markets like remote and rural communities, Aboriginal communities, marginalized urban populations, and those needing complex chronic care and emergency care. They focus on affluent populations in urban centres, who face the lowest barriers to care. [5]

Private, for-profit clinics aren’t as good for you and they cost taxpayers more.

The evidence shows that private, for-profit health care produces worse patient outcomes than non-profit care, and they order more unnecessary tests and procedures. [6],[7],[8]

Private, for-profit clinics conduct these unnecessary procedures at the taxpayer's expense, and tie up physician resources that could be used on medically necessary procedures.

Criteria for effective health care delivery

There are four important criteria in determining an effective health care delivery model. Private, for-profit delivery doesn’t stack up.

1. Equitable access to medically necessary physician and hospital services: The need to turn a profit means that accessibility can suffer, as private clinics exclude very sick patients or patients who need complex care and are too expensive to treat.

2. High quality care: Making a profit can compromise quality – it means that all of a clinic’s resources aren’t being put into optimal care for patients.

3. Delivery of effective, clinically indicated services: The need to make a profit can push private clinics to order tests and procedures that aren’t medically necessary.

4. Effective planning and integration of health care: Increased competition between private and public delivery is inefficient – it’s harder to coordinate, it’s less accountable, and it’s less effective at delivering an integrated continuum of care.

Evidence shows that more private care does not increase efficiency or access.
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[1] Duckett, S. J. “Private care and public waiting.” Australian Health Review; 29(1): 87-93. 2005.
[2] N Ivers, M Schwandt, S Hum, D Martin, J Tinmouth, N Pimlott. A comparison of hospital and nonhospital colonoscopy: Wait times, fees and guideline adherence to follow-up interval. Can J Gastroenterol 2011;25(2):78-82.
[3] Perry, Joshua E., A Mortal Wound for Physician-Owned Specialty Hospitals? The Legal and Ethical Prognosis for Market-Driven, Entrepreneurial Medicine in the Wake of 2010 Health Care Insurance Reforms (May 13, 2010).
[4] Perry, Joshua E., A Mortal Wound for Physician-Owned Specialty Hospitals? The Legal and Ethical Prognosis for Market-Driven, Entrepreneurial Medicine in the Wake of 2010 Health Care Insurance Reforms (May 13, 2010).
[5] Vaithianathan R. 2004. “A critique of the private health insurance regulations.” Australian Economic Review;37(3): 257-70.
[6] Journal of the American Medical Association, 2002; 288:2449
[7] N Ivers, M Schwandt, S Hum, D Martin, J Tinmouth, N Pimlott. A comparison of hospital and nonhospital colonoscopy: Wait times, fees and guideline adherence to follow-up interval. Can J Gastroenterol 2011;25(2):78-82.
[8] New England Journal of Medicine, 1997, 337:169