The elimination of health-care premiums will pump $1 billion annually into the economy beginning next January and some of that cash could wind up in employees' pockets, say business and union officials.
While no one can say for sure who will reap the benefits of the massive tax cut announced Tuesday, the savings give businesses that paid the fee for their employees a host of options, says Danielle Smith, Alberta director of the Canadian Federation of Independent Business.
"We get the strong indication from the business community that they recognize they have to be competitive on wages and benefits," she said. "I imagine by having more money in their pockets to devote to increasing employee pay that will be one of the main places they decide to reinvest. It may not be immediate, but I imagine throughout the course of the year there will be a lot of that money going back to employees."
While 2.6 million Albertans face health-care premiums, 1.6 million pay for them through benefit plans that are often subsidized by employers.
The CFIB surveyed Alberta businesses last summer on what they would do with any savings from a tax cut and the majority responded they would invest in new equipment and increase employee wages, Smith said.
Alberta Federation of Labour president Gil McGowan said it's an issue that unions haven't yet had time to digest.
"We're talking about hundreds of millions of dollars here that will be freed up as a result of the elimination of the premiums and the big question is where does that money go," he said. "Obviously, employers will have a lot of ideas for it, but it does at least open the possibility for some of the money going into the employees' pockets.
"It puts a little more money on the table at a time when the labour market is tight and workers are in a better position to ask for wage increases."
Mike Percy, the University of Alberta's dean of the business faculty, said the tax cut could have the same impact as former Premier Ralph Klein's $400 resource dividend, but this tax cut isn't just a one-time shot. Albertans will save that money annually, he noted.
"It will have a positive effect, but it will be very difficult to say how much," he said. "It's complex."
Edmonton Journal, Thurs Apr 24 2008
Byline: Darcy Henton
Alberta's health minister will announce plans this week for reshaping the provincial medical system in the face of rising costs and hospital overcrowding, but the fate of health regions won't be decided until summer.
Ron Liepert will bring his plans for reform to the Tory caucus as a new legislative session opens today, approximately one month after he took over as minister and promised bold changes that could include reducing the number of health regions in Alberta.
The tough-talking minister has said a broad range of proposals for change are on the table, including the controversial Mazankowski report.
But he said any decisions on the number of health regions will be announced in June.
"Our plan will lay out some initiatives we hope to accomplish over the next year," said Liepert, who will likely make the plan public on Wednesday.
"I'm not taking anything forward at this stage that will change (the number of health regions), but on or before June 15, I will take before caucus a new governance structure."
Government's plans for health reforms come as Alberta's bill for the medical system reaches $13 billion a year, making it government's single largest expense. Patients, meanwhile, are facing long lineups in emergency rooms as hospitals grapple with bed shortages.
Liepert has said the system must change, but his musings about reforms have sparked controversy as public health-care advocates and labour leaders vow to fight any move toward privatization.
The 2001 report by former federal cabinet minister Don Mazankowski recommended boosting the mix of private, public and not-for-profit providers in health care as well as raising new sources of revenue in the medical system.
Gil McGowan of the Alberta Federation of Labour said allowing more privately delivered care will not fix the problems facing the province's health system.
"If Minister Liepert and Premier Ed Stelmach think the recent election has given them a mandate to turn the health-care system on its head, they've got another think coming," said McGowan. "There will be huge opposition to major privatization in the system."
Friends of Medicare say they are concerned about any move toward allowing more private health care, saying government should concentrate on addressing staffing shortages in Calgary and Edmonton hospitals.
Suzanne Marshall, executive director of the organization, also argued reducing the number of health regions could destabilize the system.
"It seems to me they really need to focus on the system and do whatever it takes to bring health services up to par," Marshall said.
Other organizations, however, support a move towards privatization and believe Liepert should make fundamental changes in this area.
Nadeem Esmail of the Fraser Institute said Alberta should follow the lead of countries such as Sweden, which allows private medical insurance and a private medical system that offers competition to public hospitals.
"The problem is we always look inward and ask what we can do within the current health system when it's clear this is failing Albertans," said Esmail, a senior health policy analyst with the think tank.
Liepert said his proposal will help ensure the system becomes more accessible to patients as well as sustainable. His "action plan" will lay out goals for shorter term initiatives, although it isn't clear if all of his long-term plans will be made public this week.
"There's a recognition we can't deliver 1960s health care in the 21st century," said the minister. "We have to look at different ways of delivering health care."
Calgary Herald, Page A1, Mon Apr 14 2008
Byline: Michelle Lang
Gil McGowan, President of the Alberta Federation of Labour, Tuesday, April 3, 2007
Just under four years ago, the Alberta government introduced and passed a controversial law that radically altered labour relations in the health care sector.
Bill 27 allowed the government to tear up dozens of freely negotiated contracts covering the pay and working conditions of literally tens of thousands of health care workers.
It also forced unions into run-off votes, denying many workers the right to choose the union they actually preferred.
And, finally, it removed the legal right to strike from thousands of union members in areas like community health and mental health - without ever attempting to justify how the public interest would be threatened if a speech pathologist or a physiotherapist or community health nurse walked a picket line.
Our concerns about the substance of the law were profound. In many ways, it was the most blatantly anti-union piece of legislation introduced by an Alberta government in more than 20 years.
But in addition to being strongly opposed to what the new law said and what it meant for health care workers in this province, we were also deeply troubled by the process that led to its introduction.
In particular, we were concerned about the role that the Alberta Labour Relations Board played in drafting the law.
The Labour Relations Board is supposed to be the impartial referee in all labour relations matters. It is supposed to be free from influence from both employers and unions. And it is supposed to be independent from government.
However, in the case of Bill 27, it became clear to us that the boundaries between the board and the government had become dangerously blurred.
In the process, we felt that the Board's ability to act as an independent and impartial third party had been compromised.
Our concerns about the LRB's role in Bill 27 prompted us to file numerous freedom of information requests aimed at getting a clearer picture of what really happened behind the scenes between government and the Board.
It also prompted two major unions - the United Nurses of Alberta and the Communications, Energy Paperworkers - to launch legal action.
In September of 2004, Justice Watson of the Alberta Court of Queen's Bench dismissed the unions' application for a judicial review of Bill 27 - not because their arguments lacked merit, but because so much of their case rested on things that had gone on behind closed doors. We simply did not have enough evidence.
However, in the months following the lower court decision, the evidence that had been missing started to pile up. As a result of freedom of information requests launched by the Federation of Labour, a picture of what happened in the run-up to Bill 27 began to emerge.
That picture featured a government, who was also the employer - either directly or through the Regional Health Authorities it created and appointed - using its legislative power to force concessions on health care workers that it couldn't win at the bargaining table. It featured a Labour Board helping the government draft a law which they knew would be used against health care workers. And it also featured Board officers sitting in judgment on cases involving the law they had just helped write.
The new evidence that we managed to gather - and the picture that evidence painted - caused unions across the province to ask a very fundamental question: how can we possibly have confidence appearing before a tribunal that had so clearly worked with a major employer to undermine the rights and interests of a large group of workers?
How could we possibly trust a referee who had been working with the other team?
Today was supposed to be our first day at the appeal court. We were eager to have our day in court and, as a result of the new evidence, we were confident about the outcome.
But instead of appearing before the appeal panel, we are here to respond to a major new development.
Earlier this morning the Labour Relations Board released a new protocol designed to more clearly define future interactions between the Board and the government.
The protocol begins by asserting that the only way for the Board to maintain the confidence of the parties appearing before it is to defend its independence from employers, unions and government.
It goes on to say that it is the responsibility of the government, not the Board, to develop policy and draft labour legislation.
It acknowledges that in some cases the government may approach the board for narrow technical advice on legislation or regulations. But it puts strict boundaries on what this kind of consultation would involve.
Most importantly, the protocol guarantees that all interactions between the board and government on either legislation or regulation will be fully and publicly disclosed.
No more veil of secrecy. No more backroom meetings. No more government behaving as if the Board is merely a branch of one of its departments. No more guessing about what's going on behind closed doors.
The protocol also guarantees that, in those cases where the board does give technical advice, the board officers involved will not be allowed to sit in judgment on the laws or regulations they gave advice on.
It also puts restrictions on the role of outside legal counsel - so they can't act for employers one day and as advisor to the board the next.
With this document, the Alberta Labour Relations Board has gone from having essentially no clear internal rules dealing with its independence from government to having some of the best rules in the country.
We may still have some of the worst labour laws in Canada - and we do. But this protocol makes it clear that the Board's only role will be to interpret those bad laws, not help write them.
The importance of this change cannot be overstated. In a province where working people can't count on the Legislature to consistently protect their rights in the workplace, at the very least they have to have confidence that the referee isn't working against them as well.
The Board now has the tools to say "no" when the government comes calling. They now have the tools to tell say to the government, "we won't help you with your dirty work."
We expect the Board to aggressively use these new tools when appropriate.
We also have expectations for government. Now that clear boundaries have been set, we expect the government to respect those boundaries and to not compromise the independence of the board.
As a result of this new protocol, which has been signed by the Board chair and all the vice-chairs and which will be signed by all future vice-chairs, we at the Alberta Federation of Labour, the United Nurses of Alberta, and the Communication Energy Paperworkers union have collectively decided to withdraw our court appeal.
We have pursued this case tenaciously for the past four years. We have invested significant amounts of time, money and resources. And we have persevered in the face of efforts to discourage us.
But our goal was never to put trophy heads on our wall. Our goal was to improve public policy. Our goal was to defend and guarantee the independence of the Labour Board from undue influence from government and employers. And our goal was to restore confidence among all those who have to appear be before the Board.
Looking at the protocol released by the Board today, we are satisfied that our major goals have been achieved. As a result, we see no reason to proceed with the court case.
From our perspective, this is a victory for working people because we can now have more confidence in the tribunal that hears our concerns and complaints.
It is a victory for the Labour Board itself because it more clearly defines and defends its independence from government.
And it is a victory for the broader public because it sets in place a new model for governance which we think can and should be adopted by other public boards and agencies.
If the Stelmach government is sincere in its efforts to promote transparency and accountability, we think this protocol is a very good place to start.
Building a better model of governance - one that the public can really have confidence in - was our goal from the start.
That's why, last year, we at the AFL commissioned an expert study on the situation related to Bill 27. That study was done by Professor Lorne Sossin, a highly respected authority on administrative law from the University of Toronto.
It's clear to us that the Board took Prof. Sossin's recommendations to heart.
Prof. Sossin talked about the importance of maintaining a clear distance between government and administrative tribunals such as the LRB. He talked about the importance of rules to guarantee that distance. And he talked about the importance of transparency and full public disclosure.
The board may not have used the exact words proposed by Professor Sossin, but the spirit of his recommendations has clearly been given life in the Board's protocol.
As a result of these new rules, the Board has gone a long way to reestablishing confidence among the public and stakeholders.
Obviously, we would have been happier if Bill 27 had never been introduced. But we can't re-write history. We can, however, make sure that we don't repeat it.
If these rules had been in place four years ago, the government would not have been able to enlist the Board in its campaign to gut health care labour laws. We may still have gotten those laws - but their introduction would not have triggered a crisis in confidence in the Labour Board.
With the Board's new protocol, we consider our case against the Board's conduct on Bill 27 closed.
We can now turn our attention where it really belongs - to the bad laws we have on the books and to the government that has passed those laws and still defends them.
The Information and Privacy Commissioner today ordered the Alberta Labour Relations Board (LRB) to release approximately 200 records to the Alberta Federation of Labour (AFL) pertaining to the drafting of the controversial Bill 27, which restructured health care labour relations and stripped health care workers of many rights. The Commissioner also chastised the LRB for "failing" in its duty to assist an applicant under the Freedom of Information Act. (Read Commissioner's Decision)
The AFL has been trying since June, 2003 to access records revealing communications between key officials at the LRB and government officials regarding the drafting of Bill 27. The Commissioner's order is the latest revelation in an ongoing scandal where LRB officials may have breached their role as independent arbiters of labour law by assisting in the drafting of government legislation.
Last November, two memos were accidentally released which revealed significant communication about the content of Bill 27. At the time the Privacy Commissioner and the LRB took the AFL to court to try to get back the documents. The Court denied the request.
"This is a significant victory," says AFL President Gil McGowan. "For three years the LRB has stonewalled and hidden behind a veil of secrecy around Bill 27. We are pleased the Privacy Commissioner recognized the important right to access these documents."
There are two parts to the Commissioner's ruling. First, he ruled the LRB must disclose portions of documents that reveal who was involved in creating, drafting, editing or commenting on legislation, as well as the dates of those communications. Second, he ruled the LRB failed in its legal duties under FOIP by issuing an incomplete response and by delaying the release of other documents.
"We are hopeful that the nature of the documents released - including dates and names - will be enough to finally answer our questions about the LRB's involvement in the creation of Bill 27," says McGowan. "Answers that are long overdue."
Under the terms of the Order, the LRB has 50 days to release the documents to the AFL or to decide to file a judicial review. McGowan hopes that the LRB finally chooses to be transparent. "Many of the documents in question, including some not disclosed today, are in the discretion of the LRB to release voluntarily. The LRB should clear the air in this matter once and for all by releasing all the records in its discretion."
McGowan also called on the LRB to adopt the recommendations of the Sossin Report, released by the AFL in June, as a method to preventing future scandals.
"It is particularly ironic that this order comes down in the middle of the government's Right to Know Week. Clearly as far as the LRB is concerned, the right to know is on a need to know basis." McGowan concluded.
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For More Information:
Gil McGowan, AFL President Cell: (780) 218-9888
Jason Foster, AFL Director of Policy Analysis Tel: (780) 483-3021
Backgrounder: Bill 27 and Freedom of Information
September 27, 2006
- In March, 2003 the Government of Alberta introduced and passed Bill 27, the awkwardly-named Labour Relations (Regional Health Authorities Restructuring) Amendment Act, at the request of Health Care employers.
- Bill 27 radically changed the face of Health Care industrial relations in Alberta by:
a) Removing the right to strike from thousands of union members in areas like Community Health, Mental Health and Extended Care;
b) Forcing unions into run-off votes against each other, denying workers in smaller groups the right to choose the union they wanted to represent them;
c) Tearing up dozens of signed collective agreements.
- The implementation of these sweeping changes was made the responsibility of the Alberta Labour Relations Board. In order to function, the Labour Relations Board must function as a neutral umpire in labour relations.
- In June, 2003 the AFL filed a Freedom of Information request with the ALRB, asking for any record of the Board's correspondence with the government, employers, or unions concerning Bill 27. We wanted to try to determine the nature and extent of employer influence on the drafting and implementation of the bill.
- The LRB responded to the request with a one-page refusal, declining to disclose even a single record. In justification, the Board cited three sections of the Freedom of Information and Protection of Privacy Act.
- In the fall of 2003, health care unions and the AFL challenged the process in court, alleging that the conduct of the Board gave unions a reason to fear bias in its rulings. This allegation was supported by information from FOIP requests made to other parts of government.
- The court challenge was lost in court of Queen's Bench, and is now proceeding to the Court of Appeals.
- The AFL then proceeded to appeal the Board's decision to the Office of the Information and Privacy Commissioner.
- In November 2005 the inquiry produced (possibly through an accidental release) several documents that seemed to confirm that the Board played an active part in the creation of Bill 27.
- On September 27, 2006, the Information Commissioner released his decision. Among other issues decided, the Commissioner rejected the ALRB argument that it had the right to withhold any and all records relating to advice given to Cabinet, including even the names of those giving advice and the dates on which it was given. The Commissioner has ordered the Board to "sever" many of the documents, withholding only those portions properly exempted by Section 24 of the Freedom of Information and Protection of Privacy Act.
- This would mean that the Board has to disclose:
a) The names of those sending and receiving the documents.
b) The dates on which the documents were sent.
c) The subject matter lines in the emails or letters.
- The AFL hopes that the information received as a result of this decision may help to fill in some of the gaps in the Bill 27 story.
- The Commissioner also ruled that the ALRB had failed to meet its duty under FOIPPA, by improperly withholding documents, delaying the release of documents, and by failing to provide information as required by the Act.
- The Federation has called on the ALRB to adopt a set of protocols to prevent future incidences of real or perceived bias on the part of the Board. The protocols in question were drafted by Lorne Sossin, Associate Dean at the University of Toronto Faculty of Law, and Charles Smith of York University. Professor Sossin is an acknowledged expert in administrative law.
- The AFL is also asking ALRB Chair Mark Asbell to use the discretion granted him under the FOIPPA to release all the relevant documentation relating to Bill 27.
EDMONTON-The AFL today released a study conducted by Dr. Lorne Sossin, Associate Dean of Law at the University of Toronto, examining the conduct of the Alberta Labour Relations Board in the wake of the Bill 27 controversy. Dr. Sossin's report, called The Independent Board and the Legislative Process (Read the Report here), assesses the actions of LRB officials during and since Bill 27, and compares Alberta to other jurisdictions in Canada.
Sossin's Report has three key findings:
- The undisclosed involvement of the Board Chair in a legislative process is "problematic and damaging".
- Other jurisdictions hold their LRBs to a higher standard than Alberta does.
- The Board failed to ensure proper transparency for its actions, which undermined the integrity of the Board among its stakeholders.
"Dr. Sossin's report articulates very clearly that the Alberta Labour Relations Board failed in a number of serious respects to uphold its obligations for transparency, impartiality and integrity," says AFL President Gil McGowan. "These findings are serious and require immediate attention by the LRB and the Alberta government to address shortcomings identified by Dr. Sossin."
Sossin's report was commissioned by the AFL in March, following the release of memos indicating that senior LRB officials participated in the drafting of Bill 27. Bill 27 was legislation forcing the amalgamation of bargaining units in health care and removing basic legal rights from many health care workers. It is generally considered inappropriate for officials who will be charged with interpreting and enforcing legislation to participate in its creation.
The report has three key recommendations. First, it suggests that if the Alberta government wants the LRB to play a role in drafting legislation, it should say so in the Labour Relations Code. Second, the LRB should develop a protocol to protect the integrity of its proceedings. This protocol should include transparency to all parties when officials participate in legislation, and such officials should recuse themselves from hearing cases related to the legislation in question. Third, no member of the LRB should have a secret role in drafting legislation.
"The recommendations would go some distance to repairing the damaged reputation of the LRB," says McGowan. "We are open to discussing with LRB officials establishing an appropriate protocol to protect the integrity and impartiality of the Board."
The AFL calls upon LRB Chair Mark Asbell to move forward with the recommendations of Dr. Sossin's report. It is also looking for an open process for establishing protocols.
"The Bill 27 scandal has created a crisis in confidence between the labour movement and the LRB. This is an opportunity to begin the work of repairing the damage. But the ball is now in Mr. Asbell's court," McGowan concludes.
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For more information call:
Gil McGowan, AFL President @ (780) 218-9888 (cell)
As members of the provincial government caucus prepare to gather in Calgary tomorrow for a meeting that could decide the fate of the so-called "Third Way", the Alberta Federation of Labour is urging unions across the province to put the issue of private health insurance on the bargaining table.
In a letter sent to more than 350 unions and union locals around the province, AFL president Gil McGowan says one of the best ways to stop the government from proceeding with the Third Way is to remind employers in both the public and private sectors about the high costs associated with any move towards an increased reliance on private health insurance.
"We need to let both the government and employers know that whatever services they take away from our members by 'shrinking the Medicare umbrella� we will fight to get back at the bargaining table," wrote McGowan. "The higher costs associated with this will end up being a major new financial burden for employers in both the public and private sectors."
In addition to his letter, McGowan has also met personally with a number of major union presidents who have agreed to raise the issue of private health insurance with their employers - including unions representing city workers and public school employees in both Calgary and Edmonton.
"By allowing patients to 'buy their way to the front of the line� for certain services and by allowing doctors to work in both the public and for-profit systems, the Third Way will essentially create a market for private insurance in Alberta where there was none before," says McGowan.
"The best way to avoid making health insurance a crippling issue like it is for employers in the U.S. is to stop the Third Way - at least its most controversial sections. This is definitely an area where unions can make common cause with employers - because the Third Way threatens our members� access to health care and it threatens the bottom lines of employers."
To help illustrate just how big an advantage Medicare gives Canadian employers - and how much Alberta employers could lose if the provincial government proceeds with the Third Way - McGowan provided unions with a number of telling statistics.
For example, he pointed out that the average cost for health benefits in Canada is currently about $930 US per employee per year - compared to more than $10,000 US per year for American workers with families.
He also pointed to the example of contracts negotiated by construction unions on both sides of the border. In Alberta, for example, employers who work with the Ironworkers pay extended health benefits of $1.50 Cdn per hour per employee - compared to $7.15 Cdn in Phoenix; $7.38 Cdn in San Francisco; $7.29 Cdn in Minneapolis; and $10.89 Cdn in Buffalo, NY.
For more information call:
Gil McGowan, AFL President (780) 915-4599 (cell) or (780) 483-3021 (office)
Gil McGowan, President of the Alberta Federation of Labour, April 12, 2006
When it comes to politics in Alberta, there really have been only two issues that have dominated public attention over the last few months.
The first, of course, has been the Premier and his plans for retirement.
The second is the Third Way.
Like most other Albertans, I have strong feelings about Premier Klein's leadership.
But for our purposes today, I'll bite my lip about what I think of the Premier and focus instead on his policies for health care.
We've all seen or heard the news. For more than two years now, Premier Klein, has been telling us that the sky is falling.
He's been telling us we can no longer afford Medicare. And he's been telling us that privatization is at least part of the solution.
In many ways, this may be one of the most important political debates this province has ever had. From our perspective, the very future of our health care system is at stake.
With that in mind, over the next twenty minutes or so, I'd like to do four things.
First, I'll talk about what's actually being proposed when we talk about the third way.
Second, I'll talk about why we in the labour movement think at least some of those proposals will take us down a dangerous path.
Third, I'll talk about how those proposals, if implemented, might affect individuals, businesses and the economy.
And finally, I'll talk about what I think Albertans, from all walks of life, can and should do to protect Medicare.
So what is the Third Way?
For several years now, Premier Klein has been promising something big. He has even suggested that's he's willing to violate the Canada Health Act.
Until recently, it's just been talk. But, he has finally moved from rhetoric to action.
At the end of February, the Premier and his health minister, Iris Evans, released something called The Health Policy Framework.
It's not legislation - it's really just a skeleton of ideas. But the government has made it clear that this document will form the basis of new legislation that we could see as early as the middle of April.
It's the first time they've actually spelled out what the Third Way will involve. In a sense, they've finally put their cards on the table ... and that's a positive thing.
The other positive thing is that there are actually a number of policy directions contained in the Framework that almost everyone involved in the health care debate can agree on.
It's no secret that we in the labour movement are big defenders of Medicare. We helped create it and we still believe it's worth fighting for.
But even we can take issue with some of the proposals.
For example, we support the suggestion that there should be more teamwork between health professionals; we support the suggestion that we should experiment with replacing the fee-for-service approach to paying doctors with salaries; and we support the suggestion that there should be a greater emphasis on wellness and prevention.
If these kinds of reforms were the sum total of the Framework, I probably wouldn't be here today. And the government probably wouldn't be facing a rising tide of public opposition.
Unfortunately, the good in this document is far out weighed by the bad and the down-right dangerous.
Like many of the groups and individuals who have voiced opposition to the Third Way, there are four policy directions in the Framework that we find particularly alarming.
First, we're concerned about plans to remove the prohibitions on doctors working in both the public and private system.
Second, we're concerned about plans to allow patients to buy their way to the front of the line for certain services, like hip and knee replacements.
Third, we're concerned by the suggestion that some services may be de-listed or that new services may never be listed.
And fourth, we're particularly concerned about plans to open the door for private health insurance.
Despite repeated reassurances from the government, these are not mild reforms. This is not tinkering around the edges.
For the better part of a decade now, conservative governments like ours here in Alberta have been chipping away at our public health care system. We've seen contracting out of ancillary services; we've seen de-listing of things like vision care and physiotherapy; and, here in Alberta and in provinces like Quebec and B.C., we've seen strong moves towards increased for-profit delivery of services within the public system.
But let's be clear about one thing: if the Klein government goes ahead with the plans contained in the Framework document - in particular, if they allow people to buy their way to the front of the line for certain services and if you open the door for private health insurance - then they will be going one giant step beyond where anyone has gone before.
They will be going from "private delivery" to "private payment." They will be going from "access based on need" to "access based on wealth." They will be introducing a gold-plated tier of care for the few - and an inferior tier of care for everyone else.
And that doesn't just violate both the letter and the spirit of the Canada Health Act - it strikes at the very foundations of Medicare.
Before I dive into my specific critiques of the Framework document, I'd like to step back and take a closer look at the government's goals and assumptions ... because in the same way that buildings are constructed on foundations of concrete and steel, public policies are built on the foundation of goals and assumptions.
If the foundations of a building are weak, then the structure above is shaky. And if a government's goals and assumptions are faulty, then public policies that flow from them will be weak as well.
In many ways, the problem is not with the governments goals. Both Health Minister Evans and the Premier have said that their primary goals in these reforms are to control costs and reduce waiting lists.
Frankly, who can argue with that?
But while it may be hard to take issue with some of the government's over-arching goals, the same cannot be said for some of the assumptions that their plan is built on.
To put it bluntly, many of their core assumptions are flawed. And that's where the Third Way starts to come off the rails.
The first assumption that I'd like to take issue with is the assumption that public health care is not financially sustainable.
People in government have sometimes accused people like me and other leaders in the labour movement of fear-mongering on various issues. But on the issue of sustainability, it is the government that has been running around saying the sky is falling.
The truth about health care spending in Alberta is both more complex and less alarming than the government lets on.
When I met with Iris Evans last month she said breathlessly; "When Premier Klein took power, we were spending $5 billion on health care and now we're spending $10 billion."
That sounds very dramatic. But what this told me was not the health care spending is unsustainable - but rather than the minister doesn't have a really good grasp of basic economics.
The truth is that over the period of 13 years that the minister referred to, inflation in Alberta has increase by nearly 30 per cent and our provincial population has grown by more than 500,000.
We also have to remember that, in the mid-90s, the government imposed deep cuts on health services and staffing, creating a need for substantial "catch-up" spending.
When you look past the doom and gloom being pushed by certain politicians - what we find is that when you adjust for inflation and population growth, real per person spending on health care in Alberta has actually been going up by an average of about 2 percent each year over the past 13 years.
That's the crisis. That's what the government is using as justification to throw the baby out with the bathwater.
And it doesn't stop there. You can't say you really understand trends in health care spending until you break down that spending into its component parts and until you put it into the context of our provincial income.
When you do that, you see that spending on hospitals and doctors - which forms the core of Medicare - has remained almost entirely flat over the past 15 years.
You also see that the areas with the highest cost increases are actually the ones with the biggest for-profit components - most notably prescription drugs.
And then there is the question of what we can afford.
Thanks largely to a lucky accident of geology and geography, we're the richest province in the country - and getting richer.
As a percentage of our provincial GDP - which is our collective income - public spending on health care has remained stable at under 6 percent for the past twenty years.
The bottom line on health care spending is that the sky is not falling. Costs are rising, and that's a legitimate concern. But they are not as out of control as the Premier would have us believe. And they are certainly not bad enough to justify throwing the baby out with the bath water.
From our perspective, Medicare costs are still manageable - especially in a province as wealthy as Alberta.
That leads me to the second, and I would argue, even more dangerous assumption that almost all the government's Third Way proposals are built on. And that's the assumption that privatization is one of the best ways to achieve their goals on cost control and shortened waiting lists.
On the day the Framework document was released, I told reporters it read like a love-letter to private health care. That's because privatization was the strand that wound through the entire document and tied it together. It was the magic pill, the silver bullet.
But the assumption that greater privatization will lead to lower costs and reduced waiting list is just that - an assumption. And all the available research - and all the available evidence from the real world - suggests that it's a false assumption.
Take the proposal to allow doctors to work both sides of the street, for example.
The Framework suggests that by allowing doctors to take paying patients this will somehow reduce pressure on the public system.
It's a nice sounding theory - but experience shows it doesn't work in practice.
It doesn't work because there are only a limited number of doctors - and if they're working two days a week in their for-profit practice, that's two days a week they won't be available to work in the public system. The result is longer waits in the public system, not shorter. And this isn't hypothetical. These kinds of reforms have been tried in Britain, Australia and other countries. And, to put it bluntly, the experiments have failed. They haven't taken the pressure off their public systems.
On the contrary, experience shows that doctors consistently chose their higher paying private clients, and leave their public patients waiting in longer in public lines.
But allowing doctors to work both side of the street, is only one piece of the puzzle.
The government is also talking about allowing people to buy their way to the front of the line for certain service like hip and knee replacements. And you're talking about shrinking the umbrella of what's covered by Medicare by either de-listing some services or not listing new services.
When I look at all these proposals together, what I see is a deliberate attempt on the part of the Alberta government to create a market for private health care and private health insurance where there was no market before.
By shrinking the Medicare umbrella and allowing people to pay privately for things like joint replacement, they're creating the demand. And by freeing doctors to give faster access to those with thick wallets, they're creating the supply.
The big question is this: are these changes really in the best interests of Albertans? Will the creation of a market for private health care save us money? Will it improve access to care? Will it benefit our economy and serve our families better?
Our short answer to those questions is an emphatic "no" - private health care is not in our best interests.
As I've said, the biggest danger of the Third Way is that it is opening the door for and creating a market for private health insurance.
When I met with Iris Evans, I gave her a list of reasons why any move towards a greater reliance on private health insurance would not be in the public interest. And I'd like to share five of those reasons with you today.
First, an increased reliance on private health insurance would not be in the public interest because it costs more.
Our single-payer public system pools risk, thereby lowering cost. Our public health insurance system also has very low administrative costs - less than two percent of overall cost versus about 13 percent in private health care.
This explains why the American system - which relies on private insurance - is roughly twice as expensive on a per capita basis when compared to the Canadian public system.
Introducing a new tier of private insurance here in Alberta would undermine the advantages of having a single-payer system. It would fragment our system, reduce efficiencies and increase overall costs.
Second, an increased reliance on private health insurance would not be in the public interest because private health care has a much worse track record of cost containment than public health care.
Costs in the public system have been going up, but not nearly as much as costs in the for-profit health care sector.
In the U.S., private health insurance premiums have been rising at an average rate of more than 10 percent a year for each of the past seven years. The increases in premiums rates have been even higher for smaller employers.
In fact, the only way private insurers have been able to stop costs for completely spiralling out of control south of the border is by denying more people coverage, reducing the scope of coverage for those who are enrolled in plans and by charging ever-increasing deductibles and co-payments.
Third, an increased reliance on private health insurance would not be in the public interest because the companies most likely to step in and provide expanded private health insurance here in Alberta are the same American companies that have been found guilty of fraud on an almost mind-boggling scale.
Columbia/HCA, for example, was fined $745 million for fraud. Tenet Health Care was fined $683 million.
Even AON, the private insurance company that our provincial government contracted to help draft it Third Way framework, was fined $190 million.
Are these really the people we want to turn to as saviours? Are these the really people we want to invite into Alberta and entrust the care of our families to?
Fourth, an increased reliance on private health insurance would not be in the public interest because the expansion of private health insurance will hurt Alberta employers.
If the government shrinks the Medicare umbrella, workers (both union and non-union) will have no choice but to push for increased health benefits from their employers. And employers, especially in Alberta's current tight job market, may have no choice but to comply in order to attract and retain employees.
For public sector employers, this will mean less money left in their budgets to pay for the services they provide. And for private sector employers, it will mean reduced profits.
To understand just how costly the Third Way might be to employers consider these numbers: the average cost for health benefits in Canada is currently about $930 US per employee per year. In the States, the average cost is more than $10,000 US per year for employees with families.
To illustrate this point further, consider some of the numbers we've been able to gather from the construction industry. In the labour movement, we have many unions that operate on both sides of the border - and I had an opportunity to look at some of the contracts that had been negotiated by the Ironworkers in both Canada and the U.S. The numbers on health benefits were truly shocking. In Canada, construction companies in northern Alberta pay ironworkers $1.50 per hour for extend health benefits. In Saskatchewan they pay $1.60 per hour and in Manitoba it's $1.70.
But in the States, the amount they pay for health benefits is, in some cases, more nearly three quarters of what they pay for wages.
I'll give you four examples. In Phoenix, $7.15 construction employers pay ironworkers $7.15 per hour (Can) for health benefits. In San Francisco it's $7.38 per hour. In Minneapolis, it's $7.29 per hour and in Buffalo, NY it's $10.89 hour.
These costs have been literally eating American businesses alive.
The bottom line is that Medicare, as it is currently constituted, lowers costs for our businesses and gives them a huge economic advantage when competing with their American rivals. Creating a new tier of private insurance in Alberta will substantially reduce that advantage.
A move to a greater reliance on private health insurance will be particularly problematic for smaller businesses because large employers will more easily be able to afford extended health benefits. In the current tight job market that means that smaller employers will be at an even greater disadvantage when it comes to attracting and retaining employees.
With all this is mind, I ask these questions: Will your business or organization be able to afford increased health benefits for your employees? Where will the money come from? And, in a province as wealthy as Alberta, do you really think it's justified to download public costs onto individuals and business?
Fifth, an increased reliance on private health insurance would not be in the public interest because less than 35 percent of Alberta workers currently have access to supplemental health benefits through work.
These are the people most likely to received increased benefits to cover the new tier of private service that the Third Way would create. Even if you add in the families of workers covered by private insurance, more than 50 percent of the Alberta population will likely be left without supplemental insurance.
Sixth, and finally, an increased reliance on private health insurance would not be in the public interest because there is only one payer for health services - the individual citizen.
By opening the door for more private insurance, the government won't really be reducing costs, they'll just be downloading them to businesses and individuals. I ask this question: shouldn't the government consider the broader social costs of health care rather than just the focusing on getting health care costs "off its books"?
At this point I'd like to one make one thing very clear. We in the labour movement do not want to bargain for increased private health insurance coverage. We don't want to add an extra burden on our employers. And we don't want to have to deal with another item on the bargaining table that could cause tension and possibly lead to strikes.
Our strong preference is to maintain a comprehensive and universal public system. But make no mistake: if the government starts shrinking the umbrella of Medicare coverage, we will have no choice but to act. We will have no choice but to attempt to fill the gap at the bargaining table.
With all sincerity, I hope it never comes to that. It won't be good for our members, it won't be good for business and it won't be good for Alberta.
I'm fiercely proud of the fact that the Canadian labour movement has always fought for health care benefits for all Canadians, not just our members. And that will continue to be our priority.
But if the government proceeds with the Third Way as currently proposed, they'll be opening a Pandora's Box.
As it stands right now, Alberta employers cover extended health benefits costs for about 582,000 individual Alberta workers. If you add a new tier of care, that's a good indication of how many people will be demanding more private coverage from their employers.
Of course, other than hips and knees, we don't know yet what services your government plans to let people buy faster access to. So we don't know exactly how many new benefits we might have to bargain for and how much benefit costs might increase. But for each item they add to the list, the cost to employers to cover the gap will go up.
One way to estimate the cost would be to look at monthly cost being projected by Accure Health, the private insurance firm associated with Jim Dinning. They're planning to offer a plan that will cover access to services like hip and knee replacements - at a cost of $70 per month.
So if all 582,000 Albertans who currently have extended health benefits are successful in getting that kind of coverage - that would translate into an extra cost to employers of about $41 million a month and more about $492 million a year. And that's just for the one procedure.
At the end of the day, I'm left with many troubling questions about the framework document. For example, why would the government want to download so such significant costs onto businesses and individuals?
Why would they want to undermine the economic advantage conferred by Medicare?
How, if their goal is to control costs, are they going to do that by opening the door to private insurance which we know from experience is much more expensive?
And if their other goal is to reduce waiting list, how are you going to accomplish that by let doctors work both sides of the street - a practice we know will probably lead to longer public waits, not shorter? I know that the buzzword for the government on this issue is "choice." They say that people should have the free to choose where to spend their money - even if they're spending it on health services.
In democratic western societies, we've always tried to protect individual choice - and that's a good thing.
But we've also said that reasonable limits often need to be placed on choice - especially when an individual's choice might have adverse effects on other individuals. That's why we say people don't have the right to choose to drive down the highway at 200 km/hour or the right to smack their neighbour in the head when they have an argument.
Given that private insurance drives up cost and has the potential to increase waiting lists for everyone, I would argue that it's reasonable to prohibit access to it. It's a clear example of the public good trumping the narrow interests of wealthy individuals.
The majority of Canadians and Albertans understand this. It's just too bad that whoever wrote the Framework document didn't share that insight.
In conclusion, I just like to say this: Private health care and the Third Way may be Ralph's hobby horse, but Albertans don't have to hop on board.
All the evidence shows that privatization is the wrong way to go. The evidence also shows that there are many potential fruitful avenues for reform within the public system.
The bad news is that our Premier, despite his impending retirement, seems determined to proceed. And there's nothing more dangerous than a politician with a bad idea who knows he's not going to face the voters again.
The good news is that while Ralph may be riding off into the sunset, the majority of his caucus members are not. THEY will have to face the voters.
That's, frankly, is why I'm here today. We in the labour movement are often on the opposite side of issue compared to business. But in this case, I think our interests coincide.
We don't want our members to lose health benefits - and you don't want to face increased costs.
Medicare gives individuals security and access to top notch health care that, in most cases, they would otherwise be unable to afford. But it also gives business an economic advantage especially when it comes to competing with their rivals south of the board.
Medicare is an important part of the Canadian Advantage and the Alberta Advantage. It's an Advantage we should not give up lightly.
That's why I want you to help us send a message to the government.
With the Premier's retirement announcement, the Third Way is teetering. But it needs one more big push to knock it over.
We in the labour movement will be doing our part. But I'm a realist.
Here in Alberta, the Premier and the health minister can afford to ignore angry letters from people like me. But they really stand up and take notice when they hear from people like you.
The Third Way may be on life support, but, more than anyone, you and your colleagues in the business community have the power to pull the plug.
So thank you for taking the initiative to establish this committee. I hope that, after gathering the information you need, you capitalize on the power you have to stop the Third Way before it becomes an albatross around the neck of the Alberta economy.
The so-called Third Way in health care may be Premier Klein's "hobby horse" - but Health Minister Iris Evans shouldn't feel obliged to hop on board, says AFL president Gil McGowan.
In his presentation to the health care hearings being conducted by Evans, McGowan warned today that the Third Way could end up costing Alberta businesses a bundle.
"If the government shrinks the Medicare umbrella, workers - both union and non-union - will have no choice but to push for increased health benefits from their employers," said McGowan.
"And employers, especially in Alberta's current tight job market, will have no choice but to comply in order to attract and retain employees. For public sector employers, this will mean less money left in their budgets to pay for the services they provide. And for private sector employers, it will mean reduced profits."
To understand just how costly the Third Way might be to employers, McGowan asked Evans to consider that the average cost for health benefits in Canada is currently about $930 US per employee per year. In the States, the average cost is $5,500 US for single employees and more than $10,000 per year for employees with families.
"Private health insurance costs have been literally eating American businesses alive," said McGowan. "The bottom line is that Medicare, as it is currently constituted, lowers costs for our businesses and gives them a huge economic advantage when competing with their American rivals. Creating a new tier of private insurance in Alberta will substantially reduce that advantage."
For more information call:
Gil McGowan, AFL President @ (780) 915-4599
Fast Facts on Private Health Insurance
Private health care costs more. Canada's single-payer public system pools risk, thereby lowering cost. Our public health insurance system also has very low administrative costs (less than 2%). This helps explain why the Americans - who rely on private insurance - spend 16 percent of their GDP for a health care system that leaves 48 million people without coverage. We spend about 9 percent of our GDP on a much more comprehensive system.
Private health care has a much worse track record of cost containment than public health care. Costs in the public system have been going up, but not nearly as much as costs in the for-profit health care sector. In the U.S., private health insurance premiums have been rising at an average rate of more than 10 percent a year for each of the past seven years. The only way private insurers have been able to stop costs for completely spiralling out of control south of the border is by denying more people coverage, reducing the scope of coverage for those who are enrolled in plans and by charging ever-increasing deductibles and co-payments.
Private health insurance companies make money by not be giving people the care they need - but by denying it. In the U.S., people with pre-existing conditions are routinely denied coverage. Even with those with coverage, some studies suggest that up to 30 percent of claims are denied. This is already happening with supplemental coverage in Canada. In other words, private health insurers often exclude the people who need it most.
The companies most likely to step in and provide expanded private health insurance here in Alberta are the same American companies that have been found guilty of fraud on an almost mind-boggling scale. Columbia/HCA, for example, was fined $745 million for fraud. Tenet Health Care was fined $683 million. Even AON, the private insurance company that your government contracted to draft this framework, was fined $190 million. Are these really the people we want to turn to as saviours?
Private health insurance will hurt Alberta employers. The average cost for health benefits in Canada is currently about $930 US per employee per year. In the States, the average cost is $5,500 US for single employees and more than $10,000 per year for employees with families. Canadian Medicare, as it is currently constituted, lowers costs for our businesses and gives them a huge economic advantage when competing with their American rivals. Creating a new tier of private insurance in Alberta will substantially reduce that advantage.
Private health insurance will give an advantage to large employers over smaller employers when it comes to attracting and retaining workers - because the large employers will more easily be able to afford extended health benefits. This advantage will be particularly problematic for small business in the current tight labour market.
Less than 35 percent of Alberta workers (582,000) currently have access to supplemental health benefits through work. These are the people most likely to received increased benefits to cover the new tier of private service that the Third Way would create. Everyone else will have to make do with the second-class public system. Even if you add in the families of workers covered by private insurance, more than 50 percent of the Alberta population will be left without supplemental insurance.
Costs for extended private health insurance could easily run into the hundreds of millions. One way to estimate the cost would be to look at monthly cost being projected by Accure Health, the private insurance firm associated with Jim Dinning. They're planning to offer a plan that will cover access to services like hip and knee replacements - at a cost of $70 per month. So if all 582,000 Albertans who currently have extended health benefits are successful in getting that kind of coverage - that would translate into an extra cost to employers of about $41 million a month and more about $492 million a year. And that's just for the one procedure - costs would be higher if more services are de-listed or opened up for private payment.
EDMONTON-In ongoing revelations in the scandal regarding Bill 27 and the Labour Relations Board (LRB), the Alberta Federation of Labour (AFL) released documents today contradicting public statements made by Human Resources and Employment (HRE) and a lawyer with McLennan Ross regarding emails between an LRB Vice-Chair and the government about the drafting of Bill 27.
A letter from the FOIP Coordinator for HRE, released by the AFL today, suggests the department had hired no outside lawyer to offer legal services on Bill 27. This directly contradicts public statements made by the department and the lawyer in question.
"If the lawyer copied in the emails about Bill 27 was not working for HRE, who was he working for?" asks AFL President Gil McGowan.
Documents made public earlier this month show the Vice-Chair of the LRB emailing officials at HRE with a draft of Bill 27 regulations. In the email, a lawyer with McLennan Ross, Damon Bailey, was copied. McLennan Ross is a prominent employer-side labour law firm. At the time, the AFL raised alarm bells about this, saying it proved employers had played an active role in developing Bill 27, an openly anti-union labour law. But both HRE and Damon Bailey stated publicly that Bailey was working for HRE , not health care employers, at the time.
However, a letter from the FOIP Coordinator for HRE contradicts these statements. In January, 2005, the AFL's lawyer made a FOIP request for records "documenting the engagement of any outside (non-government) legal counsel and/or law firm by the Department, the Minister or Minister's staff" regarding Bill 27. In March, the FOIP Coordinator responded by saying: "I regret to inform you that a thorough search by Human Resources and Employment has failed to retrieve any records responsive to your request."
"We asked if HRE hired any outside lawyers to help with Bill 27 and were told there were no records," says McGowan. "No records usually suggests no contract. There would be an invoice or piece of paper of some kind."
In a letter to the editor published in the Edmonton Journal on December 7, Damon Bailey says: "My only involvement with Bill 27 was to provide technical assistance and expertise to the department of human resources and employment."
"If Bailey was working for HRE, then the Department deliberately withheld documents from a FOIP request," McGowan inquires. "If there were no documents, then Bailey was not working for the department, and this raises the question why he was copied on sensitive emails."
The AFL intends to ask the Privacy Commissioner to investigate this contradiction, and continues to press for all the documents related to Bill 27 to be released. "The only way to clear the air at the LRB is to let everyone see the documents and find out what happened." McGowan concludes.
Copies of the documents released today are available here. Look under the media release section.
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For more information contact:
Gil McGowan, AFL President at 780.915-4599 (cell) or 780.483-3021 (wk)
[Edmonton] The Alberta Federation of Labour has won the first round in its efforts to force the Alberta Labour Relations Board to release all pertinent documents surrounding Board involvement in writing labour regulations.
The Court of Queen's Bench decided late yesterday that the AFL had the right to retain the Board documents forwarded to them by the Office of the Information and Privacy Commission. These documents, which the Board tried to suppress, strongly support the AFL's argument that the Board acted improperly during the drafting and implementation of Bill 27 - one of the worst pieces of labour legislation in Alberta's history.
"This is a clear victory for common sense," says AFL President Gil McGowan. "We had received those documents properly and distributed them to our members. The documents had been reprinted in the media. Trying to suppress them at this point was entirely unreasonable."
"We are now calling upon the Board to release all of the other hundreds of documents relating to Bill 27 which they are still trying to suppress," says McGowan. "The Board keeps claiming it has done nothing wrong - but why then are they still trying to withhold information?"
McGowan insists that the public has a right to know all of the information about actions taken by the Board around Bill 27. "Many thousands of Albertans were hurt by Bill 27", says McGowan. "If the Board that is supposed to be the impartial referee acted wrongly, Albertans not only need to know - they need to see the wrongs redressed."
The AFL has called upon the Premier to institute a full public inquiry into the matter. "We have asked for a full public inquiry headed by an expert from out-of-province with full powers to subpoena documents and compel witness" says McGowan. "It is the only way we can be sure justice will be done."
For more information contact:
Gil McGowan, AFL President at 780.915-4599 (cell) or 780.483-3021 (wk)