Socialism is the Best Medicine

Socialism is the Best Medicine

Caring for Profit in Canada’s Medical System

February 1, 1999


Book Review: Colleen Fuller (1998) Caring for Profit: How Corporations are Taking Over Canada’s Health Care System. Vancouver: New Star.

Since 1984, the Canada Health Act has appeared to block the privatization of health care with its insistence on universal and equal access to medical services. In reality, massive budget cuts have paved the way for privatization.

Caring for Profit exposes the corporate players and their allies in medicine and government who have opened Canada’s medical system to market forces. This book is full of information that opponents of medicare would prefer we did not know.

The first three chapters chronicle the development of Canada’s hybrid medicare system, a tax-based public insurance system that purchases services from the private sector.

Class conflict shaped Canada’s medical system from the beginning. After World War II, unionized workers demanded a system of “sickness insurance” to provide medical care and wage replacement for injured workers, and small farmers organized for more medical services in rural areas. However, insurers, employers, physicians, and politicians were committed to a profit-based model. Canada’s medical system has been shaped, and continues to be shaped, by the resulting class struggle.

In the mid-1950s, just over half the Canadian population had medical insurance. Those with the highest incomes had the most access to medical services, while those with the lowest incomes suffered the most illness. The logical solution was a government-funded medical system. However, doctors and private insurers rejected this proposal as “state medicine and socialism.”

Routing the insurance companies

In 1962, Saskatchewan doctors struck for 23 days against the province’s proposal for “a complete transfer of medicare expenditures from the private to the public sector.” Despite majority support, the social-democratic government of Tommy Douglas conceded to the demands of business. The Medical Care Commission, which was created to publicly administer the health-care system, was reduced to a collection and payment agency. Nevertheless, there were important gains. Saskatchewan residents could no longer be denied access to medical services because of a pre-existing illness or inability to pay.

The federal government established a Royal Commission on Health Services to contain the demand for national medicare. The Canadian Labour Congress (CLC) argued for a comprehensive public health service that would provide preventative services, drugs, dental care, home care, and financial support for the disabled. Physicians would be on salary and there would be no user fees. The entire system would be fully financed by a progressive income tax policy including an “upward revision in corporation tax.”

The commissioners never considered the possibility of excluding the private sector. They flatly rejected “a system in which all providers of health services are functionaries under the control of the state.” This was also the position of the Canadian Medical Association. Instead, the commission recommended a publicly-financed health insurance system, to be delivered and administered by the private sector “free of government control or domination.”

After national medicare was established in 1966, Canadian health insurance companies sought markets in other countries. By the mid-1990s, over 43 per cent of premium income earned by Canadian insurers originated outside the country with several of the largest companies collecting between 50 and 80 percent of their total premium income from the United States.


Initially, federal and provincial governments agreed to share the cost of medicare equally. In response to the 1974 economic recession, the federal government began cutting social programs in order to support the corporate class. In 1977, the federal government reduced its share of medical funding from 50 to 20 percent. During the 1980s recession, the Mulroney Conservatives cut the medicare budget by another $30 billion, and during the recession of the early 1990s, the Chrétien Liberals cut out another $6.5 billion.

Private insurers filled the gap in services created by defunding medicare. Between 1975 and 1997, private spending for medical services in Canada rose from 24 to 32 percent.

Fuller documents how the Canadian government helped to privatize the more profitable parts of the medical system. Medical services were cut from public health plans and deductibles for prescription drugs were increased. Public institutions, like Ontario Blue Cross, were sold to the private sector, and insurance company executives were appointed to hospital boards.

Fuller quotes Industry Canada,

“Promoting Canadian companies as global health-keepers is the main objective driving the strategies and plans’ of the government for the medical devices, pharmaceutical and health-services sector.”

In 1994, The Ontario government’s Health Industries Committee concluded,

“To have the effective launching pad it needs, the health industries sector must expand its share of its own home market. Steps must be taken to ensure that, as in other countries, the domestic market supports the development of globally competitive companies.”

The system of workers’ compensation is exempt from the Canada Health Act. Between 1985 and 1993, workers’ compensation costs rose more than 75 per cent per year in both Canada and the United States. Because it is unprofitable to eliminate workplace hazards that injure and kill workers, employers were encouraged to invest in profit-making ‘disability management’ programs that offer rapid access to treatment and faster returns-to-work.

Privatizing medicare takes a toll in human health. In the province of Alberta, where privatization is most advanced, infant mortality rates rose to 10.6 deaths per 1000 live births compared with a national average of 6.3.

The biggest obstacle to the complete privatization of Canadian medicare is that most Canadians view access to medical care as a human right. However, corporations feel entitled to make a profit and governments support them to do so. In the 1950s, Canadian corporations contributed 52 per cent of tax revenues; today, they provide just 9 per cent. That is not enough to fund a truly universal medical system. This class conflict is at the root of the political conflict over medicare.

The Fraser Institute

Fuller discusses how influential Canadians, including Michael Walker of the right-wing Fraser Institute, campaigned to defeat the movement for a single-payer health system in the United States.

“Americans were warned that socialized medicine denied basic human rights, in particular the sacred right to jump to the head of the queue if one had the requisite cash and class privilege.”

By 1998, the for-profit takeover of nonprofit healthcare organizations represented the largest transfer of charitable assets in US history. As the insurance industry celebrated, the number of uninsured Americans climbed to 43 million.

In Canada, the Fraser Institute uses the financial crisis of medicare to promote a return to private funding. In fact, pharmaceuticals (which are manufactured in the private sector) represent the largest share of medicare spending and the fastest-rising cost component. Between 1987 and 1996, the cost of prescription drugs in Canada rose 93 per cent.

Caring for Profit removes the mask of ‘health-care reform,’ exposes the lie of restructuring, and soundly condemns the corporate greed that is driving the privatization of medical services. Disappointingly, the book fails to meet its goal of providing “the means for Canadians to take action to reclaim and improve their health care system.”

Fuller’s conclusions do not match the power of her findings. The title of the final chapter, “Conclusion: Educating Canada,” is odd, because most Canadians already oppose profit-making in health care and consider access to medical services to be a right. Repeating the demand for a publicly funded and publicly administered medical system does not tell us how this can be achieved, especially when government and business conspire against the needs and wishes of the majority.

Fuller tells us that, “Canadians can learn a few things from corporations to reach their own goals in health care.” This is mistaken. Ordinary people cannot achieve their goals in the same way that corporations do. We do not have the time, the money, or the ears of politicians. Different classes have different strengths, which the author describes but seems not to understand. The final paragraphs, titled “Solutions,” offer nothing that can stand against the determination of government and business to privatize medical care. Nevertheless, the solution can be gleaned from the body of the book.

The role of labor

Unionized workers have been key to the development and preservation of medicare in Canada. Fuller tells us that, in 1970, the Quebec government rejected the publicly-financed, private-enterprise model and embarked on a plan “to provide health services as part of a broad social benefits system that included a comprehensive range of public services, from medical care to social assistance.” While the author praises the Quebec plan, she does not explain how it was achieved. The fact that working-class struggle in North America reached a peak in the Quebec General Strike of 1972 is neither mentioned nor credited for winning the most comprehensive public medical system in North America.

Fuller recognizes that Canadian hospitals have become a battleground between hospital administrators with shrinking budgets and unionized hospital workers who oppose efforts to outsource their work to the private sector. However, Fuller fails to recognize the significance of this conflict. In the process of protecting their jobs, unionized health workers are preventing the full-scale privatization of Canada’s hospitals. Their struggle is central to the defence of medicare.

Organized labor is in the best position to defend and extend social services. In Canada, advocates of privatized medicine accuse unions of wanting to run the country. Caring for Profit demonstrates that the majority would be much better off if they did.

See also: Sick and Sicker: Essay on Class, Health and Health Care



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