By Gil McGowan, AFL Staff

Governments in Canada are in for a rude awakening if they think that partnerships with the private sector will strengthen Medicare, says a top researcher who has studied health care privatization in Britain.

"Let nobody tell you that privatization increases efficiencies," says Dr. Allyson Pollock, head of the Public Policy Research department at University College in London.

"In Britain, our government has greatly expanded the role of the private sector in our public health system and the results have been a nightmare."

Pollock, who was in Edmonton recently to address the UNA convention, says that waiting lists have increased and staffing levels have declined in Britain’s National Health System (NHS) as a result of privatization.

According to Pollock, many of the problems in Britain have been caused by financial deals between the public system and private investors called Private Funding Initiatives – or PFIs.

Under these agreements, the British government has basically cut-off all public funding for new hospital construction. Instead, responsibility for raising funds for capital projects has been handed almost entirely to the private sector.

On the surface, this may sound like a dream come true to politicians with shrinking public budgets. But Pollock argues that when the money for capital projects comes from private investors, public hospital boards become beholden to those investors.

"The number one priority of the system has shifted from providing patient care to ensuring profits for shareholders," she says.

Pollock says that many hospital boards entered into PFI agreements thinking that private investors would be their saviours – only to find themselves locked into 30-year contracts that require huge annual payments to private corporations.

As a result of the PFI program, Pollock says many new hospitals and other health facilities have been built – but the number of beds available has actually gone down and there is a growing shortage of front-line staff. That’s because money that should have been spent on front-line service is being diverted to pay off investors.

Pollock says there is a lesson in all of this for policy-makers in Canada – especially the Klein government in Alberta and the new Liberal government in B.C. which are both calling for increased private-sector involvement in the funding and operation of health facilities.

"The record from Britain is clear," says Pollock. "The consequence of using private financing and delivery is that costs escalate and service declines."