The Canada Health Act May Already Be Dead
Are Loblaw and George Weston destabilizing monopolies or visionary pioneers?
I just came across a fascinating post by Jordan Roberts on his Corruptario Substack:
The argument is that the two publicly traded companies, George Weston Limited and its subsidiary Loblaw Companies Limited are becoming so dominant in so many critical sectors - and collaborating so closely with various levels of government - that they’ve become something of a threat to the social order.
Full disclosure: like many Canadians, I’ve had both good and bad experiences with Weston-related companies over the years. And I’ve never forgiven them for their President’s Choice brand chocolate flavored soda back in the 90s. Really? Chocolate soda?
The particular point that got my attention was Weston’s relationship with Maple. It took me a moment to recall that Maple is a Canadian for-profit provider of medical services. A quick search through old emails confirmed that my automobile insurance policy came with introductory access to Maple - although I’ve never actually used it.
We’ll get back to Maple in a minute. But first we’ll address the market dominance issue.
Are the Weston Companies Monopolies?
No.
They certainly enjoy considerable scale, but they barely qualify as A-list corporate players. Even if you combined the market capitalization of Weston ($17.2 billion) with Loblaw ($31.6 billion), they still wouldn’t rank among the top ten Canadian companies. And while they have strong revenues, their operating margins aren’t even in the top 100.
Sure, Weston owns a lot of supermarkets, but they’re far from alone in that business. Their competition includes Empire Company (Sobeys, Safeway, FreshCo, etc.), Metro, Costco and, of course, Walmart.
Similarly, their control of Shoppers Drug Mart is significant, but even with its recent purchase of the Pharmasave brand, their combined 2,000+ locations would hardly overwhelm the 1,400+ locations owned by McKesson Canada (Guardian and IDA), Costco’s 108, and however many of Walmart’s 402 Canadian stores offer pharmacy services.
Do Weston Companies have access to too much of our data?
Yes.
Through the data generated by millions of transactions involving their PC Optimum points program, Weston probably has enough consumer behavior information to warn you when the socks you just took out of that drawer won’t match the shirt you’re thinking of ordering on Amazon.
Jokes aside, it really is scary. But having said that, whatever Weston knows about us is no scarier than what’s already collected, stored, and monetized by credit card providers, smartphone vendors, Amazon…and the government. I don’t believe Weston is making things noticeably worse.
Have the Weston Companies broken the law?
Probably. Which large business hasn’t at some point? Why do you think they retain all those lawyers?
But the Corruptario post’s primary focus was on Weston’s impact on the letter and spirit of the Canada Health Act. So that’s what we’ll explore.
The Act established a mechanism governing the transfer of federal funding for the administration of universal healthcare run by the provinces. Provinces are not obligated by the law itself, but their federal funding depends on compliance.
One of the key principles of the Act requires the public administration of all services. That is, only a non-profit public authority is eligible to deliver services.
But there have always been exceptions. There are a few grandfathered institutions that were allowed to continue to exist as private businesses. In the Toronto area, the most famous of those is the private Shouldice Hernia Centre in Markham.
And extra-billing or user charges - while forbidden by the Act - are commonly collected disguised as administrative fees or through the delivery of unnecessary tests and procedures to supplement government payments for insured services.
At first glance, Maple would appear to have gone much further down the road to privatization and, as of 2019, they already had many hundreds of thousands of patients. Membership costs $79.99 each month, although that money will also go towards any services you end up consuming.
To Canadian ears, Maple’s billing schedule sounds expensive. A 15 minute appointment with a pediatrician, for example, will cost $150. They won’t charge a patient for services that are covered by provincial plans, but it seems that most of what they offer - including text message consultations and sessions with out-of-province doctors - is not covered.
Maple’s website documentation goes to great pains to emphasize how they only bill patients for services that are not offered by provincial plans. Sometimes that will be because the delivery method (text messages) or practitioner (out-of-province doctors) aren’t covered. While I could imagine this could one day be tested in court, on the face of it, it appears legal.
Does Maple place universal healthcare at risk?
Yes. And no.
The success of Maple exposes the public system’s failure to meet the Act’s principle of accessibility. Backlogs and staffing problems mean that millions of Canadians have no access to primary care and can wait months or even years for surgical procedures. That’s not Maple’s fault.
On the other hand, the existence of private services like Maple does indeed threaten the Act’s universality, accessibility, and comprehensiveness principles. As private services come to dominate, there’s a real risk that public delivery may become even less effective. It’s not inconceivable that it could one day collapse altogether.
So should we push back against the innovations that Maple represents? Well we should ideally first have a plan in place to cover the healthcare needs of Maple’s hundreds of thousands of existing patients.
I honestly have no idea what that plan might look like. According to OECD figures, Canada already spends 3.2% of its GDP on healthcare, which translates to $6,319 (USD) for every man, woman, and child in the country. We rank 12th in the world for per capita healthcare spending. I really don’t think there’s much more money where that came from. (Unless we agree to cut waste, of course, in which case there might be endless budget capacity.)
In the absence of a workable alternative, I guess we have no choice but to accept an imperfect solution.
Is Weston the bad guy?
Perhaps “bad guy” isn’t quite the way to put it. As the Corruptario post observes, Weston is positioning themselves for growth in particularly rich markets. The fact that they’re accumulating vast medical, pharmaceutical, and consumer datasets in a way that can be exploited by its retail units - all while creating a giant for-profit medical services industry from the ground up - is frightening. But it’s also good business.
In other words, Weston is just doing what corporations are supposed to do. Whether that’ll end up being good for Canadians is something I’ll leave for you to decide.
Please do share your thoughts in the comments.
Glad you enjoyed the article.
I write this as an individual of "advanced" years. Put differently, I am old. Put yet again differently, I am much more a consumer of healthcare than my grandchildren or my adult children. I therefore have a vested interest in keeping the Canadian healthcare system as it is for I am not wealthy; comfortable, certainly, but not wealthy.
Okay, disclaimers done.
As I look at what our healthcare system has become, where there are obvious cracks and breaks in the system I cannot help but think of where we started. I live and have always lived in Alberta but in, was it 1962?, I was in Saskatchewan; I was visiting but even as a boy I was aware that the doctors were on strike against the provincial government. Of course, that strike failed and provincial medicare came in in Saskatchewan and shortly after that (1966, as I recall) it came in across the rest of the Dominion.
It is my recollection that the reason that it came in was that the federal government promised to pay half of all medical costs; of course, today the feds cover only twenty-four per cent of such costs (according to Mr. Google). That different of twenty-six perc cent is massive and crippling for all provinces. Further, as I recall, the original coverage was pretty bare bones. In fact, as I recall, Ontario (where I don't live!) had OMHIP and OHIP - Ontario Medical Health Insurance Plan and Ontario Health Insurance Plan, or some such. In other words, it was two completely different plans. Now, all provinces cover all medical costs - well, pretty much all! - other than some particular exceptions.
My points in this recitation are twofold: 1) I remember; and, boy, things have changed, very particularly including the money that the feds pay; and 2) the scope of medical coverage provided has expanded immensely (grew like Topsy, as we used to say).
So, you ask, what? Simply this. I'm all right, Jack. But you aren't.
Put differently, my generation is pretty well covered but, particularly, my grandchildren's generation is not at all well covered and it is getting markedly worse.
That means that either we a) dramatically, dramatically "reform" healthcare to get rid of "waste" (tried and tried but not really happened); b) we cut back dramatically on other government spending (how about, no schools? how about, no roads? how about no police? other?) - ask your local swivel servant if any of those are attractive options; c) we increase income taxes to take the majority (a large majority) of everyone's income; or d) we go forward as is and in, oh, say, ten years the medical system collapses and pretty much no one gets covered.
Oh, I forgot option e): have the system change to see if more (either "allowed" or "black market") more providers come into the healthcare system where individuals pay. And that is what the author is describing with the commentary about George Weston/Loblaws and Maple.
Is this good? I don't know, but then, remember that I'm all right, Jack; you not so much. Truthfully, if only item d) is a bit longer than ten years, I am likely to be dead so the lack of planning for this problem is not MY problem, just yours. Remember, I'm all right, Jack. How about you? You had better figure out which option you favor.