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Competitive bidding system for nursing visits hurts patients, creates shortages of skilled workers
January 10, 2008
Warren (Smokey) Thomas
The Hamilton Spectator
(Jan 10, 2008)

The policies which have brought two long-serving and widely respected Hamilton nursing agencies to the brink of closure are at the core of the present battle to maintain quality health care in the region.

The Victorian Order of Nurses (VON) and St. Joseph's Home Care were told in mid-December that they have been dropped from a competition to continue providing visiting nursing services in the area.

The two conduct about 80 per cent of all existing visits. More than 200 nurses and administrative staff will face layoff at a time when other sectors are developing strategies to recruit and retain health workers amid growing shortages.

Without sufficient experienced home care workers in the community, hospitals will be unable to discharge patients to the community sooner, waits for visits to family doctors will lengthen, and the demand for nursing-home beds will rise.

Before 1997, many nonprofit community-based agencies did the work with ongoing funding from the Ministry of Health. Only 18 per cent of home care services were contracted to for-profit agencies.

In 1997 the Mike Harris government created a system of managed competition, where three-year contracts would be bid upon by both for-profit corporations and not-for-profit community-based organizations.

Each time a contract changed hands, all the workers lost jobs. The government recklessly assumed they would all reapply for jobs with the winning agency.

No other health sector operates like this. Workers are not dismissed and asked to reapply for their jobs when a nursing home changes ownership -- instead they are given rights under sale-of-business legislation.

When hospitals underwent mergers in the 1990s, the government negotiated with labour to protect their rights -- including wages, benefits, pensions, seniority and union representation.

These rights were recently extended to health care workers affected by restructuring ordered by the Local Health Integration Networks (LHINs).

Officials contentiously claim these rights still do not apply to workers at home care agencies.

Contracting of home care agencies is the responsibility of the Community Care Access Centres. However, the rules around such contracting are established by the Ministry of Health.

The multistep process begins with a qualification stage. If an agency successfully qualifies, it proceeds with a written submission, interviews, site visits and price comparison.

Both the VON and St. Joseph's were eliminated on paper, before site visits or interviews took place. The price of their bid was never examined, nor their record in the community ever taken into consideration.

In 2004, many Ontario communities saw similar long-service agencies lose their contracts -- often to large for-profit corporations. In the first four years of competitive bidding, profit-driven companies captured 48 per cent of all home care contracts.

Niagara raised perhaps the biggest fight to preserve their local VON, which along with St. Elizabeth Nursing (renamed St. Joseph's Home Care), lost contracts amid complaints of bias in the bidding process.

Contrary to the government's assumptions, most workers did not go to work for the successful agencies in Niagara, creating major challenges for patient care. Amid worker shortages, care visits were missed or rushed, leaving some patients in precarious circumstances.

That fall, George Smitherman, the health minister, placed a moratorium on competitive bidding, asking former federal health minister Elinor Caplan to do a review. Caplan was never given a mandate to look beyond managed competition -- only to tinker with the rules.

The present situation in Hamilton proves her recommendations fall short of the objective to retain workers in the sector and protect the continuity of care for patients.

No evidence has ever been gathered to prove competitive bidding works. Studies have shown that it creates a disruption to the quality of care patients receive, that it is responsible for growing shortages of home health care workers, and that the process is both expensive to run and costly in its outcome.

In 2004 the Ontario auditor noted that one CCAC complained of costs escalating by 48 per cent per nursing visit after the bidding process.

In a two-year period when the Harris government froze funding, there was a 30 per cent drop in homemaking hours and a 22 per cent drop in professional care.

When workers are getting wage increases of only 2 to 3 per cent per year -- and wages are the major cost to agencies -- such a reduction in service is hard to explain beyond the need for profit-taking at the expense of front-line care.

There was a time, when in opposition, that Dalton McGuinty opposed this method of contracting home care providers. At a 1999 Queen's Park rally in support of the Windsor VON, he said, "If we begin to look at health care as a commodity to be auctioned off to the lowest bidder, we're looking at a reduction in the quality of services."

Now McGuinty is premier, and his words never rang more true.

The government should immediately acknowledge the rights of these workers to move with their work, like other health care workers.

The premier also needs a more thorough look at alternatives to the present bidding process.

In the meantime, the moratorium on contracts should be extended. By doing so, he not only keeps health professionals on the job, but he protects some of the most vulnerable patients in the province and the integrity of the entire health system.

Home care workers are asking Hamiltonians to support them in a rally Wednesday, Jan. 16, at 7 p.m. at the Michelangelo Banquet Centre, 1555 Upper Ottawa St., Hamilton.

Warren (Smokey) Thomas is president of Ontario Public Service Employees Union.