In early 1974, Ontario Premier Bill Davis appointed Frank Miller his new Minister of Health. Miller, a "Blue Tory", was on the conservative right of the Ontario PC Party, and set about enacting austerity measures in the healthcare system to contain growing healthcare costs commonly associated with the establishment of compulsory government health insurance, the Ontario Health Insurance Plan emerging out of legislation in 1969, and with roots in the The Hospital Services Commission Act of 1959.
Here's a brief history of how the achievement of Medicare in Ontario entrenched doctor power, sidelined the socialized medicine movement's quest for community clinics and preventative medicine, and created a healthcare system dependent on hospitals.
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| Toronto Star, December 8 1969 |
Insurance experiments and socialized medicine
Contrary to today's popular beliefs, hospital insurance was not a step towards socialized medicine, but rather a socialization of hospital costs. Once hospital insurance became a compulsory, taxpayer-funded insurance scheme across the country in the late 1950s, it ensured that hospitals would become the central focus of medical care. This stood in contrast to the community clinics - not unlike neighbourhood public schools - advocated by socialized medicine movements around the world, including Canada.
The choice to provide hospital insurance was embraced by Ontario's major health insurance companies, such as Ontario Blue Cross and London Life. Like many other private health insurance plans, London Life began offering their for-profit plan in the Great Depression, in 1935. Ontario Blue Cross, established on the American Blue Cross model in 1941, was a creature of the Ontario Hospital Association which had been established by the doctor-managers of Ontario's hospitals. Although a non-profit organization, Blue Cross finances were not disclosed to the public. By 1950, a third of Ontario residents were part of the Ontario Blue Cross plan.
Insurance companies like London Life and Blue Cross favoured hospital insurance for different but complimentary reasons. First, the Ontario Hospital Services Commission, established in 1959, was comprised of personnel drawn from the Blue Cross and Ontario Hospital Association. Absorbing much of the Blue Cross program, Blue Cross, like London Life, was allowed to provide supplementary health insurance that went beyond the new public hospital insurance scheme. Second, companies like London Life found the public hospital plan favourable because it reduced the costs of their plans and make them more profitable. Costs for these private plans were also lowered, which was a coup for the insurance companies as well. Everyone, it seemed, was coming out on top.
However, pressures mounted in the 1960s to expand hospital insurance into a more comprehensive health insurance plan. This is what we normally mean by Medicare. Medicare was first achieved in Saskatchewan in 1962 through the Saskatoon Agreement which ended the province's infamous doctor's strike against Medicare.
As popular pressures to expand hospital insurance increased, the Ontario government responded to a 1963 strike by Trenton Hospital workers by introducing legislation to ban strikes in the province's hospitals. The legislation was denounced by organized labour, and many hospital workers believed the legislation ought to be defied by strike action, if necessary, in the course of the collective bargaining process.
Ontario doctors against Medicare
Ontario's majority PC government, which had been in office since 1943 and held a majority since 1945, stopped short of popular demands for comprehensive health insurance. It instead introduced the Ontario Medical Service Insurance Plan in 1965. OMSIP was a voluntary public plan that the Canadian Medical Association, representing the profit interests of doctors, had proposed for about two decades. Ontarians could access the plan through their private health insurance provider, or, if they were too poor to access private health insurance, OMSIP would provide full or partial coverage. Crucially, doctors were not barred from extra billing and were allowed to set their own fees. This meant the public would pay the growing OMSIP costs associated with doctor profiteering.
Protests erupted against OMSIP before it became law. The government retreated, amended the act, and then passed the law in 1966. The amended OMSIP now serviced the public directly through the Department of Health, not private insurance companies. Anyone receiving any form of public assistance, such as welfare, was automatically enrolled. Voluntary enrollment involved annual means-tested user fees based on income, with a 50% reduction in premiums for people deemed low income.
The Ontario Medical Association mounted a major counter-attack against these amendments. It was reported that 4500 of Ontario's 6500 doctors signed a pledge to boycott OMSIP. Nevertheless, the program was unrolled in mid-1967. The provincial government was caught between popular pressure and new federal legislation.
By 1967, OMSIP looked as though it would not meet the requirements to access federal monies associated with the federal government's 1966 Medical Care Act. Premier Robarts waffled on modifying OMSIP. Eventually, Robarts acceded to popular pressure and initiated a major enrollment campaign.
OHIP and the concessions to doctor profits
The public battle over the form of public health insurance - Medicare - continued through 1968, with the government further amending OMSIP to include optometry costs, and then, in 1969, passed the Health Services Insurance Act which led directly to the establishment of Ontario Health Insurance Plan (OHIP). The public health insurance plan was compulsory, although private insurance plans were still allowed. In 1971, the government's hospital insurance plan and health insurance plan (OMSIP) were merged into a single plan, OHIP.
However, the Ontario government had made a major concession in 1969 to the doctor profiteers of the Ontario Medical Association. The OMA had its own private insurance company, Physicians Services Incorporated (PSI). It had been created in 1947 during the height of post-war agitation for socialized medicine. By the time OMSIP became law in 1966, two million out of seven million Ontario residents were enrolled with PSI. Using its collective power, OMA had created a fee structure to charge OMSIP. It negotiated a 90% fee reimbursement through OMSIP while also raising its fees across the board. Efforts to have this overturned in the legislature were defeated in 1969. Then Minister of Health, Doctor Matthew Dymond, declared that if fee reimbursements were reduced to 80%, doctors would simply bill patients the 20% difference. This "double billing" was what the government had hoped to avoid, so the effort to lower the fee reimbursement was abandoned. The OMA retained control over setting fees on the eve of OHIP's creation.
The complicated struggle over socialized medicine resulted in the profound compromise that is Canada's Medicare. Costs, not medicine, was socialized. Profiteering was protected. The project of socialized medicine was based around community neighbourhood clinics with salaried doctors and other salaried and waged medical and support staff. Socialized medicine advocated preventative medicine as opposed to the public hospitals which were mandated to serve working people and the poor who could not afford private doctor visits at home or rooms in private medical facilities.
The growing costs of defeating socialized medicine
To maintain control of hospitals and their lucrative practices, doctors established insurance companies and welcomed hospital insurance alongside fee-for-service programs in which doctors and their organized bodies were allowed to set fee schedules. The result was the expansion of hospital services and construction of new hospitals under the management of the deeply intertwined interests of the OHA and OMA. Medical care based around hospitals was not preventative but reactive, and the vision of community clinics with a staff of salaried medical professionals, including doctors, was limited to cooperative and municipal initiatives that did not enjoy the same levels of public operating and capital funding as doctor-controlled hospitals. In short, the community clinics that formed the foundation of socialized medicine was deliberately prevented from becoming a viable alternative.
With Medicare triumphant and the community clinics movement on its deathbed, the costs of hospital expansion and the fee-for-service system grew astronomically. Today's elite politicians and media still paint this as the burdensome cost of "socialized medicine". This expensive doctor-controlled system is also held up by the New Democratic Party and much of organized labour as socialized medicine. The NDP has constructed an entire mythology to claim responsibility for these gains, and not without some merit given the 1962 doctors' strike in Saskatchewan.
However, hospital insurance, first created by Tommy Douglas in 1947 as a sop to his base after retreating on socialized medicine, was done in partnership with a federal Liberal government which saw hospital insurance (and new hospital construction capital funds) as a means of mollifying the movement for socialized medicine and keeping doctor-profiteers content. As a consequence of this CCF-Liberal partnership between Saskatchewan and the federal government, doctors became more powerful as hospitals proliferated with this new funding. Even the 1966 Medical Care Act, passed with NDP support by the federal Liberal Party, was already Liberal policy following the Kingston Conference in 1960. Medicare, and its entrenchment of doctor profiteering over socialized medicine, was a CCF-NDP-Liberal partnership from 1947 through the 1960s.
Austerity and labour repression
With hospital costs expanding rapidly from the late 1940s onward, the Ontario government began investigating austerity measures in the public service as early 1969. By 1974, as the article below demonstrates, the screws were already turning on salaried and waged hospital workers while Ontario's doctors cashed in on the new streams of public taxpayer money.
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| Kingston Whig-Standard, June 27 1969 |
Minister of Health Frank Miller faced major opposition in 1974 and 1975 and eventually backed down in the face of threats of strikes across hospitals in defiance of the strike ban. Miller, who was de facto leader of the right-wing "Blue Tory" faction, stepped down as Minister of Health in 1975 (he re-entered Davis's cabinet in 1977 as Minister of Natural Resources, and Treasurer/Finance in 1978-83). For the rest of the decade, bargaining in hospitals was a cat and mouse game between the unions and the government. CUPE hospital workers in particular threatened again and again to strike in bargaining. This finally happened in 1981 with a province-wide illegal strike.
Because it was initially opposed by the CUPE leadership, the 1981 hospital workers' strike proved a devastating defeat. It collapsed as a result of CUPE's misleadership and insufficient strength in certain regions due to its uneven rank-and-file organization. This happened despite the fact that only months earlier the Ontario Federation of Labour had pledged support to an illegal province-wide hospital strike. The CUPE leadership's refusal to prepare and coordinate such a confrontation undermined the strong rank-and-file organization of the strike. Thousands of hospital workers were victimized by the Ontario Hospital Association and fired, including many union militants who were singled out in what was nothing less than a mass political purge. Grace Hartmann, CUPE's national president, was jailed for 45 days along with two other CUPE officers. Premier Bill Davis and his PCs went on to win a mega-majority only a month after the strike crumbled.
Permanent austerity and the privatization siege
When the last major reforms to Canada's health system happened with the Canada Health Act of 1984, extra-billing was banned. In 1986, Ontario's doctors went on strike against the repeal of extra-billing. The public's hatred of the doctors was expressed openly in protests, the press, and beyond. Organized labour called for the new Liberal-NDP majority to defeat the strike, and it was. Incredibly, when the NDP won a majority in 1990, the Ontario Medical Association was awarded collective bargaining rights over OHIP fee schedules. The power of doctor profiteers remained intact.
Through the 1990s, hospital closures, mergers and bed cuts were deep and brutal. The province lost a third of its hospital beds during this decade. Premier Mike Harris consistently defended his own cuts by correctly observing that Bob Rae's NDP slashed more beds than him.
Two decades after Harris resigned as Premier, a new aggressive campaign of hospital privatization is a reality in Ontario. It takes the form of private for-profit clinics, many of them operated by doctor profiteers and the medical corporations that have their origins in the 20th century wars against socialized medicine.
There has not been a hospital workers' strike in Ontario since 1981. Early 1960s legislation against hospital strikes remains intact. Meanwhile, today's Ontario PC government of Premier Doug Ford says OHIP will not be scrapped. This should not come as a surprise. OHIP was never intended to replace the profit motive in healthcare or hospitals. It was in fact an expensive political compromise that protected doctor profiteers and set up a system of public subsidies for an inferior and reactive hospital system.
Now, under the Ford government, OHIP will be used to subsidize the for-profit clinics who will reintroduce double billing as well as "upselling" and other scams to profit doctors and their businesses through screwing patients and the working-class taxpayer.
OHIP was established to undercut demands for socialized medicine organized around publicly-owned community health clinics focused on preventative health services and employing salaried doctors and other professionals. Once touted as a great victory, Medicare has transformed over six decades into a great defeat.