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New Media Markets and Screen Finance

As a reporter for two Financial Times newsletters, New Media Markets and Screen Finance, I covered the rapidly growing UK (and Scandinavian) television and new media markets and the expanding film-financing sector in Europe.

From Special Report: NMM (New Media Markets) Spotlight On The Emergence Of Satellite Porn Channels In The UK

October 26 1995

Is the UK rushing to watch TV porn?

By David South

Financial Times (London, UK), October 26, 1995

The aspect of satellite and cable programming most feared by the British government when it pushed the development of new media in the mid-80s looks set to become firmly entrenched as a part of the emerging television era.

Next Wednesday, the USA’s most famous soft-pornography channel will arrive in the UK, almost certainly heralding a satellite porn war for the eyes of the British public.

The Home Office, which used to look after televsion, was worried that porn would be one shock too many for the British and would create havoc with British television laws. But the mores of the marketplace have changed the climate, although the Broadcasting Act and the Independent Television Commission (ITC) still create limits that are stricter than in most other countries.

Hard-core pornography – such as that shown on several continental channels which can be picked up in the UK – remains out of bounds, as evidenced by the Department of National Heritage’s recent proscription of the hard-core TV Erotica.

But the drawing of the line between hard-porn and soft-porn changes over time: the programming now permitted by the ITC is a lot stronger than many might have thought likely a few years ago. The porn channels have learned how to push the boundaries of acceptability and, with competition increasing, are likely to push their luck even further.

Politicians, journalists and old-fashioned new-media programmers – for instance, the United Artists people who were dismayed at the decision of parent company TeleCommunications Inc to bring Playboy over to the UK – may believe that porn channels serve only to cheapen the quality of life.

But the supply side of the marketplace detects that there is a widespread demand for porn and (ironically) religion and so programmers will follow the demand by supplying suitable programming.

The soi-dissant “adult” channels estimate their potential audience at between 7 per cent and 30 per cent of cable and satellite homes – between 400,000 and 1.7 million homes at present penetration levels.

Their main target market is the consumer of “top shelf” magazines which range from the glossy, even glamorous Playboy to the more downmarket magazines of the “reader’s wives” variety. According to the Campaign Against Pornography, the top six pornographic magazine titles sell about 2.5 million copies a month. Altogether, there are about 200 pornographic titles on sale in the UK.

Deric Botham, programmer at the recently-launched Television X – The Fantasy Channel and a porn-industry veteran, estimates that the total UK sex industry – from videos and magazines to sex aids, but excluding prostitution – generates revenues of £4 billion a year, a figure which is difficult to substantiate but is equivalent to 10 times the investment in the UK film industry in 1994.

According to Botham, “our research shows that people want this thing and the majority of people want it to some degree.”

The porn channels are finding it relatively easy to find satellite capacity, largely because they are forced by the rules to operate at a time of day (i.e. night) when most channels have quit their transponders and are only too happy to find someone to sub-lease them to.

The first of the new porn channels will be the Playboy Channel, which likes to think of itself as being a cut above the others. The others, it claims, are for “sad, lonely men”. Playboy, on the other hand, is for “happy, heterosexual couples”.

The channel, probably the softest of the genre, will be launched on November 1 by Flextech, BSkyB and the US Playboy Channel.

It will be followed by the not-so-soft Penthouse which is being launched in the UK by a joint venture of Penthouse magazine owners General Media and Graff Pay-Per-View, which already owns the UK Adult Channel.

Two other channels have received licences from the ITC – David (Sunday Sportnewspaper) Sullivan’s Babylon Blue and the Adam and Eve Channel. With the Adult Channel and Television X already broadcasting, there could be six porn channels on offer to UK viewers.

But two other channels are beamed into the UK for those willing to pay the cost of extra reception equipment: the continental pirates, Rendezvous and Eurotica. There is also the now-banned TV Erotica.

Cable and satellite was bound to be an attractive medium for the porn channels, given the possibility of encrypting the signal and imposing a subscription fee and, as a consequence, benefiting from the lighter regulation that has seemed likely. Sex-channel executives say that the ITC has become increasingly flexible in what it will allow.

Three other factors have fuelled would-be channels to turn to cable and satellite:

The replacement of the independent high-street video store by big video superstores has robbed the porn industry of a key outlet.
New-media distribution should bring in consumers who are embarassed to hire a porn video from a shop. Yet buying a subscription to a porn channel may be a more embarassing act within the family environment.

The Adult Channel is regarded as demonstrating that there is an audience for porn in the UK: it is thought to have about 224,000 subscribers.

Cable and satellite has far more potential for the porn industry than the traditional-format channel. The prize, which will make everything worthwhile, is pay-per-view (ppv). Bill Furrelle, Playboy Channel’s sales director, said that he had been asked by several UK cable operators about providing a ppv service next year. The operators want Playboy, the Adult Channel and Adam and Eve to contribute to the Home Cinema ppv service which they hope to put together.

Do TV porn channels degrade and humiliate?

By David South

Financial Times (London, UK), October 26, 1995

Susan Sontag, the renowned American essayist, described pornography as a “crutch for the pyschologically deformed and brutalisation of the morally innocent.” The Campaign Against Pornography in the UK believes that pornography exploits women and children “in a degrading and humiliating way, often with the message that we enjoy this and want to be abused.”

The campaign encourages its supporters to take direct action against any distributor of pornographic material as part of its wider campaign to put the industry out of business.

The porn channels dismiss arguments that they degrade women and encourage male violence against women. Playboy managing director Rita Lewis argues that “women are happy to consume erotic imagery like pin-ups. Women are not hung-up by this anymore, they are not threatened by the fantasy women we show in our programming. We hope Playboy will lead to couples’ making love together.”

Andrew Wren, financial director of the Adult Channel, also dismisses the link between pornographic programming and sexual violence. “I don’t think there is anything in programmes that would encourage men to go and rape. Women are interested in sex as men are.”

Television X’s (Deric) Botham says that porn programmes are “a bit of titilation” in the fine, upstanding tradition of the British Carry On films. None the less, he admits that “I wouldn’t want my daughter to get involved in pornography.”

He says that the women involved in the programmes, some of them housewives, are willing participants and enjoy the opportunity. “I don’t produce anything that is against the law. We speak to the individuals concerned. If you have a reluctant model, it doesn’t work – I just won’t buy the video.”

The Campaign Against Pornography sees it all rather differently. Ann Mayne, a member of the campaign’s management committee, was particularly critical of two programmes on Television X – Shag Nasty and Mutley and Fly on the Wall.

She said that Shag Nasty and Mutley, in which a presenter approaches women in the street or in supermarkets and offers them £25 to look at their knickers, or £50 to be filmed having sex with him, gave the message that women were simply objects and that it was acceptable to harass them.

“It is complete prostitution of female sexuality,” she said. “Botham wants full-on, across-the-board prostitution of women. In his view, every woman must have a price.”

Mayne said that Fly on the Wall, in which real-life couples are shown having sex, was an open invitation for men to coerce their partners into being filmed, possibly to the point of abuse.

UK laws on satellite porn among toughest in Europe

By David South

Financial Times (London, UK), October 26, 1995

UK regulations on what can be shown on sex channels are tougher than in most countries of the European Union. Channels such as the hard-core Swedish TV Erotica and the recently-launched French Rendezvous are licensed in their respective countries and transmit explicit scenes of sexual intercourse, straight and gay, featuring close-up shots of copulating genitals.

Graff Pay-Per-View, the experienced US sex channel operator, consciously decided to exclude the UK as a market for its hard-core Eurotica channel which is licensed in Denmark and, like the other hard-core channels, transmits via a Eutelsat satellite. But pirate smart cards for the channel, as for the other channels, are available in the UK in specialist satellite shops.

Graff’s seeming respect for the UK regulations may not be unconnected with the fact that it owns the Adult Channel and would be wary of upsetting the ITC. Broadcasting unacceptable material into the UK could provoke the ITC into seeing Graff as a body unfit to hold a licence, thereby threatening the Adult Channel.

The ITC’s guidelines on sexually explicit material state that representations of sexual intercourse can be shown only after 9pm and that “the portrayal of sexual behaviour, and of nudity, needs to be defensible in context and presented with tact and discretion.”

There has been some relaxation of the rule. The ITC will, on an experimental basis, allow the watershed to be broken by a ppv or video-on-demand service. It is not, however, prepared to give this freedom to a porn channel, at least not in the early days, because it does not want to be seen to be licensing pornography. The relaxation will affect only general services.

The ITC will also monitor any ppv service to ensure that there are no cases of children accessing the programming before deciding if the programme code should be revised.

The transmission pf 18-rated films on terrestrial or new-media channels is not permitted before 10pm. Films with a 15-rating are not allowed before 9pm on terrestrial channels such as BSkyB’s Sky Movies or the Movie Channel. These are minimum requirements. Some 15-rated films, for instance those which show scenes of sexual intercourse or drug-taking, would not be deemed suitable for transmission even on an encrypted channel at 8pm.

In practice, the ITC does not permit depictions of erect penises, anal intercourse, close-ups of genitalia or ejaculation.

Where channels have overstepped the mark and gone abroad to get licences from less strict authorities – the late Red Hot Dutch and TV Erotica – the ITC has recommended that the channels be proscribed, action which has subsequently been taken by the Department of National Heritage. The ITC is now monitoring the Rendezvous channel, which shows a mix of gay and heterosexual hard-core pornography with graphic scenes of sexual intercourse.

The DNH issues proscription orders under Sections 177 and 178 of the Broadcasting Act. The orders make it a criminal offence to supply equipment to receive the channels or to market and advertise them.

The European Union directive on transfrontier broadcasting lays down that one country cannot prevent the reception of channels licensed by other European Union countries. However, it allows individual governments to take action against any broadcast which could damage the physical, mental or moral development of minors.

Playboy ‘is not for sad and lonely single men’

By David South

Financial Times (London, UK), October 26, 1995

The Playboy Channel, due to launch in the UK on November 1, is trying to position itself as being a cut above the existing sex channels with which it will compete for subscribers.

The channel, which is running an advertising campaign costing more than £1.5 million, believes that its big budgets and slick production values will attract viewers who have hitherto been uninterested in so-called “adult” entertainment. It hopes to win an audience among women as well as men.

Managing director Rita Lewis dismisses the other sex channels as being aimed at people who are “a bit sad and on their own”. The channels promote “deviant” behaviour.

Playboy hopes to attract happy, heterosexual couples who will treat the channel as an aid to foreplay: “We hope Playboy will lead to couples’ making love,” said Lewis, who believes that women, as well as men “are happy to consume erotic imagery like pin-ups.”

In the USA, according to Lewis, 70 per cent of the audience for the channel comprises couples.

She said that the UK Playboy will run programmes that have more in common with programmes like Channel Four’s The Good Sex Guide. “These days, a whole bunch of people are sampling erotic programming like The Good Sex Guide. It is very sexy programming with mass-market appeal.”

Playboy’s movies would have a high standard of production, she said, very different from what she claims to be the cheap programming made for the other channels, often home videos and often shot with hand-held cameras.

Playboy’s programming will comprise sex films, interviews with “centrefold” models, documentaries on the sex industry and general-entertainment programming such as quiz shows.

The rival channels claim that Playboy will not be a big threat to them. The Adult Channel’s Wren says that all the new channels “hype the market, which helps us.” In any case, adult entertainment consumers have already been weaned on harder mix of programming and do not want something that offers little more than what Channel Four shows.

The UK Playboy Channel, which is owned by UK programmer Flextech (51 per cent), British Sky Broadcasting (30 per cent) and Playboy Enterprises (19 per cent), will transmit from between midnight and 4am on the Bravo transponder on Astra 1c.

New Media Markets and Screen Finance were published by the Financial Times in the 1990s.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2021

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CASE STUDY 1: Investigative Journalism | 1991 – 1997

Expertise: Investigative journalism, editing, start-ups, content and magazine design, digital content, digital strategy.

Locations: Toronto and Guelph, Ontario, Canada and London, UK 1991 to 1997

Investigative Journalist, Editor, Reporter, Writer: David South

Click here to view images for this case study: CASE STUDY 1: Journalism | 1991 – 1997 Images

Abstract

I worked as a journalist for magazines and newspapers from 1991 to 1997 in Canada and the United Kingdom and as a radio host for a weekly spoken word interview programme, Word of Mouth (CKLN-FM). 

CKLN-FM’s “Word of Mouth 6 pm-6:55 pm Hosts: David South, Jill Lawless This show goes well behind the headlines for the real story behind the events.”

This included working as an investigative journalist for Now Magazine, “Toronto’s alternative news and entertainment source”, as a Medical and Health Correspondent for Today’s Seniors, and as an investigative journalist and reporter for two Financial Times newsletters, New Media Markets and Screen Finance.  

Samples of published stories can be found here (below) and on the Muck Rack platform here:https://muckrack.com/david-south

About

Could it be possible to do high-quality investigative journalism in the context of a shrinking economy undergoing austerity, and where the media sector is contracting and consolidating around a small number of media companies? Is it possible to launch new media products in the face of a contracting economy and reach new audiences and create new markets?

In Canada, the early to mid 1990s were the years of government austerity and economic crisis. After the crash of 1989/1990*, institutions came under great stress. Health care, for example, was pitched into a period of turmoil and change. Drawing on my experience working in the health sector (Princess Margaret Hospital/Ontario Cancer Institute), I covered this crisis in many stories for various publications, in particular Today’s Seniors.

The Canadian economy severely contracted and unemployment was at 11.4 per cent by 1993 (Statistics Canada), and as Statistics Canada says, “Because employment recovered at a snail’s pace after the recession of the early 1990s, the decline in the unemployment rate was delayed until 1994”. 

The media in general could not avoid the wider economic crisis. According to the book The Missing News: Filters and Blind Spots in Canada’s Press (Robert A. Hackett and Richard S. Garneau, Canadian Centre for Policy Alternatives, University of Toronto Press 2000), Canada’s media was also in a crisis throughout the 1990s, as declining resources, staff layoffs and media closures reduced the breadth and depth of news coverage. Canadian media as a whole also has a “great dependence on advertising, which accounts for more than 70% of daily newspaper revenues, about 64% of magazine revenues,” which means there is enormous pressure to only publish stories that do not upset advertisers. And monopolies exert great control over news content in Canada: “In the United States, ten companies control 43.7% of total daily newspaper circulation. By contrast, in Canada since 1996, one single company controls a comparable share of the media pie.”

The impact of this crisis was summed up by Jeffrey Simpson in the book The Missing News, where he said newspapers are “shrinking in size, personnel, ambition and, as a consequence, in their curiosity,” …. “I believe the result has been a diminution in quality.” (p64)

This is the context in which, ironically, it was possible to flourish as a much-sought-after investigative journalist who could get the story and get the quotes and as an editor. And it was also a time for opportunity, in particular as new media rose in importance, from cable and satellite television, to the rise of the Internet.

I broke original stories for Now Magazine as a member of their investigative reporting team, for Today’s Seniors as its Medical and Health Correspondent, and as a reporter for two Financial Times newsletters in London, UK. I also broke original stories as a freelancer for many other magazines and newspapers, including Hospital News, The Toronto Star, This Magazine, The Annex Gleaner, Flare, The Financial Post Magazine, Canadian Living, and others. I drew on strong contacts in health care, media, politics, international relations and the military. 

I was an editor for magazines, newspapers and newsletters as well, gaining invaluable experience and contacts. This included as Editor-in-Chief for start-up youth publication, Watch Magazine (see Case Study 2), and as Features Editor for Id Magazine (see Case Study 3). 

Themes covered included the uses – and abuses – of data, the impact of military engagements to uphold international law, how to re-structure health care when budgets are tight, with populations ageing, and technology and scientific advances quickly expanding options, the emerging new media world of cable and satellite television and the Internet, the sexual revolution 2.0, urbanization and how it re-shapes politics and community, international development, and youth culture. 

Story highlights include covering data concerns over Canada’s border screening measures, questions about the air quality of aircraft cabins, the debate over airstrikes in Bosnia, scandals involving peacekeepers in Somalia and reporting on the UN peacekeeping mission in Haiti, reforms to medical education in Canada, innovators in health care, the tug of war over health care spending during austerity measures, London, UK designers, the growing role of Nordic countries in cable and satellite television, the film financing scene in Europe and the UK, the new sexual revolution and its impact on cable and satellite television and the rising Internet, changes to Canada’s media industry, and Toronto’s embracing of the megacity concept and the political battles it sparked. 

I edited newsletters and newspapers aimed at specific communities, from Canada’s medical history community to part-time students. And had the privilege of helming a start-up youth magazine as its Editor-in-Chief to its commercial success (see Case Study 2). 

It was an exciting time of great change, best reflected by the fact in 1997 Id Magazine (Features Editor: see Case Study 3) was one of the first Canadian publications to regularly publish an online version (https://web-beta.archive.org/web/19970207103121/www.idmagazine.com).  

* “The last two recessions in Canada occurred in 1982 and 1990. … The most recent Canadian recession began in the second quarter of 1990 and over the next 12 months GDP fell by 3.2%. … The recovery from this recession was unusually slow; there was almost no growth between mid-1991 and mid-1992. This slow recovery was export driven.” (The Canadian Encyclopedia)

 “In early 1994, Canada’s economic situation was not that favourable—our economy was facing some rather serious problems.

 “… the recession here was more severe than in the United States.

“Working their way out of these difficulties was disruptive and painful for Canadian businesses. Defaults, restructurings, and downsizings became the order of the day. With all this, unemployment took a long time to recover from the 1990–91 recession and, in many instances, wages and salaries were frozen or reduced (Bank of Canada: Canada’s Economic Future: What Have We Learned from the 1990s?)

A small sample of published stories with links is below:  

Investigative Journalism 

An Abuse of Privilege?

Aid Organization Gives Overseas Hungry Diet Food

Artists Fear Indifference From Megacity

Casino Calamity: One Gambling Guru Thinks The Province Is Going Too Far

Counter Accusations Split Bathurst Quay Complex: Issues of Sexual Assault, Racism at Centre of Local Dispute

False Data Makes Border Screening Corruptible

New Student Group Seeks 30 Percent Tuition Hike

Peaceniks Questioning Air-raid Strategy in Bosnia

Safety at Stake

Somali Killings Reveal Ugly Side of Elite Regiment

Study Says Jetliner Air Quality Poses Health Risks: CUPE Takes on Airline Industry with Findings on Survey

Top Reporters Offer Military Media Handling Tips

Will the Megacity Mean Mega-privatization?

Will Niagara Falls Become the Northern Vegas?

Health and Medical

Changing Health Care Careers a Sign of the Times

Critics Blast Government Long-Term Care Reforms

Cut Services to Elderly, Says Doctors’ Survey … But Leave Our Salaries Alone!

Feds Call for AIDS, Blood System Inquiry: Some Seniors Infected

Government Urged to Limit Free Drugs for Seniors

Health Care on the Cutting Block: Ministry Hopes for Efficiency with Search and Destroy Tactics

Health Care in Danger

Lamas Against AIDS

New Legislation Will Allow Control of Medical Treatment

New Seniors’ Group Boosts ‘Grey Power’: Grey Panthers Chapter Opens with a Canadian Touch

Philippine Conference Tackles Asia’s AIDS Crisis

Private Firms Thrive as NDP ‘Reinvents’ Medicare

Psychiatric Care Lacking for Institutionalised Seniors

Seniors Falling Through the Health Care Cost Cracks

Specialists Want Cancer Treatments Universally Available

Take Two Big Doses of Humanity and Call Me in the Morning

Taking Medicine to the People: Four Innovators In Community Health

US Health Care Businesses Chasing Profits into Canada

Magazines

The Ethics of Soup: Grading Supermarket Shelves – For Profit

Freaky – The 70s Meant Something

Land of the Free, Home of the Bored

Man Out Of Time: The World Once Turned On the Ideas of this Guelph Grad, But Does the Economist John Kenneth Galbraith Know the Way Forward?

Oasis Has Arrogance, A Pile of Attitude and the Best Album of 1994

Porn Again: More Ways to Get Off, But Should We Regulate the Sex Industry?

Redneck Renaissance: A Coterie of Journalists Turn Cracker Culture into a Leisure Lifestyle

Safety at Stake

Swing Shift: Sexual Liberation is Back in Style

Time Machines

Too Black

Media 

The Big Dump: CP’s New Operational Plan Leaves Critics with Questions Aplenty

Channel Regulation: Swedes will Fight Children’s Advertising all the Way

Do TV Porn Channels Degrade and Humiliate?

Is the UK Rushing to Watch TV Porn? 

Playboy ‘is not for sad and lonely single men’

TV’s Moral Guide in Question – Again

UK Laws on Satellite Porn Among Toughest in Europe

Undercurrents: A Cancellation at CBC TV Raises a Host of Issues for the Future

Special Reports

From Special Report: NMM (New Media Markets) Spotlight on the Emergence of Satellite Porn Channels in the UK

From Special Report: Sexual Dealing: Today’s Sex Toys Are Credit Cards & Cash: A Report on the Sex-for-Money Revolution

United Nations

Freedom of Expression: Introducing Investigative Journalism to Local Media in Mongolia

Starting from Scratch: The Challenge of Transition

State of Decay: Haiti Turns to Free-market Economics and the UN to Save Itself

Traffic Signs Bring Safety to the Streets

Magazines

Watch Magazine

Id Magazine

Newsletters

Hannah Institute for the History of Medicine

New Media Markets

Screen Finance

Blue Sky Bulletin

Other Resources

Ger Magazine: Issue 1

Ger Magazine: Issue 2

In Their Own Words: Selected Writings by Journalists on Mongolia, 1997-1999 (ISBN 99929-5-043-9) 

Mongolian Rock and Pop Book (ISBN 99929-5-018-8) 

Wild East: Travels in the New Mongolia (ISBN 1-55022-434-4)

Timeline 

1991: Begin career as investigative journalist and editor.

1992: Work as a Medical and Health Reporter for Today’s Seniors and as an Investigative Journalist for Now Magazine. Work as Editor and Writer for the Hannah Institute for the History of Medicine’s newsletter. 

1993: Published in many publications, including The Toronto Star, Canadian Living and This Magazine.

1994: Work on re-launch of Watch Magazine 2.0 and its expansion (see Case Study 2). 

1995: Work as reporter for two Financial Times newsletters in London, UK.

1996: Work on re-launch of Watch Magazine 3.0 and its expansion. Begin work at Id Magazine as its Features Editor (see Case Study 3).

1997: Begin two-year assignment with the United Nations mission in Mongolia (see Case Study 4). 

Testimonials 

David South … proved himself to be a penetrating, thorough and hard-working journalist. He produced a lot of very good stories …” Neil McCartney, Editor, Screen Finance, Telecom Markets and Mobile Communications, London, UK

This work is licensed under a Creative Commons Attribution 4.0 International License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2021

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Private Firms Thrive As NDP ‘Reinvents’ Medicare

By David South

Today’s Seniors (Canada), August 1993

Many of today’s seniors fought for Canada’s internationally-admired public health system. But more and more people are becoming worried that the combination of health care reform, funding cutbacks and free trade is fuelling the growth of a second tier of private medical services serving the well off. 

The provincial government sees things differently, arguing Ontarians no longer expect government to pay for everything and rather than eroding medicare, the NDP is reinventing it. 

Whichever way one looks at it, private insurance companies, homecare providers, labs and other services designed to make money are becoming more and more involved in the health care business. 

Operating in the territory outside the guidelines of the 1984 Canada Health Act – which sets out the principles of medicare for the federal government to enforce – the private sector has room to expand, at the same time as OHIP coverage is scaled back from more and more services. 

Janet Maher, whose Ontario Health Coaltion (OHC) represents doctors, nurses and other health care workers, worries for the future of medicare. 

“A number of things like accomodation services – laundry, food services – are in the grey area of the Canada Health Act,” says Maher. “So with all these fees that are being introduced, by the strict letter of the law, there is no way to stop them. But as far as we are concerned the spirit of the Act isn’t being observed.”

In its current reforms, the government of Ontario is emphasizing paramedical professions like midwives who fall outside the CHA and aren’t covered by OHIP. The turn to community-based services means that people have to rely more on services and providers that aren’t covered under the CHA. 

Maher says privatizing accomodation services is a recent phenomenon, the result of hospitals finding creative ways to trim their budgets. 

“It’s a new area that hospitals are taking bids on,” she says. “The other thing around the accomodation services is that because they are not categorized, strictly speaking, as health care services, none of this is exempted in the Free Trade Agreement from U.S. competition.”

A recent report by two British Columbia researchers tries to put together this complex puzzle. Jackie Henwood and Colleen Fuller of the 7,500-member Health Sciences Association of British Columbia recently charged that a combination of free trade and budget-slashing governments is eroding the universality of medicare and ushering in a two-tier system. 

Fuller and Henwood identify the Free Trade Agreement as the culprit. While the health care industry created more jobs than any other sector of the Canadian economy between 1984 and 1991, they point out the job growth has been concentrated in the private sector since free trade was implemented in 1989. And they expect worse under the proposed North American Free Trade Agreement (NAFTA). 

“NAFTA will accelerate trends towards a privatized, non-union and corporate-dominated system of health care in Canada.”

One provision of the Free Trade Agreement has also made it possible for U.S. companies to compete against Canadian firms in health care. Chapter 14, “health-care facilities management services”, allows wide-open competition. 

Under NAFTA, provisions will bind all levels of government to consider for-profit health care companies on both sides of the border on equal footing with public providers when bidding for services, and entitles them to compensation if they can prove to an arbitration board they’ve been wronged. 

“That represents a substantial encroachment on the democratic right of local, provincial and federal governments to make decisions,” says Cathleen Connors, who chairs the national wing of OHC, the Canadian Health Coalition. 

It’s this plus health care cutbacks – federal and provincial – that’s resulting in service and job cuts and bed closures in the public sector and an increase in privatization, say Henwood and Fuller. These opportunities have not gone unnoticed by private companies south of the border. 

One such company is American Medical Security Inc. (AMS) of Green Bay Wisconsin. After hiring Canadian pollsters Angus Reid to do a survey, AMS saw a profitable market in offering American hospital insurance to frustrated Canadians awaiting surgery. Sixteen per cent of those polled said they wanted this service; that was enough for AMS. 

“One thing that comes across loud and clear is that Canadians for the most part are happy,” says spokesperson Carrie Galbraith. “They know they are taken care of during an emergency. But they are willing to pay a little extra if they need care.”

So far, AMS offers its plan to Ontario, B.C. and Manitoba, with Toronto its best market. Galbraith says plans are in the works to expand to all of Canada except the territories. 

Unfortunately, like most private health plans, AMS cuts its losses by avoiding what Galbraith calls “adverse selection” – anybody with a known serious health problem need not apply. 

Here in Ontario, private for-profit home care services take in close to half of all OHIP billings. Many clients pay out of their own pockets for additional services. 

The Ontario health ministry doesn’t keep statistics on the extent of the private home health care sector, says spokesperson Layne Verbeek. But the Ontario Home Health Care Providers’ Association, a trade group, estimates private homecare companies now employ 20,000 and serve more than 100,000. 

“It’s a market situation,” says Henwood. “If the services aren’t available to people within the public sector, they will go outside of it. We’ve seen this in other countries like England, where they had a public system and now have a parallel private system. If you erode a system enough that people get angry, they are going to start to look for alternatives, and the people with the greatest liberty are those with money.”

But in a recent interview, health minister Ruth Grier was adament this scenario wouldn’t be allowed to take place in Ontario. She strongly disagreed that medicare is being weakened due to recent changes, and said the government has actually “reaffirmed its commitment to medicare.”  

More from Canada’s Today’s Seniors

Feds Call For AIDS, Blood System Inquiry: Some Seniors Infected

Government Urged To Limit Free Drugs For Seniors

Health Care On The Cutting Block: Ministry Hopes For Efficiency With Search And Destroy Tactics

New Seniors’ Group Boosts ‘Grey Power’: Grey Panthers Chapter Opens With A Canadian Touch

Seniors Falling Through The Health Care Cost Cracks

My background: 

CASE STUDY 7: UNOSSC + UNDP | 2007 – 2016

CASE STUDY 5: GOSH/ICH Child Health Portal | 2001 – 2003

CASE STUDY 4: UN + UNDP Mongolia | 1997 – 1999

Hannah Institute For The History Of Medicine | 1992 – 1994

Taking Medicine To The People: Four Innovators In Community Health

Take Two Big Doses Of Humanity And Call Me In The Morning

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2021

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Health Care On The Cutting Block: Ministry Hopes For Efficiency With Search And Destroy Tactics

By David South

Today’s Seniors (Canada), August 1993

It’s search and destroy time at Ontario’s ministry of health: search out savings and destroy inefficiency and waste. But many remain apprehensive that not all the cuts are going to be logical and fear the province’s health and well-being will be affected. 

As part of the social contract deal, the Ontario Medical Association must find $20 million in cuts from the list of services covered by OHIP. The OMA and the provincial government are currently haggling over which procedures and examinations will be cut. 

“We look at services that aren’t medically necessary,” says health ministry spokesperson Layne Verbeek. “Because we were wealthier in the past, we were able to cover some services. We aren’t in that position now. But I don’t see how eliminating medically unnecessary treatments will affect the population.”

The fallout of the Rae government’s attempts to reign in costs and recover lost revenues may take years to unfold, but it is already apparent that Ontarians will be paying more. 

“Access to necessary treatment should not depend on a person’s ability to pay,” says health policy critic Carol Kushner. “What disturbs me about any delisting program is that virtually every medical service could be termed medially necessary. There are very few services that are an out-and-out waste of time.

“We often point to the fact that Ontario spends $200 million a year treating the common cold. Well, most of that is a waste of time. But delisting even that kind of service would be a detriment to the public’s health, because a small group of patients really do need to see a doctor when they have a cold.”

OMA spokesperson Jean Chow says it’s too early to pin down the exact cuts that will be made. “It’s a little premature to try and speculate what the final list will be.”

The newly-created Non-Tax Revenue Group is hard at work finding fees, fines and penalities the government can add or hike to boost revenue from this source from $5 billion to $10 billion a year. 

The spring budget saw the first hit, with the addition of $240 million in non-tax revenue. 

A radical reshaping of medicare is taking place. Private sector services – for which consumers pay directly or through insurance companies – now make up 34 per cent of Ontario’s health care funding, compared to 42 per cent in the United States, according to a recent study by the Canadian Medical Association. 

Health minister Ruth Grier has also floated the idea of widespread hospital closures. Both the Toronto and Windsor district health councils (DHCs) are carrying out feasibility studies on “reconfiguration.” The ministry is remaining tight-lipped about which hospitals will get the chop. 

“One suspects there’s room for efficiency – there are a lot of empty beds in a number of different places,” says ministry spokesperson Verbeek. 

“All hospitals are being reviewed, with a view to closing one or two hospitals,” says health planner Lisa Paolatto, who is working on a feasibility study on “reconfiguration” for the Essex County District Health Council, along with Toronto’s DHC. 

Closing hospitals could present a serious political hot potato for the government. In Britain, the Conservative government is still recovering from the bad feelings surrounding proposals to close world-renowned hospitals in the London area. The public feels great loyalty to local hospitals, a feeling that has been further fostered by hospital charities that raise millions a year from the communities’ good will. 

“This is going to open up new discussions of money between doctors and patients,” says Kushner. “Seniors are a unique group in Canada because they remember what it was like before medicare – what it was like not to be able to pay for the doctor, to forgo treatment that they thought was necessary. They understand the financial hardship that could occur if they were unlucky enough to have a family member who needs expensive medical treatment.” 

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