Canadians Flock to U.S. Hospitals That Aid Addicts : Health care: Strapped U.S. facilities welcome the business, but the practice is controversial north of the border.

Michael Gabriel, 38, a landscape contractor, needed help fast. His life, a blur of cocaine and alcohol, was a shambles. Now broke, he longed to be admitted to a hospital treatment program for drug addicts.

But the Toronto resident faced a three- to four-month wait for a hospital bed in Canada, where the socialized medical system is short of treatment facilities to counter a burgeoning drug problem.

Then a counseling agency suggested that he go to the United States for treatment.

Four days later, Gabriel was aboard a flight to Orange County’s John Wayne Airport. For several weeks recently, he was treated at Community Psychiatric Centers’ new hospital in Laguna Hills.

“It has been surprising and relieving to me,” he said.

Gabriel is in the vanguard of an unusual short-term immigration of drug-dependent Canadians to U.S. medical facilities. The arrangement is designed to relieve pressure on Canada’s overburdened health-care system, while benefiting some U.S. hospitals struggling to fill beds.

But the program has also drawn criticism. One concern is that the millions of dollars spent in U.S. facilities could be used to develop treatment programs in Canada. Another is that the agencies that refer patients to U.S. hospitals are marketing too aggressively and failing to provide the follow-up care for which they are being paid.

Nevertheless, industry and government officials say, the matching of Canadian patients and U.S. hospitals can be mutually beneficial. It gives immediate relief to the patients whose lives are in crisis and to the hospitals that need to fill unused beds.

The National Assn. for Addiction Treatment Providers in Irvine estimates that 40% to 50% of the 40,000 beds in the country’s private chemical dependency treatment facilities are empty. The vacancies stem from intense competition, cost-containment pressures and greater use of outpatient counseling services for drug and alcohol dependency treatment.

“A lot of the hospitals are in financial trouble,” said Ken Estes, an association spokesman.

So some U.S. hospitals are looking wherever they can to drum up business. More than 50 U.S. hospitals have turned to Canada--particularly Ontario province, where the drug problem is the worst in that nation--to fill empty beds with drug- and alcohol-dependent patients.

Canadians represent half the 22 patients receiving treatment at the Genesis chemical dependency program at South Coast Medical Center in Laguna Beach, just three months after that nonprofit community hospital began soliciting referrals in Ontario.

“It’s a double blessing,” Joe Sweeney, director of Genesis, said. “It enables us to fill a need and to run consistently in the black, whereas before there were months when we had difficulty breaking even.”

Canadians are being referred to eight of Community Psychiatric Center Inc.’s 49 hospitals in the United States, said Richard Conte, the company’s executive vice president. Currently, about 40 Canadians are being treated in those hospitals, including about a dozen at Laguna Hills hospital, and Conte believes that there is potential for growth.

“It is definitely worth our while to do it financially,” he said.

But Brooks Cagle, chief executive of Bowling Green of St. Tammany hospital in the suburbs of New Orleans, fears that the market for Canadian patients has become saturated. He said his hospital’s owner, Comprehensive Addiction Programs of Vienna, Va., has begun to limit the number of Canadian patients for fear of a change in Ontario government policy.

“Quite honestly, any American hospital that will place itself in a position to be completely dependent on the Canadian market is making itself very vulnerable,” Cagle said.

Now only four of the 26 patients in Bowling Green are Canadian, whereas six months ago they represented half his patient count, he said.

Still, the U.S. Immigration and Naturalization Service, which grants waivers to allow chronic alcoholics and drug addicts to enter the United States for treatment, says patient traffic between Ontario and U.S. hospitals continues to grow.

“The large influx (of chemical dependency patients) is a relatively new phenomenon that started in the fall of 1989 or early 1990,” said John M. Bulger, deputy district director in the Buffalo office of the INS. “Hospitals all over the country are accepting patients for treatment.”

He said that although his office was asked to grant only a few chemical dependency treatment waivers a year ago, it is now accepting 200 to 250 applications a month. His office is aware of about 50 hospitals that are receiving Canadians.

In June, he said, the INS made it easier for waivers to be granted for hospital treatment by allowing entry to drug and alcohol abusers with criminal histories that include prostitution or drug possession. Addicts with more serious convictions, such as drug trafficking or violent crimes, are still excluded.

However, criticism of Toronto’s budding business relationship with U.S. hospitals is mounting.

Canadian newspaper editorials have called for the money that is being spent to treat Canadians south of the border--an amount estimated to be approaching $28 million a year--to be used instead to beef up treatment programs in Canada.

“Ideally, Ontario addicts should be treated in this province. Failing that, treatment elsewhere in Canada is preferable to sending patients to U.S. facilities that use hype to attract customers,” complained a recent editorial in the Kitchener-Waterloo Record.

Moreover, there have been disturbing reports that some patients who have returned to Canada from U.S. hospitals have been left stranded without receiving follow-up counseling and other services that were paid for.

Critics complain that some of the agencies that have opened offices in Ontario to counsel and refer Canadian patients to U.S. hospitals are marketing too aggressively because they receive payments that amount to a bounty for each patient that they send to the United States.

“The majority of agencies which have approached us relative to the referral of patients appear to me to be not much more than flesh peddlers,” complained Conte of Community Psychiatric Centers.

He said CPC had such an unsavory experience with one such contract organization that it severed its relationship several months ago. Conte said CPC learned that the Ontario company it was paying $1,600 per patient was not providing follow-up care, as it had promised.

He said the agency was also coaching Canadian addicts on how to circumvent INS regulations by lying about their destination. “We had patients telling stories about how they got into the U.S. by saying they had come to visit grandma or to go on a religious retreat or to Disney World,” Conte said.

To get a surer handle on patient screening and after-care, Conte said, CPC has opened its own offices in Toronto and Kitchener, Ontario, staffed with CPC administrators and counselors.

A recent explosion in the number of insurance claims by U.S. hospitals has prompted the Ontario Ministry of Health to place “the issue under review,” spokesman Layne Verbeek said. The agency governs health care in Canada’s most populous province.

Verbeek said the Ontario Health Insurance Plan in the fiscal year ended March 31 paid $16.2 million in claims to U.S. hospitals providing drug and alcohol treatment--more than quadruple the $3.5 million paid out two years earlier.

More astoundingly, Verbeek said, the cost per claim has skyrocketed from $3,723 in fiscal 1988 to $8,975 in the latest fiscal year, giving the government concern that it may be paying too much.

And it can be much higher. The bill for Gabriel’s treatment package, including the travel, 53 days of intensive treatment at the hospital and follow-up care upon his return to Toronto, was expected to be about $28,600.

Ontario’s government-funded insurance plan picks up 75% of the cost of such medical care received outside the province. If the treatment had been received in Ontario, the entire cost would have been covered.

However, American hospitals routinely forgive the remainder of the bill, so that patients like Gabriel don’t have to pay a dime. American Hospital officials explain that the de facto discount they give Canadians is generally the same that they grant to insurance carriers in the United States. They said it still allows them to make a profit.

Mark Taylor, president of the Addiction Research Foundation, an independent but publicly funded agency that advises the Ontario government on drug addiction issues, said he believes Canadians could be more effectively cared for at home for less than half the cost.

Taylor said that although he believes that more hospital facilities are needed in Ontario, he suspects that many people being referred to hospitals in the United States should instead be in less expensive Canadian outpatient programs that would teach them to cope with their daily environment.

The government of Ontario, Taylor said, is reluctant to tamper with the right of its citizens to go outside the province to obtain the best medical treatment available. But he thinks that some of the Canadian demand for U.S. hospital care is being driven by marketing.

“They (the hospital referral agencies) are setting up storefront operations that provide counseling,” he said. “But the counseling always seems to steer individuals south of the border.”