U.S. Hospitals Open Doors to Canada’s Addicts : Health care: The Canadian medical system pays the tab, a welcome boost for facilities in Orange County and elsewhere. But some up north say Canada is getting fleeced.

Michael Gabriel, a Toronto 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 Gabriel, 38, 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 local counseling agency suggested that he go to the United States for treatment. Four days later, Gabriel was aboard an airliner headed for Orange County’s John Wayne Airport. For several weeks recently, he underwent treatment at Community Psychiatric Centers’ new hospital in Laguna Hills.

“I knew I had the addiction and I was relieved to get help right away,” Gabriel said. “It has been surprising and relieving to me.”

Gabriel is in the vanguard of an unusual growing 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. U.S. immigration officials say they are processing more than 200 applications a month from Canadian drug and alcohol patients seeking treatment here. The Canadian government will pay for such treatment and claims are expected to total nearly $28 million this year in Ontario, where the problem is most acute.

But the program has also prompted criticism. Some Canadians think the funds paid to U.S. facilities should be used to develop treatment programs in their country. Others complain 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 to U.S. hospitals can be mutually beneficial. It gives immediate relief to the patients who are in crisis and to the hospitals that need to fill their unused beds.

The National Assn. for Addiction Treatment Providers in Irvine estimates that 40% to 50% of the 40,000 beds in this 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 treatment of drug and alcohol dependency.

One result: “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 new business. More than 50 U.S. hospitals have turned to Canada--particularly Ontario, Canada’s most populous province and site of that nation’s largest drug problem--to fill empty beds with drug- and alcohol-dependent patients.

One agency that looked north was the Genesis chemical dependency program at South Coast Medical Center in Laguna Beach. Today, just three months after that nonprofit community hospital began soliciting referrals in Ontario, Canadians represent half of its 22 patients being treated.

“It’s a double blessing,” said Genesis director Joe Sweeney of the Canadian connection. “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 the Laguna Hills facility, and Conte believes 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, believes the market for Canadian patients has become saturated. He said his hospital’s owner, Comprehensive Addiction Programs based in Vienna, Va., has begun to limit the number of Canadian patients it admits 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.

Currently only four of the 26 patients in Bowling Green are Canadian, whereas six months ago they represented half his patient census, 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 while his office was asked to grant only a few chemical-dependency treatment waivers a year ago, it is now processing 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, although addicts with more serious convictions such as drug trafficking or violent crimes still are excluded.

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

Canadian newspaper editorials have called for the money spent to treat Canadians south of the border be used instead to beef up treatment programs within 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 reports that some patients who have returned from U.S. hospitals to Canada have been left stranded without receiving any follow-up counseling and other services for which the hospitals have been paid.

Critics complain that some of the agencies that have opened offices in Ontario to provide counseling and referrals of 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,” Conte complained.

He said that Community Psychiatric Center had such an unsavory experience with one such contract organization that it severed its relationship several months ago. Conte said CPC found that the company it was contracting with in Ontario at a rate of $1,600 per patient was not providing follow-up care to patients as it had promised.

He said the agency was also coaching some 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 that CPC has opened offices in Toronto and Kitchener, Ontario, that are staffed with CPC administrators and counselors.

Comprehensive Addiction Programs, which runs a chain of psychiatric hospitals in Louisiana, Texas and North Carolina, retains an exclusive agent in Toronto to refer patients to its hospitals and to provide counseling to returning patients and their families.

The recent explosion of insurance claims by U.S. hospitals has gained the attention of the Ontario Ministry of Health, which “has the issue under review,” said Layne Verbeek, a spokesman for the agency that governs health care in the province.

Verbeek said the Ontario Health Insurance Plan in the fiscal year ended March 31 paid $16.2 million in claims from U.S. hospitals for drug and alcohol treatment, which was more than four times the $3.5 million paid out two years earlier.

He added that in the first quarter of the current fiscal year, the chemical-dependency program claims from the United States were $6.95 million. At that rate, the annual bill would increase this year to $27.8 million.

Of more concern, 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 go 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 estimated at about $28,600.

Ontario’s government-funded insurance plan picks up 75% of the cost of such medical care received outside the province, compared to reimbursing the entire cost of alcohol- and drug-abuse treatment received in Ontario. However, American hospitals routinely forgive the remainder of the bill, so that patients like Gabriel don’t have to pay a dime. Hospital officials explain that the discount that they, in effect, give to Canadians is generally the same that they grant to insurance carriers in the United States, which 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 while he believes more hospital facilities are needed in Ontario, he also suspects that many people are being referred to hospitals in the United States who instead should be in less-expensive Canadian outpatient programs that would teach them to cope with their daily environment.

The government of Ontario, Taylor said, is very 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.”

However, others like Franca Carella, founder and director of Vita Nova Foundation, a charitable agency that provides outpatient treatment for drug and alchol addicts in Toronto’s large Italian community, welcome the opportunity to refer addicts to hospitals in the United States.

“It is getting more and more difficult to find space in Ontario hospitals because of the shortage of beds” and the size of drug problem, Carella said. “When an addict needs help, the need is right now. Tomorrow, he may be dead.”

CANADIAN DRUG-ABUSE PATIENTS GO SOUTH More and more Canadians with drug and alcohol problems are checking into U.S. hospitals for treatment, including several in Southern California. The claims paid and the number of claims filed for such treatment outside the province of Ontario--almost entirely to hospitals in the United States--has risen sharply since 1987.

Year* Value of Claims Paid No. of Claims Cost Per Claim 1988 $3.5 940 $3,723 1989 4.6 1,127 4,082 1990 16.2 1,805 8,975 1991** 32.4 3,416 9,485

* For 12 previous months ending March 31. ** Projected based on first quarter information. Source: Ontario Ministry of Health