P3 hospitals

This first post if from CUPE.
What's so great about P3 is they provide another outlet for private investors
and potential profits. The talk of efficiency and spreading risk etc. is all designed as justification for getting the government out. Already under public ownership and investment there is lots of profit since construction is by private companies but modern capitalism requires more and more outlets for capital. Consider the huge private jail industry in the US and the huge mercenary and private contractor roles associated with the military. There are more contractors now working for the military in Iraq than troops. Already many services in health centres are contracted out such as food services, custodial work etc. P3 hospitals are just another example of this trend. The Liberals in Ontario have scrapped P3 hospitals only to go ahead with them in another form!

What’s so great about P3s anyway?
July 3, 2007 01:32 PM
“We are embarking on an ideological crusade,” says assistant director of CUPE-Quebec, Michel Parenteau. “People who think these super-hospitals will cost less must believe in fairytales. The experience in the rest of Canada and in Europe is conclusive, and it won’t be any different here.”

Elusive savings

CUPE has done the math, and we can’t figure out how this P3 is going to save Canadians any money. We challenge Monique Jérôme-Forget to demonstrate this Even Pierre Lefebvre, president of the P3 agency in Quebec, isn’t promising any savings.

A Q&A created by CUPE demonstrates that P3 supporters are coasting on the myth that the private sector is more efficient than the public sector. Unfortunately, this myth is not supported by the facts.

Will the private corporation be able to obtain materials at a lower cost? No lower than private companies working in the conventional mode, as these are the same builders.
Will the workers be paid less? That would be impossible, as the same collective agreements for the construction sector are in effect.
Will the corporation obtain lower interest rates for financing the project? On the contrary, private firms acknowledge that no organization can negotiate better rates than the government.
Will the money invested go directly to infrastructures? The large firms that negotiate contracts with the government generally reserve a profit margin of 10 to 20%, and often higher. Tens of millions of dollars are thus diverted from health services into the pockets of distant, wealthy shareholders.
Isn’t it preferable for a part of the risk to be absorbed by a private corporation? Firstly, it is impossible to know if there is a real sharing of risks before the signing of the contract, as the negotiations are always secret. In addition, a company can declare bankruptcy, as was already the case in Great Britain, and then the government has to pick up the pieces.
Will deadlines and costs be respected? There is no guarantee. In Brampton, Ontario, the cost of a P3-built hospital nearly doubled, was delivered a year late, and was smaller than the initial project. The same thing happened with the Royal Ottawa Hospital. In London, the cost of relocating three hospitals on a single site went from 770 million to 1.7 billion dollars.
After completion, will the maintenance of the building be handled with greater care? Definitely not. Cutting corners increases profits. In addition, in the final years of the contract, what interest would the corporation have in investing in the maintenance of a building that they would soon have to cede to the government? They would be much more likely to let a property run down if it would soon no longer be their responsibility.
CUPE took a certain pleasure in hearing Health Minister Phillippe Couillard state, without batting an eye, that the sometimes-lamentable state of our hospitals was the result of a lack of public investment over the last several years.
“We are in total agreement! It is the responsibility of the government to ensure proper care and to invest in our infrastructures. There are no shortcuts for delivering quality services,” said Michel Parenteau. “We are rushing headlong into P3s that will cost us more and increase our public debt, and the buildings inherited by future generations will require major investments to bring them up to standards,” he concluded.

A post about P3 hospitals in Ontario under the Liberals.

Liberals bringing P3 hospitals in through back door

Ontario Health Coalition says Liberals behaving like Tories

Toronto - What has happened in three short months to the bold Liberal promise of Premier Dalton McGuinty to end public-private-partnership (P3) hospitals in Ontario?

The promise is fading steadily away as the new government jettisons one campaign promise after another to cope with a $5.6 billion deficit left behind by the former Tory government.

Health Minister George Smitherman strenuously denies it, but advocates of publicly owned and operated hospitals called a news conference Monday to speak out about their concerns.

"We fear there is potentially a huge program of P3 (public-private partnership) hospitals that may be brought in through the back door," said Natalie Mehra of the Ontario Health Coalition.

First, the Liberals followed their campaign rhetoric to scrap P3 hospitals in Toronto and Brampton by announcing deals that look a lot like those previously announced by the Tories, the coalition notes.

Taypayers finacing private profit

Private operators will still build the facilities, with private funding, and provide many of the services privately, all at a solid profit — with taxpayers financing the whole bill.

The major difference is that, instead of paying perpetual rent to private owners for the facilities, the province would make what look like mortgage payments and eventually become owners of the buildings.

Critics say the approach amounts to basically the same policy as the Tories, with private operators reaping billions in perpetual profit. However, Smitherman argues the difference is "significant."

Yet rather than allay concerns following the news conference Monday, Smitherman compounded the situation by disclosing that a string of six other hospitals are also pursuing private financing arrangements along the same lines as Ottawa and Brampton.

The coalition says P3 hospitals in Britain have been a disaster because the profit turned by private operations is sucking billions out of public coffers. Now Ontario seems to be following suit, the coalition says.

"(The Liberal government) campaigned explicitly against these (P3) proposals and yet is moving ahead with private, for-profit hospitals, pretending that they are not,'' Mehra says.

Smitherman says a final decision has yet to be made.

The six additional institutions investigating private financing include the Bridgepoint Health (formerly Riverdale Hospital) and the Centre for Addiction and Mental Health, both in Toronto; the Salvation Army Grace-Markham Stouffville, the Halton Health Care Centre in Oakville, St. Joseph's Health Care Centre in Hamilton and Grimsby's West Lincoln Memorial.

Web posted by NUPGE: 13 January 2003