Hospital privatization a 'disturbing picture'

This is from the Star. I doubt the picture is disturbing to the private investors who stand to do well from the new arrangements. This is just another example of government ingenuity at finding more ways for public facilities to provide profit for private industry.


Hospital privatization a `disturbing picture'

Lucas Oleniuk/Toronto Star
The Ontario Health Coalition’s Ed Schmeler and Natalie Mehra yesterday criticized public/private building deals.
Jan 08, 2008 04:30 AM
Prithi Yelaja
Staff Reporter

The Ontario Health Coalition is calling on the provincial auditor to probe all public/private partnership infrastructure plans, given what it claims were massive cost overruns and delays in building Brampton Civic Hospital – the first Ontario hospital built under a so-called P3 deal.

The coalition, a watchdog group that keeps tabs on health care in the province, also wants a moratorium on P3s until the auditor declares they are good value for taxpayers. The government has 44 P3 projects in the pipeline valued at $30 billion, including 30 hospitals.

"The government's justification for its P3 privatization policy has been that going to the private sector brings hospitals on time and in budget. The evidence from the Brampton case shows that this hospital is (not) on time, it doubled in price and the bed totals are approximately half of the assessed needs of the community at this ... time," the coalition's director Natalie Mehra told a news conference yesterday.

Health Minister George Smitherman and hospital CEO Robert Richards have denied many of the claims made in a report by the coalition, which says it examined thousands of documents it obtained after a four-year court battle for access. The documents include internal correspondence among the government, the hospital and the private consortium that built it. "What we found is a deeply disturbing picture that irrefutably shows that the costs of the hospital increased from $350 million ... to $650 million by the time the hospital was constructed," said Mehra. (With equipment, the total bill stands at $790 million.)

Although the initial construction deadline was 2005, the hospital was not completed until July 2007 and opened last October, she added.

Mehra said that at the beginning of negotiations, bed totals were to be 720, split between 608 at the new hospital and 112 beds at the redeveloped Peel Memorial Hospital, which Brampton Civic replaced. Brampton Civic opened with 479 beds, to rise to 608 by 2012. The original plan to have 20 operating rooms was scaled back to 12; six more are to open by 2012.

The province "is now in full swing of a $30 billion infrastructure program to build 30 P3 hospitals. ... If in each of these hospitals we start to see the cost increases we've seen in the first few P3 hospitals (like Royal Ottawa hospital), it's clear there will be no option but to shrink the scope of public health-care services in order to shift the money over to bricks and mortar," Mehra said. "The hospital CEO said for every $1 million they have to pay in debt financing, 10 nurses can't be hired."

The coalition believes the consortium will make "exorbitant" profits of $260 million on the hospital. The deal gives the consortium the right for 25 years to handle non-medical services such as portering, parking, food and housekeeping.

"We fundamentally believe it's a bad idea to take the governance of a local hospital and its services out of the hands of its local community, to hand them over to companies whose investors might live half a world away, who couldn't care less whether my grandmother gets great care or not, but who are in it to siphon as much money as possible out of the hospital," Mehra said.

Smitherman spokesperson Laurel Osfield said the coalition's figures and dates are comparing apples to oranges. "They're referring to two different deals," she said, referring to an original deal negotiated by the Tory government before 2003 and renegotiated by the Liberals in 2004. "It's just not relevant today."