On March 12, under mounting pressure from the Keep Our Hospitals Public campaign, management of Providence Care told their staff that the new Providence Care hospital will be a public hospital: “This is a contractual arrangement not an ownership arrangement.”
“Whether it is called a public private partnership of an alternative funding arrangement is irrelevant,” commented Ross Sutherland, Chair of the Kingston Health Coalition. “This contractual arrangement privatizes significant parts of our hospital. The hospital will become more for-profit than public.”
“The private sector has found that they can obtain the same profit, with less financial and political risk, by entering into long-term contracts rather than formal ownership,” pointed out Sutherland. “These long-term financing and maintenance agreements produce profits in the 12% range, according to Infrastructure Ontario. In Kingston the banks and international health services companies could end up taking a hundred million dollars out of this community: money that would be better spent on health care services.”
“Providence Care will own the hospital the way the bank owns a heavily mortgaged homeowner’s house; but it is even worse: in this case the bank also manages the house and could charge the owner to put up a picture or dictate how the house is to be cleaned as part of its 30-year maintenance agreement,” commented Sutherland.
The following points about these long-term public–private arrangements need to be considered:
- The only independent studies of the alternative funding model, the new name for a P3 in Ontario, have found that they cost more than the public approach.
- The long-term contractual arrangements guarantee payments to the private consortium regardless of changing times, clinical needs, or budgets. The consortium gets its money even if clinical services have to be cut.
- Two management structures in the hospital, one for the hospital facility, maintenance and any services privatized and bundled into the P3 deal, and one for clinical services, mean significant extra costs to negotiate changes in the ongoing relationship.
- These arrangements usually come with side deals that allow the private consortium to use part of the hospital or grounds for more private development.
- If the private consortium finds that the agreement is not profitable, for any reason, they can walk away, leaving us to pick up the mess. In the end the public is always on the hook; we need the hospitals.
Thirty years ago we didn’t have computer networks, electronic patient records, MRIs, CT or PET scans, widespread palliative care or the cleaning and security requirements that hospitals have today. It is not possible to know what physical upgrades our hospital will need in the future, yet we are signing a 30-year maintenance agreement. This will limit our future clinical service options, or force us to break the agreement at significant cost.
