Professor in the Departments of Journalism and Health Policy and the University of Coventry, author of Health Policy Reform: Driving the Wrong Way, a critical global review of health policy reform and privatization
will provide a
Briefing by Video Conference from Cambridge, England
and Question & Answer opportunity on the P3 fiasco in England
P3s have totally lost credibility in England where:
More than £200 billion in taxpayer money has been spent paying for these projects.
Research into 154 projects reveals “astronomical profits” averaging more than 50 per cent, according to the researchers.
P3 consortia involved in building major hospital projects enjoyed the biggest profits, at an average of 66.7%.
The same multinational companies are involved in the P3s in Ontario.
at the ‘Keep Our Hospitals Public’ campaign office
LaSalle Mews, 303 Bagot Street, Unit 12 (corner of Bagot and Princess Sts.)
We’ll provide a yummy lunch
RSVP is required so we know how many people for whom to provide lunch.
Kingston’s new hospital, replacing St. Mary’s and the Mental Health Services, will be constrained by thirty year contractual arrangements with multinational corporations. Its financing, maintenance, operations and probably various redevelopment opportunities will all be for-profit. If the hospital is built as proposed, it will be more for-profit that public.
The private sector has found that it can make the same profit, with less financial and political risk, through long-term contracts rather than formal ownership. According to Infrastructure Ontario, these long-term agreements produce profits in the12% range. In Kingston’s case, these international health services companies could take an extra hundred million dollars out of this community: money that would be better spent on local health care services.
Providence Care will own the hospital the way a homeowner owns a heavily mortgaged house. But this case is even worse. The bank will also manage your house and could charge you, the owner, to put up a picture or dictate how the house is to be cleaned as part of its 30-year maintenance agreement. The bank and its partners will likely also have a contractual right for more development on your property: for example, they could build a lemonade stand in your front yard and an auto body shop in the back. You could not unreasonably refuse these projects.
The specifics of the new hospital’s 30-year contracts are currently being negotiated behind closed doors. On one side are for-profit companies trying to maximize their gain and minimize their risk. On the other is Infrastructure Ontario, a crown corporation controlled by a board with strong ties to those same industries. The public has limited involvement in this process.
This is not a trivial question. On March 18 you received a letter from Mr. Glen Wood, Chair of the Board of Directors of Providence Care, suggesting that if the arrangements for the new Providence Care hospital were questioned that Kingston might not get its new and needed hospital.
Is it Infrastructure Ontario telling Providence Care that if Kingston does not unquestioningly go along with their plans they will not fund infrastructure developments in Kingston? Is it the Ministry of Health? Or, is it the Premier’s office. Who is trying to intimidate Kingston?
Regardless, for the Government to think that we must obediently go along with their plans or risk losing needed services is insulting and contrary to the basic principles of an open society. It is even worse because the government has tried to keep a low profile on the hospital and shrouded the development in secrecy. A request for the cost comparisons that Infrastructure Ontario was supposed to undertake before deciding on the for-profit P3 approach has been ignored. A presentation to City Council in December contained no hard information. The RFP was released on December 21, 2012; when it would receive a minimum of public attention. An initial request for the RFP data sheet was met with a suggestion that we should make a freedom information request. When the RFP data sheet was supplied 48 sections were blacked out.
This will be Kingston’s largest health infrastructure project in decades and we have an obligation to put it under constructive public scrutiny to ensure that we have the best project possible. When all the independent studies of P3s, or Alternate Finance Models, in Ontario show that they cost more, it is responsible to enter these facts into the public debate. When there are many examples of P3s that are over budget, late or with complications, it is prudent to have a discussion about the funding, maintenance and operation of our new hospital.
For the government to deny the community basic information and the right to discuss the kind of hospital we want is as serious a concern as the for-profit model that they propose. It is certainly arguable that the two go hand in hand. The lack of transparency in this development may be necessary because the proposed approach would not with-stand serious public scrutiny.
There is a relatively straight forward alternative that would mitigate many of the problems associated with for-profit P3 hospitals. The RFP can be amended to remove the long-term financing and maintenance of the new hospital and return these duties to the public, non-profit sector.
How our new hospital is built, financed and operated is a significant municipal issue. Local rate payers, both through their municipal government and individually, are expected to contribute tens of millions of dollars to the project. The range of services, the kinds of jobs and the limitations imposed by long term contracts will all affect the vitality of our community and the care patients receive.
Kingston –Today, current and former patients of St. Mary’s hospital cut the ribbon to officially open the ‘Keep Our Hospitals Public’ campaign office. The office will be the focal point of a four week community discussion on whether Kingston’s new hospital should be public or a for-profit P3 hospital. On April 13, to help answer this question, a community-wide vote will be held.
“We asked patients to cut the ribbon because this campaign, at its heart, is about patient care,” explained Ross Sutherland, campaign manager. “A publicly funded, operated and maintained hospital will provide a broader range of better quality services to patients when they need it.”
The 15 organizations currently supporting the campaign are: the Kingston Faith and Justice Coalition, the Registered Nurses’ Association of Ontario, the Ontario Public Service Employees Union, the Committee on Monetary and Economic Reform, the Canadian Union of Public Employees, the Kingston Greens, Kingston and the Islands NDP, the Council of Canadians, the Union of Nation Defense Employees, the Ontario Health Coalition, the Ontario Nurses’ Association, the Medical Reform Group, the Public Service Alliance of Canada, the Kingston and District Labour Council and the Kingston Coalition Against Poverty.
The campaign office is located in LaSalle Mews, 303 Bagot Street, and will be open seven days a week for the next four weeks. The office hours are: Monday to Friday from 12 noon to 8pm, Saturday from 9am to 5pm, and Sunday from 12 noon to 4pm. The campaign’s phone number is 613-374-5211.
(beside the main Bagot Street Entrance in Lasalle Mews)
· A bagpiper will announce the opening.
· Patients and former patients of St. Mary’s will cut the ribbon at 12 noon.
· A list of organizations currently supporting the campaign will be announced.
· The no-P3 Choir will perform ‘If I had Hundred Million”.
· Campaign staff will be introduced.
Everyone welcome!
Come out enjoy the fun, have some food and meet the campaign staff. Less than four weeks to voting day, time to take a sign, talk with your friends, co-workers and neighbours and help make our new hospital a fully public hospital.
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.
KINGSTON - The new hospital slated to be built in the city’s west end should eschew the current private funding model and instead be paid for by the Ontario government, an economist says.
As it stands now, the new hospital — which is to offer 270 beds, cost $350 million to build, and replace Providence Continuing Care’s St. Mary’s of the Lake Hospital — is to be financed through what is known as a public-private partnership, or P3.
The Ontario Health Coalition — and, by extension, the Kingston Health Coalition — has launched a campaign to have the provincial government disclose the full costs of building a P3-funded hospital. It charges that the P3 funding model is flawed and that up to $100 million could be wasted in Kingston alone.
“It’s one of the cheapest times to fund infrastructure like hospitals. At (an interest rate of) 3.4%, we won’t see these yields again,” Canadian Centre for Policy Alternatives senior economist David MacDonald said yesterday at a news conference held at City Hall.
In the past, hospitals were funded by provincial government selling 30-year bonds to investors at 2.4%, MacDonald said.
“The P3 deal won’t work that way,” he said.
“The P3 deal will have the international consortium listing their own bonds, which will be private bonds. And, because they’re private bonds, they cost 2% more, and 2% doesn’t seem like a lot until it’s stretched over 30 years and then all of a sudden it increases the present value of the project by 30% or something along those lines.”
Up to three consortiums could bid for the contract to build the new facility, MacDonald explained, but there should be another one, too.
“I think what needs to happen in this process, in order for it to actually be fair, in order to make sure that the people of Kingston are getting the hospital that they deserve, is that their should be a fourth bidder, and that fourth bidder should be the provincial government,” MacDonald said.
He feels that, if the competition is equal, the government would win that bid.
MacDonald echoes the fear of the health coalition that the new facility, to be built across King Street from St. Lawrence College, will not live up to what had been planned.
“I think what will end up happening as you continue to go down this road is Kingston will end up with a smaller hospital, with fewer services, for the same price that the province could have built a much bigger hospital with better services over this time period,” he offered.
“That’s certainly what the historical evidence suggests.”
Financing the hospital is analogous to financing the purchase of a home, MacDonald suggested, and the private financing would be like paying too high a mortgage rate. Read more ›
KINGSTON — Cuts to Providence Care Mental Health Services are impacting the safety of both staff and patients in their care.
Staff who provide care to patients are marching outside their workplace on Friday, February 1 from 11 am to 1 pm to demand both management and area politicians begin to address the deteriorating conditions at the hospital.
Without long promised community alternatives, the psychiatric hospital is facing overcrowded units, cuts to programming and budget-driven under-staffing that are creating a very volatile situation inside. Two additional units are expected to close this year, taking another 60 beds out of use and reducing staffing further. Read more ›
“Provincial Official Misleads City Council on St. Mary’s P3 Hospital”
Kingston: “Infrastructure Ontario did not provide Kingston City Council with the cost information it had been asked to provide,” said Ross Sutherland, Chair of the Kingston Health Coalition. “Instead it gave generalities, falsehoods and misinformation. It was insulting to Council and the residents of Kingston.”
Infrastructure Ontario (IO), the provincial agency telling Kingston to rebuild St. Mary’s as a privatized P3 hospital, had been invited by city council to provide the cost comparison between a privatized P3 St. Mary’s hospital and a public option: calculations that IO had promised Ontario’s Auditor General it would perform. Instead, John McKendrick, IO senior vice-president, told council, “I believe a P3 will save 10…20…25 % over a traditional approach”. No facts were given to support his opinion.
Last June a peer reviewed study of 23 P3 hospitals in Ontario found that they cost 16% more than building public hospitals. When asked
