Public Values

P3 model too costly for Saskatchewan long-term care project — report

Traditional public funding would have saved taxpayers $10-20 million.

Dr. Loxley: The bottom line is it is too expensive.April 20, 2012: When the Saskatchewan government announced the agreement with Amicus Health Care Inc. two years ago, it described the deal to build and operate Samaritan Place as "a pilot project" to test its new funding model for long-term care.

Under the agreement, Amicus pays 100 percent of the capital costs for the 120-bed facility and the health region pays a higher per diem rate — in addition to the operating grant — to cover the full cost of the company's borrowing.

At the time, Health Minister Don McMorris said he hoped the new funding arrangement would become a model for constructing and operating other long-term care facilities in the province.

  "The P3 model proved to be a costly mistake."

"But that model — known as a public private partnership (P3) — proved to be a costly mistake," said Graham.

In a recent report commissioned by the Canadian Union of Public Employees (CUPE), University of Manitoba economist John Loxley calculated the costs of the Saskatchewan government's new funding arrangement with Amicus Health Care Inc. to build and operate Samaritan Place.

Dr. Loxley concluded the Samaritan Place pilot project will cost taxpayers $10 million to $20 million more than if it had been built using traditional public sector financing.

"There are many reasons the government should not pursue this new funding model for long-term care," Dr. Loxley wrote in The Trouble with the Amicus Deal, which was released last month. "The bottom line is it is too expensive."

Graham wants the Saskatchewan government to build more long-term care facilities in the province using the most cost effective approach: traditional public sector financing.

Links and sources
  Saskatchewan government's new funding model for long-term care "costly mistake"

Posted: April 25, 2012

Categories:
  Research
  Health care
  Public services

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