Public Values

Alberta P3 study — higher costs and risks with private model

Taxpayers have to foot the bill for bankrupt for-profit company.

Gibson: Wait time reductions achieved in public sector with less cost, no risks of for-profit model.EDMONTON, AB, April 10, 2012: A new report from the Parkland Institute says that supporting private health facilities with public health dollars costs more, damages the public system and puts tax dollars and patient care at risk.

The report, entitled Delivery matters: The high costs of for-profit health services in Alberta, uses Calgary's failed Health Resources Centre, a private surgery facility, as a case study. Using documents obtained through a Freedom of Information request, the report concludes that services paid for through tax dollars at HRC cost significantly more than in the public system, and had no larger impact on wait times.

"The HRC case study enabled us to directly compare public and for-profit models for reducing wait times, and the findings were clear: wait time reductions were achieved in the public sector with less cost and none of the risks of the for-profit clinic model," says Parkland's research director and report author Diana Gibson. "The wait-list reductions were achieved despite, not because of, the for-profit surgery."

  "Every single procedure performed cost more at HRC than it would have if provided directly by a public facility in Calgary."

The report quotes a 2009 Alberta Health Services briefing note to show that every single procedure performed cost more at HRC than it would have if provided directly by a public facility in Calgary. Because of the contract signed between the government and HRC, all of those extra costs came directly from the public purse.

When HRC went bankrupt, the government had to spend millions of dollars to purchase HRC's debt, pay for an interim receiver and bank charges and assume the monthly rent. Because the capacity had not been built in the public system, government had to foot the bill for this private for-profit's bankruptcy.

The information is quite timely, as the question of paying for-profit facilities to by-pass wait times in the public system has become a key issue in the current provincial election.

"We need to understand that private facilities do not create surgeons. They are the same doctors that work in the public sector," says Gibson. "Using the private sector just means someone now has to make a profit, which removes resources from the public system and increases our exposure to the vagaries of the market."

Related individuals, organizations and significant events
Delivery matters: The high costs of for-profit health services in Alberta

Links and sources
  New report highlights dangers of private health care: HRC example shows private costs more and puts tax dollars at risk

Posted: April 25, 2012

  Health care
  Public services

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