Public Values

Calculating risk in public-private hospitals

CMAJ examines the pros and cons of public-private hospital construction.

The Hotel Dieu Hospital in Quebec has been a contentious P3 Ann Silversides, Canadian Medical Association Journal

Canada's 3 most populous provinces — Ontario, Quebec and British Columbia — have been shifting from traditional public sector procurement methods to public-private partnerships to design, build, finance, maintain and, sometimes, operate hospitals. Part 1 of this series (CMAJ 2008 featured a primer of this sea change, which has gone largely unexamined by health professionals, academics and the public.

Ontario had already invited three private sector consortia to bid to build, finance, maintain and operate services at a 289-bed hospital in Sault Ste Marie, Ontario, when Dr Michael Gardam submitted his report on a deadly outbreak of Clostridium difficile at the existing Sault Area Hospital.

Gardam, director of infection prevention and control at Toronto's University Health Network, had been brought to the Soo to investigate the fall 2006 outbreak that led to the deaths of 18 patients.

In addition to calling for measures to reduce infection rates in the existing hospital, Gardam recommended the number of private rooms in the new hospital be increased to 80 percent from the planned approximately 25 percent.

The province agreed to revise the hospital plans, hiking the proportion of single occupancy rooms to 45 percent and the consortia were given more time to bid.

Had the timing been different—if construction had already begun before the outbreak, Gardam's report, and the revised hospital plans—the province and the hospital board would have found themselves facing expensive change orders made more complicated by the fact that they were dealing with not one or two individual companies, but a consortium of many different firms and a complex legal agreement.

Critics say the evolving nature of hospital use is one reason to decry the recent proliferation of public-private partnership (P3) hospitals, in which governments are tied into extremely detailed, decades-long contracts with private consortia. "If you look at what has happened to patterns of hospital utilization in the past two decades, they've changed radically and dramatically," says Robert Evans, a University of British Columbia health care economist.

Debate over the merits of P3 hospitals is highly polarized, but there's little argument about the need to update or replace aging hospitals neglected during years of spending restraints and deficit phobia...

Links and sources
  Public-private partnerships, part 2: calculations of risk, by Ann Silversides, Canadian Medical Association Journal, November 4, 2008

Posted: November 05, 2008

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