Privatized P3 hospitals driving costs up

Negotiations have begun to increase funding in Britain for hospitals laid low by the burden of expensive public private partnership (P3 or, as the British say, PFI) deals.   P3s bring private corporations into hospital support services and hospital financing.

A Maidstone and Tunbridge Wells hospital spokesman told Kent media: “MTW is part of a national review of NHS trusts that require financial assistance to support their private finance initiative (PFI).  The trust is working closely with its PCT commissioners, strategic health authority and the Department of Health as part of this ongoing assessment."
Maidstone and Tunbridge Wells hospital is one of 22 trusts identified as needing cash support to meet its P3 payments. Its privatized P3 hospital is brand new.  
British Treasury Select Committee P3 advisor Mark Hellowell recognizes that P3 hospitals have higher fixed costs and so argues that they must be paid more per procedure than other hospitals.

"Since some NHS trusts have high fixed costs, it serves no efficiency purpose to penalise them (and the populations they serve) for this. After all, few would doubt that these trusts needed the new hospitals they commissioned, and the government forced them to use PFI (nobody would have touched it had it not been the only game in town – to borrow Alan Milburn’s phrase). Therefore, fairness dictates that these costs should be borne centrally: the PbR ('payment by result') tariff should be adjusted so that trusts with high costs are fully funded for these costs."

Kent media reports Maidstone and Tunbridge Wells hospital will in fact receive extra cash for its P3 burden. 

Despite the British experience with extra P3 costs (and a myriad of other problems) the Ontario government continues on with developing P3 hospitals.  Ontario cannot afford this experiment.  

1 comment:

  1. Whenever P3s come up, I'm always torn--how much of this is genuine ignorance, misguided blinkered ideology, and how much is deliberate scam specifically intended to siphon more public money into cronies' pockets?
    Indefensible either way.