Skip to main content

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.  

Comments

  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.

    ReplyDelete

Post a Comment

Popular posts from this blog

Ford government fails to respond to 72% increase in COVID inpatient days, deepening the capacity crisis

COVID infections continue to drive up hospital costs and inpatient hospitalizations in Ontario. For the most recent fiscal year (April 1, 2022- March 31, 2023) hospital stays related to COVID cost $1.221 billion, according to new CIHI data.   This is about 4% of total hospital spending, creating a very significant new cost pressure beyond the usual pressures of population growth, aging, inflation, and rising utilization.   Costs for COVID related hospitalizations increased 22.2% in Ontario in 2022/23 from the previous fiscal year, rising from $999 million to $1.221 billion.  That rise is particularly notable as the OMICRON spike of late 2021 and early 2022 had passed by the the 2022/23 fiscal year.   The $222 million increase in COVID hospitalization costs came in the same year as the Ford government cut special COVID funding and, in fact, cut total hospital funding by $156 million.     In total, there were 60,653 COVID hospitalizations in Ontario in 2022/3, up from 47,543 in 2021/2. 

More spending on new hospitals and new beds? Nope

Hospital funding:  There is something off about the provincial government's Budget claims on hospital capital funding (funding to build and renovate hospital beds and facilities).    For what it is worth (which is not that much, given the long time frame the government cites), the province claims it will increase hospital capital spending over the next 10 years from $11 billion to $20 billion – or on average to about $2 billion per year.   But, this is just a notional increase from the previous announcement of future hospital capital spending.  Moreover, even if we did take this as a serious promise and not just a wisp of smoke, the government's own reports shows they have actually funded hospital infrastructure about $3 billion a year over the 2011/12-2015/16 period. So this “increase” is really a decrease from past actual spending. Even last year's (2016-17) hospital capital funding increase was reported in this Budget at $2.3 billion - i.e. about 15% more th

The hospital crisis: No capacity, no plan, no end

While Canada has achieved universal public healthcare coverage, that does not mean conservative forces have given up trying to erode that coverage and expand corporate care where it does not currently exist. The battle has become particularly intense in Ontario under the Ford Progressive Conservative government, which is implementing serious cuts to the level of care and moving to bring in for-profit mini-hospitals. Inadequate Staffing.   Less and less of hospital spending is on staff.   Employee compensation as a share of hospital expenditures has consistently shrunk in Ontario. This is not some immutable law of hospital development.  It is in stark contrast with the rest of Canada, where compensation has become a larger share and now accounts for 67.1%. Hospitals in provinces other than Ontario now have 18 percent more staff per capita than hospitals in Ontario. Overall, if Ontario had the same staffing capacity as the other provinces and territories, there would be another 33,778 full t