Skip to main content

P3 hospital debts threaten quality of health care


Patients in Britain could see their health care services cut as a result of botched public private partnership (P3) hospitals.   

The Public Accounts Committee of the British House of Commons has flagged special concern about the “unaffordable” P3 deals.   Public Accounts Chair Margaret Hall said, "We are particularly concerned that the financial viability of a number of trusts is being undermined by the fact that they are locked into unaffordable PFI (the British phrase for P3s) contracts.”

She added that ministers were unable to provide MPs with reassurance that financial problems will not damage the quality of care or access.  “The Department of Health could not explain to us how it will deal with an NHS trust that goes bankrupt. Nor could it provide reassurance that financial problems would not damage the quality of care or equality of access to all citizens, wherever they live.”

At least 22 health care trusts operating 60 hospitals are facing severe problems as a result of their P3 deals. P3 contracts guarantee that the P3 consortium are paid first by the National Health Service (NHS) and the Department of Health has already agreed to pay £1.5 billion ($2.4 billion) to bail out seven health care trusts with specially bad P3 deals.

The Public Accounts Committee notes:

“A number of trusts in financial difficulty have PFI contracts with fixed annual charges that are so high the trusts cannot break even. Paying these charges is one of the first calls on the NHS budget and the Department is liable for supporting all PFI payments because it underwrites the Deed of Safeguard given to contractors. It already expects to have to find £1.5 billion to bail out seven trusts facing problems with PFI repayments over the remaining life of their contracts - equivalent to £60 million a year. The guarantee provided by the Deed of Safeguard also gives PFI providers the upper hand in any attempt by trusts to renegotiate the contracts, which experience suggests can result in reduced service levels rather than greater efficiency. The priority given to meeting PFI annual charges inevitably distorts priorities which is especially worrying at a time when resources are constrained.

In contrast with the P3 hospitals, NHS trusts reported an overall  surplus of £2.1 billion ($3.36 billion).

Also in Britain yesterday, the administrator appointed by the government to oversee one particularly troubled P3 hospital in South London has said the Department of Health should write off £207 million ($331 million) in debt that the hospital has incurred.   The administrator also said the government should pony up £20 to £25 million ($32 to $40 million) extra per year to help pay for the hospital’s P3 debts.

Britain pioneered the P3 model. Despite the many disasters with P3s in Britain, Ontario and other Canadian governments continue to invest in them, with little public discussion. 

Popular posts from this blog

Deficit? Public spending ain't the cause. Revenue, however...

With the election over, pressure to cut public programs has become quite intense. In almost all of the corporate owned media someone is barking on about it.

Another option -- increasing revenue from corporations and the wealthy is not mentioned.  However, data clearly indicates that Ontario does not have an overspending problem compared to the other provinces.

Instead, it indicates Ontario has very low revenue. 
Ontario has the lowest public spending of all the provinces on a per capita basis (see the chart from the 2014 Ontario Budget below).  So there is little reason to suspect that we have an over-spending problem.  If anything, this suggests we have an under-spending problem.







The Ontario government has also now reported in the 2014 Budget that Ontario has the lowest revenue per capita of any province.  This is particularly notable as other provinces are quite a bit poorer than Ontario and therefore have a much more limited ability to pay for public spending.  (Also notable in this…

Six more problems with Public Private Partnerships (P3s)

The Auditor General (AG) has again identified issues in her annual reportwhich reflect problems with Ontario health care capacity and privatization.   First, here are six key problems with the maintenance of the 16 privatized P3 ("public private partnership") hospitals in Ontario:
There are long-term ongoing disputes with privatized P3 contractors over the P3 agreements, including about what is covered by the P3  (or “AFP” as the government likes to call them) contract.The hospitals are required to pay higher than reasonable rates tothe P3 contractor for  maintenance work the contractor has deemed to be outside of the P3 contract. Hospitals are almost forced to use P3 contractors to do maintenance work the contractors deem outside of the P3 contract or face the prospect of transferring the risk associated with maintaining the related hospital assets from the private-sector company back to the hospitalP3 companies with poor perf…

Health care funding falls, again

Real provincial government health care funding per-person has fallen again this year in Ontario, the third year in a row.  Since 2009 real funding per-person has fallen 2.6% -- $63 per person. 

Across Canada real per person funding is in its fourth consecutive year of increase. Since 2009, real provincial funding across Canada is up $89 -- 3.6%.
In fact the funding gap between Ontario and Canada as a whole has gown consistently for years (as set out below in current dollars).

Ontario funds health care less than any other province -- indeed, the province that funds health care the second least (B.C.) provides $185 more per person per year, 4.7% more.  
Provincial health care spending in the rest of Canada (excluding Ontario) is now  $574 higher per person annually than in Ontario. 

 Ontario has not always provided lower than average health care funding increases-- but that has been the general pattern since 2005.
Private expenditures on health care have exceeded Ontario government increases …