Defend Public Healthcare

The Auditor General (AG) has again identified issues in her  annual report   which 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 to the 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...

The litany of health care problems identified by the Auditor General  in her 2015 report is frightening. Here's thirty-seven of them dealing with LHINs, LTC, EMS, Rehab Hospitals, Health Infrastructure, Home Care, and Health Human Resources. Local Health Integration Networks (LHINs): A Lot of Problems LHINs have not met performance expectations. "Most LHINs performed below expected levels in the year ending March 31, 2015. In that year, LHINs on average achieved their respective local targets for six of the 15 performance areas".  Also: "Based on the provincial results that include all 14 LHINs, only four of the 11 provincial targets that measure long-term goals for LHINs were met." Performance has not improved. "While province-wide performance in six of the 15 areas measured has improved between the time the LHINs were created and 2015, in the remaining nine areas, performance has either stayed relatively consistent or deteriorated since 2010 or...

The public private partnership ("P3") hospital scandal in Montreal is getting even worse, if that is possible.  As reported earlier, a police corruption investigation showed how SNC-Lavalin officials allegedly arranged payments of $22.5-million to McGill University Health Centre (MUHC) chief executive Arthur Porter and his side-kick Yanai Elbaz in exchange for ensuring SNC won the $1.3-billion contract.  In total, eight people are facing charges and police describe this P3 as the "biggest construction fraud in the history of Canada".  Hospital CEO (and former Steven Harper Security Intelligence Review Committee chief) Arthur Porter is fighting Canada's attempts to bring him back home to face the charge: he had, rather conveniently, left the country.   Now a senior SNC-Lavalin official has admitted that the company took design features from their competition when it became apparent their design was a flop. Someone within the McGill Universi...

Hospitals are often stereotyped as providers of acute care services.  In fact, acute care accounts for a relatively small portion of total hospital services. As noted a few days ago ,  costs per acute care patient (or, more exactly, per "weighted case")  in Ontario are significantly below the national average, coming in at $5,174  in 2010-11 (and $5,184 in 2011-12). There  was 1,484,046 weighted acute care (and newborn) cases in 2010-11 in Ontario. So  the total acute inpatient cost is about  $7,678,454,004. In 2010-11, the total hospital sector expense (funded from both government and other sources) was $20.6 billion according to figures in the  2010 Budget .   As a result, acute care spending amounts to only 37.2% of all hospital spending. In other words, acute care is a significant part of hospital activity --but it is in a decided minority in overall scheme of things going on at hospitals.   Good news for P3 p...

A commission of inquiry has heard that SNC-Lavalin deliberately went around Quebec's political party financing rules, leading to a flurry of donations to the governing Quebec Liberal Party in 2009. The donations came as the engineering firm was bidding on a major hospital construction project, the media reports. What is not reported, however, is that this is a privatized P3 project. One of the biggest in fact. These privatized P3 projects are designed so private sector corporations get their mitts on a much larger share of the booty than they would under normal procurement (e.g. billions of dollars in financing for the projects). Former SNC-Lavalin vice-president, Mr. Yves Cadotte said SNC-Lavalin knowingly reimbursed its senior staff for their political donations. (Corporations are not allowed to make donations, or to reimburse their executives for their donations to political parties in Quebec.) SNC-Lavalin employees gave $101,200 to the Quebec Liberals in 2009...

The majority of the costs reported by the Auditor General for the cancellation of the Mississauga gas plant were payments to the U.S. based investment firm that provided financing for the project -- $149.6 million. The private company doing the project (Greenfield)  negotiated  expensive financing for the project with this U.S. investment firm -- 14% annual interest. Compared to the cost of public financing, that is through the roof, perhaps 7 or 8 times higher. The Auditor General confirms this interest rate, and adds that "Penalties for Greenfield’s defaulting on the agreement were heavy: Greenfield would have to immediately pay back all amounts drawn with interest, as well as interest on the full undrawn amount for the full eight-year term of the agree­ment." Worse, "the OPA (the Ontario Power Authority, which was acting for the government after it decided to cancel the project) was unaware of any of these onerous penalty terms when it signed a Novembe...

Red Squaring by Rob Caballero The corruption scandal rocking a public private partnership (P3) hospital project in Quebec has raised some significant doubts about P3s in Canada. Over the weekend even the normally pro-privatization Financial Post ran a story considering such doubts. They allowed that the size and scope of P3 projects may make the projects a magnet for greed. The Financial Post was, however, able to dredge up an academic to claim that P3s had improved public transparency. This is pretty galling.  In fact OCHU/CUPE, several other unions, and the Ontario Health Coalition (OHC) had to go to extraordinary lengths to get any significant information about P3s. Even with the assistance of a very expensive legal challenge we were only able to get information for very restricted purposes, and only after much to do. "Commercial confidentiality" requires privatization to proceed under a cloak of secrecy.  The corporations don't want to let anyone ...

Nouveau CHUM The Canadian Council for Public Private Partnerships has honoured the Centre hospitalier de l'Université de Montréal (CHUM), the Collectif Santé Montréal (CSM) and Infrastructure Québec with its 2012 "Gold Prize" for financing construction of the new CHUM. Nouveau CHUM Apparently, the award goes for the project with the worst financing.  As   Luc Fouquette, the Collectif's General Manager said, "This funding is also the very first for a PPP project in  Canada  with a BBB rating (BBB+ by DBRS and Baa2 by Moody's)."  P3 financing is among its worst attributes, costing the public billions in extra expense compared to public financing.  The BBB credit rating is a new low  for P3 financing.  Every single P3 that has been broadly marketed so far in Canada has enjoyed an A-level rating -- until this deal came along.     Nouveau CHUM This will add even more costs for taxpayers.  Investors, in contrast...

MUHC The Washington Post reports that the sales "of Canadian project-finance bonds are lower this year as an ongoing investigation of alleged corruption in the Quebec construction industry makes the debt more expensive to issue." The American paper adds that the "inquiry into corruption in the Quebec construction industry, which led to the resignation of Montreal Mayor Gerald Tremblay on Nov. 5, is souring sentiment among investors in private-public partnership bonds linked to projects for hospitals and universities in Canada’s second-largest province." The McGill University Health Centre (MUHC) P3 project is now under police investigation. The National Post reports that questions are being raised whether " illicit cash payments helped the SNC-Lavalin consortium win the MUHC contract." Three weeks ago the police raided the downtown headquarters of the MUHC. The National   Post notes one unconfirmed report alleged that there was a secret $2...

As two Liberals on the (presumed) left of the party declare their intention to run for the leadership, it bears recalling that almost all of the major problems the Liberals have faced in the last few years have come from attempts to re-position the party to the right. First, Premier McGuinty (and  departing Finance Minister Dwight Duncan) supported moves to privatize public services. This led to a series of failures and scandals that angered the public: Mississauga gas plant Overpaid private contractors at eHealth;  Scandalous, hidden extra costs at the Brampton "public private partnership" (P3) hospital;  Bloated salaries, highly dubious corporate payments, and limited public oversight enabled at ORNGE by privatization ;  and A massive corporate payout after the Liberals opened up energy production to for-profit corporations Indeed, the Globe reports that the corporation that won the  now infamous Mississauga gas plant project (cancelled at great...

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...