BRAMPTON P3
HOSPITAL TARGET OF
COMMUNITY UNREST
(The
following article is from
the January 1-15,
2008
issue of People's Voice, Canada's leading communist newspaper. Articles
can be reprinted free if the source is credited. Subscription rates in
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By
Natalie Mehra, Ontario Health
Coalition director
Brampton's new
hospital was supposed
to be the cause of celebration. Instead, after being open for only one
month, it is mired in controversy. Last weekend [Dec. 8] thousands of
people took to the streets to protest two patients' deaths which the
public is attributing to inadequate beds and lengthy waits. Today, the
provincial government appointed a supervisor to take over the hospital
to "restore public confidence".
The hospital
is the province's first - and largest - P3 (public private
partnership). A group of multinational corporations built the hospital
in return for a contract that pays them not only large profits for
putting up the money for the building, but also gives them a guaranteed
25-year contract to take over the hospital support services and lands
to run them for profit. The Brampton P3 hospital features the deepest,
longest-term for-profit privatization of any hospital built in Ontario
since the inception of Medicare.
Since major
cost escalations across all Ontario's new P3 hospital deals have
rendered unbelievable the claim that P3s come in "on time and in
budget", the McGuinty government's new line is that P3 privatization
has nothing to do with service cuts. But the government's own documents
show that the size of the planned hospital was reduced to contain the
costs escalations of the for-profit consortium. From the outset of
negotiations with the private consortium when the hospital was
projected to cost $350 million, to the end of negotiations when the
hospital cost $550 million, the negotiated size of the hospital shrunk
from 608 to approximately 350 beds. In response to community pressure,
the government gave another $100 million early this year and the bed
total was increased to 479.
Bottom line?
For almost double the original cost ($350 to $650 million) the hospital
has 3/4 of the promised beds (608 to 479).
Independent
experts who have looked at the contracts have raised serious concerns
about the costs of the scheme. The interest rates for the private
consortium were about 120 basis points higher than government financing
rates. The difference means that the deal is $174 million more
expensive than if the province had financed the hospital through its
own means. In addition to the extra interest costs, the private sector
is taking exorbitant profits out of the hospital. The equity investors
are receiving $260 million in dividends plus the return of their
initial $61 million investment. ($260 million is enough to build en
entire new community hospital. It is an extraordinary amount in profits
on a hospital that was originally supposed to cost $350 million.)
The contract
is ultimately paid from the Ministry of Health budget. So every dollar
that has been siphoned off for the management fees, dividends and
consultants' profits (none of which would exist if the hospital was
publicly financed) is a dollar less that should have gone to health
care - doctors, nurses, support services, beds.
In all new
hospitals, local towns are expected to raise a percentage of the costs.
Here, because the costs doubled, the community fundraising portion
increased from an original reported target of $100 million to more than
$230 million. For months community members have been alternately
cajoled and threatened with service cuts by hospital officials and the
local press, as the hospital has struggled to raise money for the local
fundraising share. The Punjabi community, in particular, has been the
target of a multi-million dollar fundraising campaign for the hospital.
But fundraisers and the government never told the community that large
sections of the hospital are privatized and run for profit. According
to newspaper reports, the family of Mr. Harnek Singh Sidhu, one of the
patients who died in the hospital in recent weeks, gave the hospital a
donation of more than $20,000, for example.
Cost is not
the only problem. So too is loss of control over vital hospital
services to private interests. All the hospital support services are
managed by the private sector for their own profit for the 25 year
duration. If there are quality issues such as increases in infection
rates or loss of patients' records, the hospital must follow an
arbitration and legal process set out in the P3 contract in order to
assert their control. For example, if the private companies lose a
patient as they transport her around the hospital, the hospital's only
recourse is set out in the "project agreement". They can seek a fine
from the private company: so much if the patient is missing for a
certain number of hours, more if she is gone for longer etc. If the
private sector refuses, everyone has to bring in their lawyers to fight
it out. At every step of the way the hospital has to decide whether it
spends its remaining money on doctors and nurses or on lawyers and
arbitrators.
No wonder
Standard and Poors (credit rating agency for the financial industry)
has considered P3s to be low risk investments in which the private
sector takes on little real risk while reaping more-than-healthy profit
margins from public taxes. After all, the interests of the government
and hospital board require them to keep open a functioning hospital
while the profit-seeking mandate of the private investors hold them to
no such scruples. They can sell off their interest in the hospital at
any time and walk away with the windfall.
Ultimately,
the Brampton P3 hospital will cost us at least $3.5 billion with the 25
year service deal and equipment included. Residents of Brampton and
Ontario will have to pay the high costs of the scheme, whether we like
it or not. But we should not do so without requiring the provincial
government to answer for why they have committed the next generation to
paying out $3.5 billion for a gain of only about 130 new hospital beds.
And they need to clear up whether additional monies will be given to
the private sector to get the bed totals up to the promised numbers.
The people of
Brampton never asked to be guinea pigs in an experiment about an
expanded role for profit-seeking companies and financiers in our
hospitals. In fact, both the Harris/Eves and McGuinty governments have
gone out of their way to confuse the community about the nature of the
P3 deal, even going so far as to deny the obvious privatization and
rename the P3s as "Alternative Financing" or "Alternative Procurement"
as cover up. This strategy of denial and obfuscation must stop. A
proper evaluation of the policy must be made and private interests must
not be allowed to trump the public interest. For at stake is a huge
hospital building program covering dozens of new hospitals.
A clear
public plan must be put into place to provide the support that the
hospital needs to provide adequate services to the community and get
the bed totals up to promised levels. The provincial government must
provide these. Brampton's hospital needs financial aid and human
resources recruiting help. It is time that the province evaluate and
learn the lessons of the Brampton P3, including a full audit by the
provincial auditor. For their part, the local hospital must stop the
secrecy and come clean with the community about how many beds are
actually open and operational, how much of a budget deficit they are
facing, and what the consequences of these shortfalls are. The
fundraising drive must not be allowed to eclipse public accountability
and sound democratic practice. We are citizens not customers and should
be treated as such. And as community members, who fund the hospital
through taxes at multiple layers of government and local fundraising,
and who require hospital services as a matter of life and death, we
have a right to at least this minimal level of public accountability.
Found
at:
http://www.peoplesvoice.ca/articleprint09/BRAMPTON_P3_HOSPITAL_TARGET_OF_COMMUNITY_UNREST.html