Emerging Private Investment Opportunities in Canadian Healthcare: Impact on Governance of Provincial Health Systems
June, 15 2009 | Margaret McGregor, Marie-Claude Prémont & Jean Turgeon
The Canadian health sector of medical and hospital practice has been shielded from private investment since the implementation of public medicare, about forty years ago. Things may now be changing, step-by-step, to open up private investment opportunities. In Quebec, Bill 33 (Québec, 2006), enacted following the 2005 Chaoulli conservative-minded decision of the Supreme Court of Canada, allowed private surgical facilities to be owned by non-physician private-investors to a maximum of 50% minus one share. Will the rule succeed in maintaing physicians’ professional autonomy when the history of corporate ownership tells us that corporate control does not necessarily require majority ownership? Ownership rules may also be relaxed in due course. Only time will tell us, but the conjunction of other meaningful structural changes in public healthcare suggest the need for vigilance.
The second set of rules, brought in after the Liberals led by Jean Charest took power in 2003, is pushing public-private partnerships (P3s) across health institutions and services Quebec is now investing billions of dollars in two mega-university hospitals in Montreal where the P3 model was imposed by the highest level of public administration. Through aggressive and focused public policy, the P3 model is reproducing itself across the spectrum from construction to renovation and from hospital management to long-term care.
The third, and more recent set of rules, deals directly with contracting out of even more complex markets, namely public health services delivery where private-investor surgical facilities, laboratories and clinics may gradually supplant publicly-paid privately-delivered health services.
In British Colombia, since April 2003, five out of six health regions signed 65 contracts with 22 private medical and surgical facilities for short term clinical services (B.C., 2007). The same year, Vancouver Coastal Health, the biggest health region, contracted out 740 day surgeries. Last year, the same regional Authority granted 1.2 million dollars to a private facility to perform day surgeries (VCH, 2008). In
International experience tells us that public tendering is ill adapted to such complex contracts. Therefore, different rules are necessary, that rely mainly on hierarchical checks and balances and require constant alertness from public administrators charged with safeguarding the public interest when negotiating individual clauses in contracts.
Before and after signing such complex contracts, public administrators from all provincial health systems will have to ensure a rigorous follow-up in order to fulfill their accountability and transparency duties. We know, for example, that the
We have yet to see the full development and impact of the integration of competition rules within the Canadian health care system. We can also expect private funding, still severely restricted by the prohibition of double dipping for physicians and restrictions on private duplicative insurance, to grow in the near future.
There is no doubt that the governance of provincial health systems will be radically transformed by the introduction of competition rules across the system and the prospect of growth in private funding when private-investor delivery facilities are ready to capture the right markets across the healthcare system. Let us hope that this path will be trod warily and that full disclosure and debate will occur on the Canadian political scene.
Margaret McGregor is Clinical Associate Professor at the Department of Family Practice,
Prémont, M.-C. ”Clearing the Path for Private Health Markets in
Québec National Assembly, An Act to amend the Act respecting health services and social services and other legislative provisions, S.Q. 2006, c. 43 [Bill 33].
An Act respecting contracting by public bodies, R.S.Q., c. C-65.1
Regulation respecting the practice of the medical profession within a partnership or a company, R.R.Q., c. M-0, r. 8.1.01.
British Colombia Ministry of Health, Letter from the BC Ministry of Health requesting information about non-hospital medical surgical facilities' capacity and quality control, 2007.
Vancouver Coastal Health,
Medicare:http://www.medicare.gov/NHCompare/Include/DataSection/Questions/SearchCriteria.asp?version=default&browser=Firefox%7C2%7CWinXP&language=English&defaultstatus=0&pagelist=Home&CookiesEnabledStatus=True. Page consulted