In 2013 Kingston residents voted overwhelmingly against a proposed P3 hospital in their city. Despite the results, the Province signed a contract to use expensive private financing to build a new facility to replace Providence Care Mental Health.
Infrastructure Ontario CEO Bert Clark says the $8 billion premium the government spent to build public infrastructure under the public-private partnership model doesn’t tell the whole story.
He’s right, but likely not in the way he’s suggesting.
Remarkably Tuesday night Clark clung to the $14 billion in savings Infrastructure Ontario says is made possible through the privatized model of infrastructure development even though the Auditor General made it clear that figure is based on flawed comparisons and a lack of empirical data to support it. In today’s Toronto Star he downgraded it to $6 billion.
Infrastructure Ontario was not so brazen in its initial response to Auditor General Bonnie Lysyk’s recommendations. Most of their responses in the AG’s report make minor admissions and rely on “third party experts” to justify the rest.
As we stated Tuesday afternoon, just two errors in cost allocation identified by the AG is enough to suddenly swing 18 privatized projects into the public column, saving the public treasury $350 million. Did their “third party experts” notice these errors?
In yesterday’s Star Clark highlights the Union Station renovation and the subway extension to York University as counter examples of public procurement projects that have experienced cost overruns and delays.
By contrast Lysyk points out there were in fact eight P3 projects that were delayed longer than 60 days – the longest more than a year off schedule. For six of those projects the contractor did face financial consequences, but in two they did not. That’s eight out of 38.
Yesterday we looked at the challenge of CCACs is managing scarcity amid too few available nursing home beds in the province.
One of the ways of placing a client into the nursing home faster – albeit with a three-month median wait – is to declare them a crisis priority.
The Long Term Care Act specifically requires that crisis clients be prioritized on the basis of urgency of need, but the question is whose need?
The Auditor General of Ontario (AG) looked at this issue and revealed there are many ways in which an individual can become a crisis priority, including simply taking up space in a hospital that has itself been declared “in crisis.”
“All patients waiting for a LTC home in this particular hospital are generally given crisis priority,” the AG’s annual report states. In fact, on a four level scale, these patients would rank number one.
Managing scarcity can be very time consuming.
Ontario has been wrestling with rules around managing the shortage of long-term care beds, trying to find ways to meet sometimes contradictory objectives of freeing up hospital beds, reuniting spouses, accommodating veterans, prioritizing crisis placements and placing people on the wait list based on their assessment scores.
While the province is not shy about sharing their success in having recently reduced such waits, the Auditor General of Ontario (AG) is clear about the reason why – new criteria for admission is excluding between seven and 12 per cent of nursing home applicants. Unless the province is planning on continually tightening eligibility, the short-term wait list reduction is likely a one-time event.
The average length of stay in a long-term care home is about three years – that means about 25,000 of 76,000 beds become available each year. 32,000 people are on wait lists for their preferred nursing home. 40 per cent of those on that list are already in a long-term care bed but are still waiting to get into the home of their choice. According to the 2012 Auditor’s report, about 15 per cent die waiting to get into a home at all.
Health care is not the only public service to experience reckless ventures into private delivery of key components.
The Auditor General of Ontario (AG) raises numerous questions about costly private delivery of public services in his recent review of Metrolinx, the regional transportation planning body in the Greater Toronto Area.
Among the findings in Jim McCarter’s 2012 annual report –
- Metrolinx’s Presto Card is among the most expensive transit fare card systems in the world, yet it does little more than substitute as a fare purse.
- The airport-downtown rail link was delayed after the private partner in the public-private partnership (P3) had to pull out due to questions raised by its financial backers over optimistic ridership projections. The projected high cost of fares is anticipated to weaken ridership. The P3 was eventually abandoned.
- Cost have dramatically increased on the Union Station revitalization project – the construction being handled by Vanbots, a division of Carillion Construction, one of the consortium partners presently bidding on the new Kingston hospital to replace that city’s aging mental health facilities.
- Metrolinx is using the P3 model for a three kilometre spur line that connects to the GO line from the airport. The auditor notes that the P3 option was $22 million more expensive, justified by the now familiar “risk” calculation of $42 million on a $128.6 million project. Like the William Osler Hospital, the auditor raises questions about the methodology used to calculate such risk and justify the more costly option.
- The consulting firm used to evaluate the risk on the spur line project won the bid to provide engineering and technical advisory services to support planning and procurement for the project.
By now this mess is all beginning to sound very familiar.
Dalton McGuinty initially ran an election in opposition to Tory plans to build two P3 hospitals in Brampton and Ottawa. In power, he not only signed off on those deals with only superficial changes, but he embarked on more than 30 more such projects in the hospital sector alone. Ontario now represents more than half of all P3 projects in Canada.
Those darn private for-profit health care facilities.
You can’t locate them where you need them. You can’t tell if their doctor owners are padding their pockets with unnecessary referrals. Quality assurance is still questionable. So, the government concludes, let’s speed up the process of transferring services from hospitals to this sector.
Just weeks after a Toronto Star series highlighted the fact that nine private clinics failed to pass quality inspection and another 64 passed with conditions, the Auditor General of Ontario has issued a chapter in his 2012 report on “independent health facilities.”
The Auditor General notes that about 50 per cent of Ontario municipalities have been underserved by diagnostic services provided by these clinics and about 7 per cent have been consistently overserved from 2007-08 to 2010-11 (fiscal years).
Worse still, the Ministry indicates that many of these facility owners would like to relocate from less populated areas to more population dense locations.
Are we getting value? The Auditor General says we don’t know. Fifty per cent of these clinics (almost all for-profit) are owned or controlled by physicians, many of whom are radiologists. Yet the Ministry has not analyzed the patterns of physicians referring patients to their own facilities. Further many patients are not aware that they could in fact choose any facility or hospital providing such services.
The Ministry of Health says they conducted an in-depth analysis on the anticipated costs of new funding arrangements for doctors. When asked by the Auditor General of Ontario, they couldn’t quite find it.
They may have similarly just overlooked the fact that a significant number of doctors in family health groups (13%) and family health organizations (18%) had actually not signed their contracts or declaration forms, leading the auditor to question whether these doctors fully understood their obligations under these new arrangements. Whoops!
The auditor’s report gives a clear indication why the docs suddenly had an overriding interest in group practice – much higher compensation levels.