Media Release -February 10, 2014

Kingston’s New Hospital’s Costs Sky-Rocket:

Health Coalition Questions Waste of Health Care Dollars on Private Profit

The cost for Providence Care’s new privatized P3 hospital in Kingston has skyrocketed from an initial estimate of $350 million to $901 million.

Based on the evidence from other P3 privatization projects across Canada, the Coalition calculates that the extra payments to the for-profit consortium financing and operating the P3 hospital will take $144 million dollars out of patient care in Kingston. 

The money wasted by opting for  the P3 privatization of  Providence Care Hospital rather than building it with public financing   is equivalent to hiring 64 more full time RNs in Kingston each year for the next 30 years or providing needed home to an additional  857 patients each year for the next 30 years.

“It is really inexcusable,” commented Ross Sutherland, Chair of the Kingston and Area Health Coalition.” We had a very open public debate on the financing, operation and control of the new hospital and never in that debate did anyone mention that the cost might be higher than $400 million.   Not only did government officials not disclose the true costs, but they actively evaded questions that it was their duty to answer. It is a breach of public trust and accountability.”

“The extraordinary costs caused by the private for-profit financing of the new hospital will siphon scarce public dollars from patient care for decades to come. The consequence is that public monies are taken away from needed patient services for profits. This is totally unacceptable, particularly when the government had a choice. They could have a used a public non-profit approach to finance, maintain and operate the hospital.”

Background

A 2012 study published in the Journal of the American Planning Association found that on average P3s coast 16% more than a public option. (Reference: Value for money and risk in public–private partnerships, Siemiatycki & Farooqi, Journal of the American Planning Association, 78:3, Summer 2012, p. 286–299.)

Siemiatycki & Farooqi Ontario’s findings are supported by the only  audit of a hospital P3 done by Ontario’s Auditor General. He found that the William Osler Hospital in Brampton cost $200 million more than a public option.  The main reasons are higher financing costs, operational inefficiencies, consultants and lawyers are also significant contributors.

16% of 901 million dollars currently budgeted for the new Providence Care hospital in Kingston would mean an extra cost of $144 million  over a public option in a 30 year contract, or $4.8 million a year.

At an average RN salary of $75,000 per year that means that 64 full-time RN could be hired in Kingston and area or an extra 857 home care patients could receive care each year for the next 30 years.

The number of home patients is derived from a statement by the Health Minister Deb Mathews in last year’s budget announcement that $260 million extra  allocated to home care would provide services to an extra 46,000 patients. ($260m increase / 46,000 patients = 5,600 per patient: $4.8M/ 5,600 = 857 more patients)