For-Profit Surgical and Diagnostic Clinics

For-profit surgical and diagnostic clinics have existed for some time, but only on a very minor scale in Ontario. Total provincial funding for so-called Independent Health Facilities (IHFs) is about 0.25 percent of hospital funding — and almost all of these facilities do not perform anything as major as a surgery. While proponents of privatization like to note some of these facilities are not for profit, 97 percent of IHFs are for profit.

IHFs (and the less well known “Out of Hospital Premises”) have been hampered by poor public oversight. Like most private businesses they do not welcome public accountability, with the result that public accountability is reduced to one-word reports (“pass” or “fail”).

They are also unable to deal with emergencies — in 2007 a young woman bled out in a plastic surgery clinic while waiting for an ambulance when the operation went badly. (Waiting for an ambulance to take a patient to a hospital when things go wrong is even more frightening nowadays. With a lack of capacity, ambulance services often have zero or near-zero ambulances to respond to emergencies.) The doctor performing the operation was in this case not a surgeon but a family physician.

The Ontario Medial Association (OMA) put out a study in early 2022 backing the development of more clinics. In that study the OMA took an agnostic position on whether the clinics or mini hospitals could be for profit. The OMA was, however, critical of the IHF model. Later in 2022, the OMA formally called for the development of a new model of not-for-profit clinics — a process that would take some years. It is apparent, however, that some want for-profit clinics and are opposed to the considered approach the OMA has advocated. That would be too slow, they suggest. If only there was such urgency to expand public, not-for-profit care — e.g., public hospital facilities that are already up and running.

Ford endlessly claims that all services will be paid for through the Ontario Health Insurance Plan, but research conducted by the Ontario Health Coalition clearly shows that private clinics take public funding and extra-bill patients. The Ford government has done nothing to stop this — although it is contrary to the Canada Health Act and limits access to care, particularly for lower-income families and elders.

Rural areas and towns are especially threatened by these clinics, which will gobble up scarce staff and go where the money is — and that will not include less populated parts of the province. Care dollars and health care jobs will be directed to clinics far away, even as small and rural hospitals cannot even keep their emergency rooms open because of a lack of staff.

Keeping surgical clinics in or adjacent to hospitals means emergencies can be dealt with quickly and seamlessly at the hospital. A direct relationship with the hospital will also integrate services, prevent fragmentation, prevent profit-taking, allow the coordination and proper distribution of staffing resources, create a workplace with more career opportunities for staff, and facilitate the use of existing hospital resources to support the surgical clinics.

Moving Low Acuity Hospital Patients to Beds in “Reactivation” or “Transitional Care” Centers

The Ford PC government passed the Connecting People to Home and Community Care Act in 2020. It facilitates hospital privatization in two ways: first, it allows the expansion of the small number of for-profit hospitals in Ontario. Private, for-profit hospitals have been frozen for years — but this bill modifies the Private Hospitals Act to allow them to expand “home and community care” beds. Apparently, “home and community care” can happen in for-profit institutional facilities nowadays.

Similarly, the act also adds unlicensed “residential congregate care settings” as a location for what they refer to as “home and community care services” — with no restrictions on for-profit operators. Instead of public hospitals, these unlicensed congregate care facilities would provide rehabilitative, transitional, or other care.

Under the previous Mike Harris PC government, home care was largely privatized. The result was chaotic service and very low wages. Ontario Council of Hospital Unions/Canadian Union of Public Employees (OCHU/CUPE) had to have a pitched battle with University Health Network (UHN) when they contracted out reactivation services to a home care organization at their Hillcrest site. The personal support workers operating the beds were paid $16.50 an hour, which was even less than the local home care personal support workers were paid. While OCHU/CUPE was ultimately able to force UHN to take the work back in house, many more such projects are underway. Like so much of what Ford is up to, a key goal is to reduce the wages for the female hospital workforce.

Contracting Out Is Rapidly Increasing

Ontario hospitals have dramatically increased spending on contracted-out services. In 2005–06 Ontario hospitals spent 1.8 percent of total expenditures on contracting-out services. By 2020–21 that had doubled to 3.6 percent. In dollar terms, such expenditures had increased from $280 million to $1.03 billion, an almost fourfold increase in fifteen years.

Across Canada, hospitals spend more on contracted-out services than in Ontario: 4.25 percent of total expenditures. But the rate of increase is slower across Canada — from 3.7 percent in 2005–06 to 4.7 percent in 2020–21. The increase in spending on contracted-out services in Ontario over the last fifteen years accounts for more than half of the total increase across Canada ($750 million of a total $1.3 billion increase). Private contractors are targeting Ontario hospitals for growth.

Consistent with this trend (and the cuts applied to hospital workers and their wages), spending by hospitals on employee compensation is declining as a percentage of total spending, declining from 64 percent in 2005–06 to 59 percent in 2020–21 in Ontario. This is in complete contrast with other parts of Canada — which saw an increase from 65 percent to 67 percent. If Ontario hospitals have budget problems, it is not because of spending on hospital employees.

Public Private Partnership (P3) Privatization

For the last twenty years, governments have developed new hospitals facilities in Ontario through privatized P3s. Initially, when this method of facility procurement was first developed, most CUPE hospital service jobs were contracted out with the P3. For the first two P3 projects, over a thousand support jobs were turned over to the privatized P3 consortia. After extensive campaigns by the Ontario Health Coalition and the labor movement, the privatization was dramatically narrowed to just the HVAC and other building facility functions — perhaps ten or twenty jobs in a major hospital.

OCHU/CUPE’s contracting out collective agreement protections also allowed the contracted-out facility workers to maintain their union contracts with the same rights as hospital employees.

Nevertheless, the privatization of financing and other problems with this model have put billions of dollars in extra costs on the public’s dime, as has been well documented in two separate reviews by two different auditor generals. Spending on hospital infrastructure has skyrocketed. Other P3 projects were over budget, were delayed by years, or resulted in lawsuits and a variety of quality problems (Ottawa and Toronto light rail transit projects are good examples). And others still have proven very costly to the public (tolls on Highway 407) or have led to criminal prosecution and jailing of top government officials (the gas plants). Despite all of these problems, the Ford government remains fully committed to P3 privatization.