Private Matters Concerning Public Health Care
The government of Alberta is feeling the heat after halting bankruptcy proceedings against a private surgical facility in Calgary. The Health Resource Centre (HRC), owned by Networc Health Inc., performed about 1,000 orthopaedic surgeries for the government in 2009. Anticipating future increases in its government surgical contract, the HRC entered into a lease agreement with the Cambrian Group of Companies for space in its new Cambrian Wellness Centre. A tenant and landlord dispute arose when Networc Health, Inc., tried to renegotiate its lease after learning that the forecasted surgical numbers may not be met.
Many provincial governments contract with private facilities to deliver publicly funded medical services due to their ability to provide timely and efficient care. Alberta Health Services (AHS) does not currently have the capacity to perform the surgeries originally slated for the HRC. To avoid adding more patients to its already lengthy waiting lists, the government decided to change its status from a customer to a creditor by paying off $1.3 million worth of bank claims against the facility’s cash flow and assuming its monthly rental fees. Its new secured creditor status enabled AHS to stall bankruptcy proceedings and file an application with the Court of Queen’s Bench for interim receivership by PricewaterhouseCoopers, Inc., which the Court granted until January 15, 2011. By this time the AHS expects to gain surgical capacity with the expansion of its Foothills Medical Centre in Calgary.
In addition to its contract with the HRC, the Alberta government allows the facility to perform a set number of surgeries on patients who are exempt from its provincial health care insurance program. These patient groups include those covered by Workers’ Compensation, federal employees, members of the RCMP and Canadian Forces, federal prisoners and foreign refugees. All other patients are forced to wait in the public queue as Albertans are legally prohibited from both purchasing private health insurance coverage for publicly funded services and directly paying for them.
Alberta Health Services prides itself on being the largest health organization in Canada and the largest employer in Alberta. The situation with the Health Resource Centre serves to illustrate the problems that arise when government monopolizes the role of paying customer. Under this type of health care system the survival of private facilities, like many patients, is dependent on government.
A reasonable forecast can be made regarding the HRC and the private delivery of publicly funded services in Alberta. The number of surgical contracts between government and private facilities in Alberta and throughout Canada is destined to increase as the problems in our public health care system can no longer be considered a private matter.