With demand for healthcare increasing, the Ontario government allowed seven private MRI/CT clinics to open across the province between 2002 and 2003. But due to concerns about quality and patient safety that arose, the venture into privatized healthcare was short-lived.
Contracts shrouded in secrecy
From the start, the public had little insight into important details about the for-profit clinics. Commercial secrecy laws and a lack of regulation violated the public’s right to know where their tax dollars were being spent.
Although the terms of the contract with the companies were never made public, it was reported they were paid $4.6 million per year. In addition to their regular billings, the for-profit clinics received large public subsidies. In one case, a private operator called Diagnosticare received repeated grants totalling millions.
For-profit clinics siphon staff from public hospitals
Then-Premier Ernie Eves promised that the introduction of the for-profit clinics would not hurt staffing or capacity at public hospitals, but the evidence showed otherwise. Scarce technologists and radiologists were poached from public hospitals, reducing the capacity in the public system and causing at least three public hospitals to reduce MRI hours.
Rural populations forced to travel further for care
Attracted by the larger markets of customers, the for-profit clinics quickly began centralizing services in large urban centres in order to maximize profit margins by pushing through higher volumes. This centralization led to the closure of clinics in “unprofitable” small towns, even though these clinics were still turning a 15 per cent profit and, in some cases, the private company had received extra public subsidies. This forced rural patients to travel further to receive care.
Staffing, equipment, and facilities at the clinics were unwilling or unable to deal with complex cases or medical emergencies, which meant the heaviest and most expensive cases were left to local public hospitals. This allowed for-profit clinics to “cream-skim,” siphoning off the more profitable, lighter-care cases. Despite this, the reported costs of procedures at the private clinic were considerably higher than that of a hospital MRI – totalling between $700 - $1,200.
Quality and patient safety concerns
Premier Dalton McGuinty’s announcement that at least some for-profit clinics had been selling “medically unnecessary” scans sparked public outrage. Since all “medically necessary” hospital services are covered by the public healthcare system, clinics were left to try and explain why patients were being subjected to unnecessary tests.The president of one privatized clinic admitted that the clinic accepted patients who paid out of pocket for medically unnecessary scans.
Return to non-profit
Research continually shows that public healthcare is a better deal for Canadians. A 2002 research report commissioned by the Ontario Health Coalition showed it was less expensive to expand public sector MRI services than to pay for-profit clinics to initiate new services. Experience in Calgary indicates that private services could cost 21 per cent to 25 per cent more. In 2007, the Ontario government announced it had begun negotiations to buy out the privatized clinics and return them to the public.