Ontario is investing $125-million to add orthopedic surgeries at community surgical centres over the next two years.Frank Gunn/The Canadian Press
The Ontario government, poised to allow private clinics to do publicly funded hip- and knee-replacement surgeries, is facing behind-the-scenes criticism from some of the people who hope to build the new facilities.
The long-delayed move is part of the Progressive Conservative government’s push to boost the involvement of the private sector in the public health care system, in an effort to move more procedures out of hospitals and reduce waiting times.
But in interviews with The Globe and Mail, sources with two prospective private-sector applicants for licences to open new clinics say the terms unveiled in July are inadequate. They say the per-procedure payments that their clinics would receive will not provide a return for the financial backers that is required to build expensive new clinics from scratch.
Ontario expanding publicly funded hip and knee surgeries done in private clinics
The two sources warn that without changes, the government is unlikely to see enough of the promised new clinics materialize to fulfill its pledge to improve waiting times. The Globe is not identifying the sources, who say speaking publicly on the matter could jeopardize their prospects in the application process.
Critics of private-sector involvement in health care dismissed the complaints as attempts to pad the profits that could be made from public health care even before any new clinics open.
The government has given interested private-sector groups until Aug. 27 to submit applications, and plans to award licences next year. It says it will spend $125-million to have up to 20,000 publicly funded orthopedic surgeries done outside hospitals over two years.
That’s compared with the approximately 60,000 hip and knee replacements done in Ontario each year, according to prepandemic figures from the Canadian Institute for Health Information.
Ontario says the move will help it ensure that 90 per cent of patients receive hip and knee replacements within clinically recommended waiting times.
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The province has said that it already has the shortest such times in the country, pointing to CIHI data showing that 82 per cent of hip patients and 79 per cent of knee patients were treated within six months. But provincial data also show much longer waits in some regions, including in Southwestern Ontario.
In response to questions about the cost structure on offer for the new clinics, Ema Popovic, a spokeswoman for Health Minister Sylvia Jones, issued a statement citing the application’s stipulation that “facility cost rates may be reviewed or refreshed at the ministry’s discretion.”
The complaints from the prospective applicants are very familiar to Brian Rotenberg, a head-and-neck surgeon from London, Ont., who is the medical director of an existing private clinic and a consultant for surgeons looking to set them up.
He said he had been speaking to four different groups considering whether to apply for the new licences. Two have already decided not to bother, he said. He also said that it would take 12 to 18 months to build a new site once a licence was secured, meaning it could be 2027 before many new clinics open their doors.
“Even a small single operatory site is minimum a few million dollars,” Dr. Rotenberg said. “At the price that they have put on this, it would take years and years and years of high-volume work to recoup that.”
According to the application the government released in early July, the new clinics will be paid a $6,530 “facility cost” for every hip replacement, and $5,797 for each knee replacement. That does not include the standard fees the surgeons would still pocket from the Ontario Health Insurance Plan, which can range from $700 to $900 or more for a hip operation.
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The application says the facility cost for the clinic is all that is being offered and must include all care before and after the operation, including rehabilitation − at no cost to the patient.
The government did not release comparable figures for what these procedures and services would currently cost in the public system. The patients funnelled to the new clinics would be among the healthiest and lowest risk, least likely to see complications or need extensive rehabilitation.
The prospective applicants who spoke to The Globe say the compensation offered by the government could work out for them if private-sector clinics could purchase artificial hips and knees at the same steeply discounted prices as public hospitals can. Such an arrangement, the sources say, could save them hundreds of dollars for each procedure.
But the Ontario government has not said whether private clinics would be able to participate in the bulk purchases of joints by hospitals. All the new clinics, however, must demonstrate that they have a partnership with a public hospital.
Natalie Mehra, executive director of the Ontario Health Coalition, an anti-private-care group backed by health-worker unions, dismissed the complaints about the cost structure from the prospective private clinics. She accused them of merely angling for more profits before they even open.
“And so the lobbying commences,” Ms. Mehra said in an interview.
Data her group released in 2023 showed that many public hospitals across the province had underused operating rooms, owing to a lack of funding for staff. More procedures could be done in these existing, already-paid-for ORs, she argues.
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Ontario NDP health critic France Gélinas said the province’s new system will squeeze out non-profits and induce for-profit clinics to engage in upselling, or profiting by charging patients out-of-pocket for extras or services not covered by public insurance, once they have them in the door.
Ms. Gélinas points to complaints that elderly people have been pushed into paying hundreds or thousands of dollars themselves for enhancements or extra services while getting publicly funded cataract surgeries, which was the focus of the first phase of the government’s drive to boost the use of private-sector clinics.
The government’s rules, she charged, forbidding the new clinics from refusing to operate on patients who decline to pay for upgrades, or barring patients from paying to queue-jump, are toothless.
“Lots of investors, they don’t care if there will be extra charges, they don’t care about extra billing − they care about making a profit,” Ms. Gélinas said. “This is what investors do.”
There is at least one organization expected to apply for a licence to do hip and knee surgeries for which recouping capital costs appears to be a non-issue: the six-storey, 200,000-square-foot non-profit Schroeder Ambulatory Centre in Richmond Hill, north of Toronto.
It has already been built, with $300-million from philanthropist Walter Schroeder, the founder of the global credit-rating agency Dominion Bond Rating Service, now known as Morningstar DBRS.
The centre just received a licence and funding to do publicly funded diagnostic tests, and is expected to open in the fall.
The facility, which played host to Ms. Jones and Premier Doug Ford for a government announcement in June, declined to comment.