health care

Private health-care services growing in Canada

Serious money is going into private health clinics as the aging baby boom generation threatens to strain the system.

(Photo: John Hopkins Hospital)

For years, private health-care providers have been operating under the radar in Canada. But now, with the aging baby boom generation threatening to strain the country’s single-payer system to the breaking point, provinces are exploring new avenues of public-private partnership. And that, for the first time, is attracting serious investment to the private sphere.

Earlier this year, TSX-listed Centric Health Corp. acquired clinics in Vancouver and Winnipeg, bringing its roster of surgeries across the country to seven. Meanwhile the Westbank First Nation in Kelowna, B.C., is looking to partner with Baltimore’s Johns Hopkins Hospital to develop a $120-million for profit hospital targeted at tourists and Canadians looking to bypass wait-lists for treatment.

To date, private clinics have operated by splitting their funding among government contracts, clients that fall outside medicare and patients paying out of pocket for non-insured services. In the case of the False Creek Healthcare Centre, one of Centric’s new acquisitions, B.C. health authorities pay the professional fees and the patient pays for use of the surgical facility.

“Contracting out simple day surgeries frees up capacity in our public hospitals to do the more complex surgeries,” explains Cindy MacDougall, a spokesperson for the B.C. Ministry of Health.

Centric offers a broad range of services, including physiotherapy, elder-care facilities, home medical equipment, assessment in work-related and motorvehicle accidents, diagnostics and surgery. The business has grown rapidly over the past three years, largely through acquisitions. Leon Aghazarian, an analyst with National Bank Financial, rates the stock Outperform, praising its “proven track record in regard to growth and diversification.”

The company’s strategy is to work within the confines of the Canada Health Act. Not so the Westbank. Chief Robert Louie contends a private hospital on aboriginal land would not need to operate within the medicare system, because of his band’s self-government agreement with Canada. However Health Canada told the CBC it would intervene if the Westbank hospital began offering services covered by medicare.

To those who fear the creep toward a two-tier health-care system, Centric chairman Jack Sheval points out that we’ve long had just such a system in our lengthy, open border with the United States. People cross into the U.S. for health services when their needs are not met at home. They would spend that money in Canada if they had more private options.

Besides, as the stress on the system increases, the term universal health care is losing its meaning. In the words of the chief justice in the Chaoulli v. Quebec case, in which the Supreme Court of Canada overturned the prohibition against private health insurance in the province in 2005, “Access to a waiting list is not access to health care.”