On selective funding

The retired CEO of Prince Albert's health region chimes in on the Sask Party's privatization efforts, and points out that any claims to saving money are bound to be hollow:

Health regions get an operating budget from the provincial government. They also get some capital funding, but there is an expectation (in most instances a requirement) that more capital dollars will be raised locally through donations, foundations and local governments.

The common funding for private providers is a fee-for-service. This fee is based on negotiations between the provider and the government.

It includes sufficient remuneration to cover professional services and office overhead costs, which includes capital. Sometimes the contract includes a defined number of services over a defined period.

Either way, the publicly funded private provider is funded their operating costs and their full capital costs. Based on its operating budget, the publicly funded public provider (the health region) may be limited to how much service it can provide.

Most certainly, it's at a disadvantage when it comes to covering capital costs.

I have had the experience in the public sector of trying to raise money to buy a piece of diagnostic equipment, only to discover that a radiologist could buy the same piece of equipment and, because of the funding mechanism, recover his costs over a shorter time.

The bottom line is that when a government contracts with private providers, it funds them at 100 per cent, but when it provides the services through the public sector, the funding is less than 100 per cent.

Of course, it's worth noting that the private services arranged by the Sask Party are seemingly being carried out through the same health regions which are themselves starved of capital funding. So the price of allowing private actors to fund health services with their easier access to capital is that the regions will end up paying more than they would to set up a similar service - setting up a cycle where more and more short-sighted privatization is seen as the only way to keep the lights on in the near term.

Mind you, that outcome is probably seen as anything but an empty promise to the Sask Party: indeed, that's likely been their corporate sponsors' best-case scenario from day one. But for those of us who are more concerned with making sure that health care services are sustainable than with finding ways to dump money into private pockets, it represents a serious problem.