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By rdnewsNOW Staff

GOVERNMENT RESPONDS

Private investments eroding public health care, Parkland Institute report finds

Mar 26, 2025 | 4:55 PM

A new report by the Parkland Institute, titled “Operation Profit: Private Surgical Contracts Deliver Higher Costs and Longer Waits,” suggests that Alberta’s outsourcing to private health care providers has increased costs, undermined hospitals and prolonged wait times for critical surgeries.

Authored by health policy researcher Andrew Longhurst, the report comes at a time when allegations of political interference and price gouging in private surgical contracts are plaguing the province’s health-care system. Longhurst states the findings appear to corroborate these concerns.

The report alleges that surgeries outsourced to chartered surgical facilities (CSF), for-profit providers, are significantly more expensive. For example, in the case of the Alberta Surgical Group, a for-profit provider contracted by the province, hip, knee and shoulder surgeries cost more than twice as much, Longhurst finds.

The Parkland Institute says the province started contracting private surgical services through the Alberta Surgical Initiative (ASI) in 2019. Since then, it says the average cost per outsourced procedure has risen 79 per cent. In one year alone (2022-23 to 2023-24), the report indicates costs jumped by 52 per cent, a spike Longhurst says cannot be explained by inflation or other reasonable factors; more likely, he says, is that it’s the result of higher negotiated contract prices.

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Additionally, the report finds public spending on for-profit surgical facilities has “significantly outpaced” public operating room spending under the ASI: between the 2018-19 and 2022-23 fiscal years, public payments to for-profit facilities increased by 66 per cent, while public operating room spending rose by only 12 per cent.

In 2022-23, however, the number of outsourced procedures fell by eight per cent, yet public payments to those facilities still increased by three per cent the same year, Longhurst notes. Since contracted facilities may only bill Alberta Health Services (AHS) for services they’ve provided, a volume decrease should result in a payment decrease as well, Longhurst explains — unless facilities are being paid for services they didn’t deliver.

Longhurst’s report says that as costs have swelled, so have wait times: for nine of the 11 priority procedures tracked by the Canadian Institute for Health Information (CIHI), wait times have increased since the start of ASI.

Median wait times for colorectal cancer surgery climbed by eight per cent while wait times for lung cancer surgery have risen by 48 per cent, for example. As cancer surgeries are only provided in public hospitals, Longhurst says this increase represents the destabilizing effect of for-profit facilities on public hospitals.

Even knee replacements, one of the main orthopedic procedures outsourced to private facilities, had median await times increase by 27 per cent under the ASI, notes the report. The only decreases to wait times seen were for cataract surgery (31 per cent) and hip replacements (one per cent).

“After five years, the Alberta Surgical Initiative is still failing to deliver increased provincial surgical capacity and reduce wait times for most priority procedures, despite government claims,” Longhurst states in the report.

Overall, Longhurst states plainly that the ASI has not improved surgical capacity or wait times in Alberta for most priority procedures.

“The provincial government’s persistent claims about the benefits of this initiative are not supported by the available data,” he reflects. “In fact, the destabilizing effects on hospital surgical delivery of greater for-profit involvement are evident.”

Rather than continue down this path, the Parkland Institute suggests the government should properly fund public hospitals, staff existing operating rooms during idle hours and adopt centralized waitlists provincially.

“In most cases, Alberta doesn’t lack the physical space to perform surgeries,” states Longhurst. “What it lacks is the nursing and medical workforce needed to increase surgical activity.”

He explains, with a limited pool of qualified health professionals available, paying for-profit providers a premium rate diverts staff from hospitals to the for-profit sector.

“Public hospitals are being starved of staff and funding, while private providers receive inflated payments for the lowest complexity surgeries,” he says.

According to Longhurst’s report, Alberta was one of only three provinces where real per capita hospital spending declined — by 11 per cent, about twice the decline seen in Manitoba and P.E.I. at five per cent — from 2013-2022. Meantime, real per capita spending increased in Quebec, B.C. and Ontario. In 2022, Alberta ranked seventh out of the 10 provinces in real per capita hospital spending.

The report calls for a public inquiry into these allegations as the best mechanism to discover their extent, ideally with the ability to summon witnesses to testify under oath.

The Ministry of Health responded to this report, stating to rdnewsNOW, “I’m not surprised to see the Parkland Institute continue their work acting as the NDP’s unofficial research arm. This report selectively highlights data that supports ideological narratives while overlooking the practical, evidence-based solutions implemented by Alberta’s government.”

When it comes to capacity, the ministry says that over the 2024-25 fiscal year, it expects to complete 310,000 surgeries. This would be up from the pervious year’s 304,595 surgeries, which the ministry adds was the highest volume in the last five years, with cancer surgery volumes up every quarter over the last year.

In regard to cost, the ministry shares concerns that AHS’s internal cost analysis for surgeries delivered in AHS facilities is unreliable and lacking consideration of overhead, administration or capital maintenance costs.

“It is obviously not valid to compare only operating costs in hospital, to the cost of services in a new purpose-built CSF. Any claim based on such a comparison is misleading,” says the government.

For example, the Ministry of Health says CSF contracts from 2024 were negotiated at a rate of $6,950 per knee surgery and per hip surgery, while CIHI data found the average cost of performing those procedures in a public hospital to be just over $9,600 and over $10,500, respectively.

It adds, the government is currently considering changes to the acute care funding model that would increase transparency and accountability.

Related:

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• Alberta hires former Manitoba chief judge to investigate health spending scandal
• Two Alberta private surgery clinic contracts in limbo amid allegations in scandal
• Alberta cabinet minister calls for health minister to be removed amid scandal
• Rally held in Red Deer calling for LaGrange to resign amid AHS allegations