Private-public debate erupts anew over sale of Shouldice Hospital

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We're going to be hearing a lot about the Shouldice Hospital in the coming weeks. It's the latest flashpoint in the interminable, ideology-laced private-public debate that is a major impediment to health-care reform.

First the basic facts. The Shouldice Hospital in Thornhill, Ont., is world renowned for its treatment of hernias. It's also an anomaly, one of the few private, for-profit hospitals in Canada. While it's privately owned, almost all its work is done under contract with the Ontario government – meaning patients don't pay, as in any other hospital.

Now the Shouldice, a decades-old family business, is being sold to Centric Health Corp., a TSX-listed company that owns surgical and medical centres in four provinces, as well as pharmacies and home-care services.

Will that $14.25-million business transaction open the door to the corporate takeover of the health system and the end of medicare as we know it?

Of course it won't. That horse is already out of the barn. For-profit companies operate pharmacies, laboratory services, home-care and nursing homes, and they are increasingly present in areas such as diagnostics and surgery.

But in Canadian health care, the word "private" is gunpowder and the rhetorical sparks have already begun to fly.

On Monday, on the website HealthyDebate.ca, Irfan Dhalla, a board member of Canadian Doctors for Medicare, argued that Ontario Health Minister Deb Matthews should block the sale. He said she should insist it be operated as a not-for-profit, like most every other hospital in the province.

Under the terms of the Private Hospitals Act, the Health Minister does have the final say on the sale of the Shouldice. The 1973 law outlawed for-profit hospitals, but it exempted facilities that already existed. Seven private hospitals, including the Shouldice, still operate in the province and all but one get nearly all their revenue from contracts with the public-health system. Centric has already bought a private hospital in Ontario that specializes in orthopedic surgery – Don Mills Surgical Unit – so there is no legal justification for blocking the Shouldice sale.

But that won't stop the outcry. There is a presumption that for-profit facilities are both more expensive, have worse outcomes, and cater to wealthy queue-jumpers. None of that is true of the Shouldice.

Peter Walkey, chief financial officer of Centric Health, said the Shouldice Hospital will operate exactly as before, as a specialized surgical facility with a reputation for excellence. He laughed off the suggestion that the purchase was a stepping stone to buying larger facilities and creating a U.S-style system in Canada: "We have absolutely no interest in operating acute-care hospitals," Mr. Walkey said.

Centric, however, is obviously betting that there is a growing market for private-care delivery – that patients are getting more demanding about quality and timeliness. And the best ways to achieve excellence and efficiency is with specialization.

That is the key point. Facilities such as the Shouldice are successful not because they are for-profit, but because they specialize. The Kensington Eye Institute (a private, not-for-profit) and the Holland Centre (a satellite of the giant Sunnybrook Health Sciences Centre) also provide excellent specialized care, as Dr. Dhalla points out. And they are all paid for by medicare.

The discipline of the market is not going to cure what ails Canadian health care, nor is battening the hatches to keep entrepreneurs out of the mix. Nor would blocking the sale of the Shouldice open a Pandora's box that will make medicare go to the way of the United States.

Patients with a hernia, or in need of hip repair or cataract surgery, don't care who owns the health-care facilities where they are treated; what matters is that they get high-quality care that is accessible and affordable.

The Shouldice Hospital provides that now and will in the future. If it doesn't meet those criteria under the new owner, the Ontario Ministry of Health should stop doing business with it. The fact that Shouldice sells its services to other provinces and to Americans and makes a modest profit matters not a whit.

We have to stop behaving as if, in health care, private is poison and public is magic. Good care requires qualified health professionals, specialization, standards, oversight and regulation.

The Shouldice Hospital is actually a model of how the private and public sector can work together to provide excellent patient care. It's too bad that it's the exception, not the rule.