Missed Opportunity: Corporate Conglomerate Buys Shouldice Center
The Ontario Government has missed an opportunity with the sale of the Shouldice Clinic to health care conglomerate, Centric Health. The government could have purchased Shouldice and integrated its services into the public health care system: after all, Shouldice was funded from the public purse.
A good comparator for the missed opportunity is the Kensington Eye Centre, a stand-alone non-profit facility which specializes in eye care. It has become an example of how specialized care can be given within the public system when there is sufficient demand for similar procedures.
Shouldice was established before Medicare and, like many other pre-Medicare private services, it was “grandfathered” and permitted to continue operation. In part, the good working relationship between the center and the public system, no attempts were made by the Shouldice family to undercut public delivery, a common problem with most for-profit corporations, allowed the arrangement to continue. Shouldice was an anomaly which by its differences from most for-profit providers shows why for-profit provision is not a desirable addition to our health care system.
Centric Health, the purchaser, is a publicly traded company on the Toronto Stock Exchange. It is pursuing a strategy of “mergers and acquisitions and expansion opportunities” to “create meaningful stakeholder value”. What this means is that Centric will take public money and use these resources to buy up other health care properties in preference to expanding new services, improving quality or improving access: all primary priorities in a public system.
We will be funding an emerging health care monopoly, as happened in medical laboratory services, not better services. Centric owns Lifemark Health, an elder care service company, a chain of methadone clinics, a orthotics company and MIC which, with CML Health Care, controls 23% of the Ontario’s community diagnostic services.
Also, we will not know most of Centric’s owners, only its directors and operating officers. This was one of the big changes in the medical laboratory industry in the 1970’s. The for-profit laboratories were rapidly expanding and the government thought they would control conflict of interest, over use and over charging by keeping track of doctors who were lab owners. The Ministry of Health sent out a directive that all the companies had to report their owners. MDS, now Lifelabs, had just become publicly traded and replied with a curt, ‘good luck’: we are public traded, with thousands of shareholders, some of whom will be doctors and you will not be able to track any conflict of interest.
In the end the fortunes of Centric health are determined by its ability to thrive on the stock market, not by how much we need its services, the quality of care, how it influences public policy to enhance the common good, or how it uses excess funds to improve health care. While all of these will impact its share price, the bottom line is if it does not make a profit for its shareholders it will go out of business.
Centric currently trades at 73 cents a share on the TSX with a 2.3% increase on Sept. 10. Investors are pleased with the possible acquisition of Shouldice and Centric’s increased access to public funds, but that does not mean the public should be.
The Ontario government has missed a key opportunity. It could have made a stronger public system instead it seems determined to allow a significant expansion of corporate health care in Ontario.Explore posts in the same categories: integration, Ontario Government Policy comment below, or link to this permanent URL from your own site.