Health Facility License Auction Health Cost Driver
It seems so obvious in hindsight: if you want to know what is going on in business-side of community medicine look where doctors look – the classified section of The Medical Post.
After reading all of the articles, during a slow day at work, a big flashy classified ad for MCI: the Doctors Office caught my attention. It is one of the expanding chains of family practice centers that are the face for-profit primary care in Canada. The ad provided no further insights into the operations of the chain.
Below this ad was a more interesting offering: the sale of an Independent Health Facility (IHF) license.
Auction of IHF in GTA
A rare multi-modality IHF in Pickering, Ontario is to be auctioned
The IHF license has the following modalities: Nuclear Medicine; In Vivo – General and SPECT; Diagnostic Ultrasound; General Ultrasound; Vascular Ultrasound; diagnostic radiology; fluoroscopy; Bone Mineral Density; mammography; and, Radiography
No other assets or liabilities to be sold with this. This is strictly a license only sale. Non-conditional sealed bids must be received by end of business hours on Thursday Nov. 1, 2012. Closing of the above transaction will take place no later than December 31, 2012. A minimum reserve bid is in place.
Only serious principals send inquiry to email@example.com.
The ad is interesting because it puts no caveats on the sale except that it is a final transaction and that there is a minimum reserve bid: standard practices in any estate auction. Unfortunately this is a sale of an essential health service.
The bid is to be non-conditional but this seems at odds with the Independent Health Facilities Act. The Minister of Health has the power to refuse the transfer of a license. She ‘may’ allow the transfer if she is satisfied that the new owner will provide a quality service and “operate competently and with honesty and integrity”. Now it seems to me it should take the Ministry longer than a few weeks over Christmas to assess whether a new owner meets these criteria.
Then there is also the concern about location. The license is tied to a location and clearly there is nothing but the license being sold. Is there a lease on the building? Is it up? And there appears to be no equipment or staff. So the purchaser will be setting up a new business with a non-conditional bid and a closing date of less than two months. If the Minister rejects the transfer than we potentially lose needed services, and certainly the purchaser loses money: pretty high stakes for a non-conditional bid.
The transfer cannot really be non-conditional unless the transfer is relatively free from ministerial interference: somewhat like what happened with the establishment of Specimen Collection Centers (SSC) under the laboratory licensing provisions. The Ministry simply stopped fulfilling its obligation to protect the public interest in the location of SSCs. The indication is that now the transfer of IHF licenses and location of facilities also operates without any significant Ministry control and outside the LHINs, which were supposed to be integrating health care in Ontario. This would be a good topic for the auditor when the office next examines IHFs.
The ad also shows that these licenses have a market value independent of quality, quantity or accessibility of care. A market price tied to a license only drives up the cost of care. The private market in the sale of licensees would also facilitate the corporate consolidation of Independent Health Facilities in Ontario: creating a stronger force for more for-profit health care.
Those who doubt the primary business interests in family medicine should take a good look at The Medical Post’s classifieds and follow the money.
The Independent Health Facilities Act can be found at:
http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90i03_e.htm. The ihfacution-ad was in the October 9, 2012, print edition of The Medical Post.
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