Province requests P3 model for project
'It really nails the vendor down'
By Janet French, The StarPhoenixAugust 17, 2012
The Saskatchewan Hospital in North Battleford could see its successor built under a P3 arrangement.
Photograph by: Greg Pender, The StarPhoenix , The StarPhoenix
The Saskatchewan Health Ministry is aiming to build two new major health care facilities as public-private partnerships.
Associate deputy health minister Max Hendricks said the government is asking consultants to present it with a "good business case" for building a new Saskatchewan Hospital in North Battleford and the new Plains Surgery and Outpatient Care Centre in Regina in partnership with the private sector, or so-called P3 arrangements.
The government has issued a request for proposals, which closes today, looking for a consultant to prepare "value for money" assessments for different models of private-sector involvement in both projects, to be prepared by early November.
Hendricks said P3 projects can encourage innovation, put pressure on firms to finish projects on time and on budget, and shifts some risk from the public purse onto the private sector.
"It really nails the vendor down to providing the facility on time and on budget," Hendricks said.
Just as the Saskatoon Health Region did when it needed to shave millions from the Children's Hospital of Saskatchewan cost, both Sask. Hospital and the Plains centre will use lean methods in their design planning, including extensive input from staff, patients and families. Hendricks said lean planning improves the efficiency with which health care is provided and results in a better experience for patients and families.
A year ago, Premier Brad Wall travelled to the aging and decrepit Saskatchewan Hospital in North Battleford to announce his government will build a $100-million replacement for the province's only dedicated mental health rehabilitation hospital. That money will be in the 2013-14 provincial budget, he said last year, and he announced an immediate $8 million for detailed design plans.
Hendricks said the Prairie North Health Region has done some of the design for the 188-bed facility, but the government now wants to see if it can get more value for its money with a P3 model. It should not affect the prospective timeline of a new hospital opening by 2014 or 2015, he said.
The proposed 200,000 square-foot Plains centre in Regina is expected to serve southern patients and take pressure off of Regina's hospitals by performing day surgeries, diagnostic imaging, cancer treatments and other services that don't require an overnight stay. The price tag on the Plains centre has been estimated at $50 million to $60 million.
Private involvement in hospital projects can extend into design, construction, finance and maintenance. The province is considering the full spectrum of possible private involvement and hasn't narrowed it down, Hendricks said.
NDP health critic Cam Broten worries such P3 arrangements could cost taxpayers more in the long run, calling it a case of government "ideology trumping common sense."
"I believe it shows that the Sask. Party is quite keen to increase the amount of for-profit health care in Saskatchewan," Broten said. It's risky because for-profit companies answer to shareholders, not taxpayers, he said.
Last year, the Saskatchewan Party government came under fire for the way it procured the province's first P3 health facility - the Samaritan Place long-term care facility in Saskatoon, which was built by Amicus Health Care Inc.
In a 2011 report, the provincial auditor said the ministry and health region "could not provide us with any written analysis to support that funding long-term beds in this new way is cost effective for the province."
Hendricks said the ministry hasn't made a final decision on building both Sask. Hospital and the Plains centre as P3 projects.
"We're not automatically jumping to a P3 solution here," Hendricks said. "If there's no good economic argument to go with a P3, then you might do a traditional build like government has always been involved in."
The request for proposals indicates the government intends to choose a consultant before the end of August, with work on the analyses on track to start in early September.
jfrench@thestarphoenix.com
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