On the heels of the Romanow report, another key study has been released casting serious doubt on the wisdom of private sector ownership and operation of hospitals.

Released on Dec 2. by the Canadian Union of Public Employees (CUPE), the report concludes that so-called public-private-partnership (P3) hospitals in Ontario will likely cost taxpayers millions of dollars more than publicly owned hospitals.

The report was prepared by Lewis Auerbach, a former Director in the Audit Operations Branch for the Auditor General of Canada.

"My conclusion is that these P3s are almost certainly more expensive to the tune of millions of dollars per hospital," says Auerbach. "I expected the government to choose the less expensive rather than the more expensive way of building these facilities. But they haven’t."

"I know there is an argument that there are no government funds available for capital investments, so that P3s are the only way these facilities can be built," continued Auerbach. "But this rationale is bogus and disingenuous. The absence of capital funds for publicly owned hospitals is a completely self imposed constraint."

Auerbach says that using accounting rules that make the leasing option appear less expensive does not change the simple fact that "debt is debt."

Auerbach says that private financing for construction alone would make a privately owned hospital at least 12 percent more expensive than a public hospital – because private firms don’t have access to the lower interests available to governments borrowing for major projects.

Auberbach says that governments should adopt accounting practices that put public ownership and private ownership on a level playing field so taxpayers can see which is really cheaper.

Auberbach also questioned the confidentiality agreements between the Ontario government and private companies, which he said denies the public a true picture of what the deals will cost.

A copy of Auerbach’s report can be found at http://cupe.ca/downloads/p3_auerbach_eng.pdf