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Canadian private For-Profit Hospital Files Bankruptcy In Calgary – Government Bail Out In Action

Posted May 14 2010 12:01am

Three public hospitals were closed in the area and the Health Resource Centre was to take over, one problem, no money.  The hospital will stay open to provide hip and knee replacements and the government is supporting the effort as if the facility were to close, there would not be enough operating facilities to take care of everyone.  One doctor argued that private care is never cheaper and you don’t get better outcomes, sound like what we are hearing in the US with the debate on image some of our care here.  The hospital defaulted on their loan and that’s when the government had to step in and partially bail out the hospital.  BD 

A Calgary for-profit hospital, once a beacon of hope for medical entrepreneurs across the country, declared bankruptcy last week. And who will have to pick up the pieces? None other than the public health-care system and ultimately Alberta taxpayers.

For years, critics predicted that this experiment in privatized health care would prove unreliable and expensive. But no one imagined a scenario in which publicly funded Alberta Health Services would go to court in a bid to keep the lights on over the operating tables in an investor-owned hospital. No one imagined that AHS would be paying receivership fees in order to keep the doors open. But this is, in fact, what has happened because Calgary’s public health-care system is so reliant on private partners.

The contracts continued and HRC became so successful that it decided to expand and rent expensive space in a new development. That’s when HRC ran into trouble. Before it had even moved in, the developer claimed HRC had defaulted on payments. HRC claimed that Alberta Health Services had cut back on promised contracts, and declared bankruptcy.

The private hospital, was once the focal point of premier Ralph Klein’s health-care strategies. It was for the benefit of HRC and its bevy of investors and orthopedic surgeons that in 2000 the Alberta government passed the Health Care Protection Act, which allowed private surgical clinics to keep patients overnight, thus allowing HRC to perform hip and knee replacements that had previously been permitted only in public hospitals.

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