[CUPE healthcare list] Alberta pursues out-of-court deal with private clinic; Compensation denied, but AHS on hook for $4M

[Jennifer Whiteside <jwhiteside@cupe.ca>]

Alberta pursues out-of-court deal with private clinic; Compensation denied, but AHS on hook for $4M

Calgary Herald
Thu Oct 14 2010
Page: A6
Section: News
Byline: Matt McClure
Source: Calgary Herald

A lberta Health Services is quietly settling its legal battle with a private surgery clinic that's been providing about 1,000 hip and knee replacements a year to Calgary patients.

But the medical director at Health Resource Centre says the settlement contains no compensation for the losses his facility will suffer as the provincial health board shifts all of its cases to the new McCaig Tower at Foothills Medical Centre starting next month.

"My main customer is AHS and they've decided they don't want to do business with us anymore," Dr. Steve Miller said.

"We could have fought that, but they have very deep pockets and it would have dragged on for years."

Still, AHS is on the hook for up to $4 million it agreed to pay earlier this year to stave off bankruptcy proceedings and keep HRC operating until the new public facility opened. Those costs include $2.6 million in bills from lawyers and the interim receiver, as well a $1.1-million payout of a bank loan owed by HRC's owner, Networc Health Inc.

"We're not sure of the final bill," says Chris Mazurkewich, AHS's chief financial officer. "What we are certain of is that we are working together with HRC to ensure there is no disruption to patients."

Miller says HRC will close its doors at the former Grace Hospital on Nov. 12. Many of its clinical staff are now applying for jobs in the new orthopedic unit at McCaig Tower, which has only filled half of its 195 positions.

With millions in debt, Networc now faces the prospect of bankruptcy.

"We're in a bad situation," Miller said. "There's no question this is the end for our company."

In its court filings, Networc blames its financial woes on AHS. The company says it entered a 10-year lease with Cambrian Group of Companies for a new $65-million facility after health officials promised HRC 3,500 procedures annually, more than triple the current load. When the deal with AHS was never finalized and Networc fell behind on its payments for the new building, Cambrian filed an application last April to force the company into bankruptcy. That prompted AHS to intervene and have an interim receiver appointed instead.

Networc's affidavits also describe meetings at fancy hotels, golf course clubhouses and political fundraisers where company officials rubbed shoulders and talked business with decision-makers in Alberta health care.

One filing detailed an encounter at a political fundraiser last October for Ron Liepert, where a company official says the then health minister "shook his hand and told him that there was so much work to do that there was nothing for him to worry about."

David Eggen, executive director of Friends of Medicare, said the legal settlement means many questions about Networc's relationship with the Alberta government may never be answered.

"We may never know what prompted them to expand so dramatically with no firm deal," said Eggen, "but there's no question this is a big embarrassment for a government that has had a policy of expanding private contracts for medical services."

mmcclure@calgaryherald.com

Illustration:
• Photo: Chris Mazurkewich

Edition: Final
Story Type: News
Length: 503 words
Idnumber: 201010140022

 

 

Jennifer Whiteside

Senior Officer/Agente principale

Research, Job Evaluation and Health & Safety Branch/

Service de la recherche, de l’évaluation des emplois et de la santé-sécurité

Canadian Union of Public Employees/SCFP

1375 St. Laurent Blvd., Ottawa, ON K1G 0Z7

(613) 237-1590, x 248