A new Klondike at risk, the acquisition of medical clinics by private investors

In an article published in The duty, It was reported that medical clinics would pass into the hands of companies in other fields, a phenomenon that is not unique to Quebec. THE Globe and Mail and the New York Times reported that this was also the case in Canada and the United States, as it is undoubtedly also the case elsewhere in the world. This reality is not limited to medicine, being also observable for other professions in the health sector (pharmacy, optometry, dentistry, etc.).

The appetite of private investors for the health sector is not new, but it now seems to be increased tenfold by certain opportunities which arise from various factors, which are probably not limited only to the absence of interest among the most young professionals for clinic management responsibilities. Growth prospects undoubtedly play a big role in this in the context of a demand for services that cannot be met by a public system perpetually in crisis.

As governments themselves call on the private sector, as evidenced by the “Health Plan” of the current government of Quebec, several opportunities are offered, whether it is the creation of private “mini-hospitals” or other forms of subcontracting to private clinics of part of the service offering of public establishments. Such an approach, already possible under current law, will remain possible under the provisions of Bill 15 adopted under gag control last December.

Furthermore, the necessary decompartmentalization of various health professions, also provided for by the Health Plan, also benefits the private sector, allowing it to offer a wider range of services outside the public system, without being burdened by restrictions and limits. of the last. This is the case with specialized nurse practitioners who provide services in private practices at patients’ expense, thus adding to the supply of ever-increasing doctors leaving the public system. These same foundations allow various commercial telehealth platforms to thrive, often in partnership with private insurers.

In short, investors understand that, more than ever, various sources of financing are available in the health sector, whether public, private or mixed.

Rules that are easy to circumvent

In principle, the offices of health professionals should be under the exclusive control of the latter following the regulations adopted by professional orders on what is commonly called “incorporation”. For example, the regulations applicable to physicians require that all voting shares and directorships in a medical practice corporation be held by physicians. These rules are largely based on the traditional idea of ​​the principle of professional independence.

How then can investors acquire medical clinics? The fact is that the regulation of professional orders is quite easily circumvented, through various strategies which aim to control any activity of a clinic which offers a certain level of profitability and which, legally, does not constitute an activity reserved for professionals. Depending on the case, a professional may then find himself in a situation where he exercises limited control over his framework of practice (selection and volume of patients, supervision of support staff, pricing of services, etc.).

While it cannot be ruled out that the creation of a well-structured group, supported by investors, could have certain positive effects on the services offered (in terms of technological innovation for example), there are also certain data suggesting that this could result in a significant increase in costs for patients and public or private insurers. The quality and safety of services could also be compromised, at least if we judge by certain studies on the performance of hospitals and long-term care centers passed into the hands of private investment firms in UNITED STATES.

When compliance with ethical obligations is compromised by management or commercial practices that affect the quality or safety of services, professional orders have limited means to intervene with regard to the companies in question. Not only can it be difficult to confront large private groups which have significant financial resources to support legal challenges, but the powers of professional orders are mainly oriented towards the supervision of their members, on an individual basis, The Commission Charbonneau had also noted this limit of professional regulation, by formulating recommendation 28 aimed at ensuring that “professional service firms linked to the field of construction be subject to the supervisory power of professional orders in their sector of activity “.

As for the regulatory mechanisms provided for by other laws applicable in the field of health, they have not always proven to be particularly effective in preventing certain pitfalls. The recent example of the insolvency of a major private medical clinic, which puts at risk the medical care of some 300,000 people in the west of the island of Montreal, demonstrates a certain powerlessness of public authorities to with regard to the operations of the entities in question.

Ultimately, if we have to live with a health system that makes more and more room for these private actors, perhaps we should consider a legal framework commensurate with the issues and risks involved. In this matter as in others, it would be better to act before too much toothpaste has come out of the tube!

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