News  Superhospital plods forward

McGill hospital being built as a public-private partnership

In April 2007, the provincial government announced it would be building Montreal’s two newest “superhospitals” at McGill and the Université de Montréal as public-private partnerships – also known as PPPs. In such an arrangement, the private sector puts up the huge initial capital investment for the construction, and then designs, builds, and runs parts of the project until the Ministry of Health takes control – in this case, 30 years from now.

Two consortia are competing to build the hospital for the McGill University Health Centre (MUHC or CUSM), which will be constructed at the Glen Yards, a large empty field south of Vendôme metro station, located between the NDG, St. Henri, and Westmount neigbourhoods.

Provincial officials have grown less fond of the PPP method, but the MUHC is already deep into the bidding process, and expects to begin construction this winter.

While there are still many critics of the PPP, such as the MUHC employees’ union, the wide swath of stakeholders – ranging from doctors to those living in the neighbourhood – are attempting to negotiate this changing terrain and have their concerns addressed over the course of this enormous project.

Megaprojects like this, that immense sort of construction that brings together and hopes to solve all problems at once, are a favourite of city planners and politicians alike.

The sheer size of these projects demands that many visions synthesize and provides an opportunity to use the latest technologies, implement the best practices, and use donor funds. They also provide a constantly shifting target for critics of the ideologies and agendas that these projects represent.

In an email to The Daily, Dianne Fagan, Chef des communications, projet du redéploiement du CUSM, said that the MUHC believes the PPP offers “several important advantages.”

The advantages she refers to include the competitive process that will create two “innovative plans,” the consortium taking on some of the financial risk, and a 30-year contract that creates incentive for the consortium to build and maintain the facilities well, Fagan wrote.

The actual design and construction of the superhospital has already involved, and will continue to involve, hundreds of committees, thousands of reports, hundreds of thousands of people, and billions of dollars. These micropolitics are the real place where contentions must be hashed out.

Unions and the PPP
Olga Giancristofaro, the president of the MUHC Employees’ Union-CSN, said that PPP option will cost more and do less.

“We’re a big hospital at McGill, and McGill shouldn’t be used as a guinea pig to see if PPP works or not – we have professionals and good technology, but with the traditional method we will be getting a better quality hospital,” Giancristofaro said.

Giancristofaro, along with the Syndicat des employé(e)s du centre hospitalier de l’Université de Montréal-CSN, Médecins québécois pour le régime public, among others, have spoken out and protested against the PPP-method.

“We are not fighting not to have a new hospital. We want a new hospital – we are just fighting the method of construction – that the consortiums are in control of construction and not the public,” she said.

In her email to The Daily, Fagan insisted that “no clinical or para-clinical services will be overseen by the private consortium,” but that “support services directly related to the physical plant (building maintenance and public utility management, for example),” will be managed by the consortium.

This privatization of some former union positions is bound to set off alarm bells at the union, but with the PPP apparently moving forward, Giancristofaro implied that the union must be involved in how the hospital is run.

Union members had been invited to Great Britain to tour PPP-run hospitals.

“Some of [the hospitals] did work, but the PPP that worked best was the one where the unions and the employees are involved in the administration – that is what McGill has done, but the costs [in the long run] are [still] going to be more,” Giancristofaro said.

The surrounding neighbourhood
McGill urban planning professor Lisa Bornstein, who heads the “Making Megaprojects Work for Communities” research team – a partnership between academics from six Montreal research institutions – has worked with the neighbourhood, hospital, community health, and government stakeholders to closely monitor the superhospital process since 2007.

Bornstein outlined the multivariate and overlapping concerns that neighbourhood stakeholders, represented by the Concertation Interquartier (CIQ), a group of neighbourhood associations from St. Henri, Westmount, and NDG, have with such a large project.

These concerns included, but were not limited to, the effect that retail within the “mall-style hospital” will have on local business, concerns around massive new traffic flows, insufficient public transit infrastructure, and more.

“There are hopes that there will be employment that’s drawn from the local area, that it just won’t be people relocating into the area…which can provoke displacement of lower-income people and negative aspects of gentrification,” Bornstein said.

As this series of both small and large negotiations happens between the community and McGill, the researchers try to make interventions – providing both sides with appropriate plans and models from past development projects around the world.

With the bidding process beginning and the consortia being brought in, Bornstein points out how complicated and unclear things are quickly becoming.

“Last year the community groups asked to participate in the PPP-process. They said they wanted to have a community rep in the PPP-process, we want to meet with the consortia, we want a community benefits agreement, and I think they asked for a community auditor position to watch the PPP-process,” Bornstein said.

“The PPP exec said, ‘no way to this community-auditor position, no way to a community benefits agreement within the PPP,’” Bornstein added.

The MUHC did let one community rep sit on a design committee. This was one of the “hundreds” of committees at the hospital that the consortia have to meet while putting together their bids.

Pierre Gauthier, an urban planner from Concordia University and a member of the research project, was chosen as the community representative, bringing community concerns to the MUHC and consortia.

However, Bornstein said, during the bidding process itself, Gauthier was not allowed to communicate any details of the two projects.

Bornstein explained that the two consortia must be given identical information, and for confidentiality reasons, no one in the process can talk about what either consortium is designing to anyone outside of the process. So the community representative can at no time communicate ongoing plans with the community groups. This is a legal restriction to ensure fair competition.

“So fine, community groups agreed to this ‘black box’ because they have faith in their representative,” Bornstein said. “So if you want to think about advantages and disadvantages to the PPP, it may be that having this competition, this intensive set of meeting and co-creation between the hospital and the consortia, it does mean there’s been limited opportunities for the community groups to provide input.”

Government control
While the relationship between the superhospital and its surrounding neighbourhood is being hashed out, the stakeholders must also worry about the day-to-day operations of a PPP-run hospital and how to prepare for these operations during the planning phase.

McGill urban planning professor Raphael Fischler lays out the context of a PPP, explaining that the profit-motive is both the raison d’être and most complicated part of this method.

PPP projects, Fischler explains, are undertaken to “let the government off the hook in terms of massive one-time investments. Now the private sector does not do that out of charity, it does that at a profit. Which means that when you calculate the total amount spent by the public sector on this public facility, it comes out to more money than what the private sector spent [initially].”

Fischler explained that these PPP plans are entered into with the assumption that not only will the private sector (and requisite bidding process) bring a level of efficiency to the construction and administration of a hospital, but also that they’ll have large amounts of capital on hand.

“It’s like going to the bank to get a mortgage, you pay interest, you pay more than if you had the cash – but the government does not have the cash – the private sector has the cash,” Fischler said.

“The experience with PPPs in the U.S. has not been extremely favourable to the public sector unless you have very very strong expertise and political will to really squeeze the private sector as best as possible,” Fischler said.

The problem here, is that although PPP’s have been run well in other parts of the world, it is only with experience and abundant political will, something that Quebec will be tested on often while the hospital is running under a PPP.

“The Quebec government does not have a long track record yet with PPP; it’s not something we’ve done for many years,”wFischler added.