Private surgical contracts drive up costs and wait times as real public hospital funding declines

EDMONTON, AB – As allegations of political interference and price gouging in private surgical contracts rock Alberta’s health-care system, a new report by Parkland Institute provides critical context, revealing how privatization has dramatically increased costs, undermined public hospitals, and prolonged wait times for critical surgeries.

The report, Operation Profit: Private Surgical Contracts Deliver Higher Costs and Longer Waits, is authored by health policy researcher Andrew Longhurst and highlights a disturbing trend: surgeries outsourced to private, for-profit providers in Alberta are significantly more expensive than those performed in public hospitals. In the case of the Alberta Surgical Group — one of the for-profit providers contracted by the province — hip, knee, and shoulder surgeries cost more than twice as much.

The average cost per outsourced procedure has risen by 79% since 2019, when the province started contracting private surgical services through the Alberta Surgical Initiative (ASI). In one year alone (2022-23 to 2023-24), the costs jumped by 52%, an unusual hike that cannot be explained by inflation or other reasonable increases in input costs. Public spending on for-profit surgical facilities significantly outpaced public operating room spending under the ASI: between 2018-19 and 2022-23, public payments to for-profit facilities increased by 66 per cent while public operating room spending increased by 12 per cent.

As costs swelled, so did wait times. Since the start of the ASI, wait times have increased for nine of 11 priority procedures tracked by the Canadian Institute for Health Information, including knee replacements and all cancer surgeries. Median wait times for colorectal cancer surgery in Alberta have climbed by eight per cent, while wait times for lung cancer surgery have risen dramatically by 48 per cent.

The report emphasizes that rather than pouring millions into private surgical facilities, Alberta should use evidence-based strategies, including properly funding public hospitals, staffing existing operating rooms during idle hours, and adopting centralized waitlists provincially.

“In most cases, Alberta doesn’t lack the physical space to perform surgeries,” explains Longhurst. “What it lacks is the nursing and medical workforce needed to increase surgical activity.” There is a limited pool of qualified health professionals, and paying for-profit providers a premium rate simply diverts staff from hospitals to the for-profit sector.

"Public hospitals are being starved of staff and funding, while private providers receive inflated payments for the lowest complexity surgeries," said Longhurst. From 2013 to 2022, Alberta was one of only three provinces where real per capita hospital spending declined (by 11 per cent) — more than twice the decline seen in Manitoba and PEI (five per cent). Meanwhile, real per capita spending increased in the largest provinces, Quebec (19 per cent), BC (six per cent), and Ontario (four per cent).

The new data and analysis in Operation Profit take on greater urgency in light of the corruption allegations involving Alberta government officials and for-profit surgical providers. "Albertans deserve accountability and transparency in how their health-care dollars are spent," said Longhurst. The report calls for a public inquiry — with the ability to summon witnesses to testify under oath — as the best mechanism to uncover the full extent of these allegations.

-30-

For the full report, visit https://www.parklandinstitute.ca/operation_profit

For more information or to arrange an interview, please contact:

Rita Espeschit
Parkland Institute Communications Coordinator
[email protected]