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An undated image of a brain scan provided by the University of Iowa Department of Neurology, shows MRI scans of patient SM's brain.The Associated Press/The Associated Press

An attempt to contract out medical testing by a provincial health agency fizzled when all seven private-sector bids failed to compete with the agency's own in-house services.

The Vancouver Island Health Authority issued a request for proposals to contract out 6,000 MRIs over an 18-month period. "VIHA is seeking to establish long-term relationships with Medical Resonance Imaging (MRI) providers to expand our capacity for MRI services," stated the contract offer, made in September, 2010.

The stage was set for another battle with health-care unions over privatizing services.

But the contract offer noted that VIHA would be doing an analysis of its own capacity. "If proposals do not offer improved effectiveness and efficiency compared to VIHA providing the services, VIHA may decide to cancel the RFP." When the bidding closed, VIHA's number-crunchers concluded their hospitals could do the MRIs more efficiently.

"It was determined none of the proposals met our requirements in terms of quality, service and costs," Shannon Marshall, speaking for the health authority, said in an interview Thursday.

The health authority is not averse to contracting out medical services: It currently has contracts with private clinics for nearly 500 procedures such as gallbladder surgery, knee arthroscopies and endoscopies. Other health authorities in B.C. have contracted out MRIs as well.

Reid Johnson, president of the Health Sciences Association, said the VIHA decision to abandon its quest for private contractors in this case is a victory for common sense.

"Whether it was a trial balloon, I don't know. But we knew the economics before they tried it," he said. "It didn't make sense to be a pioneer in the privatization of those services."

The HSA represents unionized technicians who conduct MRIs in B.C.'s public health-care system. Mr. Johnson estimates that B.C. hospitals can conduct MRIs for an average of $250 each. Private clinics offer MRIs to the public for about four times that rate, although rates vary from a few hundred dollars to thousands.

"The myth is the private sector can do it cheaper," Mr. Johnson said. "But in health care, they cannot do it cheaper than our non-profit system."

The health authority had offered up the MRI contracts in anticipation of qualifying for extra cash from the province under the patient-focused funding initiative, which was announced last September.

Instead of contracting out the additional services, it used the money to ramp up its own capacity. This year it will do 4,200 additional MRIs, and waiting lists are shrinking.

A year ago, the waiting list for a routine MRI was 11 months for patients in Greater Victoria. Currently, a new booking will result in a wait of 16 to 20 weeks.

Colleen Flood, Canada Research Chair in Health Law and Policy at the University of Toronto, said she sees no real problem with private, for-profit clinics getting public funding to provide additional procedures when needed. But she said the larger issue is that such work is being done in a policy vacuum, without clear direction or transparency.

"B.C. and other provinces need to get a handle on this, but they seem to be content to let sleeping dogs lie," she said. "You can see the beginnings of a two-tier system, and left unregulated that is a significant problem. You need to regulate it and make sure the public system is not a cheap, nasty option."

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