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Philanthropist aims to open huge surgical centre in Richmond Hill

Funding of the non-for-profit clinic could be 'the largest donation in Canadian health history' but it comes amid a major debate over private health care in Ontario
Surgical instruments are used at a hospital in Washington on Tuesday, June 28, 2016.

Editor's note: This article originally appeared on The Trillium, a new Village Media website devoted exclusively to covering provincial politics at Queen’s Park.

A Canadian philanthropist is pouring a fortune into building a massive independent surgical centre in the Toronto area.

Walter Schroeder’s goal, he has said, is for the not-for-profit clinic in Richmond Hill to perform triple the number of orthopedic day surgeries as a traditional hospital and ease the pain of thousands of Ontarians on surgical wait-lists.

A Ford government spokesperson confirmed to The Trillium Wednesday that the government is looped in on the plan.

“The ministry has received draft plans from the Schroeder Clinic on how they can help reduce wait times for critical surgeries so Ontarians can receive the treatments they need sooner,” said Hannah Jensen, a spokesperson for Health Minister Sylvia Jones.

The centre’s application will be considered under the Your Health Act if it is passed, said Jensen, referring to legislation before the house to establish a new licensing regime for private for-profit and not-for-profit surgical and diagnostic clinics.

“As the province expands the types of surgeries and procedures being done in the community to include hips and knees and orthopedics, it will ensure the new community surgical and diagnostic centres have in place the highest quality standards with strong oversight,” Jensen said.

Meanwhile, the opposition NDP and public health-care advocates say they have concerns about the project and warn the new legislation, Bill 60, could usher in two-tier health care to Ontario.

Walter Schroeder is a Manitoba-born self-made millionaire who founded the Dominion Bond Rating Service (DBRS). Today, he has a charitable foundation that has given generously to Ontario hospitals and hospital foundations.

Schroeder wasn't available for an interview with The Trillium for this story but spoke to TVO about his plans in 2021. He told host Steve Paikin that, once complete, the centre would be able to perform 8,000 outpatient orthopedic surgeries a year, triple the capacity of a major hospital. 

He described buying a massive medical building in Richmond Hill after its previous owner went bankrupt before the construction was finished. Property records show the Terra Hill Ambulatory Surgical and Medical Centre, a not-for-profit corporation linked to Schroeder, bought the property for $55 million, with a $25 million mortgage.

In the TVO interview, Schroeder said he would put up to $150 million into the project in total, but it would probably require an additional $50 million to $80 million from the public purse. 

However, the treasurer of Schroeder Foundation, Michael McConnell, said that has changed and the project will no longer require public funding. In fact, the foundation is preparing to put up to $350 million toward the project, should it go ahead, and it would be “the largest donation in Canadian health history.”

Public-private debate

The opposition at Queen’s Park opposes Bill 60, legislation that sets up a licensing regime for for-profit and not-for-profit, corporations to run surgical and diagnostic clinics.

The NDP has warned it will bring the province “one step closer to a two-tier health-care system, where those who can afford it will jump the queue and everyone else will be left waiting even longer.”

It’s calling on the government to expand operating hours at hospitals instead.

The Registered Nurses’ Association of Ontario CEO Doris Grinspun said she also has similar concerns about “the creation of a two-tier system with all kinds of gimmicks.”

She said she’s concerned that independent ambulatory surgical centres will drain staff from public hospitals, but still require complex patients to be treated in hospitals that are suffering from a staffing crisis, and encouraged Schroeder to direct his philanthropy solely to the public system.

The lead of the Ontario Health Coalition, a public health advocacy group, said much the same.

“Why would we not have our public hospitals with their governance systems, and their expertise in providing public health care, provide those services?” said executive director Natalie Mehra. “Why hand them over to a bunch of businessmen?”

“I think the key thing for the public to understand in terms of what is the public interest, is the difference in governance between a private clinic and a public hospital is massive, there is a huge gulf, in terms of patient protections, in terms of quality control,” she said.

Mehra said she’s extremely concerned about comments Schroeder had made in his TVO interview described payment for its services as only partially OHIP-paid. Mehra was also alarmed that one of the board members of the not-for-profit that owns the surgical centre building is an advocate for two-tier health care and a fundraiser for the Cambie medical constitutional challenge, which seeks to allow Canadians to pay for necessary medical care when faced with long wait times in the public system.

“What commitment does this proposed facility have to single-tier public medicare?” she asked.

McConnell said the commitment is philanthropic and the plan is to run the medical centre through an operating charity “for the betterment of Ontario.”

“What the people of Ontario need to know, anyone reading your article needs to know, is that this is not a for-profit, this is all not-for-profit,” he told The Trillium. “Everything would be through OHIP or (the Workplace Safety and Insurance Board), to support the military or supportive of Indigenous (people).”

As for the Ontario Liberals, they have also raised concerns about Bill 60, but are more open to the creation of non-profit surgical centres. 

The party’s health critic, Adil Shamji, said that while he supports the creation of non-profit independent surgical sites, the legislation has given him “no reassurances that our health-care system will not be surrendered to corporate, for-profit interests.

“It does not give me reassurance that will protect health-care workers from being siphoned out of the public system. It does not reassure me that we will … ensure patient safety or protect upselling or up-charging.”

However, Shamji, who is also a medical doctor, said there’s merit to moving day surgeries out of hospitals into specialized stand-alone centres. He wouldn’t be “ideologically opposed” to Schroeder's plan if he could be convinced it would be run in a way that protects the public health-care system and protects patients, which could be accomplished if it were closely affiliated with a public hospital.

Meanwhile, NDP health critic France Gélinas told The Trillium there is a successful model for moving day surgeries into stand-alone facilities, bringing the same benefits of specialization, within the public hospital model.

“The difference is that they have the oversight and accountability of a hospital,” she said.

It's not clear what role hospitals will have.

In a statement to The Trillium, a spokesperson for the University Health Network confirmed it has discussed potential collaboration with Schroeder’s not-for-profit, “for the benefit of patients and meeting the demands of a growing and aging population.”

“Mr. Schroeder has been a generous philanthropist at University Health Network for many years,” said Gillian Howard, vice-president of public affairs for the hospital. 

“We share the view that we must experiment with new models and locales of care so that more patients might be rapidly treated — while ensuring we don’t compromise staffing in the hospitals who care for our sickest patients.”

St. Michael’s Hospital, which has been involved with the planning, told The Trillium it is not currently involved in the project. 

“We will continue to look for new ways to collaborate with government and partners to get patients the care they need when they need it, including future opportunities to integrate ambulatory surgical centres into Ontario’s health care system,” a spokesperson for the hospital network said.

Dr. Amit Atrey, a director of the not-for-profit that owns the medical building and an orthopedic surgeon at Michael’s Hospital, said he worked with his hospital and the Schroeder foundation through the planning process.

He said it would perform OHIP-funded surgeries and seek quality-based procedure funding from the government, which pays hospitals to meet certain volumes of procedures. “It's not necessarily a cash cow for surgeons like me, it's just a way that we can cut our wait-list down and use some of those resources,” he said.

As for the public-private debate, Atrey said he wants to see Canada’s universal system preserved.

He’s English and said the two-tier split in his home country doesn’t help the patients who use the publicly funded National Health Service.

But that doesn’t mean there isn’t a role for some companies to make a profit within Canada’s system, he said.

“I think the phrase that the premier used was you shouldn't need to open your wallet other than take your OHIP card out, which I think that works very well. But there is a profit to be made for private companies,” he said.

There’s room for profit when a surgical centre can specialize in certain areas, such as hips and knees, and do procedures at scale, “like a factory,” Atrey said. 

“Now, as far as I can see, it doesn't matter as long as the money's coming from the government and it's going to do government work, and the patient doesn't open their wallet — that's OK for me,” Atrey said.

“If we can cut the wait lists down by any means, which doesn't cause a two-tier system, I'm happy."

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Jessica Smith Cross

About the Author: Jessica Smith Cross

Reporting for Metro newspapers in five Canadian cities, as well as for CTV, the Guelph Mercury and the Turtle Island News. She made the leap to political journalism in 2016...
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