SUN NEWS COLUMN: Government-Run Tim Hortons & Restaurants Losing Millions

How can you lose money running a Tim Hortons?

Get the government to operate it.

New research by SecondStreet.org found that a pair of hospitals in Canada lost over $353,000 through owning and operating their own Tim Hortons franchises between 2017-19. One location was at the Windsor Regional Hospital in Ontario and the other at the Saint John Regional Hospital in New Brunswick.

While $353,000 isn’t a lot of money compared to overall health care spending in Canada, those are tax dollars that could have been spent on health services for patients. With the amount of money these two hospitals lost running their own Tim Hortons outlets, governments could have provided patients with roughly 500 additional MRI scans.

When you look at total losses by all government-run restaurants and cafeterias in hospitals across Canada, SecondStreet.org identified $12 million in red ink over the same two-year period. (Note: Our analysis focussed on food and beverages sold to the public, not food that is provided to patients complimentary)

For perspective, $12 million is roughly equivalent to the cost of providing MRI scans to an NHL arena full of people. And keep in mind, several provinces provided incomplete data so losses are likely quite a bit higher.

When COVID-19 emerged in Canada, governments postponed hundreds of thousands of surgeries, diagnostic scans and appointments with specialists. The Canadian Medical Association Journal recently noted that 148,364 surgeries were postponed between March and June in Ontario alone. Extrapolate that figure across Canada, adding in postponed diagnostic scans and appointments with specialists, and it’s easy to see how COVID-19 created an enormous backlog – in a system that was already struggling before the pandemic.

With that unprecedented backlog, it’s more important than ever for hospitals to find ways to save money. It’s a small start, but stopping the bleeding at government-run hospitals restaurants and cafeterias, along with many other changes, could free up even more resources to help patients get the care they need.

Consider Jackie Herrera’s case in Alberta. The young patient hurt her neck skiing and struggled with finding treatment in Alberta. At one point the government told her it would take a year just to see a neurologist. Unwilling to lose even more years of her life to pain and suffering, Herrera packed her bags and flew to Germany for treatment.

A camera person SecondStreet.org hired to help film her story told us he was facing a year-long wait to receive an MRI scan. A consultant we hired for a recent project told us something similar. Long health care waiting list stories are all around us, and yet the government has been busy losing millions through selling doughnuts and snacks in hospitals.

Fortunately, a very simple solution could address this problem. Instead of losing millions through running restaurants and cafeterias, governments could simply rent the space out to private restaurants.

The Victoria General Hospital in Winnipeg lost $186,851 at its cafeteria in 2011-12. After renting the space out to a private restaurant, however, it earned $25,591 the following year in rent. Ultimately, that meant more funds could be spent helping patients.

Again, addressing this situation won’t address all the problems in our health care system. But when combined with many other decisions, it could help improve patient care.

Colin Craig is the president of SecondStreet.org, a new Canadian think tank.

This column was published in the November 6, 20202 edition of Sun newspapers (Toronto Sun, Ottawa Sun, Winnipeg Sun, Edmonton Sun and Calgary Sun)

 

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Prevention – reduce demand in the first place

If Canadians lived healthier lives, we could reduce demand for emergency services, orthopaedic surgeries, primary care and more. 

For instance, if you visit the Canadian Cancer Society’s website, you’ll read that “about four in ten” cancer cases are preventable. The Heart and Stroke Foundation notes that “almost 80 percent of premature heart disease and stroke can be prevented through healthy behaviours.” A similar number of Diabetes cases are also preventable. 

Many joint replacements and visits to ERs and walk-in clinics could also be avoided through healthy living. 

To be sure, not all health problems can be avoided through healthy living – everyday the system treats Canadians with genetic conditions, helps those injured in unavoidable accidents and more.  

But there is an opportunity to reduce pressure on the health care system through Canadians shifting to healthier lifestyles – better diets, more exercise, etc. 

To learn more, watch our Health Reform Now documentary (scroll up) or see this column. 

Partner with non-profits and for-profit clinics

European countries will partner with anyone who can help patients. 

It doesn’t matter if it’s a non-profit, a government entity or a private clinic. What matters is that patients receive quality treatment, in a timely manner and for a competitive price.  

In Canada, governments often delivery services using government-run hospitals instead of seeing if non-profit or private clinics could deliver the services more effectively. 

When governments have partnered with non-profit and private clinics, the results have often been quite good – Saskatchewan, Ontario and British Columbia are just a few examples of where partnerships have worked well. 

Canada should pursue more of these partnerships to reduce wait times and increase the volume of services provided to patients.  

To learn more, watch our Health Reform Now documentary (scroll up) or see the links above. 

Make cross border care more accessible

In Canada, citizens pay high taxes each year and we’re promised universal health care services in return. The problem is, wait times are often extremely long in our health system – sometimes patients have to wait years to see a specialist or receive surgery. 

If patients don’t want to wait long periods, they often have to reach into their own pocket and pay for treatment outside the province or country. 

Throughout the European Union, we also find universal health care systems. But a key difference is that EU patients have the right to go to other EU countries, pay for surgery and then be reimbursed by their home government. Reimbursements cover up to what the patient’s home government would have spent to provide the treatment locally. 

If Canada copied this approach, a patient waiting a year to get their hip operation could instead receive treatment next week in one of thousands of surgical clinics throughout the developed world. 

Governments benefit too as the patient is now back on their feet and avoiding complications that sometimes come with long wait times – meaning the government doesn’t have to treat those complications on top of the initial health problem. 

To learn more, watch our Health Reform Now documentary (scroll up) or this shorter video. 

Legalize access to non-government providers

Canada is the only country in the world that puts up barriers, or outright bans patients from paying for health services locally. 

For instance, a patient in Toronto cannot pay for a hip operation at a private clinic in Toronto. Their only option is to wait for the government to eventually provide treatment or leave the province and pay elsewhere. 

Countries with better-performing universal health care systems do not have such bans. They allow patients a choice – use the public system or pay privately for treatment. Sweden, France, Australia and more – they all allow choice. 

Why? One reason is that allowing choice means some patients will decide to pay privately. This takes pressure off the public system. For instance, in Sweden, 87% of patients use the public system, but 13% purchase private health insurance. 

Ultimately, more choice improves access for patients. 

To learn more, watch our Health Reform Now documentary (scroll up) or watch this short clip on this topic. 

Shift to funding services for patients, not bureaucracies

In Canada, most hospitals receive a cheque from the government each year and are then asked to do their best to help patients. This approach is known as “block funding”. 

Under this model, a patient walking in the door represents a drain on the hospital’s budget. Over the course of a year, hospital administrators have to make sure the budget stretches out so services are rationed. This is why you might have to wait until next year or the year after for a hip operation, knee operation, etc. 

In better-performing universal health systems, they take the opposite approach – hospitals receive money from the government each time they help a patient. If a hospital completes a knee operation, it might receive, say, $10,000. If it completes a knee operation on another patient, it receives another $10,000. 

This model incentivizes hospitals to help more patients – to help more patients with knee operations, cataract surgery, etc. This approach also incentivizes hospitals to spend money on expenses that help patients (e.g. more doctors, nurses, equipment, etc.) rather than using the money on expenses that don’t help patients (e.g. more admin staff). 

To learn more about this policy option, please watch our Health Reform Now documentary (scroll up) or see this post by MEI.