Commentary
Jason Sutherland and Trafford Crump | August 2025 | doi: http://dx.doi.org/10.14288/1.0449917
- Wait times for many types of planned surgeries have increased beyond clinical recommendations in Canadian provinces in recent years.
- The causes of lengthening wait times are complex and there are no easy fixes, but provinces have increasingly turned to contracts with private surgical facilities.
- This commentary reviews key policy issues associated with provincial governments contracting for-profit surgical centres through the lens of the Quadruple Aim quality improvement framework, focused on population health outcomes (volume-quality relationship, corner-cutting); cost and value (marginal cost of increasing surgeries in public hospitals, risk selection or ‘cherrypicking’, ‘upselling’ of services); provider satisfaction (competition for skilled staff); and patient experience; and offers recommendations for policy makers.
In most Canadian provinces, wait times for planned surgery have continued to increase over recent years. Hospitals have failed to increase their volume of surgical activity to match the growing demand for planned surgery from an aging population, among other factors. This has caused wait times to push beyond the clinically recommended wait times for many types of surgeries.
The causes of lengthening wait times are complex and there are no easy fixes. The root causes include rising demand for elective surgery from an aging population, patients living longer with additional morbidity, population growth, and the inability of governments to implement evidence-based wait time policies such as centralized wait lists and triage practices.
As public pressure mounts on governments to reduce wait times and improve access to planned surgeries, some provincial governments have expanded contracting with private surgical centres or begun new initiatives with private surgical centres to increase the volume of surgeries. In this capacity, private surgical centres provide planned surgeries insured by provincial health insurance programs under contract with the provincial government and are free to the patient.
The growing use of provinces contracting with private surgical centres—particularly those that are for-profit—has not been without controversy even though the practice is not new nor does it contravene the Canada Health Act. Quebec, Ontario, Alberta and British Columbia (BC) have all contracted with private surgical centres on behalf of their residents. To date, government contracts with private surgical centres have been limited to ambulatory surgeries—often referred to as ‘day surgeries’—that are performed on a planned or so-called elective basis. In BC, for example, private surgical centres have been used for cataract surgeries for over two decades.
Governments contracting with for-profit private surgical centres is not typically considered ‘two-tier health care’ since patients are not charged for services and surgeons are remunerated under existing provincial health insurance plans. Used in this way, private surgical centres are not considered ‘queue jumping,’ as the patients receiving care from for-profit private surgical centres are typically assigned from provincial surgical wait lists.
The objective of this commentary is to review key policy issues associated with provincial governments contracting for-profit surgical centres to provide publicly funded day surgeries. These policy issues are presented through the lens of the Quadruple Aim, a quality improvement framework that includes four domains: population health outcomes, lower costs/better value, provider satisfaction and patient experience. Many provincial health ministries and authorities have adopted this framework in guiding their policymaking and administrative decisions. This commentary does not review evidence or policy associated with for-profit hospitals that keep patients overnight.
Population Health Outcomes
It’s not a straight line between private surgical centres and improving population health, though there are positive population-level outcomes associated with increasing the volume of surgeries.
Patients waiting for surgery often manage with functional limitations and symptoms associated with their condition. For example, patients with end-stage ankle arthritis often have significant pain that curtails their mobility and negatively affects their ability to participate in activities of daily living. Presumably, increasing the volume of surgeries—publicly provided or through private surgical centres—will improve patients’ health status and condition-related morbidity.
There is a volume-quality relationship observed for many types of surgery. This means that the more surgeries performed, the better the outcomes. Contracting with private surgical centres may offer opportunities to improve patient outcomes through specialization rather than spreading surgical volume across hospital operating rooms or surgical specialties. To date, there is limited evidence regarding whether the positive volume-quality relationship holds true for surgeries contracted with private surgical centres, how the outcomes compare with hospitals, or whether the volume-quality relationship only holds for patients with specific characteristics.
There are concerns that private surgical centres will be associated with poorer health outcomes due to ‘cutting corners’ to minimize cost. It is unclear whether fear of poorer outcomes is a significant limitation to using private surgical centres since dire outcomes are rare in elective surgery and elective surgery patients tend to be otherwise healthy since complex patients are treated on an inpatient basis.
Cost and Value
Setting the prices for contracted surgeries is key to securing value from private surgical centres. The prices become costs for provincial governments and are agreed upon through negotiation.
Provincial hospitals are a sunk cost for governments and need only cover their direct and indirect marginal costs of additional day surgeries. Leveraging public hospitals in this way suggests that it would be cheaper to increase the volume of day surgeries in provincial hospitals than to contract with private surgical centres. However, the marginal costs of provincial hospitals are very high once the indirect costs of hospitals are included. A full accounting of hospital costs means that hospitals’ indirect costs include factors for patient registration, information systems, infection control, maintenance, cleaning and administration. Private surgical centres that focus on a narrow range of surgeries do not have the same scope or breadth of indirect costs. To date, there is little empirical evidence favouring one setting over the other on the basis of cost to the taxpayer.
Risk selection is an important factor associated with measuring value from contracting with private surgical centres. There is evidence that private hospitals and ambulatory surgical centres are effective at identifying the least complex patients and leaving the least healthy patients for acute care hospitals. This is referred to as risk selection, or ‘cherry picking.’ However, the risk selection of private surgical centres can be reframed as a pricing issue or addressed through other means; Alberta, for example, mitigates private surgical centres’ ability to engage in risk selection by having the zone/region determine which patients receive surgery from private surgical centres.
There are examples of private surgical centres ‘upselling’ services or products that are not medically necessary to patients. One example that draws attention is cataract surgery. While foldable monofocal intraocular lens are insured by provincial programs, private surgical centres may offer ‘premium’ implants to patients. The latter lenses are not provincially insured and those costs are borne by patients. So far, there is a lack of evidence regarding whether upselling is more likely to occur in private surgical centres than in publicly funded facilities and the impact of upselling on patients is unclear.
Provider Satisfaction
Private surgical centres are criticized for negatively affecting the staffing models of acute care hospitals, predominantly for nurses, on the assumption that private surgical centres create competition with hospitals on operating room and recovery nurses.
Few would argue that private surgical centres providing tens of thousands of surgeries per year would not induce competition for skilled staff between hospitals and private surgical centres. However, it is unclear whether private surgical centres that provide one-half day of operating room time per week in large metropolitan areas have the same deleterious effect on hospital staffing.
Provinces contracting with private surgical centres highlights an urgent and unmet need for understanding the precarity of hospital staffing models. While union contracts often limit the ability of hospitals to target financial incentives at staff vulnerable to being hired by private surgical centres, money is not everything. There is little understanding regarding which factors influence nurses’ preferences for hospital-based employment versus private surgical centres. Benefits, shift preferences, colleague engagement, advancement opportunities, technology adoption, patient complexity, research participation, or leadership opportunities may all play a role.
Further, there is little understanding of whether surgical staffing models at hospitals are more vulnerable in cities of a certain size or geographic location, provinces do not conduct job-market surveillance to identify locales of labour scarcity that are more vulnerable to competition, and provinces do not prospectively measure emerging trends in nurses’ employment preferences. This information would be instrumental for provinces to more precisely regulate the activities or settings of private surgical centres.
Patient Experience
There is little evidence regarding patients’ satisfaction with care experiences between hospitals and private surgical centres. Patient experience information is only sporadically collected from hospital patients and no instances of public reporting of patient experience were found from private surgical centres in a format that enabled comparisons with hospitals.
Complicating efforts to compare patients’ experiences between hospitals and private surgical centres, the Canadian Institute for Health Information (CIHI) has recently shuttered their program collecting or reporting patient-reported experience measures for all but hip and knee replacements. These weaknesses in standardized data collection in provinces mean that there is little insight into whether patients have better or worse experiences in private surgical centres compared with hospitals.
Conclusions
There are many hundreds of millions of dollars in the provincial funding of day surgeries. Viewed through the lens of quality, health outcomes and cost, there is much to be learned regarding whether taxpayer money is best spent in hospitals or private surgical centres for elective surgeries.
Irrespective of one’s position on the issue, private surgical centres are being used by provinces; if they are viewed as a part of a long-term solution to reducing surgical wait times, then the following recommendations are provided for policy makers:
- Fill the gap in standardized quality measures. Mandate the collection and reporting of discharge summary data from private surgical centres. Hospitals are already mandated to collect and report this data. Private surgical centre data will enable comparison on outcomes reported by hospitals, such as post-surgery emergency department visits, readmissions and complications or reoperations.
- Fill the gap in outcome measures. Mandate the collection of patient-reported health outcomes and symptoms from day surgery patients in both settings. Outcome data are collected for hip and knee arthroplasties and reported to CIHI in several provinces. Expand collection and reporting for other day surgeries that are contracted with private surgical centres.
- Fill the gap in cost information. Mandate the collection of hospital costs for providing surgeries. This information can inform pricing negotiations with private surgical centres. Quebec and Ontario have implemented technologies to measure direct and indirect inputs from hospitals and attribute them to individual patient surgeries, but the practice has not been adopted elsewhere.
- Fill the gap in hospital staffing precarity. Mandate the routine collection of information regarding the health of the surgical workforce to identify hospital staffing vulnerabilities and identify reasons specialized health care providers leave hospitals for private surgical centres.
- Fill the gap in patient experience measures. Mandate the collection of patient experience measures from a representative sample of patients undergoing elective surgery at hospitals and private surgical centres.
Contact
Jason Sutherland (jason.sutherland@ubc.ca) is the Director of the UBC Centre for Health Services and Policy Research (CHSPR). Trafford Crump (trafford.crump@mcgill.ca) is a CHPSR Affiliate Faculty Member and an Associate Professor at McGill University.
Private Surgical Centres: An Outlet for Hospitals Bursting at the Seams?
Commentary
Jason Sutherland and Trafford Crump | August 2025 | doi: http://dx.doi.org/10.14288/1.0449917
In most Canadian provinces, wait times for planned surgery have continued to increase over recent years. Hospitals have failed to increase their volume of surgical activity to match the growing demand for planned surgery from an aging population, among other factors. This has caused wait times to push beyond the clinically recommended wait times for many types of surgeries.
The causes of lengthening wait times are complex and there are no easy fixes. The root causes include rising demand for elective surgery from an aging population, patients living longer with additional morbidity, population growth, and the inability of governments to implement evidence-based wait time policies such as centralized wait lists and triage practices.
As public pressure mounts on governments to reduce wait times and improve access to planned surgeries, some provincial governments have expanded contracting with private surgical centres or begun new initiatives with private surgical centres to increase the volume of surgeries. In this capacity, private surgical centres provide planned surgeries insured by provincial health insurance programs under contract with the provincial government and are free to the patient.
The growing use of provinces contracting with private surgical centres—particularly those that are for-profit—has not been without controversy even though the practice is not new nor does it contravene the Canada Health Act. Quebec, Ontario, Alberta and British Columbia (BC) have all contracted with private surgical centres on behalf of their residents. To date, government contracts with private surgical centres have been limited to ambulatory surgeries—often referred to as ‘day surgeries’—that are performed on a planned or so-called elective basis. In BC, for example, private surgical centres have been used for cataract surgeries for over two decades.
Governments contracting with for-profit private surgical centres is not typically considered ‘two-tier health care’ since patients are not charged for services and surgeons are remunerated under existing provincial health insurance plans. Used in this way, private surgical centres are not considered ‘queue jumping,’ as the patients receiving care from for-profit private surgical centres are typically assigned from provincial surgical wait lists.
The objective of this commentary is to review key policy issues associated with provincial governments contracting for-profit surgical centres to provide publicly funded day surgeries. These policy issues are presented through the lens of the Quadruple Aim, a quality improvement framework that includes four domains: population health outcomes, lower costs/better value, provider satisfaction and patient experience. Many provincial health ministries and authorities have adopted this framework in guiding their policymaking and administrative decisions. This commentary does not review evidence or policy associated with for-profit hospitals that keep patients overnight.
Population Health Outcomes
It’s not a straight line between private surgical centres and improving population health, though there are positive population-level outcomes associated with increasing the volume of surgeries.
Patients waiting for surgery often manage with functional limitations and symptoms associated with their condition. For example, patients with end-stage ankle arthritis often have significant pain that curtails their mobility and negatively affects their ability to participate in activities of daily living. Presumably, increasing the volume of surgeries—publicly provided or through private surgical centres—will improve patients’ health status and condition-related morbidity.
There is a volume-quality relationship observed for many types of surgery. This means that the more surgeries performed, the better the outcomes. Contracting with private surgical centres may offer opportunities to improve patient outcomes through specialization rather than spreading surgical volume across hospital operating rooms or surgical specialties. To date, there is limited evidence regarding whether the positive volume-quality relationship holds true for surgeries contracted with private surgical centres, how the outcomes compare with hospitals, or whether the volume-quality relationship only holds for patients with specific characteristics.
There are concerns that private surgical centres will be associated with poorer health outcomes due to ‘cutting corners’ to minimize cost. It is unclear whether fear of poorer outcomes is a significant limitation to using private surgical centres since dire outcomes are rare in elective surgery and elective surgery patients tend to be otherwise healthy since complex patients are treated on an inpatient basis.
Cost and Value
Setting the prices for contracted surgeries is key to securing value from private surgical centres. The prices become costs for provincial governments and are agreed upon through negotiation.
Provincial hospitals are a sunk cost for governments and need only cover their direct and indirect marginal costs of additional day surgeries. Leveraging public hospitals in this way suggests that it would be cheaper to increase the volume of day surgeries in provincial hospitals than to contract with private surgical centres. However, the marginal costs of provincial hospitals are very high once the indirect costs of hospitals are included. A full accounting of hospital costs means that hospitals’ indirect costs include factors for patient registration, information systems, infection control, maintenance, cleaning and administration. Private surgical centres that focus on a narrow range of surgeries do not have the same scope or breadth of indirect costs. To date, there is little empirical evidence favouring one setting over the other on the basis of cost to the taxpayer.
Risk selection is an important factor associated with measuring value from contracting with private surgical centres. There is evidence that private hospitals and ambulatory surgical centres are effective at identifying the least complex patients and leaving the least healthy patients for acute care hospitals. This is referred to as risk selection, or ‘cherry picking.’ However, the risk selection of private surgical centres can be reframed as a pricing issue or addressed through other means; Alberta, for example, mitigates private surgical centres’ ability to engage in risk selection by having the zone/region determine which patients receive surgery from private surgical centres.
There are examples of private surgical centres ‘upselling’ services or products that are not medically necessary to patients. One example that draws attention is cataract surgery. While foldable monofocal intraocular lens are insured by provincial programs, private surgical centres may offer ‘premium’ implants to patients. The latter lenses are not provincially insured and those costs are borne by patients. So far, there is a lack of evidence regarding whether upselling is more likely to occur in private surgical centres than in publicly funded facilities and the impact of upselling on patients is unclear.
Provider Satisfaction
Private surgical centres are criticized for negatively affecting the staffing models of acute care hospitals, predominantly for nurses, on the assumption that private surgical centres create competition with hospitals on operating room and recovery nurses.
Few would argue that private surgical centres providing tens of thousands of surgeries per year would not induce competition for skilled staff between hospitals and private surgical centres. However, it is unclear whether private surgical centres that provide one-half day of operating room time per week in large metropolitan areas have the same deleterious effect on hospital staffing.
Provinces contracting with private surgical centres highlights an urgent and unmet need for understanding the precarity of hospital staffing models. While union contracts often limit the ability of hospitals to target financial incentives at staff vulnerable to being hired by private surgical centres, money is not everything. There is little understanding regarding which factors influence nurses’ preferences for hospital-based employment versus private surgical centres. Benefits, shift preferences, colleague engagement, advancement opportunities, technology adoption, patient complexity, research participation, or leadership opportunities may all play a role.
Further, there is little understanding of whether surgical staffing models at hospitals are more vulnerable in cities of a certain size or geographic location, provinces do not conduct job-market surveillance to identify locales of labour scarcity that are more vulnerable to competition, and provinces do not prospectively measure emerging trends in nurses’ employment preferences. This information would be instrumental for provinces to more precisely regulate the activities or settings of private surgical centres.
Patient Experience
There is little evidence regarding patients’ satisfaction with care experiences between hospitals and private surgical centres. Patient experience information is only sporadically collected from hospital patients and no instances of public reporting of patient experience were found from private surgical centres in a format that enabled comparisons with hospitals.
Complicating efforts to compare patients’ experiences between hospitals and private surgical centres, the Canadian Institute for Health Information (CIHI) has recently shuttered their program collecting or reporting patient-reported experience measures for all but hip and knee replacements. These weaknesses in standardized data collection in provinces mean that there is little insight into whether patients have better or worse experiences in private surgical centres compared with hospitals.
Conclusions
There are many hundreds of millions of dollars in the provincial funding of day surgeries. Viewed through the lens of quality, health outcomes and cost, there is much to be learned regarding whether taxpayer money is best spent in hospitals or private surgical centres for elective surgeries.
Irrespective of one’s position on the issue, private surgical centres are being used by provinces; if they are viewed as a part of a long-term solution to reducing surgical wait times, then the following recommendations are provided for policy makers:
Contact
Jason Sutherland (jason.sutherland@ubc.ca) is the Director of the UBC Centre for Health Services and Policy Research (CHSPR). Trafford Crump (trafford.crump@mcgill.ca) is a CHPSR Affiliate Faculty Member and an Associate Professor at McGill University.