Is this health care controversy proof of a Saskatchewan Party privatization push?

by Lisa Johnson


“It appears that Brad Wall and the Sask. Party have returned to their 2003 privatization agenda.”

When a hydraulic hoist carrying a gigantic bag of laundry weighing thousands of pounds fell from the ceiling of a repurposed WWII-era laundry facility in Saskatoon in late 2011, it was a catastrophic failure — and a miracle nobody was injured. It also became one more reason for the Saskatchewan Party to justify giving up a huge public stake in the provision of health care laundry services.

It’s also the first of many core health care services that the NDP worries may be privatized over the next two years.

Last month, Health Shared Services Saskatchewan (3sHealth) announced that provincial health care laundry services will now be contracted out to publicly traded K-Bro Linen Systems Inc., the largest owner and operator of laundry and linen processing facilities in Canada. The highlight of the deal is a new state-of-the-art plant to be built, owned and operated in Regina by K-Bro. It will serve the entire province, replacing facilities in Moose Jaw, Prince Albert, Regina, Weyburn, Yorkton and Saskatoon. K-Bro will set up distribution centres in Saskatoon and Prince Albert. Smaller laundries that serve long-term care and other facilities won’t be affected by the deal.

Says 3sHealth: “This solution will save the health system approximately $93 million over the next 10 years through lower operating expenses and capital cost avoidance.”

But the decision has been controversial from the start. The mayor of Prince Albert, where approximately 100 laundry workers could be affected, is fuming. Unions across the province are not happy (the Saskatchewan Federation of Labour has gone as far as to accuse K-Bro of trying to make an illegal deal with one local union to undercut wages). The NDP frets that this is a sign of more health care privatization to come, and demands the Saskatchewan Party “publicly draw a line in the sand, telling people what it would consider privatizing and how much health care in Saskatchewan might change.”

According to an internal health care memo addressed to medical staff from Andrew Will, CEO of 3sHealth, and Keith Dewar, CEO of the Regina Qu’Appelle Health Region, more than a dozen core health care departments will undergo a “business case development” over the next three years.

Published by the NDP, the memo lists everything from medical imaging to environmental services (including maintenance and housekeeping staff) to food services — in other words, just about every service in the health care system not performed by doctors and nurses. It asks medical staff for their “help and advice early on” in a process that will aim to “remove barriers and support opportunities to improve the quality of health care for patients and families.”

For NDP health critic John Nilson, the K-Bro deal and the three-year plan for “business case development” suggest that the Sask. Party is reviving old mandates.

“Unfortunately that memo raises questions. It appears that Brad Wall and the Sask. Party have returned to their 2003 privatization agenda,” he says. “They don’t want to tell anybody that, because since the 2007 and 2011 elections the privatization of government services was not to be discussed — that was the [Sask. Party] message.

“This laundry announcement is the contracting out of what has traditionally been a publicly run service. But we’ve seen this spring, with the sale of Information Services Corporation (ISC), that they’re testing the waters on privatizing,” says Nilson.

Why target laundry? Because “several million dollars in capital expenditures would be required to improve all of the facilities,” says 3sHealth.

Shortly after the closure of Saskatoon’s central facility, K-Bro took over laundry services, shipping the city’s laundry to facilities in Calgary and back. In early 2012, 3sHealth began a review process to consider either rebuilding aging and outdated provincial laundry facilities, outsourcing to a third party, or a combination of both.

3sHealth met with laundry managers, laundry workers, and unions. A Request for Strategic Partner (RFSP) was issued by 3sHealth on behalf of Saskatchewan health regions and the Saskatchewan Cancer Agency last year, and the price was right with K-Bro.

“Although there will be an increase in transport costs under this new model, the reduced cost of processing and capital compared to rebuilding more central laundries significantly outweighed the increased transport cost,” 3sHealth said.

Still, critics insist that these savings are short-sighted. Sask. Party policy makers are betting that most people would consider laundry facilities as liabilities, rather than long-term assets. Nilson, for one, isn’t buying it.

“It’s like renting an apartment rather than buying a house; in the end you’d like to own it,” says Nilson. “To go and rent a service for 10 years, when we know that if we owned and ran it ourselves we could run it at a similar cost — and after 10 years we would own it — that’s what’s frustrating for many people.”

The government will also save on the cost of wages and benefits, as several unions representing health system laundry workers in Saskatchewan have pointed out. But is that desirable? “K-Bro pays about five to six dollars less per hour, [and] they don’t have to provide benefits or pensions if they aren’t a unionized work force,” says SEIU-West President Barbara Cape, who estimates that between 400 and 500 workers will be affected.

Cape also says that the details of K-Bro’s proposal remain secret. “If the people of Saskatchewan can understand why the decision was made, there can be a level of comfort. When we asked for the business case, they said, ‘we’ll give you a detailed analysis of the benefits.’ To date, we have not received this business case. They are taking a look at everything to see where they can save money, and if saving money means privatizing, then that’s their ‘business case.’

“The word ‘privatization’ puts people’s backs up in Saskatchewan, so this is playing with words and expecting people to misunderstand it. But I’ll eat my hat if the ‘business case’ is better for patients,” she says.

A spokesperson for 3sHealth could not be reached for comment prior to deadline. At the time of the announcement, 3sHealth indicated that they would be working with union leadership to find ways to mitigate the impacts of this change on the staff in the central laundries.

In the meantime, plenty of mud is being slung at K-Bro. Cape says that some laundry workers say that “carts coming back [from K-Bro] containing clean laundry are not clean — so it contaminates the clean laundry.”

“It’s an issue in health care simply because you have such a high level of cross contamination, and you need to maintain some level of infection control,” says Cape. “The other concern is the quality of the laundry coming back. They’re getting back shredded or destroyed sheets.”

CUPE, which represents the laundry workers, also says that according to its annual financial statement, K-Bro mitigates labour shortages through the Temporary Foreign Worker Program.

While most patients will never see or stop to think about the laundry workers who cleaned their bedsheets, clean linens are crucial to the entire health care system.

“It has to be done no matter what,” says Nilson. “This isn’t just washing towels for the gym — these are some of the most difficult linens to get clean, and it’s clear that the public needs a professional and thorough job done by skilled, well-paid people.”

We can find ways for the health care system to cut costs and become more efficient, but that “doesn’t require the ideological step of moving the work right out of government. I think the Saskatchewan people expect to be consulted on all of these kinds of issues before they happen. They especially don’t like when it’s been sprung on them,” he says.