Lessons from laundry privatization: Why freedom of information matters in the era of privatization

Source: Tria Donaldson and Cheryl Stadnichuk, rabble.ca, July 27, 2015

Everywhere privatization has occurred, public access to the facts and figures around privatization has been a challenge. Here in Saskatchewan, that challenge can been illustrated by the difficulty of getting information about the privatization of hospital laundry. The cloak of secrecy was delt a major blow last week when the Saskatchewan Information and Privacy Commissioner recommended the disclosure of a 10-year contract for laundry services between K-Bro Linen Systems and 3sHealth. The Commissioner also recommended that the publicly-funded 3sHealth be brought under legislation as a health care organization and subsequently freedom of information laws….The decision to privatize hospital laundry services is a major restructuring of our health-care system. It means the loss of about 350 jobs in six communities and the loss of publicly-provided and local laundry services. University of Winnipeg economist, Hugh Grant, estimated a net loss in provincial income between $14 and $42 million over the next 10 years from laundry privatization….Public access to documents through freedom of information legislation is critical to accountability and transparency.

But privatization presents hurdles to public knowledge. In this case, 3sHealth and K-Bro Linen refused to publicly disclose the 10-year contract claiming the information was a “trade secret” and that its disclosure would cause economic harm…..The Ministry responded that “[t]he Ministry has performed a search for this record and has determined that this record does not exist within the Ministry of Health.” Four of the health regions responded that “no record exists.”

It is shocking that health regions who will have to monitor K-Bro’s laundry services and pay the bills did not have a copy of the contract.

Related:

New Privacy Commissioner report a victory for transparency; CUPE calls for changes in FOI legislation in response
Source: Canadian Union of Public Employees, July 24, 2015

Attempts by 3sHealth to prevent public disclosure and transparency on the privatization of hospital laundry services have been dealt with a major blow by the Saskatchewan Information and Privacy Commissioner in a new report that calls for public disclosure of a fully unredacted contract with K-Bro Linen. “CUPE has been trying to get a public copy of the contract with K-Bro Linen since it was signed in December 2013,” said Cheryl Stadnichuk, CUPE Researcher. “Both 3sHealth and K-Bro went to great lengths to prevent disclosure of this contract.” After unsuccessful attempts to get a copy of the 10-year K-Bro contract from the Ministry of Health, who claimed it did not have a copy, CUPE filed access to information requests to five health regions. All health regions, except for Sunrise Health Region, replied that they did not have the record. Sunrise offered a costing model template and requested a copy of the contract from 3sHealth, who denied the request. A heavily censored copy of the contract was provided to CUPE by 3sHealth only after a formal review had commenced. The review culminated in today’s report, which recommends full disclosure of both documents. “When dealing with our government, or one of its agencies, an unfortunate pattern seems to have developed,” said Tom Graham, President of CUPE Saskatchewan. “Requests for information are simply denied or the information that is released is heavily censored. It is time for us to seriously consider making changes to freedom of information legislation to ensure openness and transparency in government.” CUPE is calling for 3sHealth to be included under freedom of information legislation – a move in line with the report’s recommendation that 3sHealth be made a “health care organization” under the Regional Health Services Act. “3sHealth plays a major role in the provision and restructuring of health care services,” added Graham. “3sHealth is funded by public dollars but is not covered by LAFOIP and is not subject to the same public scrutiny as other publicly-funded health organizations. This must change.” “This report is a victory for democratic accountability and transparency,” said Stadnichuk. “Saskatchewan people deserve the opportunity to view all contracts for privatizing services to monitor the full costs.” “Disclosure is especially important in this case, since we’re dealing with a ten-year contract in an industry notorious for cost overruns,” added Stadnichuk. Public statements in B.C. show that payments to two laundry corporations that hold the monopoly on service to health authorities in the Lower Mainland increased by a staggering 170 per cent over a seven-year period. Critics of the agreement with K-Bro in Saskatchewan have raised concerns about possible cost overruns because of unrealistic cost valuations.

Read the full report (082-2015) here.

Short-Term Gain, Long-Term Pain: The Privatization of Hospital Laundry Services in Saskatchewan
Source: Hugh Grant, Manish Pandey, James Townsend, Canadian Centre for Policy Alternatives, December 2014

From the abstract:
The government’s plan to privatize hospital laundry services will have a negative impact on Saskatchewan’s local economies. The decision to close five regional laundries and centralize laundry services through Alberta-based K-Bro Linen will decrease the income of the residents of Saskatchewan between $14 and $42 million over the next 10 years in comparison to public options. The laundry plant closure in Prince Albert alone will result in 74 jobs lost, cause a decline in labour income of $2.5 million in the region, and a decline in regional GDP of $3.7 million. Privatization will also redistribute income away from workers and other residents of the province in favour of a private corporation whose major shareholders reside outside of the province. That is the conclusion of a new report by University of Winnipeg economists Hugh Grant, Manish Pandey and James Townsend. “Short-Term Gain, Long-Term Pain: The Privatization of Hospital Laundry Services in Saskatchewan” concludes that while privatization may garner limited, short-term savings, the long-term costs borne by Saskatchewan residents will be significantly higher.