A private medical clinic in Metro Vancouver claims the committee that was supposed to oversee it fell prey to “regulatory capture,” resulting in the clinic being unable to bill for many of its services.
Vancouver Coastal Health (VCH) filed a petition earlier this month for the court to apply receivership over Seymour Health Centre Inc. as it is $6.8 million in debt to VCH.
But Seymour Health claims in a lawsuit against VCH, the Medical Services Commission and the B.C. government that its ability to function was effectively undermined by the province’s unwillingness to license its ancillary services.
VCH claims it is concerned Seymour Health “will be unable to continue to provide primary care services” to its patients. Seymour Health has 70,000 to 100,000 patients, depending on who you ask. VCH’s petition pegs the patient count at the former, while Seymour Health’s legal filings claim the latter.
The plaintiffs claim in their lawsuit that the defendants conspired to take over Seymour Health’s business by failing to provide the necessary licences to operate, and then using the negative cash flow to impose “onerous loan obligations” on them.
“Their goal was to ultimately rely on Seymour Health’s financial distress, created or contributed to by their conduct, to create the conditions for a hostile takeover by Vancouver Coastal Health,” the lawsuit reads.
Seymour Health has three clinics in the Lower Mainland, including one in Vancouver’s West Side, one downtown and one in North Vancouver.
The clinics operate on a “team-based” model of care, in which doctors are joined by various other health-care professionals to provide more holistic services, including diagnostics and laboratory services. To do so, the company claims it needs to be able to integrate ancillary services on site.
But to operate this model, Seymour Health claims it needs to be able to provide on-site ancillary services, noting the fixed medical services plan (MSP) rates mean a clinic without ancillary services “has very narrow margins.”
Some of Seymour Health’s clinics also include the much-touted urgent and primary care centre (UPCC) models, which are intended to direct some patients away from emergency departments. At Seymour Health’s UPCC clinics, the company provides doctors and other health-care professionals, as well as ancillary services, including X-ray, ultrasound and laboratory facilities.
“Without these ancillary services on-site, a patient’s medical home cannot deliver the quality of care required to provide a proper alternative to going to the emergency department to optimize patient outcomes,” Seymour Health’s legal filings say.
Seymour Health said its model was “uniquely successful,” citing praise by the Vancouver Division of Family Practice that led to the government approaching Seymour Health about opening a UPCC downtown.
But the company claims it was met with roadblocks by the Advisory Committee on Diagnostics Facilities, which advises the Medical Services Commission on provision of ancillary services. Seymour Health wrote in its legal filings that the committee and the commission “had become subject to ‘regulatory capture’: no provider of ancillary services would welcome the addition of Seymour Health as a new competitor.”
The government reportedly responded to the plaintiffs’ concerns of regulatory capture by noting the committee’s recommendations aren’t binding and the commission’s decisions were based on medical need, something Seymour Health could prove.
Seymour Health claims it was “extraordinarily difficult” to obtain a licence. The roadblocks have come in the form of moratoriums on applications for ancillary services facilities, including one for new diagnostic outpatient services from December 2012 to June 2014, one still-ongoing moratorium for ultrasound facilities starting in 2014 and more.
Because Seymour Health hasn’t been able to obtain licences for the facilities, it hasn’t been able to bill MSP for the services, leading to its inability to pay off its debt.
The company claims the government failed to warn it that it wouldn’t direct the commission to grant its licence applications.
As a result, Seymour Health claimed it was losing $200,000 per month, which came out of Seymour Health’s own resources. And then when Seymour Health couldn’t afford it, Gursahib Singh Bining and Sandeep Kaur Parmar, the owners of the clinic who are also plaintiffs, filled the gap.
None of the government defendants filed responses to the lawsuit as of press time. Health Minister Dix said in an interview with the Vancouver Sun that he wouldn’t comment on matters before the court.
But he told the newspaper that Seymour has relied on the province for many months to meet their financial obligations.
“Why we’ve been supporting Seymour is to see there’s no impact in the delivery of care.”
