Alberta pays for private clinic's receiver

A Calgary judge has appointed an interim receiver for a private orthopedic surgical centre that is facing bankruptcy, approving an application made by the Alberta government.

The province contracts the Health Resources Centre, located in the former Grace Hospital in the northwest, to perform about 900 hip, knee, foot and ankle surgeries every year.

Networc Health, which owns the centre, is in a legal fight with one of its creditors, Cambrian Group of Companies, which has applied for a bankruptcy order against the clinic. Cambrian says it's owed $65 million.

Fearing that patients' surgeries would be disrupted by the bankruptcy proceedings, Alberta Health Services, which oversees health-care delivery in the province, asked for a receiver to oversee the centre's financial situation so the facility can keep operating.

The AHS also asked for the bankruptcy proceedings to be stayed for 10 months, so the public system has time to prepare for the additional patients.

Court of Queen's Bench Justice Barbara Romaine granted part of that request on Monday, saying that there would be "great public concern" if the clinic closed suddenly. She appointed an interim receiver until the case returns to court next week.

The AHS will pay the cost of the interim receiver, which could reach $250,000.

Creditor's lawyer questions AHS position

The Health Resources Centre is the only overnight facility in Calgary for orthopedic surgeries, doing about one-third of the city's publicly funded hip and knee operations.

'Only use the private sector when there's a real abiding reason to do so.' —Dr. Tom Noseworthy, University of Calgary

Michael Smith, the lawyer for Cambrian, questioned whether Alberta Health Services should even have legal standing to request an interim receiver.

"I know of no case in Canada where the customer applies for a receiver to be appointed in a bankruptcy so that the bankrupt can continue to supply services to the customer at rates that are driving the supplier bankrupt. That's unprecedented," Smith said outside the hearing.

A public health expert says the private clinic's financial problems should serve as a sharp reminder of what can happen when health care is treated like a business.

"I'm hoping an example like this will perhaps guide AHS to be one, more careful about contracts they do have in the private sector; but two, only use the private sector when there's a real abiding reason to do so, and that's usually because the capacity doesn't exist in the public sector," said Dr. Tom Noseworthy, professor of health policy at the University of Calgary.