Proposed $200M private orthopedic surgical facility would be largest in Alberta's history

A group that includes orthopedic surgeons, a developer and high-powered lobbyists says it has gained tentative political support from Alberta Health Minister Tyler Shandro for a proposal to build and operate what would be the largest private, contracted surgical facility in the province's history.

Group says Health Minister Tyler Shandro tentatively supports the project

Alberta Health Minister Tyler Shandro, left, and Premier Jason Kenney were at the Mazankowski Alberta Heart Institute in Edmonton on March 3 to announce $100 million in funding to improve surgery wait times in the province. (Trevor Wilson/CBC)

A group that includes orthopedic surgeons, a developer and high-powered lobbyists says it has gained tentative political support from Alberta Health Minister Tyler Shandro for a proposal to build and operate what would be the largest private, contracted surgical facility in the province's history.

If approved and built, the privately financed building is expected to cost at least $200 million. Preliminary design is for 270,000 square feet over either five or seven storeys, on the site of the current Ericksen Nissan auto dealership on 101st Street near Edmonton's Royal Alexandra Hospital.

The proposed surgical facility would perform, under contract to the government, all non-emergency orthopedic surgical procedures — as many as 10,000 a year — for the Edmonton region.

CBC News has obtained an audio recording of a June presentation made by the group during one of three meetings with Edmonton-region orthopedic surgeons. It reveals the group:

  • Intends to seek a contract with Alberta Health Services (AHS) that will ensure the private facility is economically viable and also make it prohibitively expensive for a future government to shut it down;

  • Is pursuing a lobbying strategy to secure support from Shandro and senior health and infrastructure bureaucrats in order to present AHS, which is responsible for delivering health care in the province, with a project that has been effectively approved;

  • Plans to privately manage the facility using non-unionized staff, while running operating theatres for up to 23 hours a day and potentially increase the number of surgical procedures done to 10,000 a year from 6,000.

The roughly hour-long recording provides a rare window into how the promoters of the project, through their lobbyists, wielded political influence behind the scenes to advance a private health-care initiative.

A spokesperson for Health Minister Tyler Shandro said the proposal is currently only a concept and it has not been endorsed by the minister. (CBC)

The plan for the facility comes on the heels of Bill 30, the Health Statutes Amendment Act — provincial legislation that proposes to cut approval times required for private surgical facilities. Critics say it will open the floodgates to private, corporate health care in Alberta.

Most of the political lobbying occurred weeks before the United Conservative Party government of Premier Jason Kenney pushed through Bill 30 in late July.

Concerns disparities in care will widen

Bill 30 also gives the Ministry of Health the ability to contract directly with doctors and permit private companies to take over the administrative functions of physician clinics.

In response to criticism from the Opposition New Democrats, the UCP has repeatedly referenced the 43 private clinics that operated during the NDP's reign in government. 

Experts say those facilities are a fraction of the size of the proposed facility in terms of the number of staff and surgeries, and the space it would occupy.

University of Calgary health law associate professor Lorian Hardcastle said the private surgical facility, if approved, could be the 'first step' in shifting toward privately financed health care in Alberta. (Submitted by Lorian Hardcastle)

Lorian Hardcastle, a University of Calgary health law associate professor, said the facility would represent an exponential advance in the provision of corporate health care in Alberta. She said the proposal and the government's alleged support of it are concerning.

"Private finance and two-tier care will certainly widen health disparities between healthier people and sicker people, and wealthier people and less-wealthy people," Hardcastle said. 

"And this could really be the first step in shifting towards that kind of private finance."

Shandro declined an interview request. In a statement, his press secretary, Steve Buick, said the minister and his staff "regularly meet with physicians and others to discuss concerns and suggestions to improve the system."

"This project is only a concept at this stage. The minister has not endorsed it," Buick said.

Facility would consolidate orthopedic treatment

Dr. Paulose Paul, one of the surgeons behind the proposal, told CBC News the facility would be an expansion of care now provided at the Edmonton Bone and Joint Centre, a private non-profit facility in the Northgate shopping centre. The Bone and Joint Centre, however, doesn't perform surgeries.

Paul, who is the AHS Edmonton Zone section chief for orthopedics, said discussions have been ongoing among orthopedic surgeons for at least a decade about consolidating the surgeries and followup clinics now done in six hospitals across the region.

The new facility may also include other services, such as medical imaging and physiotherapy, he said.

"The goal of this facility is to provide more comprehensive care," Paul said. 

For example, he said, a patient complaining of shoulder pain may have a neck or back issue. Rather than refer the patient back to their family doctor, "we can take that across the hallway to the spine surgeon and say, 'Can you assess this patient and determine what the best treatment course and treatment plan is?'

"Consolidating that orthopedic care will make access much better for all patients in the zone, will make it much more cost-effective and will reduce wait times where it really matters," Paul said.

One of the orthopedic surgeons behind the proposal, Dr. Paulose Paul, told the meeting of surgeons that the plan is to keep Alberta Health Services 'at arm's length' until the project has gained enough political and bureaucratic support. (Nathan Gross/CBC)

The proposal isn't about surgeons making more money, he said, but about providing better, more efficient and accessible care.

Paul emphasized the proposal is still in the preliminary stage and said there has been no discussion about which surgeries could be performed at the facility. 

He rejected criticism that this sort of facility will lead to two-tier health care. 

"We're just changing the venue of where we are working, but not how," he said.

Government 'very warm to the project'

The group made three presentations to garner the necessary support from the region's 46 orthopedic surgeons to ensure the proposal is viable.

During the presentation, lobbyists told the surgeons about several discussions with senior government officials, including Shandro, who were described as being strongly supportive of the initial proposal because it meshes with the government's agenda to increase privately delivered health care.

"The government has been very warm to the project," lobbyist Elan MacDonald said during the pitch meeting. 

"We really want [the Ministry of Health] from the political perspective to be pulling this project through and really be directing down to [Alberta Health Services] that this is something that they want to have happen," she said later in the presentation.

In an emailed statement, Alberta Health Services said "proposals for chartered surgical facilities will be considered through a competitive public procurement process." These facilities must go through an open public process "to qualify and be awarded long-term surgical agreements with AHS," it said.

Paul said the group responded to a request for expressions of interest from the Ministry of Health and AHS in February.

"They're fully aware of the proposal and what we intend to do," he said.

The proposed $200 million private surgical facility would be privately financed and occupy the site of the Ericksen Nissan dealership, near the Royal Alexandra Hospital north of downtown Edmonton. (CBC)

At the pitch meeting, the group did not provide the surgeons with a detailed explanation of how the facility would be financed, built and operated.

But they said the initial plan is for the Ericksen family and a private company spun off the Royal Alexandra Hospital Foundation to build the facility, then lease space in the building to the orthopedic surgeons who would staff it. It would take about two years to design and another four years to build.

It is not clear if the Ericksen family stands to financially benefit from the project. Grant Ericksen did not acknowledge an interview request from CBC News.

Surgeons may be given the opportunity to move their offices to the facility and potentially invest in it, the promoters said.

In an emailed statement, Lindsay Peddle, communications director for the hospital foundation, said a separate entity called the Royal Alexandra Hospital Foundation Social Enterprise Company has since 2016 been exploring options "where sustainable revenue can be generated for the foundation through for-profit investment."

"The current option being explored is to have the company invest in a purpose-built building to lease to a potential non-hospital surgical facility," Peddle said. 

All profit from any such investment would return to the health system through the hospital foundation.

Peddle said the social enterprise company "has not made a recommendation to the foundation, nor has it made a request for funding. If and when it does, the Royal Alexandra Hospital Foundation and its board will evaluate and decide on the merits of making a decision to move forward with an investment."

Lobbyists with government ties

In addition to Paul, the group behind the proposal includes orthopedic surgeons Dr. David Sheps and Dr. Edward Masson. 

They have worked closely on the proposed project with Kevin McKee, CEO of Edmonton-based Pangman Development Corporation.

Rob Swart, a senior architect at Dialog, an Edmonton-based design firm, told the surgeons this building would be similar to, but smaller than, the Kaye Edmonton Clinic at the University of Alberta.

The site for a proposed private surgical facility in Edmonton is near the Royal Alexandra Hospital. The initial plan is for the family that owns the site and a private company spun off the Royal Alexandra Hospital Foundation to build the facility, then lease space to the orthopedic surgeons who would staff it. (CBC)

The group hired Elan MacDonald as its principal lobbyist. She is the former deputy chief of staff to premiers Ed Stelmach and Alison Redford and is currently senior vice-president at Global Public Affairs.

Another lobbyist from the same firm, former senior Health Ministry official Glenn Monteith, told the surgeons that the proposal squares with the UCP government's policy to promote privately financed health-care facilities.

Alberta's lobbyist registry shows MacDonald and Monteith registered on March 19 to lobby the Health Ministry and the premier's office for "Alberta's first Edmonton Musculoskeletal Campus." Their client is the Edmonton Bone and Joint Centre.

The filing states the campus would include a non-hospital surgical facility, an ambulatory care facility, an urgent care centre, diagnostic imaging and an outpatient rehabilitation facility "to improve operational efficiencies, reduce wait times and more readily build necessary health infrastructure."

Shandro adviser overseeing file, lobbyist says

During her presentation to the surgeons, MacDonald said that Sheps had spoken to Shandro and that the minister expressed "support for it at the principle level."

She also said Shandro directed Sheps to follow up with Ivan Bernardo, a lawyer and the minister's principal adviser. MacDonald called Bernardo a "long-standing friend and colleague" of Shandro.

"So it is not insignificant that he has been assigned to the file," MacDonald said.

"[Bernardo] also was very warm to the project and really asked, 'What are the impediments and how can he help remove them?'" 

At the presentation, lobbyist Elan MacDonald said Health Minister Tyler Shandro's principal adviser asked how he could remove impediments to the project's advancement. (Global Public Affairs)

MacDonald said in the presentation she told Bernardo: "'We are not looking for money, we are looking for support for us to proceed with an innovative idea that aligns with your policy and political agenda.'"

Shandro's press secretary, Steve Buick, said in his statement that the minister respects the formal process by which these projects will be approved and that Shandro "awaits the outcome of that process."

MacDonald also told the meeting that the Alberta Infrastructure assistant deputy minister responsible for public-private partnerships was so excited about the project that he wanted to immediately take it to Infrastructure Minister Prasad Panda.

But she said the group asked him to hold off.

"I just share that with you so you understand that from a bureaucratic perspective, this type of model is what they are looking to do and they will try to be supportive," MacDonald said.

If you have information about this story or information for another story, please contact us in confidence at cbcinvestigates@cbc.ca.



Charles Rusnell, Jennie Russell

Former investigative reporters

Jennie Russell and Charles Rusnell were reporters with CBC Investigates, the investigative unit of CBC Edmonton. They left CBC in 2021. Their journalism in the public interest is widely credited with forcing accountability, transparency and democratic change in Alberta.


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