Legal battle underway between B.C. health authority and medical services provider

An ugly legal battle between one of B.C.’s biggest health authorities and a medical services provider in Vancouver is threatening to alienate medical providers and disrupt patient care.

Vancouver Coastal Health is trying to appoint a receiver to sell Seymour Health’s two urgent and primary care centres (UPCCs), after the company racked up millions of dollars in debt following the health authority’s decision to throttle payments for medical diagnostics, which the centres performed anyway. As a result, thousands of non-urgent patients were diverted from emergency departments and the company fulfilled one of the core goals of the UPCC model.

Unlike many UPCCs in the province, Seymour Health’s location in downtown Vancouver—a fully-outfitted clinic—was able to provide all the same diagnostics as a hospital emergency department, including X-rays, ultrasounds, lab tests. In addition, these services could typically be offered in under an hour, at a lower cost to the healthcare system and days faster than tests ordered by a family doctor. Payment for those tests, Seymour Health’s filings say, was vital to operating a sustainable business.

The day after it made receivership filings in court on June 7, Vancouver Coastal Health staff attended the two UPCCs run by Seymour Health. Staff who were there tell CTV News they were stunned to be pulled into meetings informing them VCH staff were “taking over” after the owners allegedly defaulted on a loan and sublease payments, which totalled $6.8 million, according to court filings.

Seymour Health has countersued, claiming VCH owes up to $12.5 million for medically-necessary, on-site lab testing and medical imaging that was provided to patients. It’s seeking general, aggravated and punitive damages, claiming the Ministry of Health approached them to open the first UPCC on just three months’ notice and pressured them to open a second location on the North Shore, even though the diagnostic billing issue was still unresolved. In a letter to the health minister last week, Seymour Health’s owner, Sabi Bining, describes the health authority’s conduct akin to “vulture capitalists” after VCH offered a “poisoned chalice” loan he alleges was aimed at taking over the business. 

“This is not a step or a measure that helps improve access to primary care in British Columbia right now,” said BC Healthcare Matters founder and BC Green Party candidate, Camille Currie, who has reviewed the filings. “This is a tactical move that is in the interest of health authorities and the Ministry of Health alone.” 

DISPUTE OVER DIAGNOSTIC COMPENSATION

The complex situation strikes at the heart of the fraught relationship between British Columbia’s healthcare entrepreneurs and a provincial government keen to control skyrocketing costs taxpayers express frustrations over long waits in hospitals and a worsening shortage of family doctors. 

Dr. Eric Cadesky, the chief medical officer for Seymour Health and a former president of Doctors of BC, insists the City Centre clinic – which has multiple floors of practitioners offering primary care, radiology, cancer diagnoses, and urgent care for everything from broken bones to ectopic pregnancies – is a model of patient-centred care for the entire country. 

“We're able to see a lot of cases that would otherwise go to overburdened emergency rooms, and we're able to take a lot of the pressure off of walk-in clinics,” he said, showing CTV News the vast diagnostic suites that VCH shut down during their takeover last week. “If someone comes in with pain in their belly, there’s an ultrasound right down the hall that we're not being allowed to use.”

Cadesky emphasized that VCH has committed to funding diagnostics offered on site, and that his medical team had served British Columbians in person throughout the pandemic, which few other clinics did.

“It took aggressive and unnecessary legal action from Vancouver to close down our services for the first time,” he said.

When CTV News pointed out court filings by VCH urged for a swift sale of the UPCCs before staff start to leave en masse, Cadesky replied that they have a higher-than-average retention rate and that all workers want to continue to serve their patients. 

VCH ON THE DEFENSIVE

Seymour Health alleges the health authority has employed dirty and coercive business tactics that prevent them from paying their bills, forcing them into bankruptcy so they can be taken over by the province for a song. VCH claims Seymour Health’s owners have mismanaged urgent and primary care centres, such that the health authority has had to keep bailing them out to the tune of millions of dollars.

The 52-page petition filed by VCH to the courts makes no mention of the dispute over unpaid diagnostic services, and only Ernst and Young, the proposed receiver, makes any mention of the accredited services “for which Seymour does not have required licensing to receive payment.” A government press release announcing the partnership in 2018 promised on-site diagnostic services at the City Centre location. 

VCH’s chief financial officer defended the unusual actions involved in the seizure and attempted sale of a healthcare provider that serves some 100,000 patients a year.

“We found we needed to take some action to ensure we could provide a stable platform going forward for our patients and the employees there,” said Fernando Pica. “We found ourselves in a situation where, for many months now, Vancouver Coastal Health has had to provide support for Seymour Health to meet its financial obligations.”

“(The defendents’) 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,” reads Seymour Health’s court filing, which allege a conspiracy to “intend to injure” the plaintiffs.

Cadesky says Seymour Health has been processing $2 million annually in testing, but Pica insists the $180,000 per year VCH paid the company for diagnostics is appropriate and that any further tests should’ve been sent to other clinics – or hospitals.

When CTV News pointed out a key role of the UPCCs is to divert non-emergency patients from beleaguered hospitals, Pica praised the staff. 

“We're very complimentary about the work our people do at those services at the UPCCs,” he said. “They're very well attended, they're very well-staffed, they've been very successful in our eyes.”