Taxpayers Dinged for a Thousand $1,000 Phone Calls

Payments to private contractor Maximus balloon since BC outsourced health records in 2004.

By Andrew MacLeod 16 Jan 2014 |

Andrew MacLeod is The Tyee's Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.

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BC's Health Ministry paid a private contractor more than $1 million to set up a call centre and respond to questions from the public about a data breach disclosed in 2012. The centre ultimately fielded just over 1,000 calls. Phone receiver image via Shutterstock.

For each phone call a private company handled regarding a 2012 Ministry of Health privacy breach, British Columbia taxpayers paid what amounted to $950.

That $1.1 million expense to prepare for and field 1,136 phone calls was part of a contract with Maximus B.C. Health Inc. to manage and administer the province's Medical Services Plan and PharmaCare programs.

The thousand-dollar phone calls were only part of the contract, which has grown greatly since it was signed in 2004.

The original 10-year contract, signed at a time when the then three-year-old BC Liberal government was pushing to contract out and privatize more public services, was for $324 million, or about $32 million per year.

However, payments to Maximus, whose slogan is "Helping government serve the people," reached more than double that last fiscal year, coming in at $64.8 million in 2012-2013.

Rising payments

The response to a freedom of information request released on the province's open information website details how payments to Maximus have ballooned:

2004/05: $9,356,005

2005/06: $31,573,924

2006/07: $34, 403,575

2007/08: $46,995,387

2008/09: $43,319,764

2009/10: $42,623,077

2010/11: $46,375,476

2011/12: $61,592,129

2012/13: $64,822,110

A BC NDP contact said the party filed the request that resulted in the release as part of its preparation for this spring's budget debate. Nobody from the NDP was available for an interview, however.

The payment for the most recent fiscal year included $33.5 million for base fees, $27.1 million for "other operational projects" and $4.2 million for capital projects.

Over the course of the contract so far, the province has paid Maximus $68.8 million for other operational projects and $53.3 million for capital projects, on top of $259 million in base fees.

Added projects

From the Health Ministry's perspective, the growing payments are defensible.

"We've asked them to do more than the original contract in 2004 had anticipated," said ministry spokesperson Ryan Jabs in an email. "Operational projects like the BC Services Card, and the additional work from PharmaNet modernization were not yet in the works."

Last March the government announced it had extended Maximus' contract by five years, to March 31, 2020.

"Based on the solid performance of Maximus BC and an analysis of the available options, a five-year contract renewal was deemed the lowest-risk, end-of-term option for the Ministry of Health," the announcement said. "A five year renewal is provided for in the existing 10-year contract, and non-renewal of the contract would have required either re-procurement of the services or repatriation of the services back into the ministry."

In other words, with Maximus already doing the work and doing it decently -- it hasn't been assessed penalties under the contract since 2005 -- it would be riskier to put the contract out for bids or to bring the service back into the government.

The added five years would cost $264.3 million, or nearly $53 million a year, a figure that includes both the base services and the added projects.

Maximus did not respond to calls for comment.

$950 per phone call

Another example of where Maximus' revenue from B.C. has grown is provided in an information release from October 2013, a response to an individual.

Between March 1, 2012 and June 30, 2013 the ministry paid $1,079,209.89 to Maximus to set up a call centre and respond to questions from the public about a data breach that former health minister Margaret MacDiarmid disclosed to the public in September 2012.

During that period Maximus handled 1,136 calls about the data breach, according to the response, putting the average cost at around $950 per call.

"That's accurate that the call centre would be part of any additional unanticipated operational costs paid to Maximus," said ministry spokesperson Jabs. "We were anticipating a significant volume of calls when we notified the public of the details of the privacy breach.

"Health Insurance BC needed to hire enough staff to handle the anticipated increase in volume and train them to handle sensitive health-care matters, while following our strict privacy and confidentiality requirements," he said, referring to one of the areas run by Maximus. "They also needed to continue to maintain service levels for physicians and other British Columbians who were looking for information."

Maximus also helped identify the individuals who needed to be contacted directly, collected their contact information, ensured letters were correctly addressed and processed the mail out, Jabs said. "As you can imagine, it was quite a bit of work to do this for the 38,000 people we notified directly."

The Tyee reported last week that the ministry spent at least $1.2 million to have Deloitte Touche LLP investigate the data breach, contracts for which the company did not have to compete. The company produced a 22-page report on enhancing the ministry's data security.

Current Health Minister Terry Lake was unavailable for an interview.

In 2004, the province signed over $1.2 billion worth of deals with companies, including EDS Advanced Solutions, Telus, Sun Microsystems and IBM, to deliver public services.  [Tyee]

Read more: Health, Politics, BC Politics

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