Judge approves payments to stop exodus of physicians from Manitoba Clinic By: Katie May Posted: 7:00 PM CDT Monday, Apr. 24, 2023 Last Modified: 10:03 AM CDT Tuesday, Apr. 25, 2023 Updates

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A judge has authorized a plan to keep the Manitoba Clinic’s 36 remaining physicians from leaving the insolvent facility by giving them retention payments.

Doctors who continue to practise at Manitoba’s largest private clinic while it looks for a buyer will get $1.3 million in retention payments over the next six months.

The Manitoba Clinic, which is under creditor protection, can’t afford to lose any more doctors as it gets ready for a sale of its Sherbrook Street building.

Court of King’s Bench Justice David Kroft approved the retention payments during a court hearing on April 21, during which he also extended the deadline for the clinic’s debt restructuring and approved the latest monitor’s report from the Calgary-based agency that is overseeing the clinic’s financial restructuring.

The payments are “critical” to the attempt to sell the clinic, the judge acknowledged, because 90 per cent of its revenue comes from doctors’ billings to the provincial health department. As doctors leave the clinic, at 790 Sherbrook St., its budget shrinks.

“This is necessary. I believe and I’m satisfied it would jeopardize the entire sales process, which as I said, depends on the doctors (staying),” Kroft said during the hearing.

The payments are expected to halt the exodus of doctors that began before the clinic was placed under creditor protection.

Half of the clinic’s 70 physicians have moved their practices to other clinics, retired, or moved away from Winnipeg since the private clinic announced it was entering creditor protection last December. Some of the 36 who remain have talked about leaving unless they get retention payments, according to submissions made during the hearing.

The doctors are to share four payments of $335,000, which are scheduled to be given out starting May 1, until Nov. 1. The payment amounts are equal to “true-up” payments the physicians would have received if the clinic hadn’t gone into creditor protection. Their “true-up” payments from before December 2022 were stayed according to the court order.

The sales process for the clinic will begin in May, and if any physician decides to leave before November, they will forfeit their full retention payment.

“This is necessary. I believe and I’m satisfied it would jeopardize the entire sales process, which as I said, depends on the doctors (staying).”–Justice David Kroft

As the clinic undergoes restructuring, CIBC is bankrolling the $1.3 million in payments. The sale and investment solicitation process is expected to be completed by the end of August.

Current and former Manitoba Clinic physicians are still owed roughly $2.8 million in “true-up” payments for 2022, the monitor’s April 18 report states.

It also says the provincial government and health department have been briefed on the creditor protection proceedings and have been informed about “mutually beneficial” opportunities that could involve Manitoba Health.

Manitoba Clinic CEO Keith McConnell could not be reached for comment.

A representative of Doctors Manitoba participated in last week’s court hearing as an observer. Doctors Manitoba spokesman Keir Johnson said the group is concerned for its members and wants a resolution to the proceedings, which he described as a “distressing” symptom of the widespread doctor shortage.

The clinic has lost money since it moved into a newly built, modern 133,000-square-foot facility, from an outdated and cramped building, in 2018. It was unable to fill all of that space, and has been trying to secure long-term leases with the government.

katie.may@winnipegfreepress.com

Katie May
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Katie May is a multimedia producer for the Free Press.

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