Improving Healthcare’s Productivity


For many years the high cost of healthcare, estimated to have been 11.3% of GDP in 2018, has worried Canada’s provincial/territorial governments that carry most of the fiscal freight. Particularly worrying has been the continued rate of growth in healthcare’s cost beyond that of core inflation and of its approaching 50% share of provincial/territorial spending. Ontario’s governments have announced in successive budgets their aspiration to restrain that growth, an aspiration that has not been fulfilled, apart from a brief period in the late ‘90s, after which growth rebounded sharply, and another from 2011-16 when capital spending was cut and doctor’s fees were frozen in 2015; both are back with a vengeance as current cost pressures.

The 2019 budget is remarkably similar to that passed in 2012 by the previous government. Both state an intention to eliminate the deficit in 5 or 6 years primarily by constraining spending, an aspiration missed by miles in the period between 2012 and now. The then forecast balance was replaced with a deficit of $11.7 billion. The 2019 budget starts off there, with the goal of restraining growth in the healthcare budget to 1.8%, a target, as before, well below the 5 to 6 percent annual trajectory thought to be more-or-less ‘normal’ in the absence of transformational reform.

What policy changes will prevent the repetition of such failure over the next 5 years?

The core change appears to be recognition by the Ontario government that top-down management and one-size-fits-all policy direction have failed miserably, as has repeated rearrangement of its administrative deck chairs. The Local Health Integration Network Boards, originally intended but never allowed to create goals and objectives tailored to the province’s diverse regional needs, are gone; the LHIN staffs will be too in a couple of transitional years. The replacement ‘super agency’, Ontario Health, stands as yet rather uncertainly between the government and the public and its health service providers as a ‘politically-lite’ policy-maker vaguely reminiscent of Premier Harris’ Health Services Restructuring Commission of the late ‘90s.

Guided by the experienced members of the Premier’s Council on Improving Healthcare and Ending Hallway Medicine, the government appears also to have realized that the only way to achieve increased productivity is to ‘punt’ the responsibility to those health service providers prepared to organize themselves into teams. These Ontario Health Teams are expected to vary in their composition and the characteristics of the communities, districts, or regions they serve, within the limits of what could be described as providing ‘full-service’, i.e. the complete range of health and healthcare services required to meet the needs of those served, from hospital through home and community services, including some in the latter category recognized to be among the social determinants of health. Their governance, policy direction, and management are being left, in the first instance, to the founding team members to determine, subject only to the requirement that each OHT be “people centered”, incorporating into determination of their ethos and functions the voices of the patients and populations they serve. Their accountability will be not only to those populations but also to Ontario Health through individual agreements based on measurements, presumably of both outcomes and processes, yet to be developed, determined, and negotiated.

So, much is yet to be put in place to enhance the productivity of health/healthcare in Ontario and to link that productivity to greater efficiency measured in terms of the cost, over the coming half-decade and more, of providing the services people need to preserve their good health and restore it to those afflicted by disease, injury, disability, or other misfortune. The key question is “what’s in it for the participants in the putative Ontario Health Teams?” There is no question that there is money to be better spent coincident with preserving, indeed enhancing, the quality of health and healthcare services currently provided to the people of Ontario. But increased cost effectiveness will require changes to be made. “Change for the better is an oxymoron to the Canadian psyche[1]”and change that many will undoubtedly perceive to be for the worse will be especially difficult to make. It will require the substitution of lower for higher-cost personnel, family doctors for specialists, nurses for doctors, PSWs for RNAs, et cetera. It will require the introduction and acceptance of on-line patient-provider interactions, and re-introduction of the long-lost availability of primary care 24/7 by multi-professional teams big and diverse enough to provide it under humane call-schedules. Those changes won’t be made willingly, the way they must if they are to work, without clear benefit to the members of the OHTs making them. So far, on offer is the very attractive benefit of being rid of top-down, rule-bound, bureaucratic direction in favour of being relatively free to manage their own affairs, including the internal allocation of the resources in a single funding envelope. But there are two dark clouds on that horizon, one being the requirement in the proposed enabling legislation that the allocation of all Provincial resources be consistent with Legislative appropriations, the “votes” that created them. The second arises out of the 2019 arbitrated settlement with the Ontario Medical Association that treated the Physician Services budget as a line item separate from the other sources that collectively fund health and healthcare. Both imply that significant portions of the OHT envelopes will not be fungible but earmarked for specific purposes – a major, essentially ‘hand-cuffing’ constraint on innovative approaches to achieve greater productivity and efficiency. The bottom line is that the potential incentives for OHTs and their health service provider and community partners to take on the very significant challenge of change have neither been articulated nor intimated in the 2019 Budget. Nor is it apparent just how health policy formulation will be coordinated among the Premier’s Council, the Ministry of Health and Long-Term Care, those responsible for health-sector compensation negotiations, implementation of arbitrated settlements including that recently with the OMA and its ‘side deals’[2], and Ontario Health there at the interface with publicly-funded health service providers and the public. Clarification of that muddle remains to come.

Increasing efficiency in healthcare will also require government to grasp finally and firmly the nettle of mandating the adoption throughout the Province of a comprehensive health information management system, shareable by providers and patients alike while ensuring the personal privacy of both. This system must include robust, credible outcome measures in addition to processes, support the steadily increasing use of wearable and related health monitoring devices, and the use of algorithms and other ICT-based technologies generally in the provision of health and healthcare services.

Much yet remains to be done. Until it is, the aspiration to reduce healthcare’s spending in Ontario’s 2019 budget remains as tenuous as it proved to be on the predecessor government’s watch. In the meantime, the ominous threat of steady increase in the debt to GDP ratio continues.

[1] William Thorsell, The Globe and Mail

[2] Two groups are at work, one to propose changes to primary care and a second with set financial targets to reduce the use of unnecessary or inappropriate medical services

Duncan G. Sinclair

2 thoughts on “Improving Healthcare’s Productivity

  1. Julia

    Can you comment on this sentence ” (OHTs) It will require the substitution of lower for higher-cost personnel, family doctors for specialists, nurses for doctors, PSWs for RNAs, et cetera. ” – I don’t really understand what this means/why would more money need to be spent for these personnel (or the replacement of them?)

    1. Duncan G. Sinclair Post author

      Dear Julia: I think the reader has misinterpreted the sentence. The substitution would not cost more money. It would cost less because the rates of remuneration of specialists are higher than those of family physicians which are, in turn, greater than those of nurse practitioners and so on down the line.
      – Duncan


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