Longwoods Blog

by Ted Ball

WHOSE HEALTHCARE SYSTEM IS IT, ANYWAY?

To recap the assumptions that I have set up in my first four essays: I believe within the next four to five years—that is, by 2025–2026, midway through the second term of a Ford government—the combined weight of more than a trillion-dollar federal debt and a $500-billion provincial debt plus pandemic expenses that have still not yet been fully calculated, will require significant cost reductions in provincial expenditures. These cuts, in my opinion, can be achieved in the healthcare sector without affecting safety, quality, or accessibility.

We will be able do that because up to 30 percent of our current annual $73 billion in healthcare services expenditures have been proven to be “wasted” or “un-leveraged” investments.

Yes, we have all heard that for years, but nobody seems to have had the courage to either claw back the misapplied funds or systematically redeploy these valuable public resources to where the evidence says we will get a higher return on our healthcare investment.

For all of government’s rhetoric about “evidence-based decision-making,” there are few examples of the Ministry of Health and Long-Term Care (MOHLTC) actually using evidence to do the right thing—unless it’s something they want to do anyway.

In past periods of financial constraint, our provincial government simply borrowed more money on Wall Street, pushing our total provincial debt higher and higher.

But the politics of “right-sizing” healthcare and “reconfiguring” the delivery system to meet the real needs of the people it is supposed to serve could end up unleashing the health sector’s well-funded vested interest lobby groups who are already very much aligned with the Premier,  Minister, and Ministry in their campaign to maintain and expand the status quo.

We should be thankful that the healthcare interest groups have never flat out “bought” a political party, as the teachers’ unions did with the Liberal Party of Ontario. Nonetheless, the CEO of the OHA could still publicly defend Premier Ford against the “teachers’ union bosses”—which was a fascinating development never seen before from the hospital lobby.

Still, the ingrained habits of co-dependence between the public service and their politicians—and the more established, best-funded interest groups—has sometimes led to what could be described as “co-governing.” This is the “Inner Circle of Influencers.”

The pervasive influence of these few powerful interest groups has become the driving force pushing the Ontario government further and further away from actually practicing evidence-based decision-making. This is why I often cynically refer to the MOHLTC as the “Ministry of Doctors and Hospitals.” That’s what it actually does—find money for doctors and hospitals.

Even in our current financial circumstances, the provincial healthcare sector lobby groups keep asking: “Why can’t the government just keep borrowing more money”?

Some have even joined forces with the Premier by publicly calling for the federal government to invest (i.e., borrow) more money to move the current 3 percent annual health transfer payments back to 6 percent—doubling the federal contribution. But we can’t just borrow the hundreds of billions of dollars it would cost to do that without very serious economic consequences for the people of Ontario.

We already indebted our grandchildren to cover our expenses in the pre-pandemic period and now, as the invoices come in from the first two COVID waves, we will be handing the compounded cost of funding healthcare services for today’s pandemic and the next multibillion-dollar vested-interest group “ask” to our great grandchildren.

Yes, we do need to invest more public money. But we need to make smart, strategic investments with the limited amount we can afford to borrow and not continue the mutually beneficial pattern of political pandering to friendly and supportive self-interest groups.

The pandemic has shown us the glaring cracks in our public support systems, as well as the real cost of maintaining inequities in our society. While we already know a lot about these issues, we now have the opportunity to actually LEARN from our “best mistakes” of the past.

For example, we know we need to invest much more toward protecting our most vulnerable populations, with a focus on housing and food. We know that the crisis in mental health—particularly children’s mental health—needs Premier Ford to finally keep his 2018 election commitment to invest $1.9 billion of his promised $3.8 billion to the ten-year federal/provincial mental health and addictions program.

Evidence-based decision-making that is practiced rather than just preached would lead us toward investing in the determinants of health instead of locking in the past patterns of politically inspired and politically motivated resource-allocation decisions.

Throughout the pandemic, federal and provincial governments have invested billions more to ensure that our healthcare system remains effective. But these new investments in the existing fractured system could either further entrench the unaffordable status quo or they could provide the realignment and readjustment investments needed to move to the future delivery system that will evolve through the decisions of each Ontario Health Team (OHT).

Remember that most of the powerful self-interest groups don’t want change. They may be willing to support the optical illusions of change, yes, but not bring about the fundamental structural change that transforms the existing system’s DNA.

The cost of maintaining the status quo is not only unaffordable, but the cost of borrowing the money to maintain the existing wasteful and fragmented service-delivery system would become very expensive and, ultimately, unfruitful for Ontario citizens.

I am very sure that, like any jurisdiction in our circumstances, the financial markets would perceive Ontario today as a more risky investment than it was before the pandemic. Interestingly, in his previous life, our new Minister of Finance, Peter Bethlenfalvy, worked at a Bay Street bond-rating agency where he actually authorized the downgrading of the credit rating for the Government of Ontario—based on its poor financial performance.

He knows that our current circumstances are unsustainable and he’s right. I get it.

Having served as chief-of-staff to Ontario Finance Minister Larry Grossman in the Bill Davis government—just after Ontario’s period of massive post-NAFTA deindustrialization in the late 1970s—I know what it’s like when the bond-rating agencies like Moody’s Investors Services provide a regular credit rating that reflects their independent assessment of the provincial economic realities.

While immediate pandemic concerns remain our top public agenda item in the medium and longer-term, the people of Ontario really are in deep doo-doo financially.

The downgrading of our credit rating would cost Ontario taxpayers’ tens of billions of dollars in additional interest payments on the almost $500 billion the province has borrowed over the past twenty years—the largest debt, by the way, held by any non-sovereign jurisdiction on this planet.

Hello? Let that sink in.

There will be no escaping this time. Ontario is in worse circumstances today than Greece was when their economy imploded. That’s not the result of Ford Government mismanagement; it’s mostly the result of fifteen years of the provincial Liberal government’s borrowing habits, now compounded by the still-unknown costs of the pandemic.

So what’s going to happen? While the pandemic has further entrenched public support for protecting our healthcare services, there will be forces in favour of some degree of privatization. That’s not a smart or prudent public policy.

We know how valuable our public services are, but our existing system really needs to be reinvented and transformed. We can have better services for the same or less money by reconfiguring these services in the Ontario Health Team development process and by adopting true evidence-based decision-making instead of the traditional command-and-control top-down power politics of centralized public servants at Queen’s Park.

In previous iterations of provincial financial challenges, the health and education sectors have counted on our politicians to make the noble PR pledge to protect health and education from any cutbacks. However, as a result of this grand “values-based” gesture, they have always ended up taking resources out of the balance of the public sector, often by cutting back programs that were of significant value.

The problem with the noble political gesture of protecting health and education is that most of our total provincial spending is in these two sectors. Most importantly, study after study has identified significant levels of waste and unnecessary spending in these sectors.

Nevertheless, the “smart politics” in past provincial belt-tightening exercises was to ignore the proven waste and simply proclaim the government’s noble values-based commitment to protect health and education budgets.

Taxpayers, however, have always paid a very high price for peace with the public sector power-brokers in both sectors. Now peace is absolutely unaffordable.

While the depth of the co-dependency between the OHA and the government is significant, the scale of the financial challenge for Ontario over the next four or five years is going to increase rather dramatically. We are dealing with a scale of financial challenge our province has never experienced before.

I don’t think that the Ford government will be taking financial corrective action until after the next election—perhaps twenty-four to thirty-six months from now—but my assumption is our next provincial government won’t have any choice but to require the health and education sectors to finally find the courage to redeploy all unnecessary and wasteful spending.

That will be the focus of the 2025 and the 2026 provincial budgets in the second term of the Ford government. There will be two more provincial budgets before the next election and these budgets, in my view, will only acknowledge the bleak financial realities. The focus will mostly be on measures to stimulate economic growth.

After the election, the focus will shift to solving the economic juggernaut the people of Ontario have to grapple with. My assumption is that the financial realities of our next provincial government will make it impossible to ignore the evidence that 30 percent of the existing total healthcare expenditures (out of $73 billion) is wasted or unleveraged spending.

This time, however, instead of facing the challenge of pulling the money out of 2,000 individual healthcare service provider organizations, very shortly, the province will be able to pull the funding out of the eighty OHT “Bundled Payment Envelopes” and leaving the decisions on allocation and redeployment of resources to the OHTs.

While this is just a guess on my part, I believe the health and education sectors could realistically expect a 4 to 6 percent reduction in the overall expenditures by 2025, maybe more, maybe less. But a lot.

Trust me, I really wish I could be a cheerleader and provide some great inspirational words of wisdom. But I can’t.

To make it worse, when the structural claw-back is finally implemented in four or five years, it will be very hard on communities in which their Ontario Health Team has failed to make any meaningful progress on implementing integrated delivery system (IDS) designs.

That’s why it is so important that governance boards do a reality check on the “well-being status” of their community’s Ontario Health Team. The question is: Would your OHT CEO Team benefit from a more collaborative/partnership approach to the task of OHT health system design?

Integrated healthcare system design involves planning for complexity and learning to be adaptive. But without the representatives of the “owners” of our healthcare system at the CEO’s system design table, we are heading for yet another round of creating a “provider-centric” rather than a “patient-centric” healthcare system.

A major part of the problem is that our community governance boards have been very intentionally left in the dark by both the public servants—who designed the OHT development process without them—and by the silo-CEOs around the table at each OHT—who seem to have collectively decided to limit, or exclude, the involvement of their employers in determining the design of the community’s future healthcare services delivery system.

And there’s more bad news: governance boards in several communities may discover that their community’s OHT CEO development team has developed some dysfunctional power dynamics that, if not addressed, could lead to dysfunctional systems, structures, and processes that threaten the wellbeing of the communities they serve.

It appears that these negative power dynamics may have their roots in a belief within the hospital community that the newly elected Ford government actually wanted the hospitals to run their local healthcare delivery system along the lines of the US Accountable Care Organization (ACO) model.

Many hospital CEOs in Ontario believed that this was the acute care–focused model that a few high-profile hospital CEOs, their political lobbyists at the OHA, and a number of senior civil servants had been promoting for some years. They had been researching the American ACO hospital-based model and wholly embraced its assumptions that only hospitals are capable of managing the complexities of a whole healthcare delivery system.

In fact, the Ministry’s health system vision, outlined in a confidential report to the new government—leaked to and then released by the NDP—advocated scrapping the fourteen volunteer Local Health Integration Network (LHIN) boards, keeping the staff, and creating thirty Ontario Health Teams led by hospital CEOs selected by MOHLTC  and accountable to a “super agency” that was later named Ontario Health.

When the PC government healthcare policy direction  turned out not to be the the one that they were expecting, some hospital CEOs were disappointed and, in some cases, may have exhibited what their non-hospital CEO colleagues have termed “un-partnership behaviours.”

Indeed, in a number of OHTs, this more domination-style approach to what was supposed to be collaboration has produced tension arising out of fractured interpersonal relationships among the senior healthcare managers. Of course, there are also several OHT groups that, in contrast, are operating on high-levels of trust and synergy, and an innovative spirit aimed at building a better system for patients.

But again, most of our OHTs are not currently aligned and, without significant intervention, most likely never will be. This is a very serious matter in terms of the wellbeing of our healthcare system. And the government will just ignore it because they caused it.

The MOHLTC’s “low rules,” non-design of OHT development, combined with an inadequate transformation capacity-building process, seems to have unleashed personal power agendas in a significant number of communities. Unless they are addressed, these fractured relationships could end up jeopardizing the medium- and longer-term wellbeing of some communities.

Governance boards, which have to provide stewardship to their communities, can’t ignore these circumstances where they exist.

For some CEOs, the OHT development process is contributing to a rather stressed—and perhaps even threatening—environment  while they are also managing waves of the COVID-19 pandemic. CEOs who may feel threatened at the OHT CEO table and anxious to defend their turf and the status quo may be coaching their boards and board chairs to help them defend their silo’s “turf.”

This should set off alarm bells for those whose role is to be in stewardship.

The silo’s turf and the organization’s narrow self-interests are absolutely not the concern of community governance boards. The broader public interest of the owners—and not simply the narrow self-interests of the silo—is the appropriate focus for board members practicing collaborative governance. We cannot have community governance boards that are set up by their CEOs to cause harm to the larger community.

In “Trouble in the board room: The seven deadly sins of ineffective governance,” governance coach James Orlikoff points out that when a board operates as “representational governance,” it fails to consistently focus on the best interests of the system or of the organization as a whole. “Rather,” he writes, “they focus on the best interests of the component parts of the system, or on specific constituencies.”

According to Orlikoff, “Representational governance is the antithesis of integration, and the mortal enemy of effective governance.” So, boards whose CEOs have been coaching them to defend their silo ought to be alarmed about their “state of readiness” for transformation and integration within their community. They need to remember that by 2025 their whole community will pay an awful price if their delivery system has been hijacked by the narrow self-interests of the hired managers and public servants directing them.

So, whose system is it anyway? On whose behalf is it managed and governed? And, why are our community governance boards struggling with system change while seemingly oblivious to serious potential harm to the proper functioning of their local healthcare delivery system? The citizens of your communities deserve better.

As Orlikoff says, “There are many reasons why boards tend to resist change. Some are comfortable with the old paradigm, and in their complacency, do not wish to change. Some boards realize that they must change—but do not know how. Like the deer caught in the headlights, they become paralyzed into deadly inaction.”

How is your board of governance doing? Is your board sleepwalking into a chaotic and dysfunctional local healthcare delivery system. If that is the case, what can you do to address these realities?

INDEPENDENT, INTERDEPENDENT, AND EFFECTIVE BOARD GOVERNANCE

In their book Board Work: Governing Healthcare Organizations, Dennis Pointer and James Orlikoff argue that for governance to effectively lead healthcare system transformation, new mindsets, structures, and skills will be necessary. They point out that “effective governance is not a happy accident. Rather, it is the result of an integrated process of planning, coordination, implementation, and evaluation.”

Further, Pointer and Orlikoff write, “when a board is governed by chance or tradition, (or simply reacts to whatever situations arise), it abdicates its responsibility for leadership and contributes to atrophy.”

So, how many healthcare governing boards and how many OHTs are going to rise up and insist on assuming a stewardship role over the next phases of OHT development? With the pandemic and system reconfiguration happening at the same time, the CEOs would benefit from a more prominent role for community governance in the OHT development process.

In Finding Our Way: Leadership for an Uncertain Time, author Margaret Wheatley talks about “organic complex adaptive systems” like our healthcare system . She writes that when a system is failing or performing poorly, “the solution will be discovered WITHIN the system itself—if more and better connections are made.”

“The solution,” Wheatley concludes, “is always to bring the system together—so that it can learn more about itself, from itself … a troubled system needs to start to talk to itself—especially to those it didn’t know were even part of itself.”

Governance leaders who are still trapped by the old paradigm of representing their silo rather than representing the broader community interests, or ones who are trapped in turf dynamics that do not reflect the broader public interest, are actually preventing the existing system from transforming.

I suggest getting all the OHT health service provider (HSP)–member board chairs together to discuss amongst themselves about the appropriate role of governance in the development of their Ontario Health Team.

When board chairs and board members begin to meet regularly as OHT governors, the expected “aha moment” will be: “We are all here to represent the very same owners and interests—the people of our community.”

The mindset shift required to provide governance oversight to a single healthcare organization then morphs from being responsible for providing oversight to a silo in the system to providing oversight to both the organization (51 percent) and to the delivery-system components (49 percent) for which each board is holding their respective CEOs accountable.

With this new mindset, boards and CEOs need to operate as both independent and interdependent partners of a collaborative Ontario Health Team. They need to model—in their thinking, behaviour, and actions—what “connected,” “integrated,” and “seamless” leadership is all about. Everyone in the delivery system also needs to integrate cross-functionally to reflect those same characteristics.

If and when, however, our community governance boards fail to provide stewardship to the OHT-building process, who or what else might save Ontario’s healthcare delivery system at the eleventh hour?

What is Plan B?

Published with permission from Transformation Lessons Learned

ABOUT THE AUTHOR: “Whenever I hear that Ted has written something or is speaking somewhere, my ears perk up.  It’s been at least twenty years since I first heard his name and in all that time I can honestly say I have never once said ‘same old, same old…what a waste of time.’ That’s not to say I have always agreed with everything he says and I am sure he would be very surprised if I did!

But what I appreciate most about Ted is his forthrightness. You are never left wondering where Ted stands on a particular issue. But in taking his stand, he brings with him, a wealth of knowledge and experience that’s hard to ignore. He forces us to question our assumptions and not simply accept the status quo. We need more like him.” —Janet Davidson, former Deputy Minister of Health, Alberta; President and CEO, Trillium Health Centre; Chair, CIHI; Global Health Centre of Excellence

This entry was posted on Thursday, February 18th, 2021 at 1:19 pm and is filed under Longwoods Online.