Essays January 2014

The Goldilocks Principle and Canadian healthcare system governance

Tom Closson

 

Healthcare system governance is important. CEOs of healthcare organizations need to report to someone and healthcare boards fulfill this oversight role. Besides recruiting and hiring a CEO, boards also hold CEOs accountable for achieving outcomes, act as mentors and support CEOs when necessary in taking the heat from the unhappy segments of the community when contentious decisions are made. Local boards provide a mechanism for engaging people in the local community. And they develop connections and collaborative arrangements with boards from other sectors that have responsibility for matters such as housing and education that have an on impact population health. All these functions could be done by government itself, but the general view of those involved in healthcare is that that the role of government and its civil service should be limited to matters such as policy development and enabling implementation leaving the day-to-day running of the healthcare system to organizations that can operate at arm’s length.

Canada is generally not a country of extremes, but this is not so when it comes to how we govern our provincial healthcare systems. In this case, we clearly have extremes. At one end is Alberta which, at the moment, has essentially no institutional, regional or provincial boards for system governance. At the other is Ontario with 14 Local Health Integration Networks (LHINs), 14 Community Care Access Centres (CCACs), 150 hospital corporations and thousands of other community health services agencies all with their own governance structures. This raises the question regarding how much governance in healthcare is “just right” to obtain the best performance (aka the Goldilocks Principle)?

Measuring the impact of governance models on the performance of provincial healthcare systems is challenging at best given that numerous factors contribute to healthcare system performance. Based on spending alone, Alberta, with almost no governance structures, performs quite poorly compared to other provinces. Even though Alberta has a relatively young population, its cost per capita is the second highest of any province, only surpassed by Newfoundland which I think we would all agree has special geographic and population challenges. Although this relatively high level of spending has been occurring in Alberta for many years, there is no sign that recent trends towards less and less governance has brought Alberta’s high spending in line.

But cost performance is only one consideration. Good health outcomes, coordination and patient experience are also to be strived for. Local governance is intended to better engage people in designing solutions that address their needs effectively. Having too many boards increases complexity and can make cooperation and coordination difficult as individual boards often make decisions in the best interests of their own organization rather than the collective good of the population being served. Ontario is trying to address this issue with its Health Links (ultimately about 80 of them), which are intended to bring many service provider organizations together voluntarily at the local level to coordinate care for complex populations. Evaluation is currently underway to see how well this “non-board” structure works in minimizing the potentially negative impact of Ontario’s fragmented board structure.

In the 1980s, every hospital in Canada had its own board. There were hundreds of them; there were 400 in Saskatchewan alone. In the 1990s every province in Canada except Ontario did away with almost all of their hospital boards and transferred healthcare system decision making authority from the hospital boards to regional boards with only Ontario maintaining a significant number of hospital boards, reducing from around 225 to the current number of approximately 150. Finally in the early 2000s, Ontario created the CCAC and LHIN boards, devolving some Ministry authorities while still maintaining hospital boards. In most provinces, along with having many fewer boards, there are many fewer CEOs. Ontario remains the outlier with many CEOs reporting to many boards.

The number of regional governance structures in Canada has also declined. In 2001, Saskatchewan reduced regional boards from 30 to 12 and BC from 52 to 6. Other provinces such as Manitoba and New Brunswick have more recently followed suit. And in the recent Nova Scotia election campaign the winning Liberals committed to reducing their regional boards from 10 to 2.

But the prize for minimizing the use of healthcare system boards goes to Alberta. After doing away with its hospital boards, Alberta moved to a structure of 17 regional boards. Then in 2008, Alberta did away with those authorities and their boards and moved to a single authority for its entire provincial population. This new organization, Alberta Health Services (AHS), is very large, utilizing approximately 104,000 employees and 17,600 volunteers and linking with 8,400 physicians. In mid-2013, because the AHS board refused the Alberta Health Minister’s request to withhold performance payments that were owed to their executives for the previous year, the Minister dismissed the board members and appointed a single person to supervise AHS. And recently, the Minister announced that the health Ministry is taking over the handling of new home care contracts with providers in Edmonton because he believes that the AHS has not provided the necessary oversight. With these changes, one wonders whether Alberta will have any health system boards in the future.

So back to the question regarding how much governance in healthcare is “just right” to obtain the best performance. I have worked in British Columbia within a regional board structure and in Ontario with its fragmented hospital, community agency, LHIN and CCAC boards. I also participated in a review of the regional health authority structure in Manitoba. I am not aware of any definitive studies which determine the best healthcare governance structure in Canada, but the trend is clear. There is a trend towards fewer and fewer healthcare governance boards. And I believe that this trend is likely to continue.

The political process is evolving to a situation where no matter what healthcare governance structure exists, the Minister is being held publically accountable. Historically, regional boards may have been used for political cover for unpopular decisions or poor performance, but this is changing. In these days of instant media with RSS feeds, Twitter, Facebook, YouTube and 24 hour news, the Minister’s accountability is more direct and in real time. It appears that Ministers are being driven by this new instant accountability to reduce the number of healthcare boards to enable them to have a more direct line-of-sight into the day-to-day running of the healthcare system. And with fewer boards, Ministers are getting more involved and becoming more directive. This may not be “just right” to achieve healthcare system performance that is best for Goldilocks. It is just the way it is.

About the Author

Tom Closson is the former CEO of the Ontario Hospital Association, the University Health Network, Sunnybrook Health Sciences Centre and the Capital Health Region in Victoria, B.C.

Acknowledgment

This document is republished under the terms of a Creative Commons Attribution Non-commercial Share Alike license. The terms of the license are available at: http://creativecommons.org/licenses/by-nc-sa/3.0/. Originally published by HealthyDebate.ca, a project under the direction of Dr. Andreas Laupacis, at the Keenan Research Centre, Li Ka Shing Knowledge Institute of St. Michael's Hospital. 

 


Comments

John Van Aerde wrote:

Posted 2014/01/14 at 12:15 PM EST

Great trans-provinicial observation(s)! The statement, "...the Minister’s accountability is more direct and in real time. It appears that Ministers are being driven by this new instant accountability..." is true and possibly the greatest threat to our health care system because any transformational systems change cannot be based on short term decisions. I submit that the main interest of politicians at federal and provincial level is to be re-elected. Unfortunately, by politicizing our health care system, most "changes" are now based on the short term election cycle, if not the most shorter yearly financial cycle. For that reason, our health care system will not be sustainable in the long term until this fundamental underlying structural flow is changed. That change, disconnecting health care from politics as much as possible, would be the real transformation our health care system needs, the present structure of which is based on cultural, political and structural elements that go back more than half one century. Unless we let the pending system collapse happen, we need to make every effort to influence the system by raising the public awareness and by becoming involved as health care workers and consumers. One question is how and where do begin such an initiative.

 

Mario Longo wrote:

Posted 2014/01/14 at 01:51 PM EST

One of the challenges, as I see it, is that most board members at Ontario healthcare organizations (as well as other Crown Agencies) do not have any real skin in the game.

Most hospital board members are recruited because they reflect the "pillars" or "elite" of the community. Few boards truly reflect the community they represent. I understand why this happens. We can talk about skills-based boards if we must but it is unacceptable that it continue to happen and certainly executive search firms should not be part of the selection process. That is sad.

Healthcare will always be political and it wasn't until the LHINs were introduced that community engagement was a legislative requirement for them and for their health service providers. In some cases, community engagement has become a lightening rod for hospitals. And that's a good thing.

If governance is to be effective, its time to pay attention to the men and women behind the curtain. It's too late when supervisors or investigators are appointed. The horse has left the barn by the time an auditor has been sent to investigate.

Maybe the discussion about extremes should not be about governance models but rather the degree to which we hold boards accountable.

 

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