Law & Governance

Law & Governance November -0001 : 0-0

Bill 8, The Commitment to the Future of Medicare Act, 2003: An Update

Michael Watts and Kathy O'Brien

Abstract

Monday afternoon, George Smitherman, the Minister of Health and Long-Term Care, introduced Bill 8 to the Justice and Social Policy Committee ("Committee") of the Legislature. During the question period, the Minister indicated that he reviewed comments from a number of stakeholders and that he will, within 72 hours, provide the Committee with an outline of the sections that his Ministry intends to amend and the general direction of those amendments.

Our Governance Concerns Not Addressed

We attended the Committee meeting and the subsequent media scrum. Our conclusions are that, from a healthcare organization's perspective, the Minister did not introduce any material changes to Part III ("Accountability").

The governance concerns previously identified by Cassels Brock, the Ontario Hospital Association ("OHA") and countless others continue to exist. What we found most alarming, however, was that the Minister believes that his proposed amendments have substantially addressed the concerns of the OHA. Unfortunately, this perspective seems to have been accepted by the opposition and media who were present.

As a result, we believe that healthcare organizations and associations must urgently contact the Committee members, their local MPPs, the Minister and their association to convey their concerns.

We believe that the Ministry can realize its goal of achieving organizational accountability by entering into accountability agreements with the healthcare organizations. The application of sections 21, 22, 26 and 27 to the CEOs is both unnecessary and counterproductive.

The following are the highlights of the Minister's comments to the Committee and to the media about the "Accountability" part of the Bill, following his Committee appearance. The full body of his prepared text can be accessed at the Ministry's website.

Part III - Accountability

  • Bill 8 will entrench accountability as a sixth principle of medicare.
  • The accountability agreements will be negotiated.
  • The application of this Part of the Bill was admitted to be ambiguous. Part III is intended to apply to healthcare organizations (hospitals, community care access centres, long-term care facilities and independent health facilities), and their CEOs. This part of the Bill is not intended to apply to any of the other employees or professional staff of healthcare organizations. The Minister also emphasized on numerous occasions that the Bill is not intended to apply to unions.
  • In the ordinary course, the accountability agreements will be between the aforementioned healthcare organizations and the Minister (i.e., the CEO will not be required to sign). The boards will, in turn, enter into agreements with their respective CEOs.
  • CEOs are entrusted with great responsibilities. The CEOs are accountable to their boards, their community and the Ministry.
  • In exceptional circumstances, the Minister will reserve the right to enter into accountability agreements with the CEO (where the board fails to enforce the CEO's agreement) and to use the Minister's powers under sections 26 and 27 of the Bill. (Sections 26 and 27 allow the Minister to issue compliance directives and to unilaterally alter a CEO's employment agreement.)

Comments

When questioned aggressively by the media about the Bill's application to hospital CEOs (in particular, the application of sections 21, 22, 26 and 27), the Minister suggested that the media contact the OHA, as he believed that the OHA was pleased with their discussions with the Ministry on this issue.

We do not think that healthcare organizations should be pleased with the Ministry's proposed inconsequential amendments to Part III of the Bill. As long as the Minister, whether in extraordinary circumstances or not, maintains the legislative right to:

  1. require a healthcare organization's CEO to enter into an accountability agreement;
  2. issue compliance directives to the CEO; and/or
  3. materially alter the CEO's employment agreement, the same governance concerns that were previously raised by the OHA, Cassels Brock, and countless others still exist.

The Ministry's proposed fix to these concerns - that the CEO is not a signatory to the hospital accountability agreement, but is still subject to sections 21, 22, 26 and 27 of the Bill - does not make a substantive difference to the risks previously identified.

The risks include those cited in the British Columbia Auditor General's 2003 Report on performance agreements, which was previously cited in an OHA communication:

One is that the boards can be bypassed in strategic decision-making, becoming advisory boards rather than governing boards. Another is that the CEO will receive conflicting messages. A third risk is that the CEO will view his or her job as that of managing the board on behalf of the ministry, rather than reporting to the board.

We suggest that hospitals write letters identifying their concerns to members of the Committee, the President and Chair of the OHA, and their local MPPs, because as it stands now, it appears that the Committee and the Minister believe that the hospital industry is pleased with the proposed amendments to Part III. It is highly unlikely that the application of these sections to hospital CEOs will be deleted if the Minister and Committee continue to believe that the hospital industry is satisfied with his announced "concessions".

In addition, we have the following concerns about Part III of Bill 8:

  • Clarity. We fear there will not be enough certainty in the Bill about what results the accountability agreements are meant to achieve. As the B.C. Auditor General noted in its 2003 Report, if the Government intends to hold a hospital accountable for meeting specified performance goals, objectives and standards, the accountability agreement and the legislation must make it very clear who makes decisions, when decisions are to be jointly made, and how very sensitive or controversial decisions ought to be made.
  • Political Interference. The more control the Government has over hospitals and their CEOs, the more the spectre of political (partisan) interference is likely to arise in the day to day operations of a hospital. We believe that with the introduction of accountability agreements, the hospitals stakeholders are likely to perceive that the Minister and local MPPs have greater accountability and control over the operations of the hospital. As a result, the stakeholders are more likely to seek the help of their local MPP and the Minister in influencing decisions relating to the governance and management of the hospital. Contrary to the Minister's intention of making healthcare organizations more accountable to their communities, we believe the more likely outcome is that the organized stakeholders in the communities, rather than the members of the community, will be able to exert greater influence on the hospital's operations. In addition, further accountability to the community is lost because the Minister will be able to issue "compliance directives" without considering the "public interest" (section 9(11) Public Hospitals Act) or getting an order-in-council. What measures will be put in the Bill to ensure that the Minister acts in good faith and in the public interest when the Minister issues compliance directives? This is a concern which we believe the British Columbia Auditor highlighted, with his suggestion that performance agreements should provide for independent evaluations of health authority performance:
    Experience in other jurisdictions suggests that there is a need for independent evaluation and audit, especially when incentives and consequences are involved.

    Further, why is the Minister fixated on issuing directives to the CEO? The hospital can be made to comply with the Ministry's requirements via directives to the board, leaving the CEO free of dual accountability.
  • Government Agencies? Will Bill 8 turn hospitals into agencies of the Government? The 2003 Annual Report of Ontario's Provincial Auditor outlines when an organization becomes a "government reporting entity" ƒ{ when it does become a government reporting entity, the organization's bottom line is reflected in the Province's own financial statements. Currently, the SUCH sector (school boards, universities, colleges and hospitals) is not considered a "government reporting entity". There are several criteria that indicate when an organization becomes a government reporting entity ┬íV based largely on the power and control that the Government holds over the organization's assets and decision-makers. Bill 8 may tip the scales and result in hospitals becoming government reporting entities, a result that the Government itself is likely not eager to entertain. As a government reporting entity, a hospital would be subject to restrictive Management Board policies and guidelines.
  • Ministry Capacity. Another area of concern, also identified by the B.C. Auditor General's Report, is whether the Ministry has - or can recruit and attract - the kind of personnel who will be able to help the Ministry carry out its more hands-on role under Bill 8. For accountability agreements to be effective, the Ministry must be able to analyze and react to the issues that arise from the agreements. Bill 8 will create a great deal of potential new work at the Ministry level. Does the Ministry have this capacity? Can it afford to retain this capacity? Does it want to expand the healthcare bureaucracy or downsize it? Will the bureaucratic cost outweigh any related benefits?

Below are highlights of the Minister's comments about the other parts of the Bill:

Part 1 IV Ontario Health Authority Council

  • The Council will not be given the power to make recommendations to the Minister. The Council's mandate will be to measure the effectiveness of the Ontario healthcare system and to report on its performance:
    The Council would report to the people of Ontario about wait times for important procedures, for example cardiac care, and hip and knee replacements. The Council would monitor and test the effectiveness of the system through broader measures like population health status and the prevalence of serious and preventable diseases, such as diabetes. It would track rates of physical activity, obesity and smoking.

    The Government will then be accountable to the public by having to demonstrate, year after year, improvement in the healthcare system based on these objective indicators.
  • The Council will report through the Minister, not the legislature.
  • The Minister cited the Council as one of at least three examples in the Bill that demonstrates that the Bill will also hold the Government accountable for the performance of the healthcare system in the Province.
  • Community representatives and not stakeholder groups should be appointed to the Council.


Comments

  • We believe that an independent Council reporting to the legislature would be much more likely to hold the Government accountable than a Council that reports to the Minister.
  • Currently, the only stakeholder groups excluded from the Council are stakeholder groups that represent the board or senior administrators of health service organizations.

Part 2 IV Health Services Accessibility

  • This part of the Bill is intended to strengthen the ban on two-tier medicine.
  • Hospitals will continue to be able to provide diagnostic services to "non-insured" persons (WSIB, non-insured persons, third party request).
  • Bill 8 will be subject to Bill 31 IV Health Information Protection Act, 2003. As such, any provisions granting the Minister the right to collect personal information will be removed.
  • The introduction of regulations under Bill 8 will be subject to the same 60-day consultative process as contemplated in Bill 31.
  • The penalty provisions are too harsh and will be reduced.

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