Insights (Essays)

Insights (Essays) March 2011

Reality Therapy for Healthcare Leaders

Ted Ball

I've been looking at Ontario polling data on healthcare issues for over 25 years, and I can tell you: not much has changed.

Ontarians love their healthcare system. They love their nurses. They love their doctors. They love their hospitals and their drug programs.

Ontarians say that they value our healthcare system so much, they would even agree to pay higher taxes to keep it. That is remarkable. But I don’t think it matters to the real world of the bottom-line. To be fair, Ontarians don’t have much of a grasp on the financial realities of the province. They can’t see what’s coming.

I have an Irish heritage. Like Ontarians, the Irish are a sweet and wonderful people. Had you conducted a public opinion poll and asked them a year ago about their take on the future, they too would have been blissfully optimistic. But today Ireland -- and now the whole UK – are experiencing an implosion of their healthcare delivery systems, due to the economic and fiscal realities that they face.

At the initial HOOPP Think Tank Conference in November, economist Don Drummond provided the group with what I would call “reality therapy” about our $18.7 billion provincial deficit – a cold water treatment that I think healthcare stakeholders are in urgent need of these days.

We ought to listen to Don Drummond. In a previous life, I served as Chief-of-Staff to Minister of Finance Larry Grossman in the Bill Davis Government. That’s where I learned my lessons about the “discipline of the marketplace”. Politicians can say lots of things in the run-up to an election, but the “discipline of the marketplace” always trumps political rhetoric in the longer term.

I was there at the Ministry of Finance when these nice men wearing $5,000 suits came to visit us from New York. They were from “Moody’s Investors’ Service” – the Bond Rating Agency.

There is nothing personal or political about their analysis of the province’s books. If you have a “structural deficit”, you simply go from a “Triple A” credit rating, to a “Double A”. But that little downgrading adds another billion a year in interest payments on the money that the Government of Ontario has borrowed on behalf of the taxpayers.

Of course, taxpayers don’t get anything more for an extra billion in taxes -- that’s just the cost of not dealing with a structural deficit in a timely fashion. That is the meaning of “the discipline of the marketplace”.

In the recent pre-election sparing between party leaders Dalton McGuinty and Tim Hudak, we’ve seen both parties make solemn commitments to “no cutbacks in healthcare”. That means both parties are deeply committed to the “status quo” in healthcare. So if there are any cuts that have to be made in provincial spending – as a number of us are predicting – they would have to be made on other public services: children services, poverty programs, education, day care, environmental protection, etc.

That is the bottom-line implication of the party leaders’ comments. If they actually did that, they would ignore the evidence of inefficiency and waste in the health system, and sacrifice all the other public services. But I don’t’ think we should bank on these pre-election comments. We have seen the public opinion polling in Ontario on health care issues. I don’t think our political parties seeking election will be explaining how they intend to change the system when they are looking at polls that say how much taxpayers value our healthcare system. They will simply say: “Elect us. We won’t change anything in healthcare.”

Some of you will be aware that I sometimes stick my neck out and predict the future – based on the trends that I can grasp, and my knowledge of the circumstances. For the most part, I’ve been fairly accurate on my “informed guesses” over the years.

My predication – in line with Don Drummond’s conclusions – is that after the election the hammer is going to fall.

Here is my take on the future: I believe that by the Spring Budget of 2012 – five months after the election in October 2011 – whoever forms the Government (Liberals or Tories) – will be required to reduce public sector expenditures by $10 billion to $12 billion overall. Healthcare sector expenditures would be reduced in this scenario by $6 billion over 2012-2015.

Call it a $2 billion a year reduction in net health sector spending for each of three years. Reallocations within the health spending envelope would also be significant as we shrink institutional care and expand community care and home care. But overall I believe it would be prudent to expect spending reductions of at least $6 billion of our $46 billion budget. That’s 13% -- just over 4% per year for three years.

How is that possible? How can we cut that much money out of our healthcare system?

There is a great deal of evidence that 30% of all of our current spending in the healthcare sector has no value -- so many believe that we can take out $6 billion in health system inefficiencies and unleveraged spending, without causing any harm.

More than that, healthcare reformers say that we could actually have better, higher-quality, more patient-focused services if the delivery system was fundamentally redesigned, realigned, transformed and incented to be more patient/client-focused. The evidence from health system reform efforts indicates that we could in fact get more and better services for less money -- if we engaged frontline service providers in the redesign efforts.

However, if the next government were to simply drain $6 billion out of the existing health sector’s organizational stovepipes, we would almost certainly destroy the system.

We’ve done that. Been there. The last time government required downsizing in the traditional health sector silos, we lost 6,000 nurses and experienced skyrocketing preventable deaths, infections and deterioration of quality across the system. We don’t want to repeat those mistakes ever again. We really don’t.

So how will we reconfigure the Ontario healthcare delivery system? That kind of high level question was emerging by the end of HOOPP’s first Think Tank Symposium last November. Participants were beginning to ask: How are we going to change the system?

A few weeks ago the OMA stepped forward with some positive ideas for reforming healthcare. Among the OMA’s recent ideas was the suggestion that many of the specialty clinics located in hospitals don’t really have to be in such high cost structures. They could be relocated in the community -- as independent health facilities.

This is the kind of “out-of-the-box thinking” that we will need to redesign and reconfigure our healthcare service delivery system. However, there are serious existing structural impediments to change – including the fact that we have lower wages and inadequate pensions in the community sector. Moving healthcare services from hospitals, to the community sector, would result an all-out war if front-line hospital workers were to lose their pensions and receive lower wages.

HOOPP’s CEO John Crocker stood up at the opening of the November Think Tank Symposium and said that “HOOPP believes that health care workers in the community deserve a decent pension.” In their communiqué to Minister of Health Deb Matthews, HOOPP suggests that “benefits should be standardized across the system to encourage easy mobility between the hospital and community sectors.” They say that “the portability of healthcare providers is essential to a truly high quality integrated system.”

In addition to pensions and benefits, we also need to address wages. “A nurse, is a nurse, is a nurse” ought to be the core principle. RN’s should get the same pay, no matter what the setting they practice in. Yes, there can be higher pay grades for training, complexity and specialized skills, but we need to achieve equalization of pay between the sectors. So if we need to remove $6 billion in system inefficiencies over three years – we ought to make it $7 or $8 billion -- and invest a billion or two back into the delivery system to equalize wages & pension benefits to remove the existing structural impediments to health system reform.

Rather than dismantle the existing health service delivery system (which we could end up doing if we don’t have a plan before the Spring of 2012), the next Government of Ontario will have the opportunity to reconfigure the healthcare delivery system so that we have:

  • Better, safer, higher-quality and more accessible services;
  • A system that is more patient/client-focused -- with seamless services across the continuum of care;
  • A much closer integration of health and health-related social services; and,
  • With a major emphasis on patient/client/people-centred care – and with aligned incentives that reward good performance.

But we won’t get there, unless we remove the structural barriers and prepare for fundamental change. What do you think? How do you think we ought to redesign and reconfigure the existing system?

Since the politicians can’t tell us the truth (the prevailing wisdom is: “elections are no time to discuss important public policies”), perhaps it is time for healthcare system leaders to rise above our petty self-interests to look at how we could transform and reconfigure our delivery system to achieve real improvements.

If community boards of governance truly exist to represent the best interests of the “owners” – who are the people of their community, and the taxpayers of Ontario -- they should be initiating such dialogues within their organizations, and between the organizations in their LHIN.

Can the healthcare system generate their best thinking about how the delivery system should evolve? We have much to draw upon from our “lessons learned” from the past. But it really all starts with leadership.


Notes for a presentation by Ted Ball presented at a recent conference hosted by HOOPP - Healthcare of Ontario Pension Plan. Mr. Ball can be reached at


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