Insights August 2011

Will Falk Comments on John Ronson’s essay “LHINs at Five years – What Now?

Will Falk

Is structural change needed for our healthcare system to be sustainable? Does devolution of responsibility require a regionalized system? Have we seen the promised benefits of devolution and regionalization? Or is it just a distraction to real transformative change? We have two great learning examples in Canada:

  • Alberta which restructures constantly, often with little discussion; and
  • Ontario which discusses endlessly and actually restructures very little.

In 1994, the Alberta Government enacted the Regional Health Authority Act, which established seventeen Regional Health Authorities within the province. These Health Authorities took the place of hospital and organizational boards in hope that the system would become fully horizontally and vertically integrated. Alberta had some success in reducing patient days and beds (horizontal integration) using this method but less success than the un-regionalized system in Ontario.

In 2003, the number of authorities was changed again to nine (along with a cancer agency and a mental and addictions agency). These Regional authorities were well run if sometimes judged as expensive by their peers in other provinces. They did continue to deliver some consolidations of hospital capacity and started on the path towards vertical integration across the continuum of care — although the evidence of success was mainly anecdotal. Then in 2008 all the authorities were scrapped and replaced with a single super board — Alberta Health Services Board. There followed some odd media stories as the new CEO came under intense scrutiny and now super board is in the process of creating regional management teams. And so it continues.

To outside observers, it is clear that this constant structural interference has resulted in the politicization of health decision-making and constant, sometimes pointless restructuring. Alberta has done no better than other province on any meaningful measure, worse on some, and is consistently judged to be among the most expensive of our provincial health systems. With the intermediate layers all having been replaced by appointed technocrats, health system accountability rests squarely on the desks of the Premier and his health Minister.

Ontario took quite a different path. Indeed, before the debacle of the past few years in Alberta, it was quite common to hear policy discussions in which Ontario was the butt of jokes. Horizontal integration was accomplished (well) by the Sinclair Commission and “Hospital Restructuring” without the need for a devolved governance structure. The Boards were sometimes told what to do but they were not disbanded.

To achieve vertical integration across the care continuum, the Ministry in Ontario invented Local Health Integration Networks (LHINs) in 2006. The LHINs saved some money by allowing the decommissioning of two previous bureaucracies – the District Health Councils and the Ministry Regional Offices. Taken in total, the Ministry probably held constant total headcount and streamlined processes.

The intent was to shift the focus from institutional to patient centred care, by grouping providers into LHINs. The LHINs create a place where health system providers can come together with Ministry officials hosted by a local geographically-focused team that tries to keep the community’s interests in the forefront. They could be considered successful planners once one realizes clearly that they are not “the health system”, nor even purchasers of services, but rather a commentary and planning arm that serves as an interest broker between the MOHLTC, the community, and providers.

Given very limited salary levels and resources, they have difficulty doing comprehensive reviews of even high level planning given the complexity of the situations they “manage”. They have an impossibly large number of impossibly complex business plans to review for completeness annually. They are unable to comment meaningfully, aggregate to a health system level and respond to myriad requests from the Ministry. In fact, some LHINs, such as Champlain, have done a remarkably good job balancing priorities and being a force for positive change given their limited resource base.

The current debate underway in policy circles about governance was started by a series of articles by John Ronson for Longwoods about the LHINs at Five years – What Now?

Before talking about what comes next and whether we want to replace hospital boards with some newfangled integrated structure, perhaps we should consider the downsides and what we will give up when we remove these well-functioning community-based volunteers from our health system.

Regional Authorities in Alberta worked for two decades before they failed spectacularly. And they failed for the most simple of reasons. The Premier thought he was in charge of the health care system. In a period of 90 days, Ed Stelmach’s government took a well-functioning regional healthcare system and centralized it. They took strong, seasoned executives and walked them out the door. They decreed that all hospitals would report to one board and one executive team. In essence, the most conservative province in the country established a command and control centralized system that looks a lot like the NHS did before Thatcherite reform. There are many theories about what the motivation was for doing this, but they are all beside the point. The key point is that some premier at some point in time was going to try something like this. 

Edmund Burke at the time of the French Revolution pointed out that legislators always have trouble respecting the executive authorities that they create. Stated positively, the informal constitution that empowers an executive authority also provides stability and a foundation. Successful institutions have years of history and investment by the Sisters of St. Joseph, the Grey Nuns, the local Jewish community, a strong women’s advocacy group, or even just the local community at large. They create a stable unwritten constitution of executive power that works along with the formal legislative framework. 

These community interests feel ownership and pride in their institutions and they raise significant funds. And when an issue arises these “owners” are respected even by the most senior of government officials. When the Archbishop, Gerry and Heather, or the bank presidents call the Premier about “their” hospital the call gets returned. And all system players know this. They and the executive teams that report to them provide what ex-OHA President Tom Closson has called “intermediate governance”. Boards provide sober second thought that is less influenced by political whims and provide the muscle for philanthropy.

This may be frustrating for politicians when they want a policy that they consider obviously good (like moving minor surgeries out of hospitals and into ambulatory centres!) but it also means that a legislative majority does not entitle a Premier to wreck his health system in 90 days as was done in Alberta. The ability for central planning idealists to radically restructure a system is a powerful tool that’s hard to put down. Once used, it invites re-use. And as a result, hospital executives begin to respond as if the premier is their boss. This results in a wholesale politicization of the system. This road leads to central planning and to the devaluing of initiative and entrepreneurial spirit. In a high tech, fast-paced industry like healthcare, this is a road to ruin.

If we believe that form follows function, then how do we manage structural governance so that it promotes rather than hampers the achievement of established goals for system reform? In both Alberta and Ontario, structural discussions have actually prevented the creation of facilitated networks by firming up and locking in place the very turf battles they sought to prevent. Like Burke, we are left with a fundamental conservatism in terms of structure and a need to question whether structural answers are actually helping us solve the fundamental questions. Perhaps ineffective regional governance is the best we can hope for.

Click here for part two.

About the Author(s)

Will Falk (@willfalk) is an Executive Fellow in Residence, Mowat Centre for Policy Innovation, School of Public Policy & Governance and Adjunct Professor, Rotman School of Management, University of Toronto.

For recent articles and speeches click here.


John Ronson's original essay started quite a debate. Follow it here:

John Ronson responds: LHINS at 5 Years – Further Thoughts 


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