Insights (Essays)

Insights (Essays) November 2011

Transforming Ontario’s healthcare system: To regionalize or not to regionalize: Ontario needs a different path to health and economic wellness

Lisa Purdy


When it comes to healthcare costs in Canada, the challenges facing the system are well documented.  Nationally, healthcare utilization is on the rise, with expenditures expected to grow to 11% of GDP. As population health needs continue to grow, Ontario plans to cut health expenditure growth in half over the next three years to address economic challenges in the province. The current equation doesn’t add up – growing need and reduced funding – so a new plan is needed for Ontario.

Healthcare providers face significant challenges as they work to address these economic realities without compromising quality of care. This is especially true when you take into account the rising incidence of chronic disease and an aging population. Admittedly, according to the 2011 Deloitte Consumer Health Survey, 70% of Ontarians are highly satisfied with the quality of care they receive. However, for those on the front-line trying to address patient needs, all is not well as individuals continue to face issues related to access, efficiency and available resources.  Further, consumer demands for increased involvement in their own health management remain largely unmet as current models don’t effectively engage the individual in their own health management.

At the same time, the system is plagued with long lead times before regional planning is having its desired effect, payment structures that frequently fail to link outcomes to investment, fragmentation among community-based providers that limits the system’s ability to effectively transition individuals out of high cost hospitals and, too often, an over-reliance on the wrong parties in the search for solutions. Rather than empowering citizens and engaging employers to help drive critical change, many continue to turn to government, hospitals and physicians for solutions to a collective problem.

Targeted change: a pragmatic path to sustainability

Fortunately, the news is not all bad. In fact, Ontario had laid a strong foundation for a sustainable healthcare system that features a strong reliance on evidence-based care, access to care across the continuum through a mixed service delivery model, a collaborative research culture, and a solid structure for public reporting. The key is to leverage these strengths to overcome systemic challenges without slowing the pace of system transformation or delaying necessary advancements in citizen experience, service innovation and economic stability.

Accomplishing this aim demands targeted responses rather than broad-based structural change. Regionalizing the health system through formalized structures devised along lines on a map has been tried and re-tried across the country. More often than not, without realizing the planned benefits. Ontario needs to learn from experiences across the country and focus on a targeted plan to address challenges without unnecessary delays resulting from macro structural changes.

The following five-part plan for health system transformation addresses this need, enabling stakeholders to evolve today’s health system to meet the future health and economic requirements of Ontarians.

  • Directing agencies and academic centres to drive change. Strong agencies and academic centres are ready and able to lead the change and can be used by government to accelerate system-wide improvements. Further, by aggregating today’s disparate coordinating bodies (LHINs and CCACs) into service brokers, we can speed progress towards affordable, integrated care. Service bundles that cross settings of care and professionals will ensure that individuals receive cost-effective care in the right setting and incent providers to collaborate across organizations.
  • Promoting quality improvement with a focus on increasing value and containing costs. A time-limited Funding Reform Commission can serve as the conduit to promote quality improvement and lead payment reform. Its mandate: reform payment structures and align incentives across providers and all health professionals – focusing funding on the patient rather than organizational silos. De-politicizing funding model development is a critical step in moving beyond historical models to models that put the patient at the centre and drive quality, not just lower unit costs during times of economic constraint.
  • Fostering innovation through integrated policy and legislation. System innovation needs to be unleashed through enabling legislation and regulation, rather than micro-managing management/operations. This includes integrating policy across health and social services to put citizens at the centre.
  • Aligning incentives and funding across primary, hospital and community services. With a focus on patient needs, funding should be based on population outcomes rather than organization or sector. This would shift the government’s funding philosophy to reflect both value delivered and total costs expended, while ensuring entities receive incremental funding linked to enhancing the patient experience or improving inter-entity collaboration. It would also drive integrated care through incentives rather than time-consuming structural change.
  • Going beyond the “usual suspects” for solutions. Citizen groups, social enterprise and employers will take service delivery and demand management models in a new direction. Focusing on demand-side influencers drives innovation and better leverages existing resources. The result: the health system evolves and becomes more reflective of the needs of those who use and fund it.

Building a sustainable future

Spending trends, consumer expectations, health outcomes and systemic barriers all point to a challenging future for Ontario’s healthcare system. Yet the province is well-positioned to embark on the next phase of its transformation journey. The key is to engage in targeted actions intended to achieve measurable and sustainable results.

By providing overarching direction, removing long-standing barriers, reforming funding, adopting integrated policy and collaborating with diverse entities to craft and deliver a solution, the government can undoubtedly enhance the health and economic wellness of the province.

Improvements can be achieved through evolutionary, rather than revolutionary, change. However, they cannot happen without a shared vision of the future—one that empowers today’s leaders to champion necessary changes and address core challenges on behalf of all Ontarians. As with any transformation project, working in isolation is bound to lead to failure. Working together, government, service providers, health professionals, businesses, community groups and citizens can build a stronger, sustainable healthcare system.

About the Author(s)

Lisa Purdy - Partner, National Health Industry Leader, Deloitte Inc. She can be reached at


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