This month’s provincial budget renews a pledge to eliminate Ontario’s $12.5-billion deficit in the next four years. The commitment ensures that healthcare, which accounts for almost half of provincial spending, will continue to be under the microscope and the search to make the system more efficient will continue.

The challenge is that much of the low-hanging fruit is gone. As a result of a singular focus on efficiency over the past several years, Ontario now has one of the most efficient healthcare systems in Canada, with the second lowest public healthcare spending per capita of all the provinces. Ontario’s public per-capita spending on health is only $3,952, just more than Quebec but almost 20 per cent or $1,000 per person less than Alberta. And the province has been very effective in containing the growth in healthcare costs. Among all provinces since 1996, Ontario has had the lowest rate of growth in per-capita spending on hospitals.

No doubt further efficiencies can be found in any system as large as Ontario’s, but the easy gains have been exhausted. There is simply less operational fat to cut. To find the savings needed to help balance the provincial budget and further improve care in the province, Ontario needs to change its focus from efficiency to appropriateness of care.

Data released last June by the Canadian Institute for Health Information (CIHI) showed not only that a seemingly unnecessarily high number of hysterectomies are being performed in Canada, but that there is a wide variation in the number of women receiving this invasive procedure depending on where they live — from 311 per 100,000 people in British Columbia to 512 per 100,000 in Prince Edward Island.

If you look deeper, you’ll find tremendous variations in hysterectomy rates within Ontario itself. According to the findings of a recent study by researchers at Hay Group, women in the Northeast Local Integrated Health Network (LHIN) with hospitals serving North Bay, Sault Ste. Marie, Sudbury, Timmins and their surrounding communities, are three times as likely to have hysterectomies as women living in Toronto.

Variations aren’t limited to hysterectomies. For example:

  • Fewer than two of every hundred patients who come to the emergency room with chest pain at Toronto East General are admitted to hospital. Not far down the road, at the Trillium Health Partners in Mississauga, five times as many, or 19 of every 100 patients who show up at the emergency room with chest pain are admitted.
  • If you live in Thunder Bay, you’re twice as likely to be admitted to an acute care hospital for a medical condition than if you live in Ottawa.
  • You are twice as likely to have cardiac surgery if you live in the Southeast LHIN, which includes communities such as Kingston, Belleville, Trenton, Picton, Brighton and Bancroft, than if you live in Toronto.
  • You are more than three times as likely to be hospitalized with Chronic Obstructive Pulmonary Disease (CODP) if you live in Peterborough than if you live in the Central LHIN, only 100 kilometres to the west, which includes Markham and other communities north of Toronto.
  • The list goes on. Even taking potential differences due to geography and socio-economic factors into account, the variation in surgeries and hospital utilization rates is surprising.

Even more surprising is that despite these significant variations, the provincial government’s hospital funding formula suggests that almost all LHINs in Ontario are within one per cent of “expected” Emergency Department and Acute Care utilization rates. In other words, according to the current funding formula, hospitals are operating as they should; the differences in use rates are to be expected.

It’s time to take another look at the province’s hospital funding formula to ensure that it is encouraging consistent, evidence-based approaches in the use of hospital services across the province.

Masking or ignoring and then funding the current significant and unwarranted variation in the use of hospital services is keeping us from addressing significant and possibly inappropriate variations in clinical practices.

It leaves us to continue focusing on increasingly elusive improvements in hospital operating efficiency rather than turning our attention to ensuring appropriate treatment, where we can both save money and improve the quality of healthcare.

About the Author

Mark Hundert is National Director of the Hay Group Health Care Consulting, Chris Helyar is Associate Director of the Hay Group and Tom Closson is former president and CEO of the Ontario Hospital Association.


This information was first presented at “Breakfast with the Chiefs”. This article version first appeared in the Toronto Star on July 22, 2014 and is republished here with the authors’ permission.