Insights April 2019

Get it Right Ontario, The Rest of Canada is Watching

Dan Florizone


Amalgamating health authorities in Canada is a recurring trend. If you live in a Canadian province and have not recently experienced amalgamation, you are likely to soon. Or again. 

During the 1990s, provinces outside of Ontario brought almost all publicly funded health services together under single regional structures, including hospitals, long-term care homes, home care, emergency and community-based services. The last decade has seen further consolidation into even larger structures, including province-wide health authorities. Ontario’s decision to consolidate its regional Local Health Integration Networks is the latest in this trend – a move intended to reduce administrative costs and to streamline services. Many are wondering about the reasons and results for this and similar initiatives across Canada. 

Recent amalgamations in healthcare in Canada represent amongst the largest corporate mergers and have resulted in the largest corporations in Canada. For instance, for just over a year, Saskatchewan has had a provincial health authority with over 40,000 staff, 2,600 physicians, 270 facilities and a budget of $3.8 Billion. 

In the corporate world, amalgamations and mergers are primarily driven by economies of scale and economies of scope: the drive to do things more efficiently and the ability to do more things. In theory, a larger organization can achieve greater specialization, more standardization, and lower transactional costs. These same objectives have been particularly appealing in a public sector context. The caution however, is that larger public sector organizations can be more bureaucratic, less nimble, less flexible in responding to local needs, and stifling of new ideas, innovation and creativity. 

Even though healthcare structures have been changing for decades, our approach to healthcare administration in Canada has not fundamentally changed over the past century. Organizational approaches and structures still pre-date the Medicare introduced to Canada in the 1960s and we have not kept pace with the changing care needs of the population; episodic care needs, which have been the focus of healthcare services, are being eclipsed by chronic and complex care needs of individuals. With the more recent breakthroughs in medicine and technology, the resultant need for increased specialization and teamwork, and a trend away from institutionalized care, it is clear that a major rethink of how we organize healthcare is needed. Even the military, from whom our command and control structures were initially adopted, have made major modifications since the Great War. What we have preserved, they have either abandoned or modified. 

The initial impetus to amalgamate health organizations in Canada in the 1990s was to improve care by bringing a continuum of care providers together in the way patients experienced care, from community, to hospital, to longer term care. Beyond economies of scale and scope, newly integrated governance structures were intended to lead to a lower reliance on expensive institutions, investing instead in community and home-based alternatives, and in upstream prevention as opposed to, almost exclusively, downstream illness, or so the theory went. 

Unfortunately, and despite intent, organizational structures were scaled-up, siloes were pushed down and perpetuated, and those delivering care were even further disconnected, by hierarchy, from decision-making. It wasn’t that bringing these silos together was all wrong, but rather, penetration to the ground was incomplete, in that care was never fully integrated. And before initial system changes could be completed, further waves of reorganization took place. Bureaucracies grew, costs continued to rise, and worse yet, problems persisted at the point of care. As care delivery structures grew in complexity, health services became increasingly difficult to navigate and co-ordinate for patients and providers. Failing health system underwent further rounds of amalgamation, creating even larger structures; this cycle continues. 

I have to confess that in my own province of Saskatchewan, after moving from over 400 local authorities, to 32 health districts, and then to 12 health regions, I recommended moving to a single health authority. This may appear odd, given that my experience as president and CEO of the largest health region in Saskatchewan (Saskatoon) told me that we were already too large. My rationale was that a more modern approach, as an alternative to outmoded command and control structures, was not only possible but necessary to rebalance within a new organization. This rebalance needed to reflect the way patients truly experienced care, and with careful nurturing of innovation, new ideas and everyday improvements made by those actually delivering care each and every day. The benefits of scale and scope of the rebalance, the establishment of consistent provincial care standards, and the creation of teams dedicated to integration and improvement along the patient journey seemed clear. My other rationale was that moving to a single authority would end any further disruption brought about by future amalgamations. If we had moved to three, the impetus would be to move to one in future. My thinking was, one and done

My advice to Ontario? This time, we need to get it right. This time, we must: 

  • Define the problems that the reorganization is attempting to solve from the patient and provider perspective; 
  • Define the new organizational approach and management system based upon the clear intent to resolve the problems identified; 
  • Build the organization bottom up, not top down, by starting with the patient and the providers of care; and 
  • Be guided by a vision that reduces our reliance on expensive institutions, supports a shift to community-based services, and places an increased emphasis upstream on prevention of chronic illness, promotion of a healthy life and primary healthcare delivery. 

The real organizational breakthrough, though, is not possible through a scale shift alone, but rather a conceptual shift. We already know the issues with the health system – too expensive, too bureaucratic, too difficult to navigate, filled with waits and delays, inconsistent quality, mistake-prone, stifling to innovation and creativity, too institutional, poor communication, not well coordinated, the list goes on. Reorganization alone will not solve every or any problem, but the right approach and structure will support efforts to work in new and different ways – sourcing the potential solutions from and with hundreds of thousands of health workers, patients and their families, not just simply a select few policy makers, governors and administrators at the highest corporate level. 

It is time for Ontario to get it right – and share these learnings with the rest of Canada. 

About the Author(s)

Dan Florizone, Executive in Residence, Johnson-Shoyama School of Public Policy

Former President & CEO of Saskatoon Health Region, former Saskatchewan Deputy Minister of Health, former Saskatchewan Deputy Minister of Education, former Chairperson, Saskatchewan Health Quality Council.

Twitter @florizone_dan

Linkedin @Dan Florizone


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