Remember that warm and fuzzy ad campaign depicting doctors in white coats, sporting stethoscopes and smiles?

Doctors aren’t smiling any more.

That feel-good branding exercise, part of a year-long charm offensive by the Ontario Medical Association just ahead of fee negotiations, has faded from bus shelters. Now, doctors find themselves sheltering from a perfect storm that is branding them as the fall guys.

It’s not just the governing Liberals taking a hard line, but the opposition Tories demanding a blanket freeze and New Democrats wanting to make the rich pay. With public servants taking a hit, the healing profession is feeling everyone’s fiscal pain.

This time, the writing was on the wall before both sides even sat down at the table. Cabinet approved its final negotiating “mandate” in February for doctors — and teachers: No spending increases.

Doctors are paid about $11 billion; factor in teachers and other public servants with contracts up for renewal, and about $25 billion is at stake in negotiations this year — nearly one-quarter of total government spending. That’s why retreat is unlikely, lest the government’s deficit-reducing fiscal plan crumble.

Read more:How Ontario’s doctors get paid

Outgunned, the OMA deployed a secret weapon of its own: It hired the government’s guy.

As deputy minister of health in the last negotiations, Ron Sapsford helped craft the government line. After leaving in the wake of the eHealth scandal, he joined the OMA, rising to CEO last year.

Sapsford has changed chairs, but times have also changed.

Last time, the government was flush with cash and keen to win OMA support in a highly politicized drive to reduce surgical wait times and increase the supply of family physicians.

This time, doctors can’t complain of falling behind: payments have increased by 75 per cent since the Liberals took power in 2003. They remain the best-paid in the country (despite quibbling from the OMA and others, the data suggest our docs are tops when all payments are included for 2011).

This time, threats of another brain drain are contradicted by the quiet return of émigré doctors from the once-promised land of America, describing how private insurers won’t authorize treatments, patients don’t pay their bills, and malpractice premiums are punishing. Also, medical school slots have recently doubled with a clutch of new schools across Ontario, plus a surge in foreign-trained doctors.

This time, technological advances have bolstered the government’s case for fee reductions. Exhibit A is cataract surgery, which takes 15 minutes today compared to two hours in the past.

This time, expert opinion — and a strong all-party political consensus — is pushing to reallocate spending to long-term care and home care, freeing up acute care beds.

And this time, the government is being goaded by outside experts to hang tough. In his high-profile reported last February on public spending, economist Don Drummond warned, “Aggressively negotiate with the Ontario Medical Association for the next agreement.” In his annual report, Auditor General Jim McCarter complained that Ontario may not be getting value for money from special incentives for doctors.

Against that backdrop, Sapsford hasn’t been able to deliver any medical miracles for the doctors he once bargained against, but now bargains on behalf of. In frustration, the OMA walked away from the table last month.

Sapsford also faces a formidable opponent in Deb Matthews, the health minister whom he served for a few months before taking his leave. Matthews is not above demonizing doctors in public. She has artfully sugar-coated the freeze, which in reality amounts to cuts for some (since more than 550 new doctors every year will compete for that fixed pie).

Last week, Matthews went ahead with nearly 40 unilateral fee changes that achieved most of the government’s targets for this year. Now, she is inviting them back to the table to address the unfinished business for the next three years.

As for Sapsford, his OMA sought a private meeting with Premier Dalton McGuinty. But it was seen as an end-run around Matthews, his former boss. In the end game, the meeting never materialized.

And doctors aren’t smiling any more.

< http://www.thestar.com/news/canada/politics/article/1177718–cohn-why-ontario-s-doctors-won-t-win-fight-on-fees >

Ontario’s doctors complain of being “deceived” by the Liberal government after several hundred fees paid for services were slashed to save $338.3 million this year.

Health Minister Deb Matthews announced Monday there would be 37 changes to the OHIP fee schedule, targeting hundreds of services provided by cardiologists, radiologists and ophthalmologists.

The doctors claim this will mean longer waits in emergency wards and for test results — and warn that patients could expect a harder time finding a family doctor or a specialist because of fewer physicians.

“Our doctors are the best paid in Canada,” said Matthews, whose gambit comes as the province’s bitter negotiations with the Ontario Medical Association, which represents 25,000 doctors, have stalled.

“Instead of another raise for doctors, we need a real wage freeze so we can invest in more home care,” she told a press conference at Toronto Rehab, a continuing-care hospital. “I was left with no choice.”

Dr. Doug Weir, the new president of the OMA, accused Matthews of not negotiating fairly because she has not moved from her initial bargaining stance yet now wants to slash $1 billion in fees and programs.

“Where I come from, holding your breath until you get what you want is not negotiating,” said Weir, who was on his first day on the job. “This is not a wage freeze, it is a cut.”

Matthews argues the OMA is looking for a $700 million boost and what is the equivalent of a 5 per cent raise for physicians, which works out to about $20,000 per doctor.

The OMA says this is false; they will take a two-year fee freeze and help find another $250 million in savings.

Weir, a Toronto child psychiatrist, said it is clear the government never had any intention of really negotiating with Ontario’s doctors.

“We have been deceived. In doing so, they have chosen confrontation over collaboration.”

The OMA has launched a $1.5 million print, radio, TV and online advertisement campaign in an attempt to arouse public sympathy.

While the doctors have promised not to stage a job action, such as a strike or working to rule, Weir predicted patients would feel the pain of the changes.

“Patients in Ontario, particularly seniors, will suffer from reduced access to medical care for blinding conditions like macular degeneration, glaucoma and diabetes,” he said, adding ultrasound and mammography waits could return to levels not seen for decades.

The changes, which affect several hundred of the 4,500 OHIP services, were filed Monday and are retroactive to April 1, said Matthews.

Insisting that she is choosing “seniors over specialists,” the minister stressed she still wants to work with doctors to hammer out an agreement.

“Our budget was explicit; we were looking for a real wage freeze. This comes as no surprise to doctors. I am hoping they will now come back to the table so we can continue to work.”

Weir’s predecessor, Dr. Stewart Kennedy, angrily denied on Friday that all the doctors want is a raise. They say this is a fight about the future of the health system as the boomer population rapidly greys and demands more services.

With 407 specialists billing OHIP more than $1 million each a year, the Liberals believe vast savings can, and must, be found as the province faces a $15-billion deficit.

Conciliation, first refused by the government but pushed for by the doctors, was agreed to late Friday. However, the Health Ministry placed a 48-hour time limit on talks, saying the OMA had until only Sunday night.

The doctors would not accept this, saying they would talk to Matthews about conciliation Monday.

She responded by regulating fees.

Payments for cataract surgeries will be cut to $397.75 from $441 — surgeries that took two hours in the 1980s now take 15 minutes, thanks to technological improvements. Fees for eye injections for retinal diseases will be cut to $90 from $189 over four years.

“Specialties have seen tremendous windfall profits because of enhanced technology. We need to share in some of those productivity changes. It is only appropriate we update fees to reflect reality,” said Matthews.

In some specialties, new technologies have boosted doctors’ pay to $700,000 a year on average, she said.

Payments for 250 different diagnostic radiology tests, such as X-rays, CT/MRI scans and ultrasound will be reduced by 11 per cent over four years.

Self-referrals — the practice of doctors referring patients back to themselves for additional procedures — will be curbed. Currently $88 million is spent on that, but the government wants that reduced to $44 million.

Matthews noted doctors’ pay has risen an average of 75 per cent since the Liberals were elected in 2003 — from $220,000 to $385,000.

Progressive Conservative Leader Tim Hudak supported her move to impose the fee cuts and to freeze the total compensation package for doctors because “something has to happen.”

But Hudak said he’d go further by introducing a bill soon to impose a mandatory wage freeze on all public-sector workers with “no exceptions, no special deals” instead of waiting for wage freezes to be negotiated.

Premier Dalton McGuinty told Hudak that wage freeze legislation is too provocative, saying “we’re not going out there looking for a fight.”

NDP Leader Andrea Horwath chastised the government for taking the “my way or the highway” approach and not engaging the doctors in a more meaningful dialogue.

“The patients have become the ping pong ball in this high-stakes game.”

With files from Rob Ferguson

• Fee per service for any combination of retinal disease or glaucoma will be reduced to $25 from $63, and service will be limited to four times a year.

• Fees for anesthesia for conscious sedation (colonoscopies, cataracts, etc.) will be reduced to a combined fee of about $60 from $120.

• Electrocardiogram fees are being reduced to $4.95 from $9.90.

• Complete colonoscopy fee is being reduced to $197 from $218.90.

• Payments for cataract surgeries will be cut to $397.75 from $441.

• Fees for eye injections for retinal diseases will be cut to $90 from $189, over four years.

< http://www.thestar.com/news/canada/politics/article/1174205–deb-matthews-slashes-fees-for-ohip-services-to-save-338-million >

The Ontario government has reached its first test in its efforts to curb compensation costs — negotiations with the Ontario Medical Association over physician pay.

The OMA claims that a fee cut will increase wait times. The province’s position is that not raising fees given the budget situation is both necessary and reasonable. A few decades ago, policy-makers were worried that physician compensation in Ontario was out of step with our competition and that we would lose doctors to the U.S. or other jurisdictions that might court our highly trained medical workforce. Policy-makers continue to be concerned about physician compensation being out of step, but this time, in the other direction. Have times changed in Canada relative to the rest of the world? How does physician compensation pay in Canada compare to doctors in other countries?

Comparing doctor salaries across countries can be misleading as the cost of living often differs a lot between countries. Two ways to think about comparing compensation are: 1) converting currencies so that a dollar basically buys the same amount of goods in each (this method is called purchasing power parity or PPP) and 2) compare doctors’ salaries to the average wage earned in that country. Policy analysts use both of these.

A recent paper put out by the OECD suggests that in 2004 Canadian GPs were paid about the same in PPP dollars as doctors in Switzerland and Austria, but less than those in the U.S., U.K. and Germany. Using the comparison to average wages, however, Canadian GPs are among the highest paid in the OECD, just below the United States (3.2 times the average wage versus 3.4 in the U.S.).

Among specialists, Canadian specialists were again among the highest paid in 2004, at almost five times the average salary, although far behind those of the United States, which was 50 per cent higher. There has been substantial growth since these comparisons were recorded in 2004. Over the last 10 years, according to the Canadian Institute for Health Information, physician compensation in Canada has basically doubled.

Canada, as well as every other country in the OECD, has costs that are much lower than those in the United States. So saying that our costs are much lower than theirs doesn’t mean much in the global context. Comparisons with the U.K., however, are potentially more interesting. According to a recent study, while overall health-care spending is much higher in Canada per capita than in the U.K. ($4,079 U.S. versus $3,129 U.S. in 2008), GP physician salaries are considerably lower after expenses ($125,101 U.S. versus $159,000 U.S.). The gap for orthopedic surgeons between Canada and the U.K. is even greater. So the U.K. manages to pay its doctors more while spending less overall. On the other hand, Canada has far fewer physicians per capita than most OECD countries. We’re on par with the U.K. and the U.S. (around 2.4 per thousand in both countries) but below Germany, France, Italy and Spain (3.5 per thousand on average).

How should we think about the relationship between spending on physicians and wait times? It’s difficult to draw absolute conclusions from these spending and price comparisons, but here is what the research reports: countries that spend more tend to report lower wait times. This is perhaps not surprising. Beyond spending more, targeting funds at reducing wait times through activity-based funding is correlated with reduced wait times. Included in this is increased compensation for what physicians do (fee for service) when what they do is aligned with the goals of reducing wait times in specific areas. Simply increasing funding does not. There is little evidence on the relationship between doctors’ salaries and wait times.

Comparing Canada’s doctors with those in other OECD countries suggests that our doctors are paid relatively well compared to most, but less than those in both the U.S. and the U.K. That said, the U.K. manages to spend much less overall than Canada does and, recently at least, fares better in international wait time comparisons. Simply spending more doesn’t seem to solve the wait time problem, but targeted spending on agreed upon targets that increases productivity appears to deliver better results than across-the-board increases to any part of the health-care system.

Mark Stabile is director of the School of Public Policy and Governance and a professor at the Rotman School of Management, U of T.

< http://www.thestar.com/opinion/editorialopinion/article/1172109–paying-doctors-and-wait-times-how-does-canada-compare >

One of the country’s biggest labour contracts – the deal between the Ontario Medical Association and the province that is worth more than $8-billion annually – expires on March 31.

The government of Premier Dalton McGuinty has stated clearly that it wants to freeze spending on physicians for at least two years.

So why no outcry over the prospect of 0, 0? Why aren’t doctors threatening picket lines and calling in sick en masse to press their demands like other labour unions?

There are a few reasons.

The OMA is not your typical union. It is, without a doubt, the single most powerful interest group in the province. It has a cozy relationship with the Ministry of Health (and the government more generally), so it doesn’t need to resort public displays of displeasure.

In its last deal, the OMA did well, squeezing 12.5 per cent in pay increases out of the government over four years – 3, 2, 2 and 4.5 per cent annually from 2008 to 2012.

The method of payment has also changed for many doctors in recent years, so for many, wages increased beyond the negotiated hikes. Ontario doctors were making, on average, $100,000 more in 2010 than in 2005, according to a recent report by the Institute for Clinical Evaluative Sciences. (The average gross pay for Ontario physicians is $335,000, though that varies a lot by specialty and, of course, many doctors have overhead costs.) Negotiators for the doctors know better than anyone that limiting physician costs is a lot easier said than done.

Very few doctors get a set salary that can be frozen. Rather, they can be paid on a fee-for-service basis, or alternative fee arrangements, which can include a mix of fee-for-service (with the fees established in a master agreement), salary (for teaching students, for example), capitation (a set fee per patient) and bonuses for achieving targets.

About 70 per cent of Ontario doctors now receive some level of alternative funding but, over all, 70 per cent of their earnings come from fee-for-service billings. In the recent report of the Commission on the Reform of Ontario’s Public Services, Don Drummond said this equation should be flipped so that doctors receive 30 per cent of their pay via fee-for-service. Otherwise, it’s virtually impossible to control costs. Outside hospitals, there are few restrictions on billing: The more acts doctors carry out, or the more procedures they perform, the more they are paid.

These payments rarely, if ever, go down, individually or collectively. In Ontario, physician costs were $3.7-billion in 1992; today they are $8-billion and counting.

Overall physician costs – which account for about 20 per cent of the provincial health budget – depend on the number of physicians, not just individual payments. Since the last time governments attempted to cut costs due to recessionary pressures (in the early 90s), the numbers of doctors, and payments to same, have risen steadily.

There are 5,000 more doctors in Ontario today than a decade ago – 26,000 in total. Canadian physicians practicing in the U.S. are returning in record numbers. Enrollment in medical schools is at an all-time high. (Upon graduation, every new physician gets a billing number.) Provincial medical associations also play a constant game of one-upmanship, arguing that they need to increase wages or risk losing doctors to other jurisdictions. Ontario’s doctors are now the best paid in the country, according to the recent Drummond report. The OMA has disputed that, arguing that Ontario doctors are actually the 7th best paid in Canada.

Finally, let’s not forget that what we pay doctors is just a small part of physicians’ financial impact on the system. Doctors control access to hospitals, to prescription drugs and to tests. Yet we place virtually no responsibility on them for controlling these enormous costs. As a result, there is virtually no gatekeeper function.

It’s hard to imagine how it will be possible to keep costs contained in those circumstances.

So what is to be done?

You can take some showy measures like capping salaries – for example, forcing doctors to forfeit 25 per cent of the first $50,000 over the cap, 50 per cent of the next $50,000 and so on. Ontario used this approach until 2005 but it was ineffective. The result was docs “capping out” after six or nine months, and then no longer providing services or going to practice in another jurisdiction for part of the year.

You can try revamping the fee schedule but, at 812 pages, that’s a long-term job, and it still doesn’t address the fundamental problem of paying for piecework disconnected from outcomes.

Aiming for a zero increase is actually the wrong starting point because it merely perpetuates the status quo. Restricting spending a couple of years and then doing catch-up increases when the economy improves – as the patterns always goes – resolves nothing.

If we want to get value for money for physicians’ services, we need to ask more basic questions than: “How much should we increase existing pay?”

Health policy analyst Steven Lewis stated the challenge succinctly in a recent essay published by Longwoods.com: “Are we paying doctors to do things, or accomplish goals?”

Right now we pay them to do things in a rather open-ended fashion. The reality is that our health system is almost entirely devoid of goals, even for what are arguably its most important employees: physicians.

If we want healthy citizens – as opposed to citizens who have ready access to sickness care – we need a profound philosophical shift in what we should expect from medical professionals. We need to reward and incent quality, not quantity.

Two weeks before the expiry of a contract is hardly the best time to tackle this sort of fundamental issue, but we can’t put off these big decisions much longer.

The long-term goal in doctor-government talks should not merely be holding the line on costs, but ensuring that we get better value for money and, ultimately, better care.

< http://www.theglobeandmail.com/life/health/new-health/andre-picard/how-do-we-control-physician-costs/article2374017/singlepage/#articlecontent >

Ontario is unveiling a radical change to the way it funds the province’s hospitals, tailoring their budgets to the number of patients they treat as well as the quality of service they provide.

The new funding formula will reward better-performing hospitals by giving them more money for treating patients more efficiently, according to health-care sources. It will also match funding to the population of a community as well as the age of people within that area, the sources said.

This will be good news for hospitals serving growing or elderly populations, which will receive more funding. But it is liable to be less positive for hospitals in smaller regions and rural Ontario, which could end up with less funding, the sources said.

Ontario is taking the lead with a patient-based funding model just as governments across Canada face aging populations that are driving up health-care costs. The pressure is particularly acute in Ontario, the country’s most populous province, where health care consumes 42 cents of every dollar in program spending.

Health Minister Deb Matthews will announce the new formula at Sunnybrook Health Sciences Centre on Monday. The Ontario government is doing away with the global hospital budgets that for decades have allocated funding evenly across the board. The new regime is expected to reshape the way spending priorities are set at a time when Ontario is grappling with a $16-billion deficit. It could spread to other provinces if successful.

The Ontario government’s so-called Health Based Allocation Model, or HBAM for short, will divert more money to hospitals in regions where the population is growing and aging and where health-care costs are often higher. Hospitals will also be in line for additional money, based on how effectively they treat patients.

Hospital executives said changing the way hospitals are funded is long overdue. Not only will the change likely slow down the pace of growth in spending, they said, it will improve overall quality by putting pressure on these institutions to operate more efficiently.

“Moving to a model where money follows the patient is the right thing to do,” Robert Howard, chief executive officer of St. Michael’s Hospital, said on Sunday.

Under the current regime, Ontario’s 150 hospitals received a funding increase of 1.5 per cent for the fiscal year ending March 31, 2012, bringing their total base funding to $16.9-billion.

Beginning on April 1, 40 per cent of a hospital’s budget will be based on HBAM in each of the next three years, the sources said. Just over half of a hospital’s budget will come from the traditional global model and another tranche of funding will be targeted for specific procedures, including hip and knee replacements and cataract surgeries.

One executive said hospitals have been planning for zero increases in the provincial budget, which will be tabled on March 27.

To prevent dramatic swings in a hospital’s budget as the sector makes the transition to the new system, the government will cap how much an institution’s funding can increase or decrease, said a hospital executive.

The new funding formula is the latest initiative by the McGuinty government to introduce incentives for hospitals to improve patient care. The pay packets of hospital executives are now linked to their progress in meeting quality-of-care targets, ranging from improving hand hygiene to freeing up beds by discharging patients earlier in the day. A portion of their compensation can be clawed back if the executives fail to meet the targets.

A portion of the funding for some larger teaching hospitals is based on pay-for-performance. Just under one-third of the funding for University Health Network, one of Canada’s largest operators, is based on performance because of the complexity of services offered by its four hospitals in Toronto.

The new HBAM funding formula for hospitals has been under discussion for several years. Hospital executives said they expect that mistakes will be made because designing a system that actually reflects what services a hospital is providing to patients is “incredibly complicated” because institutions will have to keep track of how much each clinical service costs.

“They’ve got to work out some kinks,” said one executive who asked not to be named.

< http://www.theglobeandmail.com/news/politics/ontario-hospital-funding-changes-to-favour-growing-communities/article2373232/ >

We’ve heard it from many quarters now: the fiscal sustainability of Canada’s health-care system is under threat as health expenditures are increasing faster than government revenues.

Rising health-care budgets are largely attributable to increased utilization of medical technologies, drugs and health human resources, as recent studies attest. (Population increase and aging also have some effect, but it’s smaller.) Also driving costs is an increasing burden of chronic disease, which includes conditions such as obesity, diabetes, hypertension, heart disease, stroke, cancer, mental health conditions, muscle and joint disease, and others.

The solution lies in nothing less than a transformation of our primary health-care system in Canada. We need to provide comprehensive, integrated, community-based services that will improve population health, reduce inequities, reduce health-care expenditures and contribute to the sustainability of our publicly funded health system.

One essential step toward this transformation would be a coordinated pan-Canadian effort to develop indicators and databases that will support accountability in health care and drive the required changes.

The truth is we already know how to reduce the burden of chronic disease.

Chronic diseases are to a large extent caused by the conditions under which we grow, live, learn, play, work and engage with each other and our communities. These include our food, physical activity, use of alcohol, drugs and tobacco, employment and working conditions, income, early development, education, housing and the environment.

While many of these factors lie within social, political and economic realms outside the health-care system, there is still much the health system can do to prevent and manage chronic disease and reduce its impact on the health of the population and health-care expenditures.

Move away from the old “business” model of health care:

The health-care system was designed long ago to attend to a high prevalence of acute, infectious disease rather than our current pattern where chronic conditions prevail.

The old business model provides poor service for people today with chronic conditions, particularly when there are several coexisting illnesses. As a result, the current primary care system is characterized by poor access and prolonged waits for patients, a lack of attachment to a provider, time-limited consultations and repeated, unnecessary clinic visits. It has become inefficient and wasteful of resources and hence is contributing to public and professional dissatisfaction and rising health expenditures.

There are a few fundamental changes that could significantly improve quality of care and reduce health-care costs.

Primary health-care organizations should serve a geographically defined population and provide comprehensive services that include health promotion, health protection, prevention and clinical care through integrated interprofessional teams.

These teams should include public health professionals, community care and social agencies as well as family physicians, nurses, nurse practitioners, pharmacists and many others. This may be best achieved through development of facilitated networks, and with aligned financial incentives that may include a blended payment model.

Electronic data systems, such as electronic health records and population data systems and quality improvement programs could also improve health efficiencies.

Finally, we need a governance structure that allows the people being served to have a voice in health quality improvements, and for providers to be accountable to those being served. It should also promote a culture that is focused on positive relationships between and among providers, patients and the community.

Time to develop common metrics:

But how can such a massive transformation be achieved?

The Harper government has announced that for the 2014 Health Accord, the Canada Health Transfer will continue (~ $30 billion per year) with an “escalator” of 6 per cent until 2017 (somewhat reduced after that). However, like the health agreements of governments past, there has been no mention of direct measures for accountability by the provinces to the federal government.

With no accountability in place, how can we be sure our opportunity for health system transformation won’t be missed?

The Harper government, through Health Minister Leona Aglukkaq, has offered a possible solution: the development of “common metrics.”

Such indicators, when supported by appropriate data, would enable tracking progress on the fundamental changes needed to transform our health system, and allow jurisdictions to make comparisons of system change related to service, and outcomes related to improved health and reduced inequities.

“What gets measured gets done,” in other words. But this will require resources and cooperation among the provinces.

Developing “metrics” may not sound sexy but it could be what improves accountability, performance and sustainability in Canada’s publicly funded health-care system.

John Millar is an expert adviser to EvidenceNetwork.ca, a non-partisan online resource designed to help journalists covering health policy issues in Canada. He is also clinical professor, School of Population and Public Health, University of British Columbia.

< http://www.thestar.com/opinion/editorialopinion/article/1146381–canadian-health-care-needs-a-massive-transformation >

Stephen Harper, it is said, has a compartmentalized view of federalism. Let Ottawa do what Ottawa should do; let the provinces do what they should do. Let each stay out of the other’s hair.

This description of Mr. Harper’s views resurfaced recently when, quite suddenly, his government told the provinces what money they would be getting in health-care transfers – 6 per cent for the next three years; in the range of 4 per cent thereafter.

Ottawa would not attach any conditions to the money. Provinces are “the ones who are responsible” for health care, Mr. Harper said. “They’re the ones who deliver the service,” he added. The federal diktat apparently underscored his compartmentalized view of federalism. But did it?

Leave the dollars aside and the predictable provincial whining that the dollars weren’t enough. The dollar figures are less important than the radical break the Harper government has made in health-care policy. By turning over money without asking for anything in return, the Harper government broke with 55 years of federal policy.

In 1957, Progressive Conservative prime minister John Diefenbaker (a Harper government icon – Conservative PMs Brian Mulroney, Kim Campbell and Joe Clark not being suitable for that role) agreed that Ottawa should pay half the costs of hospital construction. Federal money, in other words, would be targeted in a particular way to help build a health-care system.

Conservative or Liberal, every federal government since Diefenbaker has placed some conditions (or tried to) on federal transfers for health care. Federal governments wanted political profile, of course, for Ottawa’s money, but they also sensed that the public viewed health care as something “Canadian” that transcended provincial boundaries.

Ottawa was often frustrated, and sometimes even rebuffed, in applying conditions to the transfers. But federal governments felt, at a bare minimum, that provinces should somehow be “accountable” for the transferred money – if not directly to Ottawa, then at least to citizens. That is why successive federal governments harped on the word “accountability.” Indeed, Mr. Harper himself and his health minister were using that word right up to the weeks before the bombshell announcement.

Mr. Harper shared the old federal consensus when campaigning in 2004. In that election, Mr. Harper pledged that a Conservative government would assume all costs for catastrophic drug coverage for anyone over $5,000 per year. He also promised to build with the provinces a “national formulary” for drugs. The Conservatives budgeted $600-million to $800-million for these initiatives.

Mr. Harper insisted in 2004 that a Conservative government would insist on “accountability.” It would ensure performance indicators for timely access and quality. He went further: Conservatives would provide Canadians with a “list of common home-care services eligible for coverage.”

The Conservatives lost the 2004 election. The next year, in the 2005 election, Mr. Harper resumed proposing an active federal role in health care. As one of his party’s five core election promises, he pledged a Patient Wait Time Guarantee and allocated about $1-billion to that cause.

Any compartmentalized view of health care did not shape Mr. Harper’s thinking in his early years and later. Even in the last election campaign, Mr. Harper’s party promised to renew the Health Accord signed by prime minister Paul Martin and the premiers – that is, to renegotiate it with the provinces, including the goal of “better reporting from the provinces and territories to measure progress, and guarantees covering additional medically necessary procedures.”

The Harper government, elected with a majority in 2011, told the provinces without warning or negotiations in December what funds they would be getting. There was no “negotiation,” as Mr. Harper had promised during the campaign. There was no demand for greater “accountability.” The 2004-2005 campaign promises had been long forgotten about wait-time guarantees and catastrophic drug coverage.

For the first time, Ottawa would not even try to influence how provinces spent federal money. Ottawa would abandon the field, except for it constitutional responsibility to provide health care for veterans and aboriginals.

Politically, Mr. Harper’s radical departure gets health care off the agenda, since Ottawa will still be spending a lot. Politically, the departure also creates a vacuum that begs for another party to fill with a revised plan for federal action.

< http://www.theglobeandmail.com/news/opinions/jeffrey-simpson/ottawas-health-care-dollars-should-come-with-strings-attached/article2360557/ >

The government of Ontario recently received a comprehensive report from Don Drummond, former chief economist of TD Bank, on how to reduce the province’s $16-billion structural operating deficit.

The largest area of concern was, of course, healthcare costs. Ontario spends $44.8 billion per year on health care and it swallows 40 per cent of total spending. That said, Ontario actually pays a smaller percentage of its revenue towards health care than provinces such as Saskatchewan.

The reason Ontario has a problem, however, is that it doesn’t have high potash or oil prices to sustain bad public policy.

Many of the recommendations have been discussed previously in other reports. However, the discussion on physician reimbursement caught the attention of many observers, namely the Canadian Medical Association Journal and the Ontario Medical Association.

First, Drummond called for an immediate wage freeze for all physicians. Second, he suggests that physicians must be integrated into the rest of the health-care system. Currently, most physicians work as independent contractors.

Third, was a proposal that 70 per cent of physicians’ pay be on salary or capitation, with only 30 per cent reimbursed through fee for service. This is the opposite of what is in existence now.

The concept of fee for service led to his most controversial recommendation that “physician compensation, and especially performance pay, should be directly linked to positive health outcomes that are linked to strategic targets, rather than the number of interventions performed.”

In other words, reimbursement of the healthcare system should be reversed in order to focus on outcomes instead of process.

Health care is the only industry where you can directly or indirectly pay for a service without actually obtaining the desired outcome. This is contrary to how the real world operates with other goods and services. For example, when you hire an electrician, you wait for the lights to come on prior to providing payment. When you enter into a furniture store you don’t provide payment simply because someone assisted you. You exchange payment only when you have secured the new asset.

So what would happen if we asked health-care workers to receive payment only after successfully transferring a positive health outcome, such as the removal of a disease, reduction of pain, improved health status, or better quality of life?

During contract negotiations, we often hear how patients would die or suffer irreparable harm without the workers. However, if these services were that valuable, there should be no problem asking practitioners to receive payment only after a positive health outcome has been obtained.

The reality is no healthcare practitioner would agree to this form of reimbursement because there are too many non-medical determinants of health.

For example, can a doctor be held accountable for a patient not following a treatment plan or neglecting to take medications?

Should a practitioner be held responsible if a patient refuses to quit smoking, lose weight, exercise, change diet or limit alcohol consumption? Most importantly, would it be fair to hold a health-care worker to account for a patient’s social economic status, low income, poor education, unemployment, or housing insecurity?

< http://www.thestarphoenix.com/health/Time+clarify+health+care+hierarchy/6195428/story.html >

The prescription to fix Ontario’s health system may sound harsh — amalgamating hospitals, reducing the powers of doctors in policy decisions and empowering local health integration networks — but it may be necessary for patients, says the commission in charge of reforming public services.

Economist Don Drummond believes a 20-year plan — shepherded by a new health commission — is needed to achieve the 105 recommendations he says must happen to drive down out-of-control health spending costs.

“Everything needs to start with a clear road map,” Drummond said Wednesday.

Health-care spending is rising too fast and can’t continue this way, he said.

Ontario spent $44.8 billion on health in 2010-2011 and that is 40.3 per cent of its total spending on programs. Of that, operating hospitals accounted for 35 per cent of health care spending and 27 per cent went to doctors and practitioners.

If the pattern continues, Ontario’s health budget will rise to $62.5 billion by 2017-2018 for an average annual increase of 4.9 per cent from 2010. But it should be held at a 2.5 per cent increase.

Privatization is not on the table, he said.

“We were asked not to recommend privatizing health care,” Drummond said, adding that did not mean further involving the private sector.

To avoid short-term pain caused by quickly made policy decisions, Drummond feels the 20-year prescription needs to be followed.

The commission also calls for “aggressive” upcoming contract negotiations with the Ontario Medical Association, the body representing 25,000 doctors. Already, the Liberals have said they expect the doctors to settle for a 0 per cent increase. However, the OMA has not signalled it would accept zero.

“The health-care system is not really a system,” the commission writes. “What we have is a series of disjointed services in many silos.”

The recommendations include:

LHINS:

LHINS need to be beefed up with more funding and responsibility — not torn down as the Progressive Conservatives wish.

In theory, LHINs were created to allocate budges but in reality they do not do this and that must change, said Drummond. To do that, the 2,500 funded health agencies need to be streamlined into the networks. That includes hospital restructuring, which began in the mid-1990s, and reducing the all-powerful hospital boards.

The only exception to the regional rules should go to facilities serving everyone in the province such as the Hospital for Sick Children, Princess Margaret Hospital and the Centre for Addiction and Mental Health.

DOCTORS:

Ontario’s doctors are the best paid in the country so in the upcoming negotiations it is “reasonable” to set a goal of allowing no increase in compensation, the commission noted.

But decisions regarding medical procedures covered under OHIP are part of the compensation package negotiated by the government and the OMA and that shouldn’t be, said Drummond.

“Doctors should be consulted, but no more,” the report said.

DRUGS:

To handle skyrocketing drug costs Drummond has a number of ideas.

The Ontario Drug Benefit program, which covers almost all of the cost of prescription drugs for seniors and those on Ontario Works, should be linked more directly to income. This would allow for the “welfare wall” to be dismantled somewhat by covering the working poor.

A greater role should be given to the non-profit think-tank the Institute for Clinical Evaluative Sciences and Health Quality Ontario to conduct drug comparison tests so the province knows which medicine offers the best value and effect.

In order to drive drug costs down, Ontario should pursue with other provinces the possibility of setting a common price for pharmaceuticals.

COMPENSATION:

The pay for health and hospital CEOs and senior executives should be targeted to health outcomes and not the number of interventions performed.

High-level salaries should be reported publicly on a website.

PUBLIC HEALTH:

The 36 public health agencies should be folded into the LHINs. Public health should also be the sole responsibility of the provincial government. The current requirement that 25 per cent of the agencies receive funding from cities should be reviewed.

More money should be put in preventative health measures.

Drummond points out only 25 per cent of the population’s health outcomes are attributed to the health system. Yet only three-quarters of environmental factors that account for health outcomes such as education and income barely register in the health-care debate.

MENTAL HEALTH:

For too long, mental health and addiction costs have drained the system without being adequately addressed. Mental health costs are estimated at $39 billion annually and the ripple effects are felt in the justice, education and social services sectors.

Care is currently delivered through 10 ministries, 440 children’s agencies, 330 community mental health agencies and 150 substance abuse centres, the commission noted. There isn’t one body to coordinate care and that has to change, Drummond said.

< http://www.thestar.com/news/canada/politics/article/1131861–drummond-report-hospital-amalgamations-and-more-power-for-lhins-among-recommendations >

Facing continued criticisms about 10,000 people on waiting lists for home care, Health Minister Deb Matthews says changes are coming to get help to more people.

Industry observers complain too much money is going into administrative costs and not into front-line care for patients coming out of hospital, the elderly and infirm needing assistance in their homes.

Money from home care filters down from the health ministry to local health integration networks and then community-care access centres that handle requests for care from the public before funding gets to agencies with nurses, personal support workers and other staff providing services to patients.

“That’s four tiers of administration before a penny gets to the front-line workers,” Natalie Mehra of the Ontario Health Coalition said Friday.

Matthews said she is aware of the need for improvement in the services offered.

“We have some work to do at the community level to make sure we’re getting the best value for the money we spend,” Matthews acknowledged as former TD Bank economist Don Drummond prepares to release a massive report next Wednesday on restructuring government to cut costs.

Auditor General Jim McCarter took the government to task in his 2010 annual report for its $2 billion-a-year home-care system, which serves about 616,000 people annually and is intended to keep Ontarians out of hospitals and nursing homes, where care is more expensive.

McCarter found administrative and case management costs totalled 30 per cent of the home-care budget and that some areas of the province had twice as much money to spend per patient than others, which meant levels of service varied widely depending on where patients live.

< http://www.thestar.com/news/canada/politics/article/1129481–deb-matthews-help-coming-for-those-on-home-care-waiting-list >