Savings that cost more

Pointing out potential savings in health care is always fraught with danger.

We’ve dramatically reduced hospital beds under the assumption that savings could be had by moving more services into the community.

Now we have overcrowded hospitals and a stubborn wait times problem that prompted a significant influx of cash from both the Federal and Provincial governments.

The Health Restructuring Commission realized that it would be better if the mentally ill were taken out of institutions and placed in community-based care. Now all our psychiatric hospitals are jammed, the justice system is seeing a significant impact in its courts and corrections, waits are embarrassingly long – especially for youth — and agencies are struggling to keep up.

Mike Harris cleaved lab services in two, giving community-based work to the private lab companies. Now the cost of sending tests to these private labs are much higher than if they had been performed in a hospital. Meanwhile hospital labs have been undermined by the withdrawal of funding that previously paid for such community-based work.

Rethermalized food was sold as a way to save money for hospitals. Now hospitals are moving away from it (with the exception of South Grey Bruce Health Centre) after realizing it negatively impacts the patient’s experience and does not contribute to wellness. Nor does it set a good example for how individuals should eat when they get out of hospital.

Seems every time a savings idea comes up, we end up either paying more in cash or the idea results in a decline in services.

The Mowat Centre’s Will Falk points out in today’s Toronto Star that much of the advantage new technology has brought to the system is not being realized because of out-of-date fee schedules between the doctors and the province.

There is no question that compensation for doctors is extremely uneven. Falk points out that cataract surgery that used to take an hour can now be done in 15 minutes, yet ophthalmologists receive the same amount to do so – about $420, or $28 a minute.

This has led to vast discrepancies in how doctors are compensated with ophthalmologists as the poster-children for this inequity.

In the last agreement with the Ontario Medical Association, there was a modest adjustment made. Under the agreement, overall, doctors will receive an increase of 4.25 per cent in 2011 – the last year of the agreement. Only half that amount will be distributed across the board. The other half will go to adjustments to doctors who have been undercompensated by the system – or what the contract describes as “relativity.” The agreement does nothing to address those who can earn in excess of a $1 million per year largely based on the advent of technology paid for by the public.

Falk suggests its time to check the bill, as we would in a restaurant. However, given the results of past governments who have elected to battle doctors, there may be more than a little reluctance to take this on.

What is more worrying is how much would be cut from hospitals, in the anticipation of savings coming, if such a revised agreement were possible.

After all, we do live in the province of cut first, ask questions later.


As an interesting footnote to this story, it was also reported this week that a new batch of patent expirations will lead to considerable savings on drug costs.

The Toronto Star reported August 3 that Ontario should save $2 billion over the next three years as 44 medications come off patent.

Drugs account for about 10 per cent of the province’s $47 billion public health care budget. This should also have a significant impact on private drug plans.

Seems the “sky is falling” scenario Don Drummond and others have been pounding is looking more and more ridiculous. As Dr. Michael Rachlis has pointed out, if the doomsayers couldn’t get their projections right for this year, how credible is their 20-year forecasts?

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