Tag Archives: Don Drummond

Drummond tips hat on health care – calls for more private delivery of public health care

While we are still waiting for the Drummond Commission report on the Reform of Public Services in Ontario, Don Drummond himself is giving broad hints at what may be ahead for health care.

The latest is a November 17 paper published by the C.D. Howe Institute: Therapy or Surgery? A Prescription for Canada’s Health System.

In it Drummond continues to scaremonger with his ‘sky is falling’ predictions even while health care costs are dropping as a percentage of the size of the overall economy and as a percentage of provincial program spending.

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Drummond recommends “structural redesign” of health care, but is he qualified to deliver?

“We have probably spent 40 per cent of our time on health care.” – Don Drummond, Toronto Star, November 10, 2011

There is no question that health care will figure predominantly in the Drummond Commission’s report expected in January.

The Commission was struck last march to look at “reforming” Ontario’s public services. The Commission has chosen who to meet with — it has not been an open process. There have been no public hearings.

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$200 billion on health care in 2012? Ridiculous!

Why aren’t we spending $200 billion on public health care in Ontario?

In the early 1990s the straight-line cost projections suggested that by 2012 that’s where our health care spending would be.

Instead we are spending $47 billion – less than 25 per cent of what the “experts” told us would happen.

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Extreme restraint could deep-six more than wages and public services

Dalton McGuinty may well need to consider the age old question, which came first, the chicken or the egg?

Commenting last week on the preliminary recommendations of the Drummond Commission, McGuinty said government spending will have to be limited to increases of only 1 per cent per year to 2018. He says this will be necessary because of the slow economic growth former bank economist Don Drummond is predicting over the next six years.

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LHINs – Funding in a time of scarcity

This spring’s provincial budget set aside a three per cent base funding increase for community-based health care agencies this year. That doesn’t mean Community Care Access Centres, Canadian Mental Health Association branches or other local agencies will necessarily receive that amount.

The dilemma for the Local Health Integration Networks is whether to pass on an across–the-board increase that amounts to less than this spring’s Consumer Price Index, or whether to split that modest increase to address specific problems within the regional health care system? Do you make the situation worse for some agencies by slashing their funding increase to improve the situation for high-priority agencies faced with significant challenges? Either way, you know somebody is going to be unhappy. Worst still, does the absence of adequate funding for some agencies show up in new unforeseen challenges for next year?

The Central East LHIN passed a motion today that effectively cleaved the across-the-board funding increase in half – to 1.5 per cent – while using the remaining funds to address some serious problems within the LHIN. For those receiving only the 1.5 per cent, they will be in good company with the hospitals, most of whom will receive a similar base increase for a second year in a row.

 What is important to stress is that these are base increases, not total increases.

As we have seen with the hospitals, while the base was 1.5 per cent, many hospitals increased their bottom line by more than 4 per cent last year thanks to a variety of budget envelopes and increases in own-source revenues. For some agencies, particularly the very small ones, 1.5 per cent could turn out to be the total they do receive. James Meloche, a Senior Director with the CE LHIN, said 1.5 per cent could amount to as little as $900 for some agencies.

The 1.5 per cent the LHIN is reallocating is not a huge amount – about $5 million to support a population of 1.4 million, or about 11 per cent of Ontario’s population.  That’s about $3.50 per resident. This is on a provincial health budget of $47 billion.

While Don Drummond hammers away at unsustainable costs, there are no huge funding increases here at the health care coalface.

Clearly the region has a capacity problem, particularly when it comes to placing seniors into care following a hospital stay.

The LHIN has decided that it will address the problem by targeting the problem further upstream. By providing improved supports in the home, the LHIN hopes to avoid the arrival of seniors in the region’s already crowded emergency departments. Keeping people healthy is far more likely to be a winning strategy.

That does not necessarily mean more money for the CCAC – in fact, even with an allocation of almost half the available money, the CCAC will receive slightly less than the three per cent.

The LHIN is betting that more assisted living – including home making and falls prevention, among other services – will help keep seniors healthier in their homes and avoid hospital admissions.

The Oshawa/Whitby area will also be targeted, particularly for increased support for mental health and addictions. With a struggling economy, the communities have been hard hit by the recession, a situation that is putting pressure on health care providers.

“Clearly we have an issue at Lakeridge Health,” said Meloche. “People live in the park and they come to the emergency department for care.”

Fortunately one of the few mental health agencies in Ontario that will receive patients with concurrent addictions problems is already in the Oshawa community.  While several years ago Pinewood/Destiny Manor faced closure from a Ministry that wanted the hospital to cut unfunded mental health services, the service is now considered a major asset for the LHIN.

The LHIN is also trying to take some of the pressure off the Northeast part of its region by providing about $259,000 to establish a rural-based palliative care team.

While these are the priorities of the Central East LHIN, it does not necessarily mean that other LHINs will treat the funding in this manner.

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The Central East LHIN used their “Urgent Priority Funding” to increase the volume of MRIs available in the region.  Senior Director Paul Barker pointed out that while the government was generously funding new MRI machines in the region, the actual funding for scans had gone down. The LHIN is tapping into this fund to provide $285,327 to buy 1,096 more MRI hours. Most hospitals can conduct about 1.5 scans per hour. The average wait for an MRI scan in the LHIN was 77 days as of July. One board member asked how it was Ontario hospitals could perform MRI scans for $260 an hour when they were charging $1600 for the same service in the United States. Barker pointed out that it may have something to do with the free market and profit-taking.

 As part of its planned to establish an umbrella organization to coordinate specialized geriatric services, the LHIN named the Northumberland Hills Hospital the “host agency.” A small secretariat will be set up at the hospital to work on a strategy to better deliver services to frail seniors. The immediate task will be to hire a project manager, recruit staff, establish office space and work on governance issues. The LHIN had found service providers, seniors and their families were largely unaware of what services were available in the LHIN. 2,100 seniors account for a third of all acute spending on seniors in the LHIN.  By focusing on the needs of this population, it could have a substantial impact on the overall use of acute care services in the LHIN.

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?