In a perfect world hospitals would be publicly funded to meet the health needs of their communities. That would be it.
When the government started talking about funding reform, the thinking was that at last we would be moving closer to a rational system of allocation.
What we got instead was a hybrid of global funding, competition, and a funding formula that was supposed to take into consideration both existing usage and local demographics. Layered on top is a base funding freeze to at least 2018. Money has always been a driver in the health system, but suddenly it appears to be driving everything.
The evidence suggests that the complex and confusing system of funding allocation is creating new inequities that may be even worse than the ad hoc system of the past.
The South Bruce Grey Health Centre, for example, has argued to the South West LHIN that they are being penalized for efficiently combining the resources of four small rural hospitals. The Scarborough Hospital and the Rouge Valley Health System have made it clear that the complex demographic needs of their two communities are not being recognized in their base funding allocation.
What the new funding system appears to be doing is driving a new wave of costly and disruptive hospital mergers. You can’t blame the hospitals for seeking such mergers because they are simply acknowledging the new rules of the game set by the province. In this new world bigger gets more clout gets more funding.
Here’s a story we don’t see every day: South Bruce Grey Health Centre is cutting two of its four senior management positions as part of its efforts to deal with a budget deficit.
Contrast that with hospitals such as Ontario Shores Centre for Mental Health Sciences, which carved out a new advisory position for its departing CEO at a time when front line staff are bracing for tough times ahead.
The decision may have been slightly easier to make at SBGHC given two senior managers are retiring. However, as most front line workers already know, when you cut vacant positions, it still has an impact on the workload of those left behind.
SBGHC is one of the few hospitals to have weathered the last decade without consistently running into deficit. The fact that they are now forced to trim their sails owes a lot to a punitive new funding formula emerging from Queen’s Park. Small rural hospitals weren’t supposed to be part of that formula, but because SBGHC combines resources from four small hospitals together, they do.
The irony is that by consolidating their resources these four small hospitals are being penalized. For the Hanover hospital, which has somehow managed to stay out of SBGHC despite being located within the same geographic area, they must be breathing a sigh of relief.
According to the Hamilton Spectator, the three wealthiest regions of the province have the best health results despite the lowest per capita health funding, a blatant reminder of the link between income and health.
These three LHINs also happen to be adjacent to Toronto, where many patients cross LHIN boundaries to seek care.
It also tells us that tackling poverty could have a substantial impact on public health care costs.
Does that make these three regions the best run LHINs? Not necessarily.
Unfortunately, the newspaper’s ranking of the 14 Local Health Integration Networks may not be entirely fair given the emphasis on population health in those standings.