Tag Archives: Will Falk

A time of great anxiety for the LHINs

These are likely times of great anxiety for the Local Health Integration Networks (LHINs).

The re-election of the McGuinty Liberals may have created a brief sigh of relief given both opposition parties had promised to kill the LHINs. According to the Mowat Centre’s Will Falk, there is “very broad consensus” that the LHINs will still be restructured.

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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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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?

Liberal think tank salutes Harris era health care cuts

The McGuinty government established the Mowat Centre in 2010 with $5 million in seed money, but they may want to ask for their money back after Will Falk’s op/ed last weekend in the Toronto Star. Falk, an “executive researcher in residence” at the Mowat, suggests Mike Harris got it right when he restrained funding for health care, leading to hospital closures, reductions in beds, compensation restraint and cuts to medical school spaces. He even appears to commend Bob Rae for starting it off with his Rae Days (ignoring the fact that it ended up costing hospitals more to pay for overtime to cover the missing ‘Rae Days’ personnel).

Quick to cast off the perception that such ideas may paint him as a neo-Con, Falk points out that straight-line Malthusian projections of gloom and doom seldom work out that way. He indicates that studies by the Fraser Institute and the C.D.Howe ignore the level of growth in health care spending the previous decade averaged 0.9 per cent and represented real declines when compared to the size of the economy.

He might have added that Don Drummond, the McGuinty government poster boy for change, also uses such deceiving straight-line projections.

Falk argues that rising health care costs are a self-fulfilling prophecy – that if you provide increases of six per cent per year, health care will spend six per cent per year. He says Canadians need government to bend the cost curve, not fund it.

To be fair, Falk is not advocating more of the same – the obvious end game of such activity would be a demolished health system. You can’t cut beds forever – especially when hospitals are already functioning at capacity. Nor can you expect professionals to continue working without a raise. He instead makes the vague suggestion that technology and IT will save us. Give him points for audacity, but it doesn’t seem to be grounded in evidence.

If you stop funding health care, there is no question that we could be over the tipping point long before technology comes riding in on a shining white horse to save us all.

Falk may think we’re beyond the need for such cuts, but starving the health care system could start us down the same draconian path again.

Even Don Drummond acknowledges that the slash and burn approach by the Harris Tories took some time to recover from – and may account for some of the spending in the ensuing years. When it comes to deferring health care costs, it’s a safe bet that those costs will be much higher at a later date.

Falk, like the Chicken Littles he criticizes, doesn’t make the distinction between public spending and total spending.

The charts accompanying his article appear to lack the most recent health spending data which shows spending already in decline relative to the size of our economy. By ignoring 2010 it looks like health spending took a sharp turn upwards as a percentage of our economy. In fact, it was a shrinking economy, not an upswing in health care costs that bent the curve upwards.

His expenditure chart has no adjustment for inflation. Any expenditure will look like a straight-line upward without adjustment. The notion that better management of health care could take us back to the days of national spending of $400 per capita is silly.

By extending his graphs over 35 years it also makes it difficult to notice that as a percentage of our overall economy, spending has been relatively static in this last decade of supposedly runaway spending.

Then again, if we simply recognized that, this whole new industry of scaring the wits out of Canadians would lose much of its mojo.