Supporting Our Every-day Heroes: Curing Ontario's Hospital System
The Empire Club of Canada Addresses (Toronto, Canada), 4 Oct 2001, p. 127-136

MacKinnon, David, Speaker
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The real heroes of September 11. The need to cure the hospitals so they can cure us. First, what's right with hospitals. The exceptionally positive results from the acute care survey. The public face of the Ontario hospital system. A review of the problems. Consequences of insufficient funding. Examples of consequences of budget pressures. Four "prescriptions" that must be taken to cure the hospital system.
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4 Oct 2001
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The speeches are free of charge but please note that the Empire Club of Canada retains copyright. Neither the speeches themselves nor any part of their content may be used for any purpose other than personal interest or research without the explicit permission of the Empire Club of Canada.
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Full Text
David MacKinnon
President and Chief Executive Officer, Ontario Hospital Association
Chairman: Bill Laidlaw
President, The Empire Club of Canada

Head Table Guests

Bart J. Mindszenthy, APR, FCPRS, Partner, Mindszenthy & Roberts Communications Counsel and Director, The Empire Club of Canada; Reverend Karen-Anne Fox, Chaplain, William Osler Health Centre, Brampton Memorial Campus; Felipe Allendes, Honour Student, Humberside Collegiate Institute; Alan Pearson, Alan Pearson and Association; Professor James D. Fleck, CC, Chairman, Fleck Management Services; Betsy MacKinnon, Teacher/Librarian, Jackman Public School; Catherine S. Swift, President, CEO and Chairman of the Board, Canadian Association of Independent Business and Director, The Empire Club of Canada; Peter Barnes, President, Burak Barnes International; Dr. Ken Sky, President, Ontario Medical Association; and Rino Stradiotto, Partner, Borden Ladner Gervais LLP.

Introduction by Bill Laidlaw

I do not believe anyone in the audience does not have an opinion concerning health care in Ontario.

We all have an opinion, whether it be positive, negative or indifferent. I personally have some very positive experiences and some not so positive ones.

I do know from sitting on the Board of the Queensway General Hospital that hospitals have gone through major changes in the last decade and 1 suspect more change will come.

For many Ontarians the hospital is still the centre of health care in their minds. Hospitals for some are where you go when you are ill, whereas for others they are places where you become well.

Today we are fortunate to have as our guest David MacKinnon. David is the President and Chief Executive Officer of the Ontario Hospital Association, a position he has held since 1996.

The Ontario Hospital Association (OHA) is a voluntary association representing the hospitals in Ontario. Among its members are all of the public hospitals in Ontario as well as the province's psychiatric hospitals. Many other health-related organisations are among OHA's associate and affiliate members.

The organisation was founded in 1924 as an independent, nonprofit organisation and is governed by a 26-member board of directors made up of hospital trustees and chief executive officers from across the province.

Prior to joining OHA, David served as President of Ortech Corporation and he is the past CEO of the Ontario Development Corporation.

He has also worked for the Ontario and Nova Scotia governments as well as the federal department of industry, trade and commerce. David received an Honours BA in Economics from Dalhousie University and was awarded a centennial fellowship by the Canadian Imperial Bank of Commerce and York University for study at Harvard, Oxford and York Universities as well as the European Institute of Business Administration.

Today David will speak about the subject of "modernising medicare" and the future of medicare in Canada specifically, new advances and ideas to keep our medicare system affordable and sustainable.

David MacKinnon

Good afternoon, and thank you for that kind introduction.

In the aftermath of the horrific events of September 11, I'm struck by who the real heroes were.

They were the individuals who confronted the terrorists on the flight that crashed in Pennsylvania. They were the firefighters, and the police officers, and the emergency medical personnel who rushed to ground zero to help out. And they were the hospital workers. If you followed the story, you know that New York hospitals went on full alert. Off-duty doctors and nurses rushed to their posts. The hospitals were ready.

Our own hospitals too were ready to receive the injured, and the Ministry of Health line was jammed by calls from our own doctors and nurses who wanted to help.

All this shows that public institutions--police and fire departments and hospitals--are the first line of defence against every-day challenges and disasters. We should keep these institutions strong.

But the hospital system, which is so important to all of us, is itself unwell. Consequently, my message to you today: we must cure the hospitals so they can cure us.

Before I tell you what's wrong with hospitals, let me tell you what's right. The hospitals in this province have great strengths. To begin with:

• They deliver the same or better results as other provinces, but with far fewer beds;

• They receive high marks from patients for the way patients are discharged from hospital to home care or long-term care; and

They increasingly are communicating electronically with physicians outside the hospital. Ontario hospitals also are leaders in accountability. We believe you can manage only what you can measure. In 1998 and 1999 our hospital system became the first in Canada to produce hospital report cards. We've now completed the largest patient satisfaction survey in North America.

The results from our acute care survey are exceptionally positive. Nine out of 10 patients rated the care they received as good or excellent, while fewer than 1 in 20 felt it was poor.

Not all institutions rank equally high, but the larger picture is clear. If you're staying in an acute care facility in Ontario, you'll receive good treatment from highly skilled and dedicated physicians and nurses.

These impressive results are the public face of the Ontario hospital system. But, behind the scenes, our hospitals face grave challenges. It's no exaggeration to say the system is unwell. We must cure the hospitals so they can cure us.

Let's look at the problems.

A serious problem is the one of recurring financial crises caused in part by the way the province funds hospitals.

Let me tell you the story of how hospitals get their money. Every year, the budgeting cycle for each hospital starts with instructions from the government that the hospitals must absorb the cost of population growth and aging.

It's as if the government washes its hands of any responsibility for serving a growing and aging population. Now, Ontario grows every year by the size of the entire population of Prince Edward Island.

So you can imagine how serious a challenge it is to absorb the costs of providing additional hospital service to 150,000 people.

As the budget year goes by we have to muster two or three lobbying campaigns to gain the funding needed to serve the growing and aging population.

There are many very sad consequences of this process:

• Public anxiety is stoked;

• Hospital boards and CEOs must devote too much of their time to lobbying efforts;


• Other serious issues are crowded off the public agenda; and

• Serious erosion of skills and morale takes place. But the saddest part of this saga is that it is entirely unnecessary.

Hospital costs are among the most predictable in the public sector. There are many ways our society can deal with growing expenditures. But the annual budget ritual of denying their reality isn't one of them.

In addition to recurring funding crises, Ontario hospitals have all faced the problem of reducing services to the public.

Despite increased efficiencies, budget pressures are leading hospitals to cut back on the services they offer their communities.

Hospital beds are an example. The number of acute care beds in Ontario hospitals has dramatically dropped in the last decade from approximately 50,000 to 30,000. That decline came in the face of a growing and aging population. Although greater efficiencies have lessened the need for some of these beds, we have far too few beds today. It's become increasingly difficult to find a bed for a sick person in this province.

Earlier this year, the occupancy rate for acute care beds in central Ontario was 97 per cent. According to international studies, that's far too high. That leaves us with too little room to handle major emergencies.

The same cutbacks are evident among nurses. Relative to our population, we have 6 per cent fewer nurses than the rest of the country. That is a very serious shortfall.

Cutbacks are evident, too, in the "waiting game" that takes place in hospitals. Research studies show that patients are waiting longer for specialised treatment including cancer care.

What's more, at a time when hospitals are straining to provide care, the demands on the hospital system are steadily increasing year by year. Population grows 1.2 per cent a year. An aging population increases demand by a further half a per cent each year. Inflationary pressures add another 2 to 4 per cent a year to these costs.

Add those numbers together and hospitals require an increase of 6 per cent annually just to maintain the current levels of service. This figure is comparable to experience in the United States and the United Kingdom.

Yet Ontario hospitals are operating with much less money today than in the early 1990s. Real per-capita funding has fallen 18 per cent since 1992. Also, operating funds have dropped from 2.4 per cent to 2 per cent of GPP since 1995.

So, the budgeting process and the levels of funding are the ills hospitals face. And they need to be cured.

What medicine are we recommending?

There are four "prescriptions" that must be taken to cure the hospital system.

The first prescription is to change the way we fund our hospitals.

We must get rid of our present infinitely corrosive system of funding. We must excise it. We must remove it from the landscape of our democracy because it works to veil problems rather than illuminate them.

We must eliminate it because it wears down the people managing hospitals. And, finally, we must discard it because it has the same wearing effect on political leaders.

We should replace it with a process of funding geared to community needs, clinical goals, consumer satisfaction and international benchmarks.

We also need to have adequate three-year funding plans instead of learning of the one-year funding allocation half way through the current fiscal year as is presently the case in this province. Long-term funding will provide hospitals with a secure planning framework. They will be able to plan for improvements in patient care. Three-year plans will also facilitate long-term agreements with unions and employee associations.

Funding plans also must involve better co-ordination between capital and operating budgets. Right now the capital budget might provide for a new building or hospital wing. But the operating budget may not provide funds to staff that structure. Such uncertainty has to end.

Our second prescription for hospitals is greater federal support.

Federal spending for health care has remained constant since the early 1990s, while provincial health-care spending has gone up 28 per cent. Federal transfers for health must keep pace with real health needs.

A fiscal imbalance exists between the federal government and the provinces--and Ontario in particular.

Since 1992-93, federal revenues grew by 47 per cent, but spending increased by only 6 per cent. According to one recent study, this imbalance is expected to continue for the future.

What does a fiscal imbalance mean to the people living in Ontario? It means that spending on key public services in Ontario is significantly below the national average.

For example, per-capita spending on hospitals in Ontario in 2000/01 is 6.1 per cent below the national average. For universities and community colleges it is 19.9 per cent. It's not just a question of spending. It is also a matter of capacity. All Canadians should be very concerned about the capacity limits on Ontario's hospital system because Ontario also treats patients from other provinces.

To use another example, the number of acute care beds per capita in Ontario is 75 per cent of the national average and in large urban centres, particularly Toronto, the hospital system is particularly stressed with occupancy rates well above what is considered reasonable by international standards.

This problem urgently needs attention by the federal government. It is not in the national interest that core public services in the province which is the major funder of the transfer system should be underfunded relative to the rest of the country.

Funding issues of the type I've mentioned are important. But they remain only one component of any complete solution for the ills that trouble the Ontario hospital system.

My third prescription for curing our hospitals is to think outside the box.

I'm encouraged by the recent statements of Roy Romanow, Senator Kirby, Premier Harris, and Minister Clement, that the only option off the table is the status quo. Surely we can build a broader consensus from there.

When I say we should "think out of the box" I mean that quite literally. Some think of hospitals as "big boxes." All things to all people.

We should move toward more differentiation in the types of hospital facilities we build. Every community needs access to emergency services that can treat heart attacks and serious injuries. But hospitals don't need to be scaled up or scaled down versions of the same model in every community. Perhaps, for example, we need hospitals that focus on particular illnesses and by doing so can produce better outcomes at lower costs.

My fourth prescription for the health of hospitals is for us to focus on prevention. The goal of any medical system should be to put itself out of business. That won't happen of course, but we should try.

Lifestyle changes would save our health-care system hundreds of millions of dollars each year. Imagine the decline in health spending if everyone gave up smoking, had a better diet, and got regular exercise.

Scientists believe, for example, that lifestyle and type-2 diabetes are closely linked. And a person with diabetes incurs medical costs that are two to five times higher than a person without diabetes.

Smoking, too, is burdening our health-care system. Smoking not only kills, but it affects non-smokers who are exposed to second-hand smoke. It increases their chances of developing lung cancer by 25 per cent, and heart disease by 10 per cent. And all that puts pressure on our hospitals and the entire health-care system.

We must eliminate these unnecessary stresses.

We must, as individuals, do more to make ourselves healthy so we can make our hospitals healthy.

Hospitals and health-care organisations must act as health-promotion centres, educating people in all aspects of health and wellness.

And let's not forget the Internet.

The Internet is now an integral part of many people's lives. The health system must become more responsive and give them the information they're looking for on the Net.

We must help people distinguish what's useful from what's bogus.

Health classes in primary and high schools should teach students about prevention, how to make healthy life-style choices and how to make the best use of the Internet for finding health information.

In the end we're all responsible for our own health. Funding is important, but it must be part of a broader plan to address our health-care needs.

The Ontario Hospital Association is focussing its efforts towards health promotion and wellness. "Life the greatest show on earth" is the theme of our Life and Health consumer show to be held in Toronto next November.

My message to you who fund hospitals, who use hospitals, and who expect hospitals to be there for you, is this: we must cure our hospitals so they can cure us.

As we have learned in recent days, public institutions are at the heart of what a community is. Put the hospitals at risk and we put our communities and our citizens at risk. There's a lot at stake.

We need each of you to help, whether you're a business person, a public servant, a concerned citizen, or health-care provider. We need each of you to influence public debate so the vast, wonderful network of hospitals we have can provide the secure treatment we've all come to expect.

Canada is a special country.

If we have an advantage over other countries, it's in the well-being we, as a nation, have come to expect. We consistently score high in "quality of life." A place to raise families. A safe environment. Our institutions have been safe havens.

Today more than ever we must look to our institutions as the key elements which define our sense of community.

Let's care for them, so they can care for us.

The appreciation of the meeting was expressed by Bart J. Mindszenthy, APR, FCPRS, Partner, Mindszenthy & Roberts Communications Counsel and Director, The Empire Club of Canada.

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Supporting Our Every-day Heroes: Curing Ontario's Hospital System

The real heroes of September 11. The need to cure the hospitals so they can cure us. First, what's right with hospitals. The exceptionally positive results from the acute care survey. The public face of the Ontario hospital system. A review of the problems. Consequences of insufficient funding. Examples of consequences of budget pressures. Four "prescriptions" that must be taken to cure the hospital system.