Francesca Grosso and Michael Decter

Opinion: We can save money and improve health care

May 10, 2012

Ontario needs to find $2 billion in annual health care savings.

Provincial premiers and health care stakeholders had been gearing up for a noisy battle with the Conservative government around renewal of the 2004 Health Accord.

Confounding expectations, in December 2011, Finance Minister Jim Flaherty announced a unilateral renewal of federal health funding. The “deal” provides six per cent annually for the next five years, and after that no less than three per cent per year. This unanticipated federal generosity leaves the provinces with the ability to manage federal health care dollars as they choose.

It also deprives them of the federal government as a convenient scapegoat.

It places full responsibility on the provinces for shaping the future of health care delivery within the universalist and public principles of the Canada Health Act.

The Ontario government is committed to holding spending growth in health care to 2.1 per cent per year, down dramatically from a historic, eight-year growth rate of 7.4 per cent. To meet its target, Ontario will need to find $2 billion of annual savings. The recent Ontario Health Action Plan highlights aggressive bargaining with doctors and health care unions as well as lowered drug costs as key cost-saving strategies. However, even if real zeros can be achieved in these areas, such strategies will yield only about half the required savings.

What other cost-cutting measures might the provinces consider that could improve patient care?

Fewer health organizations

Ontario’s Drummond Commission questioned whether the 2,500 separate governance bodies in the Ontario health care system actually result in effective governance. His answer: probably not.

More importantly, we should ask whether more governance means better health care.

Individual governance bodies are largely concerned with the quality of the care in their own institutions. Transitions of care are not governed by anyone; no single organization is responsible for the patient journey across many health care settings. The one per cent of patients with multiple conditions who account for 49 per cent of total health care costs, are under-managed. Many simply fall between the cracks.

Reform is therefore required not only for cost-saving reasons, but also to improve quality of care.

Get rid of processes that are unnecessary orredundant

In Saskatchewan, Premier Brad Wall is implementing the Toyota Corporation “lean” philosophy as a way of removing unnecessary and inefficient processes from health care delivery. Significant savings are being achieved.

At the same time, Ontario patients being discharged from hospitals may undergo as many as three home-care assessments, all before a single home-care visit takes place (one by the hospital to determine if home care is needed; one by the Community Care Access Centre to determine the appropriate kind and number of visits; and another by the actual home-care provider).

We are spending a disproportionate number of public dollars in the management and assessment of need rather than on the care itself. The government should cut out duplication, streamline administrative layers and put the money into front-line care and home-care visits.

Reduce unnecessary readmissions to hospitals

Unplanned readmissions to hospitals are significant and, according to various studies, often avoidable. Shortened hospital stays mean that patients may be discharged quicker but sicker. In Ontario, the readmission rate is around 15 per cent. This is high. Many different problems can emerge for patients post-discharge. However, a study conducted by the University of Toronto found discharged patients were about 28 per cent less likely to be readmitted to hospital within seven to 30 days if they had a home-care visit within one day of discharge. That statistic alone merits action.

Use health care professionals more effectively

In Ontario we operate on the assumption that each medical emergency call means an ambulance dispatch to the ER. In Nova Scotia, calls are triaged and dispatched by paramedics through one centralized system. A medical communications officer determines the right service for each patient, whether it is ground or air ambulance or an extended care paramedic (ECP). ECPs have advanced training in geriatric care and can treat elderly patients for things such as stitches, replacing catheters, etc. in their place of residence. One year into the program, more than 70 per cent of callers avoided a trip to the ER.

Move services out of hospitals

Today, about 80 per cent of all hospital surgery is conducted as day surgery on an outpatient basis. This represents a vast cost improvement for the hospitals. However, we are still conducting surgeries in the most expensive setting — one constructed to house infrastructures required for complex care and in which labour costs and staffing levels are very high. There are more than 700 Independent Health Facilities licensed in Ontario. Some of these facilities could provide uncomplicated procedures with higher efficiency and volumes.

It is also well known that volumes lead to better outcomes — practice does make perfect. At the Kensington Eye Clinic, for example, the volume of cataract surgery has led to economies as well as greater access.

Innovative change can curb health care cost growth while improving outcomes and patient safety. The challenge is to make innovation work for patients and for taxpayers.

Francesca Grosso is a principal at Grosso McCarthy and former director of policy for the Ontario minister of health. Michael Decter is founding chair of the Health Council of Canada and former deputy minister of health for Ontario. The authors are contributors to Canada 2020’s project ‘The Canada We Want in 2020: Towards a strategic policy roadmap for the federal government.’ They will be presenting at the Canada 2020 event, Securing our Health Care System for the Future, in Ottawa on Thursday. Watch live at at 5:30 p.m. or join the discussion during a live chat with the authors Thursday at noon at

The Ottawa Citizen, May 10, 2012.

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