Local Health Integration Networks – Internal Discussion DocumentOnce again, the Ontario government wants to “transform” health care and certain social services – this time by creating Local Health Integration Networks (LHINs). Fourteen LHINs are being established to plan, integrate, and fund hospital, nursing home, homes for the aged, home care, addiction, child treatment, community support, and mental health services.
Background
Costs are rising. In the 1997 Ontario budget, operating spending on health care was set at $17.8 billion dollars. Eight years later that had increased to $32.9 billion, a $15.1 billion or 85% increase. That is equal to an 8% increase each and every year, approximately triple the rate of inflation.
Two factors are key in cost increases: [1] the rising cost of pharmaceutical drugs; and [2] the rising costs of medical equipment. Incredibly, costs for drugs and equipment have increased from 18% to 24% of Ontario hospital costs in just six years. Barring fundamental changes, these cost pressures will continue to increase.
Notably, these costs pressures come from the two parts of health care that are totally dominated by for-profit corporations. In contrast, spending on hourly paid workers has been restrained, particularly for support workers.[1]
LHINs as Cost Cutters: Instead of dealing with the cost pressures arising from the for-profit sector, the Ontario Liberal government has chosen to focus its cost cutting efforts on the creation of LHINs and the integration of health care and (certain) social services. So, although hourly paid health and social service workers have not been responsible for the rapid increase in health care costs, this reform will create very serious problems for them.
In the summer of 2004, the Ontario government proposed the development of Local Health Integration Networks (LHINs). The government wants LHINs to oversee:
- Hospitals (including divested psychiatric hospitals)
- Community Care Access Centres
- Community Support Service Agencies (e.g. Alzheimer societies, associations for people with physical disabilities, meals on wheels, hearing societies, family counseling centres, VONs, CNIBs, hospices, child treatment centres, etc.)
- Mental Health and Addictions Agencies
- Community Health Centres
- Long-Term Care Homes
The government says that LHINs will not oversee:
- Physicians
- Ambulance Services (emergency and non-emergency)
- Laboratories
- Provincial drug programs
- Individualized care
Although they will not be included at the present time, the government is still reviewing the relationship between LHINs and “independent health facilities” (i.e. privatized clinics), public health programs, and provincial networks.
Each LHIN will be funded by the provincial government, governed by a board of directors appointed by the provincial government, and bound by a memorandum of understanding and a performance agreement with the Ministry of Health and Long Term Care (MOHLTC).
The government has now appointed three person boards (consisting of a chair and two directors) for each of the 14 LHINs. The government did not wish to appoint board members based on the specific groups or areas within the LHIN. The government plans to increase LHIN board membership up to nine members. Board members will be remunerated in accordance with the Government Appointees Directives, which includes per diem pay rates.
The government plans that each LHIN would be responsible by 2007/08 for:
(a) Local health system planning in accordance with MOHLTC strategic directions
(b) Local health system integration and service coordination (including integration with other LHINs)
(c) Accountability and performance management (including accountability agreements with health service providers funded by LHINs)
(d) Local community engagement
(e) Evaluation and reporting
(f) Funding
(g) Providing funds to health service providers within the scope of LHINs and within the available LHIN funding envelope
(h) Providing advice on capital needs to the MOHLTC
The government reports that work is underway to identify models for a shared back office of certain operations (purchasing, procurement, payroll, etc.) for all LHINs.
This proposed LHIN reform raises many serious problems for public health care and health care workers. Key issues are identified below.
[1] Privatization
LHINs will create a split between the purchasers of health care and social services (i.e. the LHINs) and the providers (e.g. the hospitals, the homes, etc.).
The Experience with the Ontario Home Care Purchaser-Provider Split Such a split has already been established in home health care, where community care access centres fund home care providers through a system of competitive bidding. In effect, this means compulsory contracting out of home care services.
The results of this system in home care have been extremely negative. The most reliable and recent figures show that the percentage of homecare nursing market share provided in Ontario by for-profit service providers increased from 18% in 1995, two years prior to the introduction of competitive bidding to 48% in 2001.
As contracts come up for renewal, home care providers regularly lose contracts and workers, who have no successor rights, are laid off. In Cornwall, homecare staff have lost their jobs at least three times since competitive bidding was introduced. A recent snapshot study identified over 1,000 home care workers in Ontario who were laid off due to contract loses over an eight-month period.
Faced with this uncertainty, many of the workers naturally decide to work in other, more secure sectors. The Red Cross estimates that where it has lost contracts, up to 35% of its former workers leave the homecare sector.
This system makes it very difficult for workers to bargain effectively. First of all, they are not bargaining with the agency that controls the purse strings, weakening the ability of the employers to bargain wage increases. Second, even if the union is able to extract a significant wage increase, their employer may not be able to put in a competitive bid and win a new contract, as labour costs make up a large portion of costs in home care (and other parts of health care).
The result? Similarly qualified workers make much less in the home care sector than they would in other health care sectors.
Not surprisingly, turnover rates are extremely high – going as high as 73% in 1999. No industry – and certainly not an industry as vital as health care— can maintain adequate service with high turnover.
The purchaser-provider split proved so bad in home care that the government was forced to halt the tendering process and appoint Elinor Caplan to review the system. Unfortunately, she chose only to make recommendations that would tinker with the existing purchaser-provider system. Health Minister George Smitherman is now reviewing her recommendations.
The NDP government had tried to implement a publicly delivered home care system during its term in office. The Mike Harris Conservatives stopped this and brought in the purchaser-provider split now defended by the Liberals.
The Experience with Competitive Bidding in Social ServicesCompetitive bidding is also doing damage in social services with its introduction by Human Resources and Skills Development Canada. The new bidding process has, in the first round of proposals, disrupted over a third of the long-standing arrangements with community organizations. Three organizations are losing so much of their funding that they will have to close their doors. Four contracts have been awarded to the for-profit sector.
Clients have no idea where they will be served, if at all, while the programs and linkages created over decades of work are being lost. Laid off social service workers are being forced to re-apply for their same jobs – at a lower rate of pay and benefits. Not everyone has found re-employment.
And yet, Ontario government officials are now talking of extending the purchaser-provider split and competitive bidding to other areas of health care and social services through the LHINs.
Britain
Over the last two decades, Britain has introduced the purchaser – provider split in health care, leading to a massive expansion of privatization. This change has influenced other European countries and is now having an impact on the Ontario Liberal government. The early move to this system has helped English corporations gain expertise in health care privatization. So, it is not surprising that Carillion – an English corporation – has won the bids for both P3 hospital projects in Ontario.
Before the introduction of the purchaser-provider split in Britain, no other western country could match its low health care costs, largely because no other country had so radically eliminated market mechanisms. With few exceptions, there was no invoicing and so no payment of bills. As a result, administrative costs were kept low. The system was truly integrated.
With the introduction of the purchaser-provider split problems arose:
- Openings for privatization. Before the split, there were few entry points for private sector intrusion into health care in Britain. With the split, every new contract has the potential to divert resources to the for-profit sector. For every £1 spent on National Health Service (NHS) staff in 1995, 71 pence was spent on procurement of goods and services from the private sector; by 2003, the figure was £1.15 for every £1 on staff.
- Fragmentation. While the Ontario government has sold LHINs as a way to integrate services, the purchaser-provider split has actually led to fragmentation in Britain. Funding comes by winning contracts. So, for example, hospitals must compete with one another for contracts. For its own survival, each hospital must now assess each cost as if that hospital stood completely alone in the health care system. But cost savings for a hospital can lead to cost increases for other health care providers. But these “externalities” cease to be relevant for the hospital when competition becomes its mode of survival. As a result, the focus in Britain changed from planning services to meet patient needs to a focus on contract performance and the denial of care when contracts are exceeded.
- Increased administrative costs. If services are purchased, they have to be priced. So, every single major activity now has to be costed in British hospitals. But costing services and all the other aspects inherent to the market (e.g. establishing contracts, implementing billing systems, and overseeing contracts) costs time and money. Increased administrative costs are typical of the purchaser provider split model. The extreme case is the United States: its highly privatized purchaser-provider split sees almost 1/3 of health care costs tied up in administration: that’s hundreds of billions of US dollars.
- Mass reductions in the number of support service workers. Many such jobs were contracted out, others simply eliminated: In the first phase of the purchaser provider, split support service jobs were cut from 260,000 to 120,000 from 1981 to 1994. Contracted out workers have been forced to live on poverty level wages, with benefits stripped. Turnover increased and hospital cleanliness fell. Hospital acquired infection rates have soared. The poor quality of hospital food became notorious: incredibly, 10% of seriously ill patients were found to have suffered malnutrition while in hospital.
- The establishment of private clinics and the expansion of private hospitals. Private diagnostic and surgical clinics increasingly have taken over work previously done in hospitals, despite costing more. The goal is now to have up to 640,000 surgeries carried out by private clinics each year. More work is also being done in private hospitals: in the early 1990s, the British National Health Services (NHS) was buying less than £200m worth of treatment from private hospitals a year. This will have increased 10-fold by 2007. Up to 15% of elective surgery will be hived off to private hospitals. Recently, another £3bn has been announced by the government for services exclusively to be provided by for-profit providers – with NHS hospitals forbidden to bid on this work. Yet, a recent poll showed 89% against private provision of NHS Care. Typically, the private sector “cherry-picks” the most profitable areas of work.
- Specialization: Hospitals that cannot provide a service for the set price either have to subsidize it from other parts of their budget or give up providing that service. This is quite unsatisfactory where alternate hospitals are at some distance (as is often the case in Ontario). Inequality in service is the result.
But all of this change has only led to serious problems for British health care: despite more than doubling funding since 1997, the service is running into an “autumn crisis”, with debts totaling at least £750m, bed closures, operating theatres closures, service cuts, and estimates of 8,000 or more layoffs. And now, the government may be forced to own up to the many billions of pounds of debt for its ill-conceived and expensive public private partnership hospitals. If the government is forced to bring these debts onto its books (as proper accounting should require), business papers indicate that tax increases become much more likely.
Bottom line: Privatization and increased competition are major threats of this reform. Instead of integration, privatization will bring “disintegration” with the various providers in competition to win contracts. The institution of the purchaser-provider split and the expansion of privatization in health care and social services must be prevented.
Funding: The purchase of services by the LHINs through a tendering system is likely the worst possible alternative. While government officials talk of introducing this system, it would so destabilize the existing health care system that it is likely there would, at first, only be an incremental expansion of a purchaser-provider tendering system beyond home care.
There remains significant uncertainty about the range of tools LHINs will use to fund the basket of health care and social services.
- Will certain services (e.g. cancer care services, cardiac services, acute care services) be exempted from LHINs funding and be funded directly by the province?
- Will capital funding eventually devolve to the LHINs?
- Will different LHINs use different funding tools?
- What other tools might the LHINs use to fund services?
Likely change will be incremental: not all of it will happen right away. This is positive as it gives us a chance to push for funding systems that will discourage privatization, ensure stability and the continuity of care, and allow workers to bargain fair collective agreements.
Notably, the hospitals have taken a very dim view of devolving funding to the LHINs.
The OHA strongly supports the government’s plan to take time and to conduct further research in making its decision on the devolution of funding responsibilities to the LHINs…. We believe that hospital rate setting must remain at the provincial level to maintain equity and avoid balkanization of the system… we also recommend that the OHA, hospitals and the government, develop a common hospital funding formula for use across the province. To ensure provincial clinical standards are met, we believe that the government should create a provincial specialized services agency to monitor, fund and evaluate provincially based programs and services, such as Cancer Care Ontario and the Cardiac Care Network. Finally, hospitals also believe that the funding of capital and health research should remain with the Ontario government given their obvious provincial and even national significance.[2]
Provincial Funding of LHINs: There is also the unresolved question of how the LHINs themselves will be funded. By historical levels? (Notably, these levels vary significantly by hospital and so moving away from them could lead to significant changes in the level of services on a regional level.) By population and demographic figures? By volume and complexity of services provided? By some combination of the above?
[2] Access to Health Care ServicesA key goal of this reform is to reduce costs by “integrating” services. But this raises questions about cutting services.
So, at first, the government talked only of integrating support services. This reflects a long-term policy of government to initiate its cost saving efforts with support services. While cutting back support services is dangerous (note the infection control problems in hospitals) and inefficient (it often requires more highly paid staff to take over the functions formerly done by support staff), it can be less controversial to the public than attacks on direct health care services, or in-classroom services.
Major steps are now being taken to integrate support services on a regional level. New organizations like “Hospitals Business Services” are being established to take over and centralize support services formerly provided by hospitals, homes and other non-profits, with many of the services then contracted out to for-profit corporations (see the fuller discussion in section 4 below).
The government has also introduced on April 27th Bill 190, the “Good Government Act, 2005”. Among many other items, this Act would amend the Ministry of Government Services Act that allows the Ontario government to acquire, manage and provide common services for government-related agencies. Bill 190 would designate hospitals and other selected broader public sector organizations (e.g. municipalities, universities, colleges) as “government-related agencies” allowing the government to provide common services to these organizations.
Notably, however, the hospitals balked at an exclusive focus on support services. Simply integrating support services cannot satisfy the cost savings demanded by the government – the savings would also require clinical cuts. Indeed the hospitals drew up a long list of clinical services under the knife.
Clinical Services Threatened: So by April 2005, the government admitted as much, with Health Minister George Smitherman publicly calling for the centralization of hospital surgeries and taking less serious surgeries right out of hospitals. This squarely raises the possibility of the establishment of for-profit surgical clinics – just as in Britain. Indeed, when Smitherman announced his interest in surgical clinics, the chosen sponsor of his speech proposed private sector clinics providing two tier care as soon as Smitherman sat down.
Bottom line: “Integration” will likely be used as a cover for removing jobs and services from local communities and privatizing health care and social services. Support services will be the first target, but direct care will also be targeted.
[3] Eroding Community Control and Accountability
The government emphasizes the movement of some powers from its direct control to the LHINs. However, the autonomy of the LHINs from the government will be very modest. The LHIN boards will be appointed by the provincial government, board members will receive (for the first time) payments from the province, and LHINs will be required to sign memorandums of understanding and performance agreements with the government.
So LHIN boards will be responsible to the provincial government rather than local communities. In contrast, hospitals boards are not appointed by the provincial government and they have effectively fought for better funding for their communities.
Indeed, the government has successfully blunted criticism of its funding and implemented massive cutbacks by taking over local health care organizations in the very recent past. Community care access centres were taken over by the provincial government in 2001. Their vigorous public campaigns for better funding stopped immediately. The result? Their funding was flat lined for years and home care services were cut back dramatically.
Compounding this lack of community control, the proposed LHINs cover vast and very diverse areas. The LHIN boundaries have been formed based on hospital referral patterns, overriding political and social boundaries. The proposed LHINs are not “local”, they are not based on communities, and they do not represent communities of interest. As a result, they lack political coherence. It will be very difficult for the people living within a LHIN to have a significant voice over the direction of that LHIN.
Conflict within the LHINs: The large, socially diverse areas covered by the LHINs also suggest that there will be significant conflict over resource allocation within the LHINs. Already there are clear signs of this. With cost cutting a key goal for the provincial government, the question will arise: what services will be provided in each area of a LHIN. One LHIN covers Hamilton, Burlington, Niagara, Haldimand, Brant and Norfolk, another Scarborough, Oshawa, Peterborough, and Haliburton, another all of northwestern Ontario. Into which of these communities will the funding flow as the LHIN tries to manage on whatever funds are provided? Smaller communities are especially threatened.
These battles may only be the beginning. The experience elsewhere indicates that provincial governments regularly change regional health care boundaries – sometimes radically. Moreover, centralization doesn’t necessarily mean cost savings. Indeed, the most recent government experiments with it have led to increased costs: i.e. the merger and closure of hospitals and the centralization of jail services under the former Tory government. And nothing in this reform deals with the undisputed real health care cost drivers: soaring costs for drugs and medical equipment provided by for-profit corporations.
Bottom line: The proposed LHIN structure puts up significant barriers to local community control of health care. Conflicts between communities within a single LHIN are likely. Small communities are particularly threatened. Yet, changes to LHIN boundaries are also quite likely and cost savings are an open question at best.
Provincial Government Accountability Diminished
Flak Catchers: LHINs will insulate government from decisions to cutback or privatize services by creating another level bureaucracy that will catch much of the “flak”. The government will control LHINs (by appointing board members, establishing accountability agreements, and setting funding levels) but the LHINs will actually implement decisions. They will be the first targets for popular discontent, even if their actual autonomy from government is more imaginary than real.
Bottom line: Communities will have to deal not just with the provincial government (and health care providers) but also with the 14 LHINs. Likely, the provincial government will respond to complaints by stating that, “it was not our decision – it was a decision of the LHIN.” Yet, the LHIN will largely be unaccountable to local communities.
[4] Impact on Bargaining Unit Structure and Union Local Structure
LHINs may affect bargaining unit structure in at least three ways.
Immediate Impact on Certain Bargaining UnitsFirst, there are changes directly caused by the inauguration of the LHINs. The LHINs themselves (at least to start) will employ relatively small numbers of employees: reportedly about 40 each. Community care access centres will also be directly impacted. They will have to change their boundaries to fit within the LHINs. It is not yet clear if there will be one CCAC per LHIN, or somewhat more. In any case, there will be a reduction from the current 43 CCACs. An announcement could come at any time. CUPE represents (mostly clerical) staff at 19 CCACs. Representation votes are almost a certainty.
Impact of the Integration of Services on Bargaining Units
A second form of change in bargaining units will come from efforts by health care providers to integrate services.
The government wishes to cut costs by integrating services on a regional (or even multi-regional) basis. This means that services currently provided by local employers may now be moved to regionally based employers. LHINs will be able to use their funding powers and accountability agreements to encourage or even require these changes.
Support services are the first target for this sort of change. We are already seeing signs of this with the move by hospitals to establish regional back office and supply chain organizations. Currently there are about 150 different hospital supply chains – this can be expected to be reduced to about 14. While efforts are being made to establish these organizations in many parts of the province, the most advanced is in the Greater Toronto Area with Hospital Business Services (HBS). Fourteen hospitals are trying to establish a new organization that would provide back office and supply chain services not just to hospitals but also to a whole variety of not for-profit organizations. The hospitals wish to move employees out of their existing hospital bargaining units. HBS documentation indicates that many jobs will then be privatized or eliminated. The bottom line in this exercise is to cut costs.
While some hospitals are moving to establish new employers like HBS to integrate services, other forms of integration are possible – hospitals could trade services to foster specialization, a dominant hospital could become the provider of support services for other health and social services in the region, etc, etc. Notably, hospitals in Hamilton, Niagara, Haldimand and Brant region have appointed a chief information officer to oversee the regional integration of electronic health records and information networks (“Integrated Vice President and Chief Information Officer”).
Another even more fundamental form of integration by health care providers is suggested in a recent report by former hospital CEO Tom Closson on integration in Northwest Ontario.
Closson Report on Health Care in Northwestern OntarioOn August 8, 2005, Ontario’s Ministry of Health and Long-Term Care made public the report of Special Advisor Tom Closson, entitled “An Integrated Service Plan for Northwestern Ontario”.
Health Minister Smitherman has said that the report may serve as a model for how LHINs across the province can approach health care planning.
In his report, Mr. Closson recommended restructuring hospital services, reforming the delivery of primary and tertiary care, changing out-of-region services, and reorganizing local governance and hospital management in Northwestern Ontario.
Mr. Closson recommended restructuring hospital services by establishing a hierarchy of facilities to provide secondary and tertiary care for the entire Northwest. To facilitate this, there would be district governance and management structures. This model would require the dissolution of most existing local service delivery governance and management structures.
“To facilitate this new hospital/health services organizational continuum there should be District Governance and management structures for each of six districts:
· Sioux Lookout & isolated communities
· Kenora
· Dryden-Red Lake
· Fort Frances-Rainy River
· Thunder Bay District
· Thunder Bay City
“These new District governance and management structures would lead management of health care in the Northwest. These new entities would be challenged to introduce a new focus on integrated management of health services across the continuum at the District level. Planning and funding allocations among the Districts would be led by the LHIN.
“This new model will require dissolution of most existing local service delivery governance structures. Special consideration will need to be given to governance of religious service delivery agencies such as the St. Joseph’s Care Group.”
The Ontario Hospital Association’s Board of Directors believes that Mr. Closson’s report is valuable given the advent of LHINs. The OHA’s Board decided at its August 17, 2005 meeting to create a task force to conduct a comprehensive review of the Clossson recommendations.
Mr. Closson’s recommendations are for much more fundamental form of health care provider integration – effectively merging various providers within the six districts in the LHIN and causing major changes in bargaining unit structure.
This suggests that while to date there the government has focused on back office and supply chain integration, it is very likely that there will be a move to expand integration into other areas: food services, maintenance, housekeeping, clinical services, right up to and including the merger of organizations.
LHIN-wide bargaining units?While this second form of change to bargaining unit structure could be very far reaching a third even more fundamental change to bargaining unit structure is potential at some point in the future of regionalization.
Ontario is the last of all the provinces to move to some form of health care regionalization. With regionalization in the other provinces however, the regional health authorities became the employer. So for example, a support service bargaining unit could cover employees who work in a hospital facility, a nursing home, or in a home care service (depending on the scope of activities provided by the regional health authority).
The Ontario government has rejected this form of regionalization so far. Indeed, the direct provision of services by regional health authorities runs counter to the government’s current interest in regional health authorities purchasing services through contract tendering.
Moreover, direct provision by regional health authorities would create a major conflict with hospitals – strong organizations with deep roots in their communities. The role of religious hospitals, francophone hospitals, and prestigious research hospitals sets Ontario apart from other provinces to a degree.
Nevertheless, LHINs may be only a first step in the move to the direct provision of services by regional health authorities. While LHINs may facilitate integration in some ways, it hampers it in others (see above). Direct provision would obliterate many of the barriers to integration.
Even with the current LHINs proposal, the Ontario Hospital Association has raised the possibility of the LHINs becoming the employer:
“When LHINs do receive funding responsibilities, “related employer” provisions in the Ontario Labour Relations Act mean that the LHIN could be considered the employer. This means a potential impact on collective bargaining, compensation, pay equity, health and safety, union certification and many other labour related matters.”
While this is not likely on the immediate horizon, if this does happen, the status of all bargaining units in health care and (the affected portions of) social services are thrown into question. Barring agreement between the unions, there would likely be a major representation struggle between unions for up to 200,000 members. Losing unions could be shut out, winning unions could do very well.
Future changes in LHIN boundaries are quite likely, given the experience in other provinces with regionalization. So, if representation rights do become associated with the LHINs, we could see repeated rounds of representation votes between unions.
Bargaining unit changes are coming – the extent remains unclear. The changes however, are likely significant enough that the ensuing representation votes will weaken labour solidarity –unless steps are taken.
Bottom line: The LHINs reform opens up uncertainty concerning the future of health care and some social service bargaining units in the province. Taking measures to preserve labour unity will become more important.
As a first step to preserve labour unity, CUPE and OCHU will attempt to win other unions to support the establishment of councils of unions to represent workers at newly established regional health care support service providers. The councils would allow unions to represent workers at the successor employer based on their current levels of membership in the predecessor employers. This will deepen the ties between health care unions and help us avoid using precious resources in representation votes battling other unions.
[5] Collective Bargaining
The purchaser-provider system will increase competition between health care providers. Even in areas where the LHIN does not implement full contract tendering, there will likely be increased competition between providers for scarce health care funding. LHINs, unlike provincial governments, cannot simply decide that new funding is required – they will be stuck with whatever funding the government gives them.
CUPE must change to deal with this reality.
Most of our bargaining is done strictly on an employer-by-employer basis.
The hospital sector has central bargaining which allows hospital workers in many different hospitals to jointly agree on bargaining strategy, bargaining proposals, and the terms of a single central collective agreement. This prevents hospitals from competing with each other on the basis of fewer protections against contracting out, lower working conditions or reduced wage increases.
We need to expand this sort of unity to other sectors. As a first step, CUPE will begin building a consensus on how we can build coordinated bargaining in areas where we do not have central bargaining.
CUPE will explore with other health care and social service unions the potential for central bargaining, or failing this, specific unions or groups of unions taking the lead in each LHIN to establish patterns for wage settlements and contract gains. While bargaining would, at least, be coordinated within each LHIN, the bargaining priorities would be established on a province-wide basis.
CUPE will consult with CUPE locals after these initial consultations and make a specific proposal for how bargaining should proceed and what responsibilities we are asking the respective parties to take on.
DA:dm
cope491
[1] As a percentage of hospital spending, support service spending has fallen dramatically for many years across Canada. Indeed, in recent years, the actual dollars spent has fallen in many areas. And despite large spending increases by Ontario hospitals, the actual number of hourly paid hospital workers in Ontario fell starting in the mid-1990s. It has only in the last year returned to earlier levels.
[2] Speaking Remarks, Sheila Jarvis, Chair of the Board of Directors Ontario Hospital Association, to
Conference on Optimizing the Effectiveness of Local Health Integration Networks, 25 February 2005
In the summer of 2004, the Ontario government proposed the development of Local Health Integration Networks (LHINs). The government wants LHINs to oversee:
- Hospitals (including divested psychiatric hospitals)
- Community Care Access Centres
- Community Support Service Agencies (e.g. Alzheimer societies, associations for people with physical disabilities, meals on wheels, hearing societies, family counseling centres, VONs, CNIBs, hospices, child treatment centres, etc.)
- Mental Health and Addictions Agencies
- Community Health Centres
- Long-Term Care Homes
The government says that LHINs will not oversee:
- Physicians
- Ambulance Services (emergency and non-emergency)
- Laboratories
- Provincial drug programs
- Individualized care
Although they will not be included at the present time, the government is still reviewing the relationship between LHINs and “independent health facilities” (i.e. privatized clinics), public health programs, and provincial networks.
Each LHIN will be funded by the provincial government, governed by a board of directors appointed by the provincial government, and bound by a memorandum of understanding and a performance agreement with the Ministry of Health and Long Term Care (MOHLTC).
The government has now appointed three person boards (consisting of a chair and two directors) for each of the 14 LHINs. The government did not wish to appoint board members based on the specific groups or areas within the LHIN. The government plans to increase LHIN board membership up to nine members. Board members will be remunerated in accordance with the Government Appointees Directives, which includes per diem pay rates.
The government plans that each LHIN would be responsible by 2007/08 for:
(a) Local health system planning in accordance with MOHLTC strategic directions
(b) Local health system integration and service coordination (including integration with other LHINs)
(c) Accountability and performance management (including accountability agreements with health service providers funded by LHINs)
(d) Local community engagement
(e) Evaluation and reporting
(f) Funding
(g) Providing funds to health service providers within the scope of LHINs and within the available LHIN funding envelope
(h) Providing advice on capital needs to the MOHLTC
The government reports that work is underway to identify models for a shared back office of certain operations (purchasing, procurement, payroll, etc.) for all LHINs.
This proposed LHIN reform raises many serious problems for public health care and health care workers. Key issues are identified below.
[1] Privatization
LHINs will create a split between the purchasers of health care and social services (i.e. the LHINs) and the providers (e.g. the hospitals, the homes, etc.).
The Experience with the Ontario Home Care Purchaser-Provider Split Such a split has already been established in home health care, where community care access centres fund home care providers through a system of competitive bidding. In effect, this means compulsory contracting out of home care services.
The results of this system in home care have been extremely negative. The most reliable and recent figures show that the percentage of homecare nursing market share provided in Ontario by for-profit service providers increased from 18% in 1995, two years prior to the introduction of competitive bidding to 48% in 2001.
As contracts come up for renewal, home care providers regularly lose contracts and workers, who have no successor rights, are laid off. In Cornwall, homecare staff have lost their jobs at least three times since competitive bidding was introduced. A recent snapshot study identified over 1,000 home care workers in Ontario who were laid off due to contract loses over an eight-month period.
Faced with this uncertainty, many of the workers naturally decide to work in other, more secure sectors. The Red Cross estimates that where it has lost contracts, up to 35% of its former workers leave the homecare sector.
This system makes it very difficult for workers to bargain effectively. First of all, they are not bargaining with the agency that controls the purse strings, weakening the ability of the employers to bargain wage increases. Second, even if the union is able to extract a significant wage increase, their employer may not be able to put in a competitive bid and win a new contract, as labour costs make up a large portion of costs in home care (and other parts of health care).
The result? Similarly qualified workers make much less in the home care sector than they would in other health care sectors.
Not surprisingly, turnover rates are extremely high – going as high as 73% in 1999. No industry – and certainly not an industry as vital as health care— can maintain adequate service with high turnover.
The purchaser-provider split proved so bad in home care that the government was forced to halt the tendering process and appoint Elinor Caplan to review the system. Unfortunately, she chose only to make recommendations that would tinker with the existing purchaser-provider system. Health Minister George Smitherman is now reviewing her recommendations.
The NDP government had tried to implement a publicly delivered home care system during its term in office. The Mike Harris Conservatives stopped this and brought in the purchaser-provider split now defended by the Liberals.
The Experience with Competitive Bidding in Social ServicesCompetitive bidding is also doing damage in social services with its introduction by Human Resources and Skills Development Canada. The new bidding process has, in the first round of proposals, disrupted over a third of the long-standing arrangements with community organizations. Three organizations are losing so much of their funding that they will have to close their doors. Four contracts have been awarded to the for-profit sector.
Clients have no idea where they will be served, if at all, while the programs and linkages created over decades of work are being lost. Laid off social service workers are being forced to re-apply for their same jobs – at a lower rate of pay and benefits. Not everyone has found re-employment.
And yet, Ontario government officials are now talking of extending the purchaser-provider split and competitive bidding to other areas of health care and social services through the LHINs.
Britain
Over the last two decades, Britain has introduced the purchaser – provider split in health care, leading to a massive expansion of privatization. This change has influenced other European countries and is now having an impact on the Ontario Liberal government. The early move to this system has helped English corporations gain expertise in health care privatization. So, it is not surprising that Carillion – an English corporation – has won the bids for both P3 hospital projects in Ontario.
Before the introduction of the purchaser-provider split in Britain, no other western country could match its low health care costs, largely because no other country had so radically eliminated market mechanisms. With few exceptions, there was no invoicing and so no payment of bills. As a result, administrative costs were kept low. The system was truly integrated.
With the introduction of the purchaser-provider split problems arose:
- Openings for privatization. Before the split, there were few entry points for private sector intrusion into health care in Britain. With the split, every new contract has the potential to divert resources to the for-profit sector. For every £1 spent on National Health Service (NHS) staff in 1995, 71 pence was spent on procurement of goods and services from the private sector; by 2003, the figure was £1.15 for every £1 on staff.
- Fragmentation. While the Ontario government has sold LHINs as a way to integrate services, the purchaser-provider split has actually led to fragmentation in Britain. Funding comes by winning contracts. So, for example, hospitals must compete with one another for contracts. For its own survival, each hospital must now assess each cost as if that hospital stood completely alone in the health care system. But cost savings for a hospital can lead to cost increases for other health care providers. But these “externalities” cease to be relevant for the hospital when competition becomes its mode of survival. As a result, the focus in Britain changed from planning services to meet patient needs to a focus on contract performance and the denial of care when contracts are exceeded.
- Increased administrative costs. If services are purchased, they have to be priced. So, every single major activity now has to be costed in British hospitals. But costing services and all the other aspects inherent to the market (e.g. establishing contracts, implementing billing systems, and overseeing contracts) costs time and money. Increased administrative costs are typical of the purchaser provider split model. The extreme case is the United States: its highly privatized purchaser-provider split sees almost 1/3 of health care costs tied up in administration: that’s hundreds of billions of US dollars.
- Mass reductions in the number of support service workers. Many such jobs were contracted out, others simply eliminated: In the first phase of the purchaser provider, split support service jobs were cut from 260,000 to 120,000 from 1981 to 1994. Contracted out workers have been forced to live on poverty level wages, with benefits stripped. Turnover increased and hospital cleanliness fell. Hospital acquired infection rates have soared. The poor quality of hospital food became notorious: incredibly, 10% of seriously ill patients were found to have suffered malnutrition while in hospital.
- The establishment of private clinics and the expansion of private hospitals. Private diagnostic and surgical clinics increasingly have taken over work previously done in hospitals, despite costing more. The goal is now to have up to 640,000 surgeries carried out by private clinics each year. More work is also being done in private hospitals: in the early 1990s, the British National Health Services (NHS) was buying less than £200m worth of treatment from private hospitals a year. This will have increased 10-fold by 2007. Up to 15% of elective surgery will be hived off to private hospitals. Recently, another £3bn has been announced by the government for services exclusively to be provided by for-profit providers – with NHS hospitals forbidden to bid on this work. Yet, a recent poll showed 89% against private provision of NHS Care. Typically, the private sector “cherry-picks” the most profitable areas of work.
- Specialization: Hospitals that cannot provide a service for the set price either have to subsidize it from other parts of their budget or give up providing that service. This is quite unsatisfactory where alternate hospitals are at some distance (as is often the case in Ontario). Inequality in service is the result.
But all of this change has only led to serious problems for British health care: despite more than doubling funding since 1997, the service is running into an “autumn crisis”, with debts totaling at least £750m, bed closures, operating theatres closures, service cuts, and estimates of 8,000 or more layoffs. And now, the government may be forced to own up to the many billions of pounds of debt for its ill-conceived and expensive public private partnership hospitals. If the government is forced to bring these debts onto its books (as proper accounting should require), business papers indicate that tax increases become much more likely.
Bottom line: Privatization and increased competition are major threats of this reform. Instead of integration, privatization will bring “disintegration” with the various providers in competition to win contracts. The institution of the purchaser-provider split and the expansion of privatization in health care and social services must be prevented.
Funding: The purchase of services by the LHINs through a tendering system is likely the worst possible alternative. While government officials talk of introducing this system, it would so destabilize the existing health care system that it is likely there would, at first, only be an incremental expansion of a purchaser-provider tendering system beyond home care.
There remains significant uncertainty about the range of tools LHINs will use to fund the basket of health care and social services.
- Will certain services (e.g. cancer care services, cardiac services, acute care services) be exempted from LHINs funding and be funded directly by the province?
- Will capital funding eventually devolve to the LHINs?
- Will different LHINs use different funding tools?
- What other tools might the LHINs use to fund services?
Likely change will be incremental: not all of it will happen right away. This is positive as it gives us a chance to push for funding systems that will discourage privatization, ensure stability and the continuity of care, and allow workers to bargain fair collective agreements.
Notably, the hospitals have taken a very dim view of devolving funding to the LHINs.
The OHA strongly supports the government’s plan to take time and to conduct further research in making its decision on the devolution of funding responsibilities to the LHINs…. We believe that hospital rate setting must remain at the provincial level to maintain equity and avoid balkanization of the system… we also recommend that the OHA, hospitals and the government, develop a common hospital funding formula for use across the province. To ensure provincial clinical standards are met, we believe that the government should create a provincial specialized services agency to monitor, fund and evaluate provincially based programs and services, such as Cancer Care Ontario and the Cardiac Care Network. Finally, hospitals also believe that the funding of capital and health research should remain with the Ontario government given their obvious provincial and even national significance.[2]
Provincial Funding of LHINs: There is also the unresolved question of how the LHINs themselves will be funded. By historical levels? (Notably, these levels vary significantly by hospital and so moving away from them could lead to significant changes in the level of services on a regional level.) By population and demographic figures? By volume and complexity of services provided? By some combination of the above?
[2] Access to Health Care ServicesA key goal of this reform is to reduce costs by “integrating” services. But this raises questions about cutting services.
So, at first, the government talked only of integrating support services. This reflects a long-term policy of government to initiate its cost saving efforts with support services. While cutting back support services is dangerous (note the infection control problems in hospitals) and inefficient (it often requires more highly paid staff to take over the functions formerly done by support staff), it can be less controversial to the public than attacks on direct health care services, or in-classroom services.
Major steps are now being taken to integrate support services on a regional level. New organizations like “Hospitals Business Services” are being established to take over and centralize support services formerly provided by hospitals, homes and other non-profits, with many of the services then contracted out to for-profit corporations (see the fuller discussion in section 4 below).
The government has also introduced on April 27th Bill 190, the “Good Government Act, 2005”. Among many other items, this Act would amend the Ministry of Government Services Act that allows the Ontario government to acquire, manage and provide common services for government-related agencies. Bill 190 would designate hospitals and other selected broader public sector organizations (e.g. municipalities, universities, colleges) as “government-related agencies” allowing the government to provide common services to these organizations.
Notably, however, the hospitals balked at an exclusive focus on support services. Simply integrating support services cannot satisfy the cost savings demanded by the government – the savings would also require clinical cuts. Indeed the hospitals drew up a long list of clinical services under the knife.
Clinical Services Threatened: So by April 2005, the government admitted as much, with Health Minister George Smitherman publicly calling for the centralization of hospital surgeries and taking less serious surgeries right out of hospitals. This squarely raises the possibility of the establishment of for-profit surgical clinics – just as in Britain. Indeed, when Smitherman announced his interest in surgical clinics, the chosen sponsor of his speech proposed private sector clinics providing two tier care as soon as Smitherman sat down.
Bottom line: “Integration” will likely be used as a cover for removing jobs and services from local communities and privatizing health care and social services. Support services will be the first target, but direct care will also be targeted.
[3] Eroding Community Control and Accountability
The government emphasizes the movement of some powers from its direct control to the LHINs. However, the autonomy of the LHINs from the government will be very modest. The LHIN boards will be appointed by the provincial government, board members will receive (for the first time) payments from the province, and LHINs will be required to sign memorandums of understanding and performance agreements with the government.
So LHIN boards will be responsible to the provincial government rather than local communities. In contrast, hospitals boards are not appointed by the provincial government and they have effectively fought for better funding for their communities.
Indeed, the government has successfully blunted criticism of its funding and implemented massive cutbacks by taking over local health care organizations in the very recent past. Community care access centres were taken over by the provincial government in 2001. Their vigorous public campaigns for better funding stopped immediately. The result? Their funding was flat lined for years and home care services were cut back dramatically.
Compounding this lack of community control, the proposed LHINs cover vast and very diverse areas. The LHIN boundaries have been formed based on hospital referral patterns, overriding political and social boundaries. The proposed LHINs are not “local”, they are not based on communities, and they do not represent communities of interest. As a result, they lack political coherence. It will be very difficult for the people living within a LHIN to have a significant voice over the direction of that LHIN.
Conflict within the LHINs: The large, socially diverse areas covered by the LHINs also suggest that there will be significant conflict over resource allocation within the LHINs. Already there are clear signs of this. With cost cutting a key goal for the provincial government, the question will arise: what services will be provided in each area of a LHIN. One LHIN covers Hamilton, Burlington, Niagara, Haldimand, Brant and Norfolk, another Scarborough, Oshawa, Peterborough, and Haliburton, another all of northwestern Ontario. Into which of these communities will the funding flow as the LHIN tries to manage on whatever funds are provided? Smaller communities are especially threatened.
These battles may only be the beginning. The experience elsewhere indicates that provincial governments regularly change regional health care boundaries – sometimes radically. Moreover, centralization doesn’t necessarily mean cost savings. Indeed, the most recent government experiments with it have led to increased costs: i.e. the merger and closure of hospitals and the centralization of jail services under the former Tory government. And nothing in this reform deals with the undisputed real health care cost drivers: soaring costs for drugs and medical equipment provided by for-profit corporations.
Bottom line: The proposed LHIN structure puts up significant barriers to local community control of health care. Conflicts between communities within a single LHIN are likely. Small communities are particularly threatened. Yet, changes to LHIN boundaries are also quite likely and cost savings are an open question at best.
Provincial Government Accountability Diminished
Flak Catchers: LHINs will insulate government from decisions to cutback or privatize services by creating another level bureaucracy that will catch much of the “flak”. The government will control LHINs (by appointing board members, establishing accountability agreements, and setting funding levels) but the LHINs will actually implement decisions. They will be the first targets for popular discontent, even if their actual autonomy from government is more imaginary than real.
Bottom line: Communities will have to deal not just with the provincial government (and health care providers) but also with the 14 LHINs. Likely, the provincial government will respond to complaints by stating that, “it was not our decision – it was a decision of the LHIN.” Yet, the LHIN will largely be unaccountable to local communities.
[4] Impact on Bargaining Unit Structure and Union Local Structure
LHINs may affect bargaining unit structure in at least three ways.
Immediate Impact on Certain Bargaining UnitsFirst, there are changes directly caused by the inauguration of the LHINs. The LHINs themselves (at least to start) will employ relatively small numbers of employees: reportedly about 40 each. Community care access centres will also be directly impacted. They will have to change their boundaries to fit within the LHINs. It is not yet clear if there will be one CCAC per LHIN, or somewhat more. In any case, there will be a reduction from the current 43 CCACs. An announcement could come at any time. CUPE represents (mostly clerical) staff at 19 CCACs. Representation votes are almost a certainty.
Impact of the Integration of Services on Bargaining Units
A second form of change in bargaining units will come from efforts by health care providers to integrate services.
The government wishes to cut costs by integrating services on a regional (or even multi-regional) basis. This means that services currently provided by local employers may now be moved to regionally based employers. LHINs will be able to use their funding powers and accountability agreements to encourage or even require these changes.
Support services are the first target for this sort of change. We are already seeing signs of this with the move by hospitals to establish regional back office and supply chain organizations. Currently there are about 150 different hospital supply chains – this can be expected to be reduced to about 14. While efforts are being made to establish these organizations in many parts of the province, the most advanced is in the Greater Toronto Area with Hospital Business Services (HBS). Fourteen hospitals are trying to establish a new organization that would provide back office and supply chain services not just to hospitals but also to a whole variety of not for-profit organizations. The hospitals wish to move employees out of their existing hospital bargaining units. HBS documentation indicates that many jobs will then be privatized or eliminated. The bottom line in this exercise is to cut costs.
While some hospitals are moving to establish new employers like HBS to integrate services, other forms of integration are possible – hospitals could trade services to foster specialization, a dominant hospital could become the provider of support services for other health and social services in the region, etc, etc. Notably, hospitals in Hamilton, Niagara, Haldimand and Brant region have appointed a chief information officer to oversee the regional integration of electronic health records and information networks (“Integrated Vice President and Chief Information Officer”).
Another even more fundamental form of integration by health care providers is suggested in a recent report by former hospital CEO Tom Closson on integration in Northwest Ontario.
Closson Report on Health Care in Northwestern OntarioOn August 8, 2005, Ontario’s Ministry of Health and Long-Term Care made public the report of Special Advisor Tom Closson, entitled “An Integrated Service Plan for Northwestern Ontario”.
Health Minister Smitherman has said that the report may serve as a model for how LHINs across the province can approach health care planning.
In his report, Mr. Closson recommended restructuring hospital services, reforming the delivery of primary and tertiary care, changing out-of-region services, and reorganizing local governance and hospital management in Northwestern Ontario.
Mr. Closson recommended restructuring hospital services by establishing a hierarchy of facilities to provide secondary and tertiary care for the entire Northwest. To facilitate this, there would be district governance and management structures. This model would require the dissolution of most existing local service delivery governance and management structures.
“To facilitate this new hospital/health services organizational continuum there should be District Governance and management structures for each of six districts:
· Sioux Lookout & isolated communities
· Kenora
· Dryden-Red Lake
· Fort Frances-Rainy River
· Thunder Bay District
· Thunder Bay City
“These new District governance and management structures would lead management of health care in the Northwest. These new entities would be challenged to introduce a new focus on integrated management of health services across the continuum at the District level. Planning and funding allocations among the Districts would be led by the LHIN.
“This new model will require dissolution of most existing local service delivery governance structures. Special consideration will need to be given to governance of religious service delivery agencies such as the St. Joseph’s Care Group.”
The Ontario Hospital Association’s Board of Directors believes that Mr. Closson’s report is valuable given the advent of LHINs. The OHA’s Board decided at its August 17, 2005 meeting to create a task force to conduct a comprehensive review of the Clossson recommendations.
Mr. Closson’s recommendations are for much more fundamental form of health care provider integration – effectively merging various providers within the six districts in the LHIN and causing major changes in bargaining unit structure.
This suggests that while to date there the government has focused on back office and supply chain integration, it is very likely that there will be a move to expand integration into other areas: food services, maintenance, housekeeping, clinical services, right up to and including the merger of organizations.
LHIN-wide bargaining units?While this second form of change to bargaining unit structure could be very far reaching a third even more fundamental change to bargaining unit structure is potential at some point in the future of regionalization.
Ontario is the last of all the provinces to move to some form of health care regionalization. With regionalization in the other provinces however, the regional health authorities became the employer. So for example, a support service bargaining unit could cover employees who work in a hospital facility, a nursing home, or in a home care service (depending on the scope of activities provided by the regional health authority).
The Ontario government has rejected this form of regionalization so far. Indeed, the direct provision of services by regional health authorities runs counter to the government’s current interest in regional health authorities purchasing services through contract tendering.
Moreover, direct provision by regional health authorities would create a major conflict with hospitals – strong organizations with deep roots in their communities. The role of religious hospitals, francophone hospitals, and prestigious research hospitals sets Ontario apart from other provinces to a degree.
Nevertheless, LHINs may be only a first step in the move to the direct provision of services by regional health authorities. While LHINs may facilitate integration in some ways, it hampers it in others (see above). Direct provision would obliterate many of the barriers to integration.
Even with the current LHINs proposal, the Ontario Hospital Association has raised the possibility of the LHINs becoming the employer:
“When LHINs do receive funding responsibilities, “related employer” provisions in the Ontario Labour Relations Act mean that the LHIN could be considered the employer. This means a potential impact on collective bargaining, compensation, pay equity, health and safety, union certification and many other labour related matters.”
While this is not likely on the immediate horizon, if this does happen, the status of all bargaining units in health care and (the affected portions of) social services are thrown into question. Barring agreement between the unions, there would likely be a major representation struggle between unions for up to 200,000 members. Losing unions could be shut out, winning unions could do very well.
Future changes in LHIN boundaries are quite likely, given the experience in other provinces with regionalization. So, if representation rights do become associated with the LHINs, we could see repeated rounds of representation votes between unions.
Bargaining unit changes are coming – the extent remains unclear. The changes however, are likely significant enough that the ensuing representation votes will weaken labour solidarity –unless steps are taken.
Bottom line: The LHINs reform opens up uncertainty concerning the future of health care and some social service bargaining units in the province. Taking measures to preserve labour unity will become more important.
As a first step to preserve labour unity, CUPE and OCHU will attempt to win other unions to support the establishment of councils of unions to represent workers at newly established regional health care support service providers. The councils would allow unions to represent workers at the successor employer based on their current levels of membership in the predecessor employers. This will deepen the ties between health care unions and help us avoid using precious resources in representation votes battling other unions.
[5] Collective Bargaining
The purchaser-provider system will increase competition between health care providers. Even in areas where the LHIN does not implement full contract tendering, there will likely be increased competition between providers for scarce health care funding. LHINs, unlike provincial governments, cannot simply decide that new funding is required – they will be stuck with whatever funding the government gives them.
CUPE must change to deal with this reality.
Most of our bargaining is done strictly on an employer-by-employer basis.
The hospital sector has central bargaining which allows hospital workers in many different hospitals to jointly agree on bargaining strategy, bargaining proposals, and the terms of a single central collective agreement. This prevents hospitals from competing with each other on the basis of fewer protections against contracting out, lower working conditions or reduced wage increases.
We need to expand this sort of unity to other sectors. As a first step, CUPE will begin building a consensus on how we can build coordinated bargaining in areas where we do not have central bargaining.
CUPE will explore with other health care and social service unions the potential for central bargaining, or failing this, specific unions or groups of unions taking the lead in each LHIN to establish patterns for wage settlements and contract gains. While bargaining would, at least, be coordinated within each LHIN, the bargaining priorities would be established on a province-wide basis.
CUPE will consult with CUPE locals after these initial consultations and make a specific proposal for how bargaining should proceed and what responsibilities we are asking the respective parties to take on.
DA:dm
cope491
[1] As a percentage of hospital spending, support service spending has fallen dramatically for many years across Canada. Indeed, in recent years, the actual dollars spent has fallen in many areas. And despite large spending increases by Ontario hospitals, the actual number of hourly paid hospital workers in Ontario fell starting in the mid-1990s. It has only in the last year returned to earlier levels.
[2] Speaking Remarks, Sheila Jarvis, Chair of the Board of Directors Ontario Hospital Association, to
Conference on Optimizing the Effectiveness of Local Health Integration Networks, 25 February 2005
Competitive bidding is also doing damage in social services with its introduction by Human Resources and Skills Development Canada. The new bidding process has, in the first round of proposals, disrupted over a third of the long-standing arrangements with community organizations. Three organizations are losing so much of their funding that they will have to close their doors. Four contracts have been awarded to the for-profit sector.
Clients have no idea where they will be served, if at all, while the programs and linkages created over decades of work are being lost. Laid off social service workers are being forced to re-apply for their same jobs – at a lower rate of pay and benefits. Not everyone has found re-employment.
And yet, Ontario government officials are now talking of extending the purchaser-provider split and competitive bidding to other areas of health care and social services through the LHINs.
Britain
Over the last two decades, Britain has introduced the purchaser – provider split in health care, leading to a massive expansion of privatization. This change has influenced other European countries and is now having an impact on the Ontario Liberal government. The early move to this system has helped English corporations gain expertise in health care privatization. So, it is not surprising that Carillion – an English corporation – has won the bids for both P3 hospital projects in Ontario.
Before the introduction of the purchaser-provider split in Britain, no other western country could match its low health care costs, largely because no other country had so radically eliminated market mechanisms. With few exceptions, there was no invoicing and so no payment of bills. As a result, administrative costs were kept low. The system was truly integrated.
With the introduction of the purchaser-provider split problems arose:
- Openings for privatization. Before the split, there were few entry points for private sector intrusion into health care in Britain. With the split, every new contract has the potential to divert resources to the for-profit sector. For every £1 spent on National Health Service (NHS) staff in 1995, 71 pence was spent on procurement of goods and services from the private sector; by 2003, the figure was £1.15 for every £1 on staff.
- Fragmentation. While the Ontario government has sold LHINs as a way to integrate services, the purchaser-provider split has actually led to fragmentation in Britain. Funding comes by winning contracts. So, for example, hospitals must compete with one another for contracts. For its own survival, each hospital must now assess each cost as if that hospital stood completely alone in the health care system. But cost savings for a hospital can lead to cost increases for other health care providers. But these “externalities” cease to be relevant for the hospital when competition becomes its mode of survival. As a result, the focus in Britain changed from planning services to meet patient needs to a focus on contract performance and the denial of care when contracts are exceeded.
- Increased administrative costs. If services are purchased, they have to be priced. So, every single major activity now has to be costed in British hospitals. But costing services and all the other aspects inherent to the market (e.g. establishing contracts, implementing billing systems, and overseeing contracts) costs time and money. Increased administrative costs are typical of the purchaser provider split model. The extreme case is the United States: its highly privatized purchaser-provider split sees almost 1/3 of health care costs tied up in administration: that’s hundreds of billions of US dollars.
- Mass reductions in the number of support service workers. Many such jobs were contracted out, others simply eliminated: In the first phase of the purchaser provider, split support service jobs were cut from 260,000 to 120,000 from 1981 to 1994. Contracted out workers have been forced to live on poverty level wages, with benefits stripped. Turnover increased and hospital cleanliness fell. Hospital acquired infection rates have soared. The poor quality of hospital food became notorious: incredibly, 10% of seriously ill patients were found to have suffered malnutrition while in hospital.
- The establishment of private clinics and the expansion of private hospitals. Private diagnostic and surgical clinics increasingly have taken over work previously done in hospitals, despite costing more. The goal is now to have up to 640,000 surgeries carried out by private clinics each year. More work is also being done in private hospitals: in the early 1990s, the British National Health Services (NHS) was buying less than £200m worth of treatment from private hospitals a year. This will have increased 10-fold by 2007. Up to 15% of elective surgery will be hived off to private hospitals. Recently, another £3bn has been announced by the government for services exclusively to be provided by for-profit providers – with NHS hospitals forbidden to bid on this work. Yet, a recent poll showed 89% against private provision of NHS Care. Typically, the private sector “cherry-picks” the most profitable areas of work.
- Specialization: Hospitals that cannot provide a service for the set price either have to subsidize it from other parts of their budget or give up providing that service. This is quite unsatisfactory where alternate hospitals are at some distance (as is often the case in Ontario). Inequality in service is the result.
But all of this change has only led to serious problems for British health care: despite more than doubling funding since 1997, the service is running into an “autumn crisis”, with debts totaling at least £750m, bed closures, operating theatres closures, service cuts, and estimates of 8,000 or more layoffs. And now, the government may be forced to own up to the many billions of pounds of debt for its ill-conceived and expensive public private partnership hospitals. If the government is forced to bring these debts onto its books (as proper accounting should require), business papers indicate that tax increases become much more likely.
Bottom line: Privatization and increased competition are major threats of this reform. Instead of integration, privatization will bring “disintegration” with the various providers in competition to win contracts. The institution of the purchaser-provider split and the expansion of privatization in health care and social services must be prevented.
Funding: The purchase of services by the LHINs through a tendering system is likely the worst possible alternative. While government officials talk of introducing this system, it would so destabilize the existing health care system that it is likely there would, at first, only be an incremental expansion of a purchaser-provider tendering system beyond home care.
There remains significant uncertainty about the range of tools LHINs will use to fund the basket of health care and social services.
- Will certain services (e.g. cancer care services, cardiac services, acute care services) be exempted from LHINs funding and be funded directly by the province?
- Will capital funding eventually devolve to the LHINs?
- Will different LHINs use different funding tools?
- What other tools might the LHINs use to fund services?
Likely change will be incremental: not all of it will happen right away. This is positive as it gives us a chance to push for funding systems that will discourage privatization, ensure stability and the continuity of care, and allow workers to bargain fair collective agreements.
Notably, the hospitals have taken a very dim view of devolving funding to the LHINs.
The OHA strongly supports the government’s plan to take time and to conduct further research in making its decision on the devolution of funding responsibilities to the LHINs…. We believe that hospital rate setting must remain at the provincial level to maintain equity and avoid balkanization of the system… we also recommend that the OHA, hospitals and the government, develop a common hospital funding formula for use across the province. To ensure provincial clinical standards are met, we believe that the government should create a provincial specialized services agency to monitor, fund and evaluate provincially based programs and services, such as Cancer Care Ontario and the Cardiac Care Network. Finally, hospitals also believe that the funding of capital and health research should remain with the Ontario government given their obvious provincial and even national significance.[2]
Provincial Funding of LHINs: There is also the unresolved question of how the LHINs themselves will be funded. By historical levels? (Notably, these levels vary significantly by hospital and so moving away from them could lead to significant changes in the level of services on a regional level.) By population and demographic figures? By volume and complexity of services provided? By some combination of the above?
[2] Access to Health Care ServicesA key goal of this reform is to reduce costs by “integrating” services. But this raises questions about cutting services.
So, at first, the government talked only of integrating support services. This reflects a long-term policy of government to initiate its cost saving efforts with support services. While cutting back support services is dangerous (note the infection control problems in hospitals) and inefficient (it often requires more highly paid staff to take over the functions formerly done by support staff), it can be less controversial to the public than attacks on direct health care services, or in-classroom services.
Major steps are now being taken to integrate support services on a regional level. New organizations like “Hospitals Business Services” are being established to take over and centralize support services formerly provided by hospitals, homes and other non-profits, with many of the services then contracted out to for-profit corporations (see the fuller discussion in section 4 below).
The government has also introduced on April 27th Bill 190, the “Good Government Act, 2005”. Among many other items, this Act would amend the Ministry of Government Services Act that allows the Ontario government to acquire, manage and provide common services for government-related agencies. Bill 190 would designate hospitals and other selected broader public sector organizations (e.g. municipalities, universities, colleges) as “government-related agencies” allowing the government to provide common services to these organizations.
Notably, however, the hospitals balked at an exclusive focus on support services. Simply integrating support services cannot satisfy the cost savings demanded by the government – the savings would also require clinical cuts. Indeed the hospitals drew up a long list of clinical services under the knife.
Clinical Services Threatened: So by April 2005, the government admitted as much, with Health Minister George Smitherman publicly calling for the centralization of hospital surgeries and taking less serious surgeries right out of hospitals. This squarely raises the possibility of the establishment of for-profit surgical clinics – just as in Britain. Indeed, when Smitherman announced his interest in surgical clinics, the chosen sponsor of his speech proposed private sector clinics providing two tier care as soon as Smitherman sat down.
Bottom line: “Integration” will likely be used as a cover for removing jobs and services from local communities and privatizing health care and social services. Support services will be the first target, but direct care will also be targeted.
[3] Eroding Community Control and Accountability
The government emphasizes the movement of some powers from its direct control to the LHINs. However, the autonomy of the LHINs from the government will be very modest. The LHIN boards will be appointed by the provincial government, board members will receive (for the first time) payments from the province, and LHINs will be required to sign memorandums of understanding and performance agreements with the government.
So LHIN boards will be responsible to the provincial government rather than local communities. In contrast, hospitals boards are not appointed by the provincial government and they have effectively fought for better funding for their communities.
Indeed, the government has successfully blunted criticism of its funding and implemented massive cutbacks by taking over local health care organizations in the very recent past. Community care access centres were taken over by the provincial government in 2001. Their vigorous public campaigns for better funding stopped immediately. The result? Their funding was flat lined for years and home care services were cut back dramatically.
Compounding this lack of community control, the proposed LHINs cover vast and very diverse areas. The LHIN boundaries have been formed based on hospital referral patterns, overriding political and social boundaries. The proposed LHINs are not “local”, they are not based on communities, and they do not represent communities of interest. As a result, they lack political coherence. It will be very difficult for the people living within a LHIN to have a significant voice over the direction of that LHIN.
Conflict within the LHINs: The large, socially diverse areas covered by the LHINs also suggest that there will be significant conflict over resource allocation within the LHINs. Already there are clear signs of this. With cost cutting a key goal for the provincial government, the question will arise: what services will be provided in each area of a LHIN. One LHIN covers Hamilton, Burlington, Niagara, Haldimand, Brant and Norfolk, another Scarborough, Oshawa, Peterborough, and Haliburton, another all of northwestern Ontario. Into which of these communities will the funding flow as the LHIN tries to manage on whatever funds are provided? Smaller communities are especially threatened.
These battles may only be the beginning. The experience elsewhere indicates that provincial governments regularly change regional health care boundaries – sometimes radically. Moreover, centralization doesn’t necessarily mean cost savings. Indeed, the most recent government experiments with it have led to increased costs: i.e. the merger and closure of hospitals and the centralization of jail services under the former Tory government. And nothing in this reform deals with the undisputed real health care cost drivers: soaring costs for drugs and medical equipment provided by for-profit corporations.
Bottom line: The proposed LHIN structure puts up significant barriers to local community control of health care. Conflicts between communities within a single LHIN are likely. Small communities are particularly threatened. Yet, changes to LHIN boundaries are also quite likely and cost savings are an open question at best.
Provincial Government Accountability Diminished
Flak Catchers: LHINs will insulate government from decisions to cutback or privatize services by creating another level bureaucracy that will catch much of the “flak”. The government will control LHINs (by appointing board members, establishing accountability agreements, and setting funding levels) but the LHINs will actually implement decisions. They will be the first targets for popular discontent, even if their actual autonomy from government is more imaginary than real.
Bottom line: Communities will have to deal not just with the provincial government (and health care providers) but also with the 14 LHINs. Likely, the provincial government will respond to complaints by stating that, “it was not our decision – it was a decision of the LHIN.” Yet, the LHIN will largely be unaccountable to local communities.
[4] Impact on Bargaining Unit Structure and Union Local Structure
LHINs may affect bargaining unit structure in at least three ways.
Immediate Impact on Certain Bargaining UnitsFirst, there are changes directly caused by the inauguration of the LHINs. The LHINs themselves (at least to start) will employ relatively small numbers of employees: reportedly about 40 each. Community care access centres will also be directly impacted. They will have to change their boundaries to fit within the LHINs. It is not yet clear if there will be one CCAC per LHIN, or somewhat more. In any case, there will be a reduction from the current 43 CCACs. An announcement could come at any time. CUPE represents (mostly clerical) staff at 19 CCACs. Representation votes are almost a certainty.
Impact of the Integration of Services on Bargaining Units
A second form of change in bargaining units will come from efforts by health care providers to integrate services.
The government wishes to cut costs by integrating services on a regional (or even multi-regional) basis. This means that services currently provided by local employers may now be moved to regionally based employers. LHINs will be able to use their funding powers and accountability agreements to encourage or even require these changes.
Support services are the first target for this sort of change. We are already seeing signs of this with the move by hospitals to establish regional back office and supply chain organizations. Currently there are about 150 different hospital supply chains – this can be expected to be reduced to about 14. While efforts are being made to establish these organizations in many parts of the province, the most advanced is in the Greater Toronto Area with Hospital Business Services (HBS). Fourteen hospitals are trying to establish a new organization that would provide back office and supply chain services not just to hospitals but also to a whole variety of not for-profit organizations. The hospitals wish to move employees out of their existing hospital bargaining units. HBS documentation indicates that many jobs will then be privatized or eliminated. The bottom line in this exercise is to cut costs.
While some hospitals are moving to establish new employers like HBS to integrate services, other forms of integration are possible – hospitals could trade services to foster specialization, a dominant hospital could become the provider of support services for other health and social services in the region, etc, etc. Notably, hospitals in Hamilton, Niagara, Haldimand and Brant region have appointed a chief information officer to oversee the regional integration of electronic health records and information networks (“Integrated Vice President and Chief Information Officer”).
Another even more fundamental form of integration by health care providers is suggested in a recent report by former hospital CEO Tom Closson on integration in Northwest Ontario.
Closson Report on Health Care in Northwestern OntarioOn August 8, 2005, Ontario’s Ministry of Health and Long-Term Care made public the report of Special Advisor Tom Closson, entitled “An Integrated Service Plan for Northwestern Ontario”.
Health Minister Smitherman has said that the report may serve as a model for how LHINs across the province can approach health care planning.
In his report, Mr. Closson recommended restructuring hospital services, reforming the delivery of primary and tertiary care, changing out-of-region services, and reorganizing local governance and hospital management in Northwestern Ontario.
Mr. Closson recommended restructuring hospital services by establishing a hierarchy of facilities to provide secondary and tertiary care for the entire Northwest. To facilitate this, there would be district governance and management structures. This model would require the dissolution of most existing local service delivery governance and management structures.
“To facilitate this new hospital/health services organizational continuum there should be District Governance and management structures for each of six districts:
· Sioux Lookout & isolated communities
· Kenora
· Dryden-Red Lake
· Fort Frances-Rainy River
· Thunder Bay District
· Thunder Bay City
“These new District governance and management structures would lead management of health care in the Northwest. These new entities would be challenged to introduce a new focus on integrated management of health services across the continuum at the District level. Planning and funding allocations among the Districts would be led by the LHIN.
“This new model will require dissolution of most existing local service delivery governance structures. Special consideration will need to be given to governance of religious service delivery agencies such as the St. Joseph’s Care Group.”
The Ontario Hospital Association’s Board of Directors believes that Mr. Closson’s report is valuable given the advent of LHINs. The OHA’s Board decided at its August 17, 2005 meeting to create a task force to conduct a comprehensive review of the Clossson recommendations.
Mr. Closson’s recommendations are for much more fundamental form of health care provider integration – effectively merging various providers within the six districts in the LHIN and causing major changes in bargaining unit structure.
This suggests that while to date there the government has focused on back office and supply chain integration, it is very likely that there will be a move to expand integration into other areas: food services, maintenance, housekeeping, clinical services, right up to and including the merger of organizations.
LHIN-wide bargaining units?While this second form of change to bargaining unit structure could be very far reaching a third even more fundamental change to bargaining unit structure is potential at some point in the future of regionalization.
Ontario is the last of all the provinces to move to some form of health care regionalization. With regionalization in the other provinces however, the regional health authorities became the employer. So for example, a support service bargaining unit could cover employees who work in a hospital facility, a nursing home, or in a home care service (depending on the scope of activities provided by the regional health authority).
The Ontario government has rejected this form of regionalization so far. Indeed, the direct provision of services by regional health authorities runs counter to the government’s current interest in regional health authorities purchasing services through contract tendering.
Moreover, direct provision by regional health authorities would create a major conflict with hospitals – strong organizations with deep roots in their communities. The role of religious hospitals, francophone hospitals, and prestigious research hospitals sets Ontario apart from other provinces to a degree.
Nevertheless, LHINs may be only a first step in the move to the direct provision of services by regional health authorities. While LHINs may facilitate integration in some ways, it hampers it in others (see above). Direct provision would obliterate many of the barriers to integration.
Even with the current LHINs proposal, the Ontario Hospital Association has raised the possibility of the LHINs becoming the employer:
“When LHINs do receive funding responsibilities, “related employer” provisions in the Ontario Labour Relations Act mean that the LHIN could be considered the employer. This means a potential impact on collective bargaining, compensation, pay equity, health and safety, union certification and many other labour related matters.”
While this is not likely on the immediate horizon, if this does happen, the status of all bargaining units in health care and (the affected portions of) social services are thrown into question. Barring agreement between the unions, there would likely be a major representation struggle between unions for up to 200,000 members. Losing unions could be shut out, winning unions could do very well.
Future changes in LHIN boundaries are quite likely, given the experience in other provinces with regionalization. So, if representation rights do become associated with the LHINs, we could see repeated rounds of representation votes between unions.
Bargaining unit changes are coming – the extent remains unclear. The changes however, are likely significant enough that the ensuing representation votes will weaken labour solidarity –unless steps are taken.
Bottom line: The LHINs reform opens up uncertainty concerning the future of health care and some social service bargaining units in the province. Taking measures to preserve labour unity will become more important.
As a first step to preserve labour unity, CUPE and OCHU will attempt to win other unions to support the establishment of councils of unions to represent workers at newly established regional health care support service providers. The councils would allow unions to represent workers at the successor employer based on their current levels of membership in the predecessor employers. This will deepen the ties between health care unions and help us avoid using precious resources in representation votes battling other unions.
[5] Collective Bargaining
The purchaser-provider system will increase competition between health care providers. Even in areas where the LHIN does not implement full contract tendering, there will likely be increased competition between providers for scarce health care funding. LHINs, unlike provincial governments, cannot simply decide that new funding is required – they will be stuck with whatever funding the government gives them.
CUPE must change to deal with this reality.
Most of our bargaining is done strictly on an employer-by-employer basis.
The hospital sector has central bargaining which allows hospital workers in many different hospitals to jointly agree on bargaining strategy, bargaining proposals, and the terms of a single central collective agreement. This prevents hospitals from competing with each other on the basis of fewer protections against contracting out, lower working conditions or reduced wage increases.
We need to expand this sort of unity to other sectors. As a first step, CUPE will begin building a consensus on how we can build coordinated bargaining in areas where we do not have central bargaining.
CUPE will explore with other health care and social service unions the potential for central bargaining, or failing this, specific unions or groups of unions taking the lead in each LHIN to establish patterns for wage settlements and contract gains. While bargaining would, at least, be coordinated within each LHIN, the bargaining priorities would be established on a province-wide basis.
CUPE will consult with CUPE locals after these initial consultations and make a specific proposal for how bargaining should proceed and what responsibilities we are asking the respective parties to take on.
DA:dm
cope491
[1] As a percentage of hospital spending, support service spending has fallen dramatically for many years across Canada. Indeed, in recent years, the actual dollars spent has fallen in many areas. And despite large spending increases by Ontario hospitals, the actual number of hourly paid hospital workers in Ontario fell starting in the mid-1990s. It has only in the last year returned to earlier levels.
[2] Speaking Remarks, Sheila Jarvis, Chair of the Board of Directors Ontario Hospital Association, to
Conference on Optimizing the Effectiveness of Local Health Integration Networks, 25 February 2005
Notably, however, the hospitals balked at an exclusive focus on support services. Simply integrating support services cannot satisfy the cost savings demanded by the government – the savings would also require clinical cuts. Indeed the hospitals drew up a long list of clinical services under the knife.
First, there are changes directly caused by the inauguration of the LHINs. The LHINs themselves (at least to start) will employ relatively small numbers of employees: reportedly about 40 each. Community care access centres will also be directly impacted. They will have to change their boundaries to fit within the LHINs. It is not yet clear if there will be one CCAC per LHIN, or somewhat more. In any case, there will be a reduction from the current 43 CCACs. An announcement could come at any time. CUPE represents (mostly clerical) staff at 19 CCACs. Representation votes are almost a certainty.
Impact of the Integration of Services on Bargaining Units
A second form of change in bargaining units will come from efforts by health care providers to integrate services.
The government wishes to cut costs by integrating services on a regional (or even multi-regional) basis. This means that services currently provided by local employers may now be moved to regionally based employers. LHINs will be able to use their funding powers and accountability agreements to encourage or even require these changes.
Support services are the first target for this sort of change. We are already seeing signs of this with the move by hospitals to establish regional back office and supply chain organizations. Currently there are about 150 different hospital supply chains – this can be expected to be reduced to about 14. While efforts are being made to establish these organizations in many parts of the province, the most advanced is in the Greater Toronto Area with Hospital Business Services (HBS). Fourteen hospitals are trying to establish a new organization that would provide back office and supply chain services not just to hospitals but also to a whole variety of not for-profit organizations. The hospitals wish to move employees out of their existing hospital bargaining units. HBS documentation indicates that many jobs will then be privatized or eliminated. The bottom line in this exercise is to cut costs.
While some hospitals are moving to establish new employers like HBS to integrate services, other forms of integration are possible – hospitals could trade services to foster specialization, a dominant hospital could become the provider of support services for other health and social services in the region, etc, etc. Notably, hospitals in Hamilton, Niagara, Haldimand and Brant region have appointed a chief information officer to oversee the regional integration of electronic health records and information networks (“Integrated Vice President and Chief Information Officer”).
Another even more fundamental form of integration by health care providers is suggested in a recent report by former hospital CEO Tom Closson on integration in Northwest Ontario.
Closson Report on Health Care in Northwestern OntarioOn August 8, 2005, Ontario’s Ministry of Health and Long-Term Care made public the report of Special Advisor Tom Closson, entitled “An Integrated Service Plan for Northwestern Ontario”.
Health Minister Smitherman has said that the report may serve as a model for how LHINs across the province can approach health care planning.
In his report, Mr. Closson recommended restructuring hospital services, reforming the delivery of primary and tertiary care, changing out-of-region services, and reorganizing local governance and hospital management in Northwestern Ontario.
Mr. Closson recommended restructuring hospital services by establishing a hierarchy of facilities to provide secondary and tertiary care for the entire Northwest. To facilitate this, there would be district governance and management structures. This model would require the dissolution of most existing local service delivery governance and management structures.
“To facilitate this new hospital/health services organizational continuum there should be District Governance and management structures for each of six districts:
· Sioux Lookout & isolated communities
· Kenora
· Dryden-Red Lake
· Fort Frances-Rainy River
· Thunder Bay District
· Thunder Bay City
“These new District governance and management structures would lead management of health care in the Northwest. These new entities would be challenged to introduce a new focus on integrated management of health services across the continuum at the District level. Planning and funding allocations among the Districts would be led by the LHIN.
“This new model will require dissolution of most existing local service delivery governance structures. Special consideration will need to be given to governance of religious service delivery agencies such as the St. Joseph’s Care Group.”
The Ontario Hospital Association’s Board of Directors believes that Mr. Closson’s report is valuable given the advent of LHINs. The OHA’s Board decided at its August 17, 2005 meeting to create a task force to conduct a comprehensive review of the Clossson recommendations.
Mr. Closson’s recommendations are for much more fundamental form of health care provider integration – effectively merging various providers within the six districts in the LHIN and causing major changes in bargaining unit structure.
This suggests that while to date there the government has focused on back office and supply chain integration, it is very likely that there will be a move to expand integration into other areas: food services, maintenance, housekeeping, clinical services, right up to and including the merger of organizations.
LHIN-wide bargaining units?While this second form of change to bargaining unit structure could be very far reaching a third even more fundamental change to bargaining unit structure is potential at some point in the future of regionalization.
Ontario is the last of all the provinces to move to some form of health care regionalization. With regionalization in the other provinces however, the regional health authorities became the employer. So for example, a support service bargaining unit could cover employees who work in a hospital facility, a nursing home, or in a home care service (depending on the scope of activities provided by the regional health authority).
The Ontario government has rejected this form of regionalization so far. Indeed, the direct provision of services by regional health authorities runs counter to the government’s current interest in regional health authorities purchasing services through contract tendering.
Moreover, direct provision by regional health authorities would create a major conflict with hospitals – strong organizations with deep roots in their communities. The role of religious hospitals, francophone hospitals, and prestigious research hospitals sets Ontario apart from other provinces to a degree.
Nevertheless, LHINs may be only a first step in the move to the direct provision of services by regional health authorities. While LHINs may facilitate integration in some ways, it hampers it in others (see above). Direct provision would obliterate many of the barriers to integration.
Even with the current LHINs proposal, the Ontario Hospital Association has raised the possibility of the LHINs becoming the employer:
“When LHINs do receive funding responsibilities, “related employer” provisions in the Ontario Labour Relations Act mean that the LHIN could be considered the employer. This means a potential impact on collective bargaining, compensation, pay equity, health and safety, union certification and many other labour related matters.”
While this is not likely on the immediate horizon, if this does happen, the status of all bargaining units in health care and (the affected portions of) social services are thrown into question. Barring agreement between the unions, there would likely be a major representation struggle between unions for up to 200,000 members. Losing unions could be shut out, winning unions could do very well.
Future changes in LHIN boundaries are quite likely, given the experience in other provinces with regionalization. So, if representation rights do become associated with the LHINs, we could see repeated rounds of representation votes between unions.
Bargaining unit changes are coming – the extent remains unclear. The changes however, are likely significant enough that the ensuing representation votes will weaken labour solidarity –unless steps are taken.
Bottom line: The LHINs reform opens up uncertainty concerning the future of health care and some social service bargaining units in the province. Taking measures to preserve labour unity will become more important.
As a first step to preserve labour unity, CUPE and OCHU will attempt to win other unions to support the establishment of councils of unions to represent workers at newly established regional health care support service providers. The councils would allow unions to represent workers at the successor employer based on their current levels of membership in the predecessor employers. This will deepen the ties between health care unions and help us avoid using precious resources in representation votes battling other unions.
[5] Collective Bargaining
The purchaser-provider system will increase competition between health care providers. Even in areas where the LHIN does not implement full contract tendering, there will likely be increased competition between providers for scarce health care funding. LHINs, unlike provincial governments, cannot simply decide that new funding is required – they will be stuck with whatever funding the government gives them.
CUPE must change to deal with this reality.
Most of our bargaining is done strictly on an employer-by-employer basis.
The hospital sector has central bargaining which allows hospital workers in many different hospitals to jointly agree on bargaining strategy, bargaining proposals, and the terms of a single central collective agreement. This prevents hospitals from competing with each other on the basis of fewer protections against contracting out, lower working conditions or reduced wage increases.
We need to expand this sort of unity to other sectors. As a first step, CUPE will begin building a consensus on how we can build coordinated bargaining in areas where we do not have central bargaining.
CUPE will explore with other health care and social service unions the potential for central bargaining, or failing this, specific unions or groups of unions taking the lead in each LHIN to establish patterns for wage settlements and contract gains. While bargaining would, at least, be coordinated within each LHIN, the bargaining priorities would be established on a province-wide basis.
CUPE will consult with CUPE locals after these initial consultations and make a specific proposal for how bargaining should proceed and what responsibilities we are asking the respective parties to take on.
DA:dm
cope491
[1] As a percentage of hospital spending, support service spending has fallen dramatically for many years across Canada. Indeed, in recent years, the actual dollars spent has fallen in many areas. And despite large spending increases by Ontario hospitals, the actual number of hourly paid hospital workers in Ontario fell starting in the mid-1990s. It has only in the last year returned to earlier levels.
[2] Speaking Remarks, Sheila Jarvis, Chair of the Board of Directors Ontario Hospital Association, to
Conference on Optimizing the Effectiveness of Local Health Integration Networks, 25 February 2005
In his report, Mr. Closson recommended restructuring hospital services, reforming the delivery of primary and tertiary care, changing out-of-region services, and reorganizing local governance and hospital management in Northwestern Ontario.
Mr. Closson’s recommendations are for much more fundamental form of health care provider integration – effectively merging various providers within the six districts in the LHIN and causing major changes in bargaining unit structure.
While this second form of change to bargaining unit structure could be very far reaching a third even more fundamental change to bargaining unit structure is potential at some point in the future of regionalization.
Ontario is the last of all the provinces to move to some form of health care regionalization. With regionalization in the other provinces however, the regional health authorities became the employer. So for example, a support service bargaining unit could cover employees who work in a hospital facility, a nursing home, or in a home care service (depending on the scope of activities provided by the regional health authority).
The Ontario government has rejected this form of regionalization so far. Indeed, the direct provision of services by regional health authorities runs counter to the government’s current interest in regional health authorities purchasing services through contract tendering.
Moreover, direct provision by regional health authorities would create a major conflict with hospitals – strong organizations with deep roots in their communities. The role of religious hospitals, francophone hospitals, and prestigious research hospitals sets Ontario apart from other provinces to a degree.
Nevertheless, LHINs may be only a first step in the move to the direct provision of services by regional health authorities. While LHINs may facilitate integration in some ways, it hampers it in others (see above). Direct provision would obliterate many of the barriers to integration.
Even with the current LHINs proposal, the Ontario Hospital Association has raised the possibility of the LHINs becoming the employer:
“When LHINs do receive funding responsibilities, “related employer” provisions in the Ontario Labour Relations Act mean that the LHIN could be considered the employer. This means a potential impact on collective bargaining, compensation, pay equity, health and safety, union certification and many other labour related matters.”
While this is not likely on the immediate horizon, if this does happen, the status of all bargaining units in health care and (the affected portions of) social services are thrown into question. Barring agreement between the unions, there would likely be a major representation struggle between unions for up to 200,000 members. Losing unions could be shut out, winning unions could do very well.
Future changes in LHIN boundaries are quite likely, given the experience in other provinces with regionalization. So, if representation rights do become associated with the LHINs, we could see repeated rounds of representation votes between unions.
Bargaining unit changes are coming – the extent remains unclear. The changes however, are likely significant enough that the ensuing representation votes will weaken labour solidarity –unless steps are taken.
Bottom line: The LHINs reform opens up uncertainty concerning the future of health care and some social service bargaining units in the province. Taking measures to preserve labour unity will become more important.
As a first step to preserve labour unity, CUPE and OCHU will attempt to win other unions to support the establishment of councils of unions to represent workers at newly established regional health care support service providers. The councils would allow unions to represent workers at the successor employer based on their current levels of membership in the predecessor employers. This will deepen the ties between health care unions and help us avoid using precious resources in representation votes battling other unions.
[5] Collective Bargaining
The purchaser-provider system will increase competition between health care providers. Even in areas where the LHIN does not implement full contract tendering, there will likely be increased competition between providers for scarce health care funding. LHINs, unlike provincial governments, cannot simply decide that new funding is required – they will be stuck with whatever funding the government gives them.
CUPE must change to deal with this reality.
Most of our bargaining is done strictly on an employer-by-employer basis.
The hospital sector has central bargaining which allows hospital workers in many different hospitals to jointly agree on bargaining strategy, bargaining proposals, and the terms of a single central collective agreement. This prevents hospitals from competing with each other on the basis of fewer protections against contracting out, lower working conditions or reduced wage increases.
We need to expand this sort of unity to other sectors. As a first step, CUPE will begin building a consensus on how we can build coordinated bargaining in areas where we do not have central bargaining.
CUPE will explore with other health care and social service unions the potential for central bargaining, or failing this, specific unions or groups of unions taking the lead in each LHIN to establish patterns for wage settlements and contract gains. While bargaining would, at least, be coordinated within each LHIN, the bargaining priorities would be established on a province-wide basis.
CUPE will consult with CUPE locals after these initial consultations and make a specific proposal for how bargaining should proceed and what responsibilities we are asking the respective parties to take on.
DA:dm
cope491
[1] As a percentage of hospital spending, support service spending has fallen dramatically for many years across Canada. Indeed, in recent years, the actual dollars spent has fallen in many areas. And despite large spending increases by Ontario hospitals, the actual number of hourly paid hospital workers in Ontario fell starting in the mid-1990s. It has only in the last year returned to earlier levels.
[2] Speaking Remarks, Sheila Jarvis, Chair of the Board of Directors Ontario Hospital Association, to
Conference on Optimizing the Effectiveness of Local Health Integration Networks, 25 February 2005
