Breakfast with the Chiefs – January 11, 2012

Achieving a High Performing Health Care SystemTom Closson, President and CEO

Ontario Hospital Association

Ontario Government Budget Deficit Projections

2

Sources: 2011 Ontario Budget, 2011Ontario Economic Outlook and Fiscal Review

-25

-20

-15

-10

-5

0

-6.4

-19.3

-14.0 -16.0 -15.2

-13.3

-10.7

-7.8

-4.2

$ B

illi

ons

0.0

Actual Projected

2009-10 2010-11 2011-12

2012-13

2013-14 2014-15

2015-16

2016-17

2017-18

2008-09

Total Debt of $236.6 Billion as of March 31, 2011

Provincial Government Health Expenditures per Capita, 2011

3

Source: National Health Expenditure Database, Canadian Institute for Health Information, 2011.Notes: Data for 2011 are forecast. Canada average includes the territories. Non-Ont: NL, PEI, NS, NB, Que, Man, Sask, Alta, B.C. Provincial expenditure on hospitals, other institutions, physicians, other professionals (dental, vision and other) drugs (prescribed and non-prescribed), capital, public health, administration, health research and other health spending.

QueBC

Ont

Canad

a

Non-Ont

NSNB

PEIM

anSas

kAlta

Nfld0

1,000

2,000

3,000

4,000

5,000

6,000

3,4073,604 3,645 3,778 3,844 3,972 4,033 4,058

4,266 4,348 4,528

5,077

$

4

Percentage Change in Nominal GDP

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Ontario 2.9 5.3 3.2 4.7 4.1 4.3 4.2 0.5 -0.9 5.3

Canada 2.9 4 5.2 6.4 6.4 5.6 5.5 4.8 -4.6 6.3

-5

-3

-1

1

3

5

7 Ontario Canada

% C

hang

e in

Nom

inal

GD

PY

ear

over

Yea

r

Source: Statistics Canada WebsiteAverage Annual Increases Since Health Accord 2004:3.2% for Ontario, 4.3% for Canada

5

Potential Years of Life Lost (PYLL) Index, Cancer, by Country, 1992-2006

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20060

0.5

1

1.5

2

2.5

Australia Canada France Sweden

United Kingdom United States

PY

LL I

nd

ex

Source: OECD, 2009

Notes: PYLL Index = PYLL per 100,000 population divided by PYLL per 100,000 population in Canada in 1992

PYLL per 100,000 population in Canada in 1992 = 1032

6

Potential Years of Life Lost (PYLL) Index, Circulatory Disease, by Country, 1992-2006

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20060

0.5

1

1.5

2

2.5

Australia Canada France Sweden

United Kingdom United States

PY

LL I

nd

ex

Source: OECD, 2009

Notes: PYLL Index = PYLL per 100,000 population divided by PYLL per 100,000 population in Canada in 1992

PYLL per 100,000 population in Canada in 1992 = 635

7

Same-or-Next Day Appointment When Needed

• Able to get an appointment on the same or next day when sick or in need of medical attention.

Health Council of Canada. (2010). How Do Canadians Rate the Health Care System? Results from the 2010 Commonwealth Fund International Health Policy Survey. Canadian Health Care Matters. Bulletin 4. Toronto: Health Council of Canada

8

Waiting to see a Specialist

• Had to wait four or more weeks after being advised to see a specialist.

Health Council of Canada. (2010). How Do Canadians Rate the Health Care System? Results from the 2010 Commonwealth Fund International Health Policy Survey. Canadian Health Care Matters. Bulletin 4. Toronto: Health Council of Canada

9

Total Health Expenditure per Capita in $US (PPP)* and Population, 25 Selected Countries, Recent Years

US (2009) 307 MNorway (2009) 5 M

Switzerland (2010) 8 MNetherlands (2009) 17 M

Canada (2010) 34 MDenmark (2009) 6 M

Austria (2009) 8 MGermany (2009) 82 M

France (2009) 63 MBelgium (2009) 11 M

Ireland (2009) 4 MSweden (2009) 9 M

UK (2009) 61 MAustralia (2008) 22 M

Finland (2010) 5 MItaly (2010) 60 M

Spain (2009) 46 MN. Zealand (2009) 4 M

Japan (2008) 128 MGreece (2007) 11 M

Portugal (2008) 11 MKorea (2010) 49 M

Hungary (2009) 10 MPoland (2009) 38 M

Mexico (2010) 108 M

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

7,9605,3525,344

4,9144,478

4,3484,289

4,2183,9783,946

3,7813,722

3,4873,445

3,2823,236

3,0672,983

2,8782,724

2,5081,980

1,5111,394

934

Source: Organisation for Economic Co-operation and Development, OECD Health Data, Real time access: Oct. 24/11.Note: $ US comparison based on Purchasing Power Parity (PPP). PPP’s are the rates of currency conversion which eliminate differences in price levels between countries. 2010 are estimates. Population in millions, 2009. “Total” is public and private expenditure.

10

Recommendations

1. Identify and reduce utilization in high-impact, high cost areas

• High use, high cost care is concentrated among a small proportion of the population.

• 1% of Ontario’s population accounts for 50% of hospital and home care costs.

• A large component of high-cost care is due to chronic illness.• OHA calculates: $12 B in annual provincial health

expenditures for chronic illness.*

* - Source: “Ideas and Opportunities for Bending the Health Care Cost Curve” Page 8, “The MOHLTC Framework document states that over a third of Canada’s direct health care costs arise from major chronic illness and injury. Extrapolating from this statistic, using 2009 data, one third of Ontario’s direct health expenditures of $48.5 billion is $16 B. If an estimated 25% of expenditures can be attributed to major chronic illness (excluding injury), the figure is $12 B.”

11

Recommendations

1. Identify and reduce utilization in high-impact, high cost areas (continued)

Source: Canadian Health Services Research Group, April 2010 presentation on Ontario’s Health Based Allocation Model (HBAM).

% Distribution by Group

12

Rates of Hospitalization for Ambulatory Care Sensitive Conditions, Canada, 2009-2010

13

Per Capita Pharmaceutical Spending 2009M

exic

oN

ew Z

eala

ndD

enm

ark

Pola

ndIs

rael

Est

onia

Lux

embo

urg

Uni

ted

Kin

gdom

Cze

ch R

epub

licN

orw

ayK

orea

Swed

enSl

oven

iaFi

nlan

dIc

elan

dN

ethe

rland

sO

EC

DH

unga

ryA

ustra

liaPo

rtuga

lA

ustri

aSw

itzer

land

Spai

n

Slov

ak R

epub

licJa

pan

Italy

Fran

ceG

erm

any

Bel

gium

Irel

and

Gre

ece

Can

ada

Uni

ted

Stat

es

0

100

200

300

400

500

600

700

800

900

1000

249

265

289

306

316

319 37

038

138

939

139

7 437

448

452 46

047

348

749

350

351

851

852

152

9 554

556

572 62

662

763

6 662

677

692

947Per capita USD PPP

Source: OECD Health Data 2011, spending for 2009 or most recent year

14

Recommendations

2. Make targeted, evidence-based investments in key areas though shifts in funding

• Shift a portion of funding from larger sectors and programs with relatively high growth in expenditure to:

• Community-based services and other identified services to help address the ALC problem.

• Mental health and addiction services, both community and hospital-based.

• Target a 5.5% increase in per capita expenditure to these areas.

• Investments must have expectations of achieving desired results.

15

Recommendations

3. Integrate physicians into the structural reform of the system

• Integrating physicians into structural reform is key to: • ensuring alignment of incentives;• reducing gaps in care;• meeting the needs of people with high cost & chronic health conditions;• keeping people out of hospital.

• It is estimated that there are between 2,000 and 3,000 primary care organizations in Ontario.

• Many people are not “effectively” rostered to primary care organizations.• Family health teams, other primary care organizations, specialists and public

health must become directly integrated with other parts of the local health care system.

Ontario per Capita Physician Expenditure, 2011

Ontario Non-Ont0

250

500

750

1,000897

712

Per

Cap

ita

Pro

vinc

ial G

over

nmen

t P

hysi

cian

Exp

endi

ture

($)

Ontario would spend $2.5 billion less on physician expenditures if it spent at the average per-capita level of other provinces.

$897 Ontario

- 712 Non-Ontario

185 Differential

x 13 Ontario pop. in millions

$ 2.5 Billion difference*

16

Notes: 2011 data are forecast. Non-Ont: NL, PEI, NS, NB, Que, Man, Sask, Alta, B.C. Expenditure includes primarily professional fees paid by provincial/territorial medical care insurance plans to physicians in private practice and hospitals as well as other forms of professional incomes (salaries, sessional, capitation). In Ontario in 2009, $663 M in the physician expenditure category was identifiable as commercial laboratory expenditure. Due to differing expenditure reporting practices across the provinces, comparable information on laboratory expenditure for other provinces is not available. * Calculated using non-rounded figures. Source: National Health Expenditure Database, Canadian Institute for Health Information, 2011.

17

Recommendations

4. Initiate provincial-level health care capacity planning

• Capacity planning involves projecting future requirements for:• hospital beds, long-term care places, assisted living spaces, home care hours,

primary care services, etc.• benchmarking the appropriate mix of services • operating and capital funding• health human resources

• Every 10% shift of ALC patients from hospital care (waiting for long-term care) to home care, results in $35 M in savings.

• Every 10% shift of palliative care from acute care to home care could save $9 M.

Source: “Ideas and Opportunities for Bending the Health Care Cost Curve” Pages 10 and 15

ALC Patients in Acute and Post-Acute Care November 2007 to October 2011

No

v-0

7

Dec

-07

Jan

-08

Feb

-08

Mar

-08

Ap

r-0

8

May

-08

Jun

-08

Jul-

08

Au

g-0

8

Sep

-08

Oct

-08

No

v-0

8

Dec

-08

Jan

-09

Feb

-09

Mar

-09

Ap

r-0

9

May

-09

Jun

-09

Jul-

09

Au

g-0

9

Sep

-09

Oct

-09

No

v-0

9

Dec

-09

Jan

-10

Feb

-10

Mar

-10

Ap

r-1

0

May

-10

Jun

-10

Jul-

10

Au

g-1

0

Sep

-10

Oct

-10

No

v-1

0

Dec

-10

Jan

-11

Feb

-11

Mar

-11

Ap

r-1

1

May

-11

Jun

-11

Jul-

11

Au

g-1

1

Sep

-11

Oct

-11

0

1000

2000

3000

4000

5000

6000

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

4,5

28

4,5

78

4,7

41

4,6

93

4,6

00

4,5

56

4,6

03

4,6

96

4,7

16

4,7

68

4,9

90

4,8

02

4,8

78

4,7

74

4,8

34

4,5

85

4,6

72

4,6

09

4,7

56

4,9

05

5,0

48

5,0

09

5,0

55

4,8

86

4,9

77

4,9

88

4,9

26

4,8

12

4,7

41

4,6

65

4,7

64

4,8

23

4,7

86

4,6

39

4,5

58

4,7

48

4,6

79

4,5

33

4,2

56

4,0

93

4,0

73

4,0

88

15.7 16.1 16.616.4

16.115.9 16.1 16.4

16.4 16.617.4

16.8 17.0

16.6 16.8

16.0 16.3

15.9 16.4 17.0 17.517.3 17.5

16.9 17.217.2

17.0

16.6

16.3

16.1 16.4 16.616.5

16.015.9 16.5

16.3

15.8

14.8

14.214.2 15.0

OHA # of ALC patients in acute and other in-patient beds % of acute and other in-patient beds occupied by ALC

WTIS-ATC Volume of Acute and Post-Acute Cases

Source: OHA ALC Survey Results – November 2007 to June 2011 – all hospitals WTIS:ATC Data as of Oct 31, 2011: Excludes 37 small hospitals with 220 ALC patients in Jun/11 18

19

Recommendations

5. Accelerate the Excellent Care for All Strategy with a focus on improving quality and basing decisions on solid evidence• ECFA Strategy intended to promote compliance with best clinical

practices.

• Health Quality Ontario to begin to take on mandate for identifying high impact areas for improvement.

• Every 10% reduction of expenditures on wound care across all settings, using evidence, could save $100 M.

• Every 10% reduction in adverse events in hospitals could save $12.5 M.

Source: “Ideas and Opportunities for Bending the Health Care Cost Curve” – Pages 13 and 18

Hip & Knee Replacements

• Elective primary unilateral hip and knee replacements make up 3.6% of all hospital acute inpatient activity, based on cost.

• Ontario expenditures on primary unilateral joint replacements estimated at $414 million for 2009/10.

• A 2005 review identified no advantage to receiving inpatient physiotherapy compared with a home-based.

Source: “Patient-based Payment, Final Report” – MOHLTC, 2011

20

Hip & Knee Replacements(continued)

• Despite the 2005 recommendations, significant regional variation continues. In 2009/10 patients discharged from acute care to home ranged from 51.7% to 95.0% across the 14 LHINs.

• A target of 10% hospital inpatient rehab for elective joint replacements, would divert 5,000 cases annually to home-based rehab.

• At an average cost reduction of $3,500, this would result in a savings of $17.5 million annually.

21

Ontario

Erie S

t. Clai

r

South

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t

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ton

Ham. N

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ald. B

rant

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ga H

alton

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to Cen

tral

Centra

l

Centra

l Eas

t

South

East

Champla

in

North

Simco

e Mus

koka

North

East

North

Wes

t0

5

10

15

20

25

30

35

40

45

30

13

2824

33

41 42

2523

3034

38

17

11

Note: * Among ischemic stroke patients who arrived at an ED within 2.5 hours of symptom onset and who do not have contraindications to tPA..**Cental West: No reported/available data.Source: Ontario Stroke Evaluation Report 2011: Improving System Efficiency by Implementing Stroke Best Practices (Ontario Stroke Network, Canadian Stroke Network, ICES.) 22

Percentage of eligible* adult stroke patients who received Acute Thrombolytic Therapy (tPA), by LHIN, 2008/09

%

23

Recommendations

6. Implement Patient-based Payment (PbP) for funding health care providers.

• Implementation of PbP should be expedited to promote incentives for quality and efficiency.

• Ontario needs a Provincial Payment Commission to develop and continually revise provincial rates for hospitals, physician services, home care, long-term care, etc., to ensure that they are appropriate and in alignment.

24

Recommendations7. Consider options for addressing labour costs

• Change the Hospital Labour Disputes Arbitration Act to further guide arbitrators’ decisions.

• Change the Public Sector Labour Relations Transitions Act (PSLRTA) to enable transfer of services to the community.

• Amend the Workplace Safety and Insurance Act to permit hospitals to elect coverage under Schedule II of the Act (i.e. Self-insurance).

25

TO BE CONTINUED………