Those Who Repeat History are Doomed to Condemn It

Volume 6. No. 2 Summerfit6 1993

Invited Essay

Those Who Repeat History are Doomed to Condemn It

by Dennis R. Timbrel1

ealth care reform heads the agenda in Canada and other countries due to the convergence of H a number of trends, including the steady up-

ward spiral of costs and aging populations. The exponential growth of new medical techno-

logies, and new services to meet changing expectations are also universal issues. Other pressures for reform, restructuring and realignment in Canada include: increasing limitations on federal transfer payments to the provinces for health care, and recognition that health expenditures have been consuming increasing proportions of provincial resources, at the expense of other components that also contribute to health status, such as social services, education, environment and housing.

The health care system is under economic, social and political pressure to husband scarce resources and use them wisely by concentrating on outcomes. But, while the tools for measurement and comparison are being created, the dynamics of government, hospital management, health care professionals and patients have come together in a manner that may ultimately inter- fere with achieving those objectives. The recent reces- sion simply underlined the increasingly urgent need for reform.

Canada has a composite health care system, consist- ing of a unique blend of the private and public sectors. Physicians, for the most part, are paid on a fee-for-service basis; many see themselves as private entrepre- neurs. But much of the treatment they provide occurs in hospitals, which are organized on a non-profit basis, and have traditionally been autonomous.

With the introduction of universal hospital insurance, provincial governments and their agencies “began to assume a new administrative role, at first simply distributing money to the hospitals and then, inevitably, becoming deep1 involved in deciding how hospitals should spend it.” &P. 88)

National health insurance was debated in Canada through most of the first half of the twentieth century. Eventually, universal hospital insurance was introduced in Saskatchewan in 1947, and after other provinces followed suit, the federal government approved the Hospital Insurance and Diagnostic Services A c f (HIDS) in 1957.2

Federal medicare legislation was enacted in 1966, fol- lowing the example set in Saskatchewan, where fee-for- service insurance for physician services was extended to the entire province in 1962.*

This watershed, a generation ago, is traditionally identified as the birth of medicare. Today’s crisis, and the need for reform, can best be understood by looking at the contemporary system as a hybrid creation em- bracing both hospital care and medical care.

At the heart of today’s crisis is the fact that there is no clearly defined, integrated mechanism for planning in a system that is increasingly interrelated. Account- ability is understood from political and fiscal perspec- tives, where changing priorities are the norm.

Our prized - and internationally praised - national health care system is undergoing a difficult period of restructuring. The five principles of medicare en- shrined in the 1984 Canada Health Ac t - universality, ac- cessibility, comprehensive coverage, portability and non-profit public administration - are at risk. Amid the plaintive cries that medicare is in danger, it is also widely acknowledged that we cannot afford not to change.

We must recognize that the existing health care system was created through add-ons, much like medicare itself. The health care system wasn’t designed, it simply happened. The challenge of the 1990s is that of suc- cessfully implementing change as part of the ongoing process of evolution.

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Canada’s background paper for the Organization for Economic Cooperation and Development (OECD) Health Care Reform Project, presented in draft form to federal, provincial and territorial health and finance ministers earlier this year, noted that ”the 1980s was not a decade of radical restructuring” for health care.3

The reforms initiated throughout the 1980s were in- cremental, as a rule, but collectively they demon- strated ”a pattern of shifting priorities that developed in response to mounting pressures on the health care system. Developments over this 10-year period were part of the continuum of evolutionary development that has characterized the Canadian health care system since universal health care began in Saskatchewan in the 1950s,” the paper said.

And, after approximately a decade of introspection - in the form of health care system reviews conducted by various commissions, premier’s councils, provincial ministries and departments and consultants - “the similarity of the conclusions and recommendations which emerged ... is striking,” the OECD paper observed.

History is repeating itself as governments articulate the need for regional planning, without defining the term, or addressing the appropriate balance of power and authority in a system that is increasing complex and interrelated. As Robertson observed in 1973: “We see at the moment, in the country, an amorphous mixture of centralization and regionalization, with both components in the early stages of development. N1@. 101)

One of the earliest references to the concept of the regional system comes from England’s Dawson Report of 1920, which called for fully functioning, comprehensive regional systems built around medical schools, affiliated teaching centres, primary and secondary care centres, co-ordinated with other curative and preven- tive services.

In the past two years, we have witnessed the initial stages of radical and profound changes to a health care system that dates back to the seventeenth century and the creation of Canada’s first hospitals. Provincial governments, including Ontario, have focused inde- pendently on district and regional planning, driven by restricted growth of funding for health care.

But the reallocation of resources, and the down- sizing - or perhaps rightsizing - of the system has already been occurring for some time. One difficulty is that changes seem to be driven as much or more by fiscal necessity, rather than on the basis of health plan-

4

ning.

Several agendas are being pursued simultaneously, and the distinctions have been blurred. One is cost containment, driven by the federal government’s preoccu- pation with the deficit through recent measures such

as Bills C-69 and C-20. Since 1977, the open-ended nature of the original 50:50 federal-provincial cost-shar- ing agreement for certain health and social services has changed dramatically. At the same time, it is quite clear that despite the Canada Health Act and federal involvement in financing, health care is, ultimately, a provincial responsibility.

As the Canadian Hospital Association (CHA) pointed out to the joint meeting of national, provincial and territorial health and finance ministers in June 1992, there is mounting concern that “cost containment has become the sole or primary objective of health policy and that, conse uently, medicare has been put at unnecessary risk.”

Provincial governments are attempting to cope with changes in the financing of health care. They must also adapt to changing realities. Various trends, including growing awareness of, and sensitivity to, determinants of health, and empowerment of workers and consu- mers, have converged.

Regional governance and management have been identified as possible sources of salvation through ra- tionalization and streamlining, and as such have become governmental priorities in some provinces. At the same time, the lines between health and social services are becoming increasingly blurred.

With growing interest in preventing institutionaliza- tion, governments are also looking increasingly to home care and long-term care reform, as well as integration - or in some provinces, re-integration - of health and social services.

The Ontario government’s planning framework, re- leased in January 1992, refers to the need to plan stra- tegically for the restructuring of the health system and the realignment of resources to meet population-based needs.

It calls for the provincial government to play a key role in management of the health care system by increasing the focus on objective planning targets, such as patient days per 1,000 population, average length of stay, case costing and the need for optimal utilization of resources. The reform of the health care system is being imposed at the clinical level, at the same time as the government talks about increasing local control through district health councils.

At the same time, numerous provincial governments - including British Columbia, Saskatchewan, New Brunswick, Newfoundland and Ontario - have begun to implement variations on regional hospital or community health boards to co-ordinate the organization, management and delivery of services, depending on their structure.

The role of public hospitals, and their relationship with various levels of government, must be seen

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Volume 6, No. 2 Summerfite 1993

through the prism of history to isolate the elements that truly require reform. One question is the extent to which reform can be mandated without infringing on local board autonomy.

range of structures. Some of the 222 public hospitals were created by individual Acts; others are incorporated under Letters Patent. Some are incorporated as charities; others are not incorporated at all. About 60 of the 222 public hospitals are actually municipal hospitals.

It is recognized that Ontario’s 1931 Public Hospitals Act needs to be rewritten to reflect contemporary realities. But there is a misperception by government that hospitals have resisted a role as community health centres, active in disease prevention.

In an address to the OHA in 1927, Major A.C. Gal- braith, superintendent of the Toronto Western Hospi- tal, noted that “the public has come to look on hospitals not as ‘charities,’ but as institutions for the advancement of health, with facilities for better diag- nosis treatment and prevention of disease, serving every class in the comm~nity.”~ (p.

He argued that hospitals should not be grouped under legislation with prisons and charities, but should “logically function under the broader departments of health or education,” noting that a hospital bill that had that year been introduced in the legisla- ture was withdrawn because it was acceptable ”neither to the Ontario Hospital Association, the hospitals, nor the m~nicipalities.”~ (p.

Dr. Harvey Agnew - author, historian and one-time professor of hospital administration - made a similar point in 1930, noting the “growing tendency to regard the hospital as a health centre. It should be more than a place to cure illness; it should be the logical centre for the prevention of illness. I feel that the time is coming when our hospitals will be the health headquarters of the community, will be the base for the district health nurse and will disseminate health knowledge throughout the community.”’ (p. 13)

Until the end of the nineteenth century, hospitals were primarily charitable refuges for the indigent, shunned by the more affluent who received care at home. Hospitals also were few and far between.

ter mainly to the spiritual needs of those who were both ill and needy. “By the mid-nineteenth century a few hospitals had also been built by secular groups motivated by a,similar humanitarian concern for the sick poor. These voluntary groups formed non-profit hospital corporations. The membership of the boards of trustees varied considerably from city to c,ity and region to region but generally they included wealthy philan-

Hospitals in Ontario exist and operate under a broad

The early religious hospitals were intended to minis-

thropists and other influential community leaders in- terested in charitable works,” Agnew wrote.’ (p‘ 2,

The main function of voluntary hospital boards was originally to raise funds for the establishment, mainten- ance and physical expansion of local hospitals. Govern- ment ”occasionally appointed members to these boards of governors insofar as the governments con- tributed financially to the hospital,” he observed.’ (p’ 2,

Hospitals were transformed by a number of forces, including the advent of antibiotics, which made the outcome of medical intervention more likely to be beneficial. But government involvement in funding has also been a major force.

By the time HIDS was implemented in the late 1950s, ”hospital boards of trustees, comprising citizen volun- teers, were struggling to maintain highly complex, costly and socially indispensable health care facilities with essentially the same funding mechanisms, and operating under the same rules, as the had at their disposal in 1880,” David Gagan wrote.

The Ontario Hospital Services Commission was created in 1956, and within three years took over responsibility for much of the basic hospital insurance that had been provided by Ontario Blue Cross, which had been formed by the OHA in 1941. The Ontario Medical In- surance Plan, introduced in 1966, was subsequently ex- panded with the creation of the Ontario Medical Services Insurance Plan, and then merged with the hospital insurance plan in 1972 to form OHIP, the Ontario Health Insurance Plan.

As the purchaser of insured services, the government can define what it is willing to buy from either hospitals or physicians. That partnership does not con- fer on government the proprietary rights of ownership of public hospitals. Governments can regulate, but ownership varies, depending on the way the hospital was created.

In 1881, there were a dozen public general hospitals in Ontario, serving a population of about 1.9 million people. “Whether they were organized by voluntary committees of citizens or by municipal governments, they existed primarily to care for the indigent or work- ing poor,” Gagan noted.” (p. 154) As the role of both government and hospitals evolved, increased partnership became inevitable.

With the passage in 1931 of Ontario’s Public Hospitals Act, hospitals and the provincial government entered into an uneasy relationship which probably owed more to the Great Depression and the mounting cost burden of indigent patients than any desire for rational management of, or planning for, a comprehensive health care system.

According to OHA’s records, representatives of the association met with Ontario Health Minister Dr. John

To @. 12)

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Summefit6 1993 Volume 6, No. 2

Robb in February 1931, to discuss the pending legislation. OHA President Dr. John Ferguson said that he ”hoped it would be possible to frame an Act that would be fair to the hospital, just to the public, and helpful to the sick.”

meeting indicated a unanimous sentiment that “the Act was in general a disappointment to hospitals.”

An August 1931 article in The Canadian Hospital, by A.L. McPherson, Inspector of Hospitals, explained that “the new Act is exclusively a Hospitals Act, and relates to public and Red Cross Hospitals and hospitals for in- curables,” distinguishing them from ”welfare institutions” such as orphanages and other “refuges,” which became subject to the 1931 Charitable Institutions Act.” (P. 16)

h4r. McPherson wrote that ”If a uniform standard of service is to be maintained throughout the Province at a minimum of cost, governmental supervision and control is absolutely necessary.” Under the Act, “...need- less duplication of hospitals in communities already provided for, will be avoided and all hospitals will be re uired to maintain the standard set,” he predicted.”

In his book, Dr. Agnew expressed the opinion that, in hindsight, partnership between government and hospitals was inevitable. “One cannot but ponder the future course of this partnership. It is not static, bound by legal contract and incorporation papers with a stated division of voting power. This is a flexible, ill- defined relationship, changing all the time and with the state controlling new capital and enerally writing

The minutes of OHA’s Board of Directors’ June 1931

(P.%

the regulations,” Agnew noted.’ (p. 6 This, at times, puts central government in conflict

with local perception of need, based on the tradition of autonomous hospitals, highlighting the basic flaw in Canada’s health care system - the lack of an overall plan.

Hospitals have always been an integral part of their community. They are locally governed, serve and em- ploy local residents, and raise funds locally, making everyone in the community a stakeholder.

tions, hospitals have been vulnerable to rivalry, and boards tended to focus on the “bricks and mortar” of the institution, a view encouraged by traditional government funding patterns.

As provincial governments became increasingly involved in financing both the construction and oper- ation of hospitals, “regional or area-wide planning became the order of the day,” Agnew said in his book. ”To facilitate regional planning,” several provinces (Nova Scotia, Ontario, Manitoba, Saskatchewan and British Columbia) ”have set up regional planning coun-

However, because of the roots as charitable organiza-

cils” to set riorities and advise the provincial government.9 (P. 2 f 6 )

These councils were developed “as a means of co-or- dinating programs and avoiding duplication of services,“ by building on the foundation of local hospital councils, he wrote.9 (p. 97)

pital Council, formed in 1936 and now known as the Hospital Council of Metropolitan Toronto.

However, it is difficult to balance regional planning with local autonomy. Agnew observed that “so long as the provinces budget for and distribute such a large portion of capital costs, they will probably insist on having the final decision. Thus the future of regional planning councils depends not so much on the willing- ness of hospital, medical and community leaders to co- operate in planning for their regio ns... but on the degree to which the provinces will be willing to decen- tralize their planning authority. If the recommendations of regional councils are constantly ignored, deferred or drastically altered, they will simply wither and fade into the background, their members con- vinced they are wasting their time.

In the mid-1970s, with the rising interest in regional planning, writers speculated that hospital trustees were in danger of becoming redundant. Twenty years ago, an editorial in The Canadiun HospitaZ identified the developing erosion of the voluntary board, through a law in Quebec requiring election of trustees and changes in other provinces permitting government ap- pointments.

The board chairperson of Bashaw General Hospital in Alberta warned in 1974 that ” ... regionalization is closer than we think. How it will affect us will probably depend a great deal on how it comes about, who

One of the earliest forerunners was The Toronto Hos-

119 (p. 227)

12

institutes it and what their primary goals and objectives are. ,113 (pp. 10-11)

The roles of hospitals and their boards have changed over the years, as they sacrificed a certain degree of autonomy in return for government funding. Since the onset of government-run insurance, trustees have struggled to retain decision-making power and the ability to respond to local needs.

ards are planned, despite the sometimes shallow rhetoric of local empowerment.

There has not been adequate discussion of the dis- tinction between hospital management and governance. Much-needed debate about the proper role of a hospital board in the context of Ontario’s new Public HospifaZs Act was sidetracked last year by wrangling over who should sit on boards, an issue which did not advance the agenda of heath care reform.

At this point, in Ontario at least, strict central stand-

52 Healthcare Management FORUM

Volume 6, No. 2 Summerfit6 1993

At this point, plans to rewrite the Act and make it more relevant to contemporary realities have been overshadowed by the looming provincial deficit. The Ontario government has now turned to the development of a social contract as a safety valve for mounting fiscal pressures.

Clearly, the health reform agenda must focus on quality of care within an environment of cost containment. Amalgamated hospital boards and regional planning bodies may prove to be valuable. They are obviously not new, nor are they a panacea.

generals, often prepare to fight the last war. While it is a truism that we ignore history at our peril, there is at least equal danger in ignoring the present and the future.

Government funding policies have restricted the ability of hospitals to operate beyond their own walls. Medical and hospital services are lumped together under the blanket classification of health care, but are not and never have been integrated.

Hospitals have not co-ordinated their activities as well as they might have done, in part because they re- flected their communities. Hospital and health-planning councils have never lived up to expectations, partly because they were never fully empowered.

Today's fiscal pressures have motivated all parties to look at how to achieve reform. Faced with the complex- ity of contemporary society, governments are weigh- ing the benefits of centralization versus regionalization and devolution.

There appears to be a trend toward greater integration of public health, community health, social services and hospital services. Broad philosophical goals have been articulated, but the remaining challenges must focus on structures and processes for implementation.

The way care, service and treatment are delivered can be decided on a local or regional basis, but not without more universal standards and guidelines. There are lessons to be learned from what is happen- ing in each province, but there must also be recogni-

It may be that planners and policy makers, like

tion that each jurisdiction's success - and failure - is shaped by its unique environment and history.

References and notes 1. Robertson, H. Rocke. August 1973. Health Care in

Canada: Background Study for the Science Council of Canada, Ottawa: Information Canada.

2. Taylor, Malcolm. 1978. Health Insurance and Public Policy: The Seven Decisions That Created the Canadian Health Insurance System, Montreal: McGill-Queen's University Press.

3. Organization for Economic Cooperation and Devel- opment. 1992. Health Care Reform Project. Unpub- lished background paper.

4. Dawson, Lord of Penn. 1920. Interim Report on the Future Provision of Medical and Allied Health Ser- vices, London. Cited by Roice D. Luke in: Local hospital systems: forerunners of regional systems? Frontiers of Health Service Management 1992; 9(2): 5.

5. Canadian Hospital Association. 1991. Health Care Financing. Brief presented to the House of Com- mons Standing Committee on Finance on Bill C-20 Budget Implementation Act.

6 . Ontario Ministry of Health. January 1992. Health Services Planning Framework: A Tool for Planning.

7. The Canadian Hospital. November 1927. 8. Agnew, G. Harvey. March 1930. Hospital Buying.

Cited in: Dimensions in'HeaIth Service, January 1974. 9. Idem. 1974. Canadian Hospitals, 1920 to 1979: A Dra-

matic Half Century, Toronto: University of Toronto Press.

10. Gagan, David. 1989. Canadian Historical Review

11. McPherson, A.L. August 1931. The Canadian Hospi-

12. The Canadian Hospital. July 1973. Editorial. 13. Reirson, L.S. February 1974. Dimensions in Health

Dennis R. Timbrell is President of the Ontario Hostlital Association, Toronto.

LXX(2).

tal.

Service.

Gestion des soins de sante 53

Documents

Those Who Repeat History are Doomed to Condemn It