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Proceedings of the Standing Senate Committee on
Social Affairs, Science and Technology

Issue 56 - Evidence

OTTAWA, Wednesday, May 22, 2002

The Standing Senate Committee on Social Affairs, Science and Technology met this day at 12:35 p.m. to examine the state of the health care system in Canada

Senator Michael Kirby (Chairman) in the Chair.


The Chairman: Our first panel consists of the Canadian Medical Association, led by Dr. Barrett and Dr. Hutchison. Also on the panel is Dr. Halparin, the current president of the Ontario Medical Association, and Dr. Sky, who was the president until the first week of May.

I know Dr. Halparin wishes to speak first. I will ask each of you to make the comments that you wish to make, and then we will go through a series of questions.

Dr. Elliot Halparin, President, Ontario Medical Association: I would like to thank the committee for this opportunity to add to the health care debate, and share with you some of the exciting developments occurring in Ontario's health care system. I would also add that the work done thus far by your committee has added greatly to the discussion now taking place in this country concerning medicare's future. I cannot suggest strongly enough that the final recommendations of your committee must contain practical and implementable solutions if we are to prevent the further deterioration of our ability to provide high quality and timely care to our patients. We welcome the committee's interest in primary care reform and the enormous potential it has to improve patient care.

Part of the Ontario primary care model includes the integration of information technology, and my colleague Dr. Kenneth Sky, the immediate past president of the OMA, will be discussing the exciting advances we are making with respect to IT in Ontario.

The explosion of medical knowledge, along with technological advances that have occurred in the last decade combined with dramatic demographic changes, has made it necessary to confront the challenges to the way we deliver health care in this country. If physicians are to continue to be able to deliver high quality care to our patients, we at the OMA have always maintained — and others now echo the sentiment — that evolutionary, not revolutionary, change is mandatory. One change in which I firmly believe is the reform and renewal of the delivery of primary care. In Ontario, this is not an abstract concept. It is being implemented as we speak.

Just over two weeks ago, I became president of the Ontario Medical Association. At that time, I identified several priorities for my term. Near the top of that list was to be an active and knowledgeable resource to physicians as they consider the models on offer, as well as to the public and other stakeholders as requested.

Today, I want to highlight some of the background history behind Ontario's primary care reform, or PCR. I want to describe the core philosophy and to list the benefits to patients and doctors, both family practitioners and specialists, contained within our models.

From the initial pilot sites launched over five years ago to last week's opening of the first voluntary family health network in Ontario, the OMA has led the way in developing new models that are practical for both patients and physicians. The FHN models developed in Ontario are the culmination of years of hard work by many dedicated people, including representatives from the OMA, the Ontario government and the 176 physicians and over 250,000 patients in our 13 pilot sites.

Principles and guidelines were developed by the 8,000-member OMA-GP section and our 250-member governing council and utilized by the group developing the contract templates that outline the conditions under which patients and physicians function within a family health network, or FHN, as they are called.

The OMA understood from the beginning the need for wide consultation and evaluation before primary care reform contract templates could be offered province-wide. Rushing into models that were not carefully constructed would have created needless complications and could have ruined the process. If physicians and patients were to accept these new models, we had to ensure that the models acknowledged the challenges inherent to the provision of comprehensive care to our patient, and that patient's roster to their family doctor in the network. We believe we have succeeded in doing just that.

Honourable senators, at the heart of these family health network arrangements lies the doctor/patient relationship. These networks will enhance the provision of comprehensive family medicine care through a patient-centred model. These models also provide a structure to integrate other health care professionals, such as nurse practitioners, dieticians and mental health workers into collaboration team working in the best interest of patients.

Furthermore, family health networks provide many benefits to both patients and physicians, some of which overlap. Benefits to patients include improved access to physicians, enhanced continuity of care, emphasis on prevention and wellness, enhanced information technology available to networks, extended office hours — 5:00 to 8:00 p.m. Monday through Thursday and three hours on the weekends; the Integrated Telephone Health Advisory System staffed by specially trained nurses with support from on-call physicians in the FHN, resulting in 24/7 service; expanded ability of doctors to provide ongoing care to patients and greater opportunity to track health outcomes for epidemiological research.

The benefits to family physicians include the following: enabling physicians to join voluntarily with their consenting patients; enhanced ability to provide continuity of care; opportunity for more time to care for complex patients; potential to decrease complications of long-term chronic disease; acknowledgment of the challenges of providing comprehensive care to patients; access to information technology; the ability to coordinate and collaborate with a team approach to patient care.

The benefits to our consultant colleagues include the following: improved access to results of tests already performed; improved ability to manage their office consultation priority system; enhanced ability to co-manage complex patients with the networks. In short, PCR makes Ontario a more attractive place in which to provide high quality patient care.

Since we finalized the template contracts for the FHNs, I have spoken with over a thousand physicians all over Ontario, and I am very encouraged by the level of interest in these new voluntary models by Ontario's physicians. I am also proud to say that we have had interest expressed in this model both nationally and internationally.

Finally, before Dr. Sky addresses you, I would like to reinforce some of the components of what PCR is, what it is not, and what it can be to the future of health care in Canada. PCR is an example of what can be achieved when government and physicians work together in an evolutionary process to meet the needs of patients and their respective mutual interests. It is an opportunity to acknowledge the inherent challenges in the provision of 24/7 comprehensive care to patients. It is an opportunity to create a structure that allows the integration of all health care professionals into a collaborative team with the goal of better patient outcomes.

PRC is not a tool to save money on physician and allied health professional human resource costs. However, if there is the will for it, PCR can be an integral part of a sustainable solution to our medicare malaise, and I am looking forward to the debate and your questions.

I will now ask Dr. Sky to discuss the IT component with you.

Dr. Kenneth Sky, Past President, Ontario Medical Association: Mr. Chairman, I would like to thank you for this opportunity to appear before you again and offer an update on the exciting work that the OMA has been doing in the field of information technology. When I appeared before you last November to outline the OMA's views on information technology, I stated that IT would revolutionize the day-to-day practice for physicians. Today I can tell you that the revolution is under way. It is the one revolution that we have in primary care reform.

After a lot of hard work, I am pleased to inform you that we will soon be launching the OMA Web portal, which will help serve the ePhysician Project, or ePP. What is the ePhysician Project? The aim of the project is to develop a primary care information technology solution that will be physician-friendly in regard to time needed to set up and maintain, yet will offer the greatest benefits to the physicians and their patients.

The features of the IT solution being considered include a clinical management system that has both clinical management and practice management capabilities, a secure electronic medical record and a secure sharable portion of the electronic medical record consisting of essential medical and demographic information, hardware and software for family health networks, a physician portal which is an interactive gateway enabling access to a range of online products and services, a physician help desk run 24/7, and a transition support program to help physicians choose the appropriate products and services for their family health network.

The family health network physicians have an important requirement to share essential patient medical and demographic information, which we call ``core data set,'' with other authorized health care providers. The core data set contains essential medical and demographic information extracted primarily from a patient's cumulative patient profile or other parts of the patient's electronic medical record. A core data set will provide authorized health care providers with secure access to a standardized set of patient information.

The physician portal will support the provision of high quality and efficient health care services by providing family health networks with Web access to secure electronic communications that enable privacy, integrity and authentication of information; search engine capabilities that operate like a card catalogue of Web resources; medical and drug reference information and practice guidelines; chat forums, which are online means of communicating interactively with colleagues, both in terms of personal information and in terms of patient information, and that is associated with online news. As well, there will be links with other useful Web sites and portals.

What will this project mean for physicians? It means a more efficient way to deliver health care, quicker access to patient records, hospital reports, lab and test results.

With new technologies come new opportunities and new challenges. From the beginning, the OMA has remained true to the principle of protecting our patients' confidentiality. The OMA Council set out strict conditions about the IT project, and it is a credit to our profession that we have stuck to our principles. If it was to be successful, we had to be able to safeguard the doctor-patient relationship.

Recently, Ontario's Privacy Commissioner, Ann Cavoukian, reviewed our Chatham-Kent PCR pilot site, which was the testing area for IT. In her report, Mrs. Cavoukian made it clear that our system was secure and that every precaution had been taken to safeguard both the patients and physicians. We can be assured that the principles laid out by our council have paid off in a secure and confidential system. As we move forward with similar initiatives, we will always put our patients first. No matter what the future holds for IT, we as physicians will never lose sight of what is important to us: our patients.

When I appeared before you in the fall, I covered three areas in which the federal government can play a key role in IT. Before I finish, I would like to restate those three areas. We recommend that the federal government needs to develop national standards for the use of IT, provide development funding to the provinces, and establish explicit policy and procedures regarding personal health information. By working collaboratively with the provinces in these areas, the federal government can greatly move along the use of IT.

There is much about the exciting potential of IT that I do not have time to cover in the limited time available for this presentation. That is why I am looking forward to the question-and-answer period to delve deeper into the IT issue. Before I turn things over to Dr. Barrett, I would mention that a demonstration of the OMA IT model can be arranged, and I would be glad to give you a hands-on demonstration.

Dr. Peter Barrett, Past President, Canadian Medical Association: Mr. Chairman, on behalf of the 53,000 physician members of the Canadian Medical Association, we too appreciate the opportunity to offer some thoughts on the issue of primary care reform and some of the recommendations recently made in your 2002 report card. We appreciate being here with our colleagues from Ontario.

I am also pleased to introduce to you Dr. Susan Hutchinson, who is chair of our GP forum. She is a practising family physician from Nova Scotia. It is important she be here, because, as many of you know, I am a urologist from Saskatchewan.

Before presenting our recommendations, I believe it is important that we make three points clear from the beginning. The first is that Canada has one of the best primary care systems in the world. Things can always be better, but it is important that we realize that up front. In fact, when we asked Canadians their opinions for our report card last summer — I am sure you saw the results of that — one of the few players in the health care system to get an ``A'' were Canada's family physicians. We should be proud of what they are doing now.

Second, primary care reform is not a panacea that will cure all that ails medicare, although increasingly, we believe that that thought is out there.

Finally, primary care and specialty care are inextricably linked. This is an important consideration, since time and again we see people separating the two. However, we truly believe in a continuum of care in this country, and that what you do to one will definitely affect the other. They are very integrated. There are situations where family physicians, because of geographic location, do things that specialists would do in other locations, and vice versa. They are interdependent upon one another, so any approach we take must be integrated. We heard about that in the Ontario model just presented.

Furthermore, in respect to our recommendations on implementing changes on the delivery of primary care, we think the government must respect four policy premises, and I will list and then discuss them: First, all Canadians should have access to a family physician; second, to ensure comprehensive and integrated family care, family physicians should remain as the central provider and coordinator of timely access to publicly-funded medical services; third, there is no single model that will meet the primary needs of all communities in all regions of this country. Finally, scopes of practice should be determined in a manner that serves the interests of patients and the public safely, efficiently and competently.

Returning to the first policy premise: access to family physicians. Renewal of the primary care delivery system cannot be accomplished without addressing the critical shortage of family physicians and general practitioners that we have. In both our report card and the one issued from the College of Family Physicians last fall, there is a significant percentage — in the range of 30 per cent — of Canadians who cannot find a family doctor. This is not a condition limited to rural areas; it exists in the big cities as well.

We need to look at the effects of an aging practitioner population and changes in lifestyle and productivity, along with the declining popularity of the field, and I will emphasize that that is a choice of medical students. Family practice used to be one of the top choices, whereas in the last few years it has declined. At the Canadian Resident Matching Service, or CaRMS, where students are asked to apply for speciality or family physician positions, 57 per cent of the CaRMS that were unmatched were in family physician positions. That has an even greater effect when we know that we have an older population in that specialty and we have few younger people to replace them. Our concern is that this situation may get worse.

Second, the issue of physicians as central coordinators: While multi-stakeholder teams offer the potential for providing a broader array of services to meet patients' health care needs, it is clear that most Canadians view having a family doctor as the central provider for all primary medical care services as a core value. The College of Family Physicians of Canada, in its recent submission to the commission on the future of health care, suggested that research has shown that over 90 per cent of Canadians seek advice from a family physician as their first resource in the health care system. Similarly, in a recent Ontario College of Family Physicians public opinion survey, 94 per cent, an overwhelming percentage, agreed that it is important to have a family physician providing the majority of care and coordinating the care delivered by others.

Multi-stakeholder groups can facilitate the continuum of care, as the family physician has developed an ongoing relationship with his or her patients and their families, and I would emphasize not just the patient but the family, and as a result is better able to direct the patient through the system such that he or she receives the appropriate care from the appropriate provider.

Third, there is no single model for reform: In recent years, we have had several government task forces and commission reports, including the report of this committee, calling for primary care reform. We have seen common themes emerge, such as 24/7 coverage, alternatives to fee-for-service payment of physicians, nurse practitioners and other alternative providers, as well as health promotion and disease prevention. Governments across the country have launched many pilot projects and various models of primary care delivery, much as we heard today from our Ontario colleagues.

It is critical that these projects are evaluated before they are adopted on any grand scale. We must take into account the range of geographical settings across this country, which vary from isolated rural communities to highly urbanized communities with advanced medical science centres. Obviously, the needs of a rural community in northern Saskatchewan will be very different from a downtown community practice in Toronto.

Finally, on the scope of practice issue, there is a prevailing myth that physicians are barriers to change when, in fact, physicians have often led the progressive changes in the health care system. Canadian physicians are willing to work in teams, and have been for quite some time. The Canadian Medical Association had a developed a ``scopes of practice'' policy that clearly supports a collaborative and cooperative approach, which has been supported in principle by the Canadian Nurses Association and the Canadian Pharmacists Association. We indeed have a signed document to that effect.

Due to the growing complexity of care, the exponential growth of knowledge, and an increased emphasis on health promotion and disease prevention, primary care delivery must increasingly result in multi-stakeholder teams. This is a positive development. However, expanding the primary care team to include nurses, pharmacists, dieticians and others, while desirable, will cost the system more, not less. Therefore, we need to change our way of thinking about primary care reform. We must think of this as an investment, not in terms of cost savings but as a cost effective way to meet the emerging, unmet needs of Canadians.

In conclusion, there is no question that primary care delivery needs to evolve to ensure it continues to meet the needs and emerging needs of Canadians. We see this as making a good system better, not fundamental reform.

I thank you, and I will ask my colleague, Dr. Hutchison, to proceed.

Dr. Susan Hutchison, Chair, GP Forum, Canadian Medical Association: Mr. Chairman, the perspective that I am presenting to you today comes from the chairs of the general and family practice of the divisions and territories of the CMA.

As noted in Dr. Barrett's presentation, the primary medical care system forms the basis for medical services in Canada, and family physicians, working collaboratively with their specialist colleagues, form a virtual network care continuum. They are inextricably linked. This network of professionals, working in cooperation with allied health professionals, delivers an array of services to patients in a variety of settings from the most complex institutions to the home. The system has formed the basis of a universal health care system that is world renowned.

The committee has asked us to adress a list of questions framed around the primary care issue, and these questions have formed the basis for this presentation. It is important that we consider what is primary care reform as a first step in responding to these questions.

Primary care reform is an amorphous term. It has been associated with ``efficiency planning,'' which is another term for economic cuts. In other areas it is used to introduce alternative providers, and in yet other areas it is coined to serve as the curative panacea for the ills of our current system. The language of reform is a source of confusion and needs to be clarified.

If primary care reform means providing the same or more services for less, it is a non-starter. If it means finding ways to provide more comprehensive care to patients while maintaining the quality Canadians deserve, then there is common ground from which to begin to work towards alternative models.

Physicians are supportive of changes to the system that are evaluated prior to their implementation. It is necessary to evaluate the outcomes of alternatives to the current system on patient care and patient health outcomes. Adopting untested changes to the current system may negatively impact on patient health outcomes, and this is to be discouraged.

Primary care pilot projects have been the focus of Canada's health transition fund. The synthesis report on the pilot projects is due to be released in a few weeks and will include some outcome measures of alternative models of care delivery. There are challenges in interpreting these reports, however. There are no valid and reliable database sets on which to compare the changes. In light of the short time frame of the health transition fund, it is unlikely that they have true patient health outcome measures on which to compare the alternatives. This makes conclusive interpretation of any of the initiatives difficult, and caution must be used in their interpretation. Physicians need to be integral to the reform process as they have the domain knowledge that will help interpret these pilot projects accurately.

Evaluation takes time and resources, and both are in scarce supply. This can sometimes make the reform process seem slow. Taking the time to consider options carefully is necessary. The delays do not belong to the profession; the delay is characteristic of the time it takes to evolve a complex system. Anecdotal reports from pilot projects, however, do tell us one thing: It is clear that the alternatives are more costly than the current system.

Primary care reform options have considered primary care teams to include family physicians, nurses and other allied health professionals, but it does not ask what other skills are required to serve the needs of the patient. Most reform proposals consider the inclusion of nurse practitioners despite the current nursing crisis. Other options could be explored.

The Canadian military's use of medical assistants is one option. In the public sector, the emergency medical technicians who staff our emergency response teams are another way to extend medical expertise to patients where and when it is needed. Nurse clinicians have a special skill set and can function in many other roles in addition to the primary care setting, such as in specialized clinics for cardiac patients and diabetes, for example. The system's reform options must consider where best to commit scarce resources.

Delays in the reform agenda are a function of the funding and human resource challenges. The other major challenge to the reform agenda is the delay in the creation and implementation of information technology. There are several iterations that have occurred in advance of Ontario's implementation of its IT agenda. If you have the time to ask, the number of iterations is striking.

The technology must be designed so that it is the servant of the system. Systems programmers have been working on this objective for years. The introduction of the technology itself is time consuming and the use of the technology is an additional component of the system that will need additional resources. The major delay in progress in this area is cost. Applying technology to the practice of medicine is an expensive though necessary proposition. You have heard of all the potential benefits to the primary care agenda in Ontario that IT is thought to contribute. In the short term, the implementation of information technology will cost the system significantly more in terms of human and financial resources. There is the expectation that this investment will eventually save time and money. While this potential exists, it cannot be assumed to be the case. It is prudent to discuss information technology more in terms of its ability to be an enabler of quality care to Canadians.

There are many models of primary care reform that include different payment option alternatives. We have learned that no matter what the payment method, if the funding is adequate the outcome will be positive. Physicians appear to be most satisfied with a blended form of payment, which includes a fee-for-service component as well as a sessional or salary component. Services to be included in the models can vary. In general, however, it is not possible to include previously unfunded services in the current funding without additional resource commitments. This will result in a failure of any reform initiative.

You have asked whether we can envisage primary care in Canada as teams acting as purchasers of care on behalf of their patients. Off the top, it would be imperative to avoid the perverse incentives of the managed care system in the U.S. to provide less than optimal care. As a start, it would be reasonable, in my opinion, to look at the U.K. experience of fund holding, which I understand has had a mixed success, and ensure that it applies to the Canadian experience.

Considering the scopes of practice, we know that physicians are concerned with training and liability as well as legislative issues, and these processes take considerable time. Physicians have worked collaboratively with nurses for years. In the office setting, many physicians used to hire nurses but can no longer afford to maintain this practice model as nurses were paid from their fee-for-service billings. Many physicians have voiced their desire to return to their prior collaborative models. Ways to fund these initiatives should be supported.

The mix of health care providers varies based on the needs of the population. There is no ideal mix. What works best is an adequate human resource to meet the needs of the population. The mix of providers is dictated by the services required to address these patient needs. The ideal range of services for a given team would depend on the needs of the population and the available mix of providers. There may be considerable variability between the needs of a given population, as is the case in Aboriginal populations, for example.

If primary care reform includes the medical care continuum, adequate funding, realistic human resources planning, inclusive governance structures, supportive information technology with appropriate connectivity has the potential to improve the quality of care delivered to patients. More resources may be committed to illness prevention and health promotion if the resources are adequate. This would have the potential to further improve the population's overall health status. The cost of reform initiatives will be significant and will depend on the elements to be included. It is therefore difficult to predict without definitive models to cost out.

Whatever alternative system is proposed, physicians need to retain their role as patient advocate. They need to retain their clinical autonomy. Physicians have worked for years as agents for change, as advocates for their patients, with the goal of improving their ability to deliver quality care to their patients.

The Chairman: I would like to get a couple of factual answers before I turn to my colleagues. Dr. Barrett, can the scope of practices rules document you talked about be made available to us? Do we have copies? The obvious answer to my question is ``yes''

Dr. Barrett: Yes.

The Chairman: Second, as someone who was in the market research business for a long time, let me make a couple of observations on your polling data. I know why you put it in. You should understand it will not have any impact on us to tell us, for example, that 90 per cent of Canadians seek advice from their family physician as their first resource. That is hardly surprising. I am surprised it is not higher because they would not now be aware of another alternative. When we are told that 94 per cent agree that it is important to have a family physician who provides the majority of care, I am curious as to what the other 6 per cent think, since most people would think that way. In other words, having been in the business, I understand the process of asking the questions of the public that get you the answers you want. I am simply making the observation that it will obviously have no impact on us in terms of where we ultimately come out. I leave that thought with you.

To Dr. Sky, is what you call the ``core data set'' the same as what we call an electronic health record?

Dr. Sky: The electronic health record could include more than the core data set. It could be a very detailed amount of information and follow the patient from time to time. Whereas the core data set is the stuff that you need if the patient were to show up in an emergency room, for instance.

The Chairman: In some sense, it is a subset.

At the end of your remarks, you said that the federal government should provide funds to the provinces to help the development of the core data set. My question to you is does it not make more sense to simply fund one electronic health record and apply it nationally? Why would the federal government start to give money to provinces to further Balkanize the system?

Dr. Sky: The first thing is that health care is constitutionally a provincial jurisdiction.

The Chairman: We know that.

Dr. Sky: We do want to have a similar system from place to place. There are some differences and different needs in terms of what each province will require.

The Chairman: I thought we were talking about patients, not governments.

Dr. Sky: That is true. However, what usually happens, unfortunately, is that if you have a system that is being funded by the provinces, they want to have control in the sense that they are not prepared to have that information dispersed beyond their jurisdiction.

The Chairman: You are giving what I would call a political answer. You are here today representing the OMA and the profession, as opposed to telling me about federal-provincial relations.

My question is, from a practical standpoint, why does it not make sense? Is there a practical argument against having a single national EHR?

Dr. Sky: That is exactly what I called for, that we should have a standardized form that we could apply across the whole nation. Obviously, we do not want to Balkanize the system or have a patchwork.

The Chairman: Therefore, funding the provinces is not the issue; the issue is funding the system. That is a significant difference.

Dr. Sky: Yes.

The Chairman: Dr. Halparin, if you asked me what my overwhelming reaction was to the tone of all of this, it is, ``Whatever you do, go slow, take time; do not act as if you have to make a decision quickly. Bring everyone along with you. Run a zillion pilot projects. Everything must be done voluntarily. There should be no pre-emptive portion on anybody. We should be nice, little quiet Canadians and bring everyone together collegially.'' At what point do we say, ``Enough is enough: solve the damn problem.''?

Dr. Halparin: Mr. Chairman, there is much in that question. First, it is important for people to know that primary care delivery has been evolving exceedingly rapidly. Physicians and, I am sure, all other health care professionals have been altering the method by which they practise at an exceedingly rapid rate. What we have been discussing is how we will codify that and how we will acknowledge that the provision of this portion of the puzzle, the comprehensive care, needed some other kind of structure. You may ask any family doctor or any other health care professional about how the approach that they have taken towards primary care has altered.

The Chairman: I would take issue with your ``rapidly changing'' comment. I am using your own data. You tell me there are 8,000 members of the OMA GP section. You tell me that 176 are involved in 13 pilot projects. To my way of thinking, 176 out of 8,000 is hardly rapid progress.

You go on to say that you are encouraged by the level of interest — I do not know what ``encouraged'' and ``level of interest'' means — in regard to these new voluntary models. The frustration I am expressing, because I feel it passionately, and it is reflected in other comments, is with the notion that everything must be done voluntarily, and that nothing should be done that is likely to create a problem.

In Dr. Hutchison's report, she gives herself the out of not supporting the synthesis report on the pilot projects by saying that the report is due to be released shortly but, of course, there are challenges in interpreting the answers. These are all of the weasel words that I would use to try to ensure that I had manoeuvring room to disown the report if that is what I need to do when it comes out. I understand the game. That is not my problem. My problem is that, at some point, we need to stop talking, and running pilot projects, and start doing something.

I believe it was Dr. Barrett who said that there is a prevailing myth that physicians are barriers to change. I wish to tell you that I do not know that it is a myth.

Dr. Halparin: Let me try to respond.

The Chairman: Other than that, I do not have any views on the subject. Then I will turn to my colleagues. You can tell I am somewhat frustrated.

Dr. Halparin: Mr. Chairman, you raise many complex issues inside the context of one comment. If the notion is that somehow you will make it mandatory for physicians to join, what you are also saying is that, in essence, you are making it mandatory for patients. Physicians cannot join voluntarily. There is a large issue with respect to whether or not the public wants to be told, in a mandatory fashion, that they must do something.

The Chairman: That is our problem, not your problem.

Dr. Halparin: It is our problem, too. I do not want patients enrolling with me who are opposed to the notion of enrolling. The core of this issue is the doctor-patient relationship.

Second, the notion that we are not providing change as we go along, that we are somehow obstructionist to this process, is not the case. The profession has been open. I will give you one example: There are about 14,000 physicians in Ontario who work in hospitals. I was at the hospital from 12:30 to 3:00 this morning. When I am there, I work with the whole team. The concept that physicians are obstructionist to any kind of team approach is wrong. Every day that we work in the hospital, we work with nurses, dieticians, mental health workers and community care access centres.

The Chairman: I do not believe anybody has ever said that physicians are opposed to any kind of team practice, just so that we are clear.

Dr. Halparin: It is a matter of taking the experience that we have had in the hospital and moving it into the community.

Finally, I would tell you that we have a product. It is not as though I have come here without a product. We have brought a product. There is a contract there, and I believe it will be acceptable to the profession and to patients. However, making that mandatory at this point would not be a good idea.

Dr. Sky: In regard to the issue of rapid and revolutionary change, where you have a revolution and the next morning you have many dead bodies in the street, we have had some rapid change in Ontario with regard to hospital restructuring. We have found that it was not well thought out. Everything was not in place for the changes that were occurring. When that happens, if you do not have the things ready in the community to take up the slack, patients are left out in the cold. They are thrown out of hospital quicker and sicker, and suddenly there is nothing out there for them.

We do not want these kinds of changes on something that is as vital to Canadians as their primary health care to be made without their being though about very carefully. If a mistake is made, the patients will be the ones who will pay.

The Chairman: Can you give me a time frame? You have 13 pilot projects in progress; how long do you need to think about it?

Dr. Sky: That is interesting. We have had them for two years. Out of that, we finally have a contract that we now offer out to physicians right across Ontario as of January of this year. Unfortunately, we did have the OPSEU strike which interfered with the processing of these contracts, and we are just now starting to see some of them coming to fruition.

The Chairman: Give me some estimate of your numbers. I understand we are at 176 out of 8,000. When will you get to the 2,000 mark?

Dr. Sky: I cannot give you a hard and fast target.

The Chairman: Give me an estimate.

Dr. Sky: I cannot tell you. We have offered out those contracts. I do not know how many the family health network has received back yet. They have had many people express an interest, but it takes time to work out these changes.

I would also caution you. We had some reference by Dr. Barrett to the issue of physician human resources, especially when it comes to family practitioners. In Ontario, almost 10 per cent of our family practitioners are over the age of 65. We have a terrible demographic shift here. If you suddenly confront these older physicians with something dramatically different from what they have already had, they may opt to retire.

The Chairman: That is legitimate. We need to have some form of a grandfathering clause. I do not have a problem with that.

Dr. Hutchison: I think our frustration mirrors your frustration.

The Chairman: Do you know what is in the Health Canada report? I will not ask you what is in it, but have seen the synthesis or do you know roughly what is in it?

Dr. Hutchison: I have some hints, but no.

The Chairman: The words are protective.

Dr. Hutchison: The words are the same words I have used all along. We need to look at how alternative models impact on patient health outcome. As a practicing family physician, you ask: What is the problem, and how do we fix it? Is it a single problem? What can we do? We did offer some concrete alternatives.

Are we trying to bring our system back to the level where it was sustainable and we could hire nurses in our offices, work more collaboratively and extend our practices? That is a do-able step. In addition, we are contemplating pilot projects to look at alternatives at the same time.

The big issue is increasing the funding back to reasonable levels so that we can actually regain some of the ground we have lost while other alternatives are being considered at the same time.

The Chairman: I found useful your comment on the Canadian military's use of medical assistance and emergency medical technicians. That is a view we have not had before. That was useful.

Dr. Barrett: With regard to the barriers to change comment, one of the biggest barriers to change is always comfort. Everyone here knows from my previous presentations here that the physicians of Canada are not comfortable right now. We see some urgency here too. Things have to change soon. We cannot hold the system together much longer. We feel that is what we are doing right now. We would like to see change, and we would like to see change rapidly, too.

One concern we have, as you heard from Dr. Sky, is that some of the changes that occurred in the early 1990s occurred without our input. In fact, we were definitely excluded from input. As a result, we, the providers and the patients, were often left to implement and live with policies that were not workable. That is what we do not want to see again. We want to be there: We want to be at the table every time, everywhere, for input, which is not necessarily for us to tell you how to do your business. That is your job. We want to be there to advise. We do not want to see what happened in the early 1990s happen again. We think that is part of the reason we are in a mess now. We are looking to change, and looking for it urgently. Something must happen soon.

The Chairman: Let me make one comment about comfort: Change is never comfortable. When you talk to people in the high tech sector today, they are not comfortable. When you talk to people teaching in universities, they are not comfortable. When you talk to people in a whole pile of other professions, they are not comfortable. Your profession is not comfortable, and I could be sarcastic and say, ``So what?'' If the objective is to make change that keeps your members comfortable, we will not make change. That is the reality.

Dr. Barrett: Perhaps I did not make myself clear. We are not comfortable with the way things are. We are ready for change. We will not be comfortable until there is some change.

Senator LeBreton: This whole debate is about change. I happen to belong to a political party that paid a hell of a price for having the courage to make some changes, but that is another issue.

We have had testimony on the issue of primary care reform. We have had testimony about the aging population amongst physicians, but also the aging population in general and the people you are treating. We have had a lot of evidence about orphan patients and the need for primary care reform.

Senator Kirby asked that broad, overarching question. However, if we cut to the chase and we start with a clean slate — I suppose Dr. Halparin can jump in on this first — what kind of incentives do you see that, with you and the government giving some direction here, can be brought in to encourage doctors to enter into a genuine primary health care unit or team? Is it with young doctors graduating from universities? How do you see this evolving? How much time do you think will pass between what we have now and when we have a country-wide, workable primary health care system in place, acknowledging that, region to region, this is not always possible?

Dr. Halparin talked about his pilot projects. At our round table a few weeks ago, several people made some very disparaging comments about pilot projects. A lot of effort, money and resources go into such pilot projects, and then they are completed and that is the end of it and we are back to square one.

What incentives do you see, if we can cut to the chase, that would start this process along much more quickly?

Dr. Halparin: First, we went on what I have described as an odyssey through the billing patterns of family doctors in Ontario over the past three years to try to determine, to the best of our ability, what they were doing. Second, we took the information and evaluation we had received from our pilot sites, which were fundamental to this process, and tried to understand the areas where it worked and the areas where it did not work. We came up with this blended model that we are offering. It is really an effort to blend and marry the best components of capitation with the best components of fee for service.

I need to say a word about fee for service en passant. It is not as if there is a terrible need that we absolutely fundamentally must change. Fee for service has served patients and the professions well for something akin to 4,000 years. There is a necessary component in these arrangements that is substantially related to fee for service.

We tried to take the new dollars that were allocated and divide them into sections. One section was with respect to capitation, so the patients are age and weight distributed. Your have a payment for your patients for a core set of 57 services. I will not go into all the details, but a core set of 57 services makes up the capitation, mainly office-based procedures and office-based assessments that make up the core. There are extra dollars in there. They are age and sex weighted. If you are a 10-year-old male, you get 0.44 times what the value is. If you are 75 or over, you get double. We wanted to create an incentive to look after the elderly. That is how that part of it worked.

Then we said, what about wellness and prevention? There is a list of conditions, immunizations, mammography, pap smears and flu shots, where you can earn bonuses by having X percent of your patients receive those services on an annual basis. We blended into that the information technology so you actually know what is happening.

We offer premiums because we want physicians to continue to provide certain services that they were abandoning, perhaps because they were not cost effective. If you continue to work in a hospital, the premium is up to $5,000; if you continue to work in obstetrics, the premium is $3,200. There are four other sets of premiums one can earn.

We took the best features we could find from fully capitated models with a much larger basket of services and blended those in order to create the model we have. We believe it will be successful in acknowledging the changes that have taken place and the requirement for comprehensive care, something that doctors needed to know was an important and fundamental part of the delivery system.

Senator LeBreton: What is the next step to move from the system we now have into a much broader primary care system? Do you concentrate on doctors entering the system? How do you implement your plan?

Dr. Halparin: You are asking how it should be marketed. The question is whether it should also be marketed to patients. I do not think that is our decision to make, but if you wished to recommend that such a model be marketed to patients so that they are asking for it, that would be a good thing.

With respect to the profession, we have held a variety of education sessions. I have personally explained this arrangement to over 1,000 physicians. The presentation I give lasts 90 minutes and then there is a question period of usually another 90 minutes. There has been a wide range of interest.

I think it will be a bit like popping popcorn: A few kernels will pop to begin with, but then there will be a lot of popping going on when people understand that this acknowledges the complexities involved in providing comprehensive care, that it is good for patients and, by extension, good for physicians.

Dr. Sky: Might I suggest, senator, that you should look at it in light of what happened with laparoscopic cholecystectomy, the keyhole gallbladder surgery. Initially there was very slow uptake, but patient demand drove surgeons to acquire that skill. I believe that is exactly what will happen with this initiative. As patients understand the benefits of primary care reform, they will be asking their physicians if they can get involved in it. For physicians, the IT component of primary care reform is a big incentive.

Dr. Hutchison: There is great benefit in the Ontario model that is being proffered. Other options are available in other jurisdictions that are not even being piloted; they are simply available. Ongoing alternative fee structure models and salary blended options are currently available that are not subject to any pilot project or evaluation model. Adding the IT decision-support tools to those elements may be very attractive to many as well.

If we limit ourselves to the options that are currently being piloted, we may miss some of the models that are very effective and are practised in many jurisdictions across the country. Being aware that there are different strategies that work for different places and looking at some of the strategies that are currently functioning is a good place to start.

Senator LeBreton: You talk about information technology being something that physicians would support. When you go into a doctor's office, you see a wall of files. Will doctors really want to turn all of those files on their patients into a general pool of information technology? How will that be implemented?

Dr. Sky: A couple of principles are involved. Paramount is patient confidentiality. That is why I asked for legislation. I believe that we must have legislation to make this work well.

Second, we need to understand that the information will be in a central server. However, pursuant to the way in which we have established the process in Ontario, the Government of Ontario will provide everything but will be at arm's length to the information. We want to ensure that the doctors are still in control of the patient information. Otherwise, patients will likely not give us full disclosure, which would make treatment very difficult.

We should understand that once the doctor manipulates the data and arrives at a treatment plan, that intellectual property belongs to the physician. That needs to be respected as well. Any data mining that will occur must be done with that in mind, and in a non-threatening environment. If physicians were to believe, for instance, that that would be used as a management tool to extract some form of guideline from them, they would probably not cooperate as well.

Senator LeBreton: You say the information belongs to the physician. Some people will argue that the data belongs to the patient. How do you bridge that gap?

Dr. Sky: Let me be clear, senator. The data on the patient belongs to the patient; it does not belong to the doctor. It is that which the doctor does with his own brain in manipulating that information to develop a treatment plan or to interpret the information that belongs to the doctor. I do not in any way exclude the fact that the property rights on the information belong to the patient.

Patients want that information to arrive at the point of service in a timely fashion so that there is no duplication and no delay in their treatment.

Senator LeBreton: Dr. Hutchison said that most reform proposals consider the inclusion of nurse practitioners despite the current nursing crisis. Yet, some time ago we heard witnesses who tabled the very alarming information that 40 per cent of nurse practitioners in the Province of Ontario are not utilized in their chosen field but are rather working in retail or other, unrelated fields. How do you explain that?

Dr. Sky: We have said all along that we want nurse practitioners involved, especially in the primary care reform teams or the family health network teams. We have not yet secured a funding model for these nurse practitioners and we have not yet determined how liability will be dealt with. Those are the two areas on which we need to get working. The Ontario Medical Association was negotiating for the template, and Dr. Halparin can expound on the negotiations for that. That took a long time to work out.

Dr. Halparin: First, I must say that physicians have done nothing to create problems for nurse practitioners with respect to this initiative.

Senator LeBreton: I acknowledge that.

Dr. Halparin: Although the contract we have provides a structure for all health care professionals, we have recognized in section 8.5 the role that nurse practitioners can play in practising within their scope of practice inside one of these family health networks. Again, there is no obstruction to the process. We are interested in this initiative. We need it on behalf of our patients.

The Chairman: Dr. Sky, you referred to a letter that you received from the Privacy Commissioner of Ontario indicating that your system was, in her terms, ``privacy secure.'' May we have a copy of that letter, please? It will assist us in discussions that we will need to have, inevitably, with the federal Privacy Commissioner.

Dr. Sky: Certainly.

Senator Cook: Thank you for coming today. I would like to return to the Chair's opening statements in which he mentioned 8,000 physicians, 176 of whom look after 250,000 patients in 13 pilot projects which were started initially five years ago.

You need to help me understand this because I come from Newfoundland and Labrador. If you were to double the number of patients, that is how many people live on my island.

In the second paragraph of your presentation, even though there are 176 physicians, are you saying that the principles and guidelines were totally developed by your 8,000 members?

Dr. Sky: That is right.

Senator Cook: Therefore, everyone had a shot at developing this model that is in use by the 176 physicians who are covering 250,000 people, is that right?

Dr. Halparin: Not precisely, no. What that means is that there were a set of principles developed to guide the negotiators with respect to what the terms and conditions might be. Some 8,000 doctors did not have input into the nitty-gritty of how to write a contract.

Senator Cook: Even though 8,000 people did not have input, is the outcome a result of the experience of 8,000 people?

Dr. Halparin: There are 8,000 members in our GP section, all of whom were invited to provide input to their executive. Their executive created a set of principles. As well, the team that was involved in the initial stages of creating options for primary care reform also presented a set of principles to our council.

This information was to demonstrate to you that we had a great deal of input from family physicians across the province with respect to the guiding principles behind the type of arrangement in which they would be interested in participating along with their patients.

Senator Cook: I need to ask the question again. I know I heard the answer. Five years have expired and there have been 13 pilot projects. What are the barriers? Why can we not move beyond this? I know change is constant and inevitable, but we must link this to time sooner or later. I am looking at 13 pilot projects over five years in but one province of this nation. We are attempting to understand and bring in primary care for the entire country. My frustration knows no limit at this point.

Dr. Sky: Senator, I wish to correct one inaccuracy. Only two years have been spent on the pilot studies. We have had two evaluative reports from Price Waterhouse Cooper on these pilot sites. At that point we felt sufficiently secure about the changes that needed to be made to offer up these templates that are now being offered to physicians in Ontario.

Senator Cook: In your opinion, do you have sufficient evidence-based information to move this agenda forward? When I look at the bottom of this document, no one can object to the points that are set out.

Nowhere do I see a role for the nurse practitioner. I know that everyone is tired of hearing from me about these people. I look at benefits to patients and benefits to specialists. We are looking for integration and a way to do things differently. We are looking for people within the system who can make it easier to reform it, change it or deliver it. The nurse practitioner falls off the end, and I know the stresses. The nurse practitioner is a graduate nurse who is working on a floor of a hospital and who is trying to upgrade her skills, who has a family, and there is the question of funding and time. I do not see where he or she fits.

Dr. Hutchison: Everyone fits. One of the delays in the process has been in regard to the development and integration of the information technology which, as an enabler, has taken a long time to develop. Senator Kirby asked if we need one electronic health record or a set of standards to which all the electronic health record modellers can work. The electronic health record is a decision-support tool which helps to coordinate the delivery of care.

Your concern is with the delays over the course of the five years. Why has it taken so long? It has taken that long to develop the technology. If electronic health records are available to nurses and allied health professionals, they can help to coordinate care. Not including it does not mean it is not implied. Not only nurse practitioners are to be considered, however. As I mentioned before, in the Canadian military I worked with physician assistants. There are many physician extenders, or however you want to term them, along with different ways to deliver care to patients. The IT piece is essential in helping to coordinate that.

Senator Cook: If we could move the IT piece forward today, would that help to accelerate the reform that we all desire? And how do you see us moving it forward?

Dr. Hutchison: I think all physicians believe information technology has the ability to help in decision-making support and help in moving the reform forward as a coordination piece.

Senator Cook: In light of the fact that we are moving patients out of hospitals, do you see home care as a component of this reform?

Dr. Hutchison: It is essential. As a practising family physician who has been practising during the years of the changes, we saw many patients whose care was devolved from the institution into the home. The delivery of medical care now extends much more into the community than it did before. It has become a larger piece of the delivery of medical care and health care in general. We need to be able to provide the continuum of care.

Dr. Halparin: I do not wish to leave people with the notion that some of these things are not being done. Home care is being delivered now. It is an integral part of the system. In terms of the structure of the product I bring here, it is a fundamental element. Right now, however, there is not the incentive to provide that care, whereas in the context of the arrangements we have developed, there is additional incentive to provide that kind of care. There is an extra incentive for hospitals, home care and long-term care institutions. There are many incentives to encourage provision of care. It is that totality of care that doctors provide to patients and their families, especially if they have other allied professionals who can go out and make those house calls, that makes this system that we are proposing one which we think will be beneficial to patients.

I add parenthetically that the nurse practitioners and the entire team are specifically referenced under benefits to family physicians.

I did not wish to rewrite every benefit, as they overlap so much. It is the ability to coordinate and collaborate with a team approach to patient care that is a fundamental benefit to the family physicians and the patients.

Senator Cook: The component of home care — extended hospital care, if you like, in a home setting — is part of your model?

Dr. Halparin: There is an incentive in this model to provide that service. The sheet on the blended payment parameters will explain why there is not an incentive, and how it works.

Perhaps I can invite you to the Newfoundland Medical Association meeting on June 7. They have asked me to speak to them about the structure in this arrangement. I will go into significant detail about how the blended payment parameters actually work.

The Chairman: I take it you have just extended the invitation.

Dr. Halparin: I am reluctant to extend invitations on behalf of an association that has invited me.

Senator Cook: I have one final point. I was in Halifax last week, becoming a new grandmother. I want to commend the system. The baby came home 48 hours later. Her grandmother had forgotten what to do, but the public health nurse was on the doorstep, so I could see the continuum of care for maternity. I wonder about the other types of care, because specialized care was needed for all three people: mother, grandmother and child.

Senator Roche: I would like to direct a question to Dr. Barrett. Dr. Halparin might want to add some comments. When Mr. Chairman was questioning Dr. Barrett, he ended his comments, if I understood him correctly, by saying that doctors are uncomfortable and that they do want change. He made a point of saying that. I am getting a mixed message.

Dr. Barrett, you ended your brief by saying that you want to make a good system better, rather than seek fundamental reform, which was in harmony with Dr. Halparin's views of evolutionary change, not revolutionary change.

My first question may give you a chance to reconcile the two impressions that I got from you that are not in harmony. Does this medical system need radical change? Is it a question of putting more money in so you can do more things better? Dr. Halparin went to great lengths to tell us about the family health networks that are being developed. I am wondering whether we need more of the same and not real change. Is that what you are after?

Dr. Barrett: The answer is that we do want real change. We want things to be better for our patients; we want things to be better for us. I think Canadians have lost confidence in their health care system, and that is one of the reasons we are glad you are doing what you are doing.

We do not want what we saw in the early 1990s. It was a bit like — and we have used this analogy before — the banks getting rid of the tellers before putting ATMs in place. Bankers could have told them the results of that.

In our health care system, we were excluded in the early 1990s from the reform process. As a result, we saw such things as the cutbacks in medical school enrolment, where we could have predicted what would happen and why we have some of the problems we now have.

We are looking at reform. We simply want to be involved. As I said before, it is not that we need to make the decision. We will give you our ideas; you ultimately will have to make the decision on behalf of all Canadians. We would like to be at the table where those things are considered, just to have the input.

Senator Roche: The use of the phrase, ``Canadians have lost confidence in the health care system,'' troubles me, because that is not what I see, nor do I think there is evidence to support it. I think Canadians have lost confidence in government underfunding of the health care system, which has precipitated numerous crises, some of which have been referred to this afternoon.

In seeking this change — and it is not clear to me the parameters of the change — can we hold to the values of the Canadian Health Act? Are the values and the five principles that underscore the Canada Health Act still valid in their entirety? What are you saying to us with respect to how we are to go forward? Do we have to wrench from what has brought us this far, or just put more money into it to make it better?

Dr. Barrett: First, I think there should be a federal reinvestment. The federal government, to a certain extent, pulled out. Second, I do not think it is a question of putting more money in, to do the things in the way we have done them before. That will not be enough with an aging population and new technology. Therefore, we must think about doing things differently. Yes, I think the Canada Health Act should be looked at, and whatever health care system we move to has to be consistent with the values that Canadians hold, and I think the big one is universality; that we are all in the same boat together in this country.

Senator Roche: When you say the Canada Health Act should be looked at, do you mean in the sense of opening it up or just reviewing it? There is debate, as you well understand, about not opening it up lest it precipitate an unproductive debate. What is wrong with the Canada Health Act as it is that will not allow us to extend its services to meet the needs of the aging population, to make use of new technologies and all the rest of it?

Dr. Barrett: One of the problems with the Canada Health Act as it has been applied — not necessarily what it says — is that it is speaking to a smaller and smaller percentage of the overall expenditure in health care in Canada. As a result, increasingly, things like pharmacare, for instance, or what we spend on drugs, have surpassed the cost of physician services. Yet that really is not falling under the prerogative of the Canada Health Act as it has been interpreted. It has basically been physician and hospital services, which now is less than 50 per cent of what Canadians spend on health care.

When I say looking at it, I do not necessarily mean opening it up. It will be for judicial and federal-provincial experts to look at whether we can accomplish what needs to be accomplished without opening it up. However, I think it definitely must be looked at.

Dr. Sky: You have raised the level of the debate here, because we are no longer just talking about primary health care reform, which is just a part of the whole issue of change that needs to happen to health care. We are now talking about the Canada Health Act as if it were totally encompassing. It is an act that was devised essentially almost 50 years ago. It does not encompass ideas like sustainability or quality. There are no guarantees about access. Patients are falling through the cracks right now. In Ontario, we have been calling for this debate to proceed for the last four years now. We are happy it has finally reached this stage where Canadians are involved. The problem has been that, for many years, the public has been shut out of the debate. It has just been between the providers and the payers that this discussion is carried on, and it really does need to be an open debate.

Dr. Halparin: You have touched on several topics. One was about the notion of change. We all have our favourite quotes. When physicians ask about change, I often use one of my favourite quotes: ``You do not have to change. Survival is not mandatory.'' However, If they want to survive in this ever-changing world, they must change with it.

Second, it is important again with respect to delivery of primary care, because the physicians — and, I am sure, the other health care professionals — have modernized the way in which we practice. It is not like the system they had in East and West Germany, where one side produced the Trabant and the other side produced the Mercedes. We have a much closer system here. We need to upgrade from Pentium 2 to 3, or from 3 to 4. That is the kind of change we are advocating.

In the meantime, we do not have to have every single physician or patient enter into a rostering process in order to create substantial change. As time goes by, people will enter into the process. We need to incorporate into the process the changes that have occurred so that we can codify them.

With respect to the Canada Health Act, I do not practice the same way in 2002 as I did in 1984. I think the same would apply to the Canada Health Act. Issues of quality, access and what ``medical necessity'' means have to be addressed. The Canadian people have to enter into that dialogue. You called for it yourself. You have said that Canadians are being forced to make changes. They will have to face the fact that they need to make choices. This aspect is extremely important. It would be very beneficial for this country, going forward, to have an act that is modernized and meets the needs of the patients and the health care providers in this country.

Senator Roche: Regarding primary care and multi-stakeholder teams that you said are a positive development, you cautioned us not to think of it in terms of cost savings but as a cost-effective way to meet the emerging, unmet needs of Canadians. Will we save money by using multi-stakeholder teams, or not have to spend money for new kinds of services? I ask this question in terms of the framework of these present hearings which, in the framework of volume 6, will be financial recommendations. How do you see the finances of primary care being a contribution to the financial debate that we are starting here?

Dr. Barrett: First and foremost, the idea of multi-stakeholder teams is not that we will be able to provide cheaper care. One concern we have had is that that is some people's interpretation of primary care reform. Multi-stakeholder groups are a great idea. Involving nurse practitioners is a great idea. There is no question that nurses, pharmacists and other health care providers are better educated than they ever were before. The knowledge base in health care is expanding at an exponential rate. If we are to provide care for all of these patients right now, with a reduced work force in many cases, we will have to go that way. That is the quickest and easiest way to solve the problem to a degree.

It will cost more. As we do more things and we involve more people, the biggest cost in health care is the health human resources element to it. As you involve more people who can do more, it will cost more. That is a good thing. In the end, our goal should be the health of Canadians. If that is our goal, I believe that that is the way in which we can achieve that goal much better than we ever have before. We should look at it economically, as an investment in the health of Canadians as opposed to a consumer good, if you would.

Dr. Halparin: In the context of Ontario, we certainly had much discussion about this point. We believe there are potential substantial cost savings as a result of good primary care reform, if it works in the way we envisage it, in two main areas. One is the decreasing cost of avoiding duplication of testing. Laboratory and diagnostic imaging testing is exceedingly expensive. There is a tremendous amount of duplication, for a wide variety of reasons that we do not need to get into. With an integrated program of the team, we think there will be substantially decreased costs in avoiding duplication.

The second one is the big one, and it is what Dr. Barrett is saying. If it works, we will decrease the complications of chronic decease. There is no question that the end stage of disease is incredibly expensive. Every time you delay or avoid the requirement of dialysis for someone, for a common example, you save the system dramatic amounts of money. The question is when will you see those savings? That is always the issue we get into when we are in a political debate. If someone must invest $100 million today, he or she wants to know what other budget the $100 million will come from. That is a debate that the politicians need to have with the public.

With respect to this process, I truly believe there are tremendous potential cost savings, but the savings are not in the health human resources. It is an investment in health human resources that will produce these potential savings. Frankly, even the amount of dollars that is being invested in Ontario is not a particularly expensive investment in relation to the potential savings they plan on accruing from this process.

Senator Morin: We have been talking about primary care reform. What do you see as the federal role in promoting primary care reform?

Dr. Barrett: The federal role can come in a number of ways. First and foremost, there must be a federal reinvestment in health care in this country. They have pulled out from what they had funded in earlier days. We need to see that reinvestment. In order for that to happen, there will have to be some way whereby they feel that they are contributing, and getting acknowledgement for that contribution.

Secondly, that federal investment can take place partly in the area of IT that we have heard about here. The health care system is an information-rich system. Yet, industry-wide, we have fallen way behind other industries in terms of our investment in information technology. Industry in general is up in the 6 to 7 per centile. We are way below that.

We did see federal reinvestment in the September 2000 First Ministers Agreement, but it was nowhere near the $4 billion to four and a half billion dollars that would be necessary to bring us up to industry standards. That is one area right off the bat where the feds could be involved.

Then, with respect to pilot projects and funding those initiatives across the country, as I have said earlier I do not think one size fits all. The primary health care you will deliver to an Aboriginal population in northern Saskatchewan will be very different from what you would deliver in Rosedale in downtown Toronto. The needs are different. Even the personnel would be different in terms of meeting those needs. There is a role for the federal government there.

Senator Morin: This is important. We can write that we are in favour of primary care reform. You are saying increase in general the funding and support of information technology, and give more funding to the transition fund, which is really the primary care pilot projects. These primary care pilot projects have been in existence now for many years. You are saying there should be more transition funding?

Dr. Barrett: That is right. I can give a whole lot more examples.

Senator Morin: It is very important.

Dr. Barrett: Another area where there is a precedent is the crumbling infrastructure right across this country. We see it in our universities.

Senator Morin: We are talking about primary care?

Dr. Barrett: Even in primary care, to deal with the health human resources problem, our academic centres will have to train more physicians and more nurses. We have seen approval across the country for that to happen. Yet during that same period, our universities are crumbling. The infrastructure is not there. They cannot handle the new numbers, and we have had precedent for a federal investment in academic centres across this country. It is time again for a one- time federal catch-up investment.

Dr. Sky: I could tell you what not to do, and that is what the federal government did in primary care reform in British Columbia. They set aside $50 million for primary care reform to fund the nurse practitioners for three years. When the funding ran out it was not renewed, and the physicians in the pilot projects found they had no way to sustain the project any further and keep the nurse practitioners in their practices. One of the things we should consider is making funding predictable and long-term so that people can make plans.

Senator Morin: This is different from what Dr. Barrett said. He thinks we should have more pilot projects. That is okay.

Dr. Halparin: With respect to what you say in your own documentation about the federal government's role in research, exactly the same thing applies to primary care reform. In fact, it seemed to me you could say the same thing about the role of the physicians inside the family health networks that we are applying: Facilitator, catalyst, performer, consensus builder and coordinator. That is an important federal role for this process.

Dr. Hutchison: In addition to that, there should be a federal role in developing national standards for information technology and coordinating the successful health transition outcomes, the pilot projects, if they are successful in coordinating the introduction of those successful strategies in other jurisdictions. Developing national standards for IT is imperative.

Senator Morin: If I can follow up on that? What do you mean by standards for information technology? Are you talking about hardware?

Dr. Sky: We start with the protocols, the source codes of the pipeline that the information flows through. We had, in past years in Ontario, 20-odd different software programs run by the ministry of health, none of which could coordinate with each other or talk with each other, so the information was not being transferred back and forth. We need a standard so we can move the information from one place to another.

Senator Morin: Is it the compatibility of information?

Dr. Sky: That is the bulk of it.

Senator Morin: I would like to come back to the patient for a minute. When we were talking about primary care reform, we think of capitation, and we are talking about rostering. If we talk about rostering, gatekeeping comes into the picture, and there is a loss of freedom of choice for the patient. There is no doubt about that. We are working in the North American context, not in Britain. In the cities, and it may be different in rural areas, people like to have their own physician and gynaecologist. There is much more mobility between providers here in North America than there is in Europe. It is a fact.

If we move as quickly as the chair recommends, and in two weeks time everyone is rostered, they lose freedom of choice. They can no longer see their gynaecologists every year and have their kids seen by a paediatrician. How will the Canadian public react to that?

Dr. Halparin: First of all, I would suggest that the Canadian public, unlike the American public, tends to utilize their family doctors, their primary source. The notion of multiple providers is not nearly as common here. This is the reason why you cannot make it mandatory for physicians. By doing that, by extension you will make it mandatory for patients. I do not think that is possible. There are reasons why patients may not want to roster. This is about choice. It is a choice for doctors and patients.

We will find out whether or not the patients prefer this style. Personally, I believe it is in their interest to participate in this process. What we discovered in our analysis was that approximately 80 per cent of the core services were provided by their family doctor and 20 per cent by others. We would like to see that 20 per cent drop to zero with the use of this team approach. That will be a substantial step forward in overall quality care. We think the patients will like that. They will like the extra hours, the integrated telephone answering service and many other things about this model that make it very attractive for them to belong.

Senator Morin: My final question is to Dr. Sky about the patient electronic health record. Do you need the patient's consent to have their information on now? I do not know if you have been following the debate in Quebec, where they have the ``smart card.'' It has been an interesting debate. There are an amazing number of patients who do not want their information on that card. In certain cities, nearly one-third of patients did not want it on their card. It is a fear of the unknown more than anything else. The fact remains that, in spite of all the explanations given, they still do not want to have electronic information. They have the impression that everyone will use it. What do you do when a patient does not consent?

Dr. Sky: That fear is not totally unwarranted. It is something we need to address. That is why I have called for some form of legislation to protect that information, so that it is not datamined by commercial interests, for instance. Right now, we see where companies are taking prescription information on physicians and using that to tailor their sales approach to physicians. We do not want that to be extended to patient information. There are good reasons for that safety factor.

As to the use of the smart card, I was at a meeting of the Quebec Medical Association, the QMA, a few weeks ago and mentioned to them that our experience in Ontario is that the smart card is a dumb card. It is dumb for a lot of reasons. First of all, it is fragile. You could lose it, and it may not come with you. If you have it on an insecure piece of plastic, there is nothing that prevents somebody else from reading that card. We have to be very sure that whatever system we have is extremely secure. To do that, we have had to invest a lot of money in the encryption of the information and in the certification of the users. That is a very difficult and time-consuming process.

Senator Keon: First of all, I want to apologize to the panel for being late.

I want to pursue the concept of privately delivered health care in a publicly funded system in the context of primary care. In other words, the government pays for the care, but a private enterprise delivers it. Even though I have not heard your testimony, I have been following the developments at OMA with a great deal of interest, and I must commend you on what you are accomplishing in information technology as it relates to primary care, and so forth.

We have this conundrum where we, for some reason, have not been able to do as well as Britain, Sweden and other countries in getting this primary care piece organized. It seems to me we will not get the necessary resources and buy-in if it comes down from government, whether there is a specially funded program with federal transfers to the provinces or whatever. It will probably end up being a combination of all of the above.

What would you feel about government incentives to have organizations like the OMA, local physician groups and other primary caregivers get organized, let private enterprise provide their clinics and networks, let them run them efficiently but, of course, for the patient they would be covered in the same way as if they were going to a government- owned clinic, and not all that different from what the doctors' offices once were?

Some of these problems were solved in the past with the so-called doctors' buildings, with the offices upstairs and the labs downstairs. They functioned very well. That would never have happened if we had been waiting for government funding, but somehow, serendipity provided them.

I would like to hear you ponder this aspect. The chairman and I have been taking a bit of heat here in the city because a newspaper headline misrepresented this committee and suggested that we are advocating private health care. What we were talking about, however, was privately delivered public health care. I feel there is tremendous opportunity in the primary care sector to bring groups together and have little enterprises going here and there.

Dr. Hutchison: There is merit in all options if there is adequate funding. Probably the biggest concern physicians have is being put in the position similar to HMOs, where there is a disincentive to provide what the physician believes is quality care, and not being able to retain the clinical autonomy and their patient advocate role. That is the biggest concern for physicians.

There is the potential, as I think we all agree, in many different strategies. In essence, family physicians are functioning somewhat in that role now. There is a set fee for a set service and the physician delivers that service for that fee, which is sort of akin to a publicly funded private delivery of a service. We are not really that far off. The real concern physicians have in moving any further from there is that they are again placed in a role where they are not able to deliver quality care and not able to advocate on behalf of their patients. I believe there is merit and consideration of that option if the funding needs can be met, and the guarantee for the funding needs can be met.

Senator Keon: Do you not think, if you had a little group of primary care physicians and nurses, and whatever other people they wanted to bring into the group, that the risk of them getting into the conundrum of the HMOs would be much less than if this system is designed from above by some bureaucrat who never touched a patient in his life?

Dr. Hutchison: Definitely. The potential for physicians to advocate at the grassroots on behalf of their patients exist if in fact we are developing, designing and implementing the models. There is potential in the Canadian context if in fact technology is used and there is proper information to help guide the funding model so that there is an assurance, for example, on the part of the provincial or federal or whatever funding agency to ensure that physicians are not placed in the role of having to compromise quality. If those assurances are met, what you are saying, from what I understand, is that grassroots organization for the delivery of service has merit. Definitely it has merit.

Dr. Halparin: I would only offer that the OMA has always supported choice of a model for physicians. This particular contract that we have been discussing today is only one of several with which I have been involved. We have community service contracts, we have northern group funding projects, reform fee for service and community health centres. We have a variety. To the extent that there is a subset of physicians and their allied health care team who would be interested in that is an excellent idea.

At the end of the day, what you really want to do, apart from making sure you are providing high quality care, is make Canada an attractive place in which to practice. Part of the problem with this underfunding, and the lack of sustainability in the system, is that it has become unattractive to practice here. It has become more attractive to practice elsewhere.

The American recruiters have a system of rating physicians by a medal rating: a bronze, a silver or a gold doctor. Because of the quality of the educational process that we have, Canadian family physicians are automatically rated as platinum physicians. Part of the reason that attracts people to move is their frustration with the fact that they cannot practice the quality care they would wish.

The method that you are advocating here is one way of satisfying a subset of doctors and will make Canada an attractive place for them in which to practice. If that does not interfere with any of the tenets we have with respect to the Canada Health Act in either its current form or its modernized form, then that is an excellent idea.

Dr. Sky: If you raise the level beyond primary care reform, what you are talking about is internal market reform. I would put to you that that is a bit passé at this stage. Most of the studies have shown that if we are talking about having competition for public funds, it tends to be wasteful, so that if you divert some of that public funding to pay for the administration of privately run situations, and that usually means an HMO type of situation, you will find that it is wasteful of public funds.

The Chairman: I must challenge you on that. First, I do not know what public funds have to do with the matter. It is either wasteful or not wasteful. It seems to me whether the payment is from public funds or private funds has nothing to do with your conclusion. Second, I want to make sure I understand what you are saying. Are you saying that an element of competition among providers is inherently wasteful?

Dr. Sky: No. I am saying that if we were to have a set of privately run clinics paid out of —

The Chairman: Paid. Forget about where the money comes from. They are going to be paid by an insurance company. It does not matter. They are going to be paid, right?

Dr. Sky: When we run our school systems, we are very careful that the money we devote to publicly funded systems does not get raided by private schools. We make sure that we secure the publicly funded school system. I believe we would want to be sure of that.

The Chairman: I know you are tempted to always get back into what ``most Canadians'' want or thing, and give us a lecture on public opinion. I suppose that is really our end of the business. We are interested in your opinions from your end of the business.

Dr. Sky: Most practitioners now are private providers. We would not be changing anything unless you were talking about some other group coming in and acting as the administrators for these physicians and other providers. At that point, they would have to be paid for.

The Chairman: What about clinics or hospitals being privately owned?

Dr. Sky: There has to be a profit motive in that situation. Are we prepared to accept that some of our public funding will go to that aspect?

The Chairman: You ask the question. Obviously, if there are no benefits in terms of reduced costs as a result of competition, that is a different issue.

What Senator Keon and I are finding difficult to understand is that in every sector of the economy in which there is an element of competition, that leads to efficiency. That is probably a non-disputable statement. My question is, why is the hospital/clinic sector different? By the way, if you think it is different, it is only different in Canada because we are the only western industrialized country in that situation. How do you defend the status quo, which is what you seem to be attempting to do?

Dr. Sky: I do not have to defend hospital administrators. I believe there are efficiencies that can be made. I am not sure if it is the funding model to hospitals and clinics that needs to be changed, so that it is patient and service-based, as opposed to the global funding that we have now for many hospitals that does not really encourage increased services to the patient.

The Chairman: You favour our service-based funding approach, do you?

Dr. Sky: Yes, I do.

Dr. Halparin: You have seen the effects of competition in this country. There is a doctor and a nurse shortage; there are shortages everywhere. Part of the reason is that the competition for their services has attracted them elsewhere. That is part of the problem.

Senator Keon: Let me return to the concept of privately-delivered, publicly-funded services. In the institutions, I am aware of a situation where a particular service was being provided at a provincially competitive rate in-house. You could go to an outside contractor and get the same service for 50 per cent of the cost, and that outside contractor was turning a profit and the service was much better.

Somehow we must get out from under the suffocating bureaucracy that is overtaking us, like the Russian system of health care. One must tread carefully in this business and be very clear about what we are talking about here. We are not talking about private health care, where somebody pays out of pocket for health care delivery. We are talking about an efficient delivery of service at a reduced cost and at the same quality.

Dr. Sky: I am not necessarily a fan of hospital administrators and their efficiencies. As a hospitalist myself, we know that over the past 10 years the fastest growing part of any hospital cost has been administration. I can cite chapter and verse in our own hospital. However, that is beside the point.

If Senator Keon is suggesting that we should leave things to private contractors to run private hospitals, then that is a debate for which we have no models on which to make a comparison within Canada.

Senator Keon: I am not suggesting anything quite that simple. However, if you get away from the health care industry and look at some of the things that have happened in private enterprise, right in our own city in the high-tech industry, where we had a giant that died of inanition. The people who came out of the bowels of that big system came together and started little companies, and they are making a huge profit and renting back all of the buildings that the giant vacated.

We must find a way of maximizing the freedom and enterprise of the health care providers and give them a chance to do that sort of thing.

Dr. Barrett: The challenge is, in part, can private industry provide the system with the same quality and standards that you mentioned exist in the public domain. If they could, it would be very difficult for us to stand against that.

The one issue, though, would be the issue of cherry-picking. Do they go and pick the low-cost, high-profit stuff, and leave the rest to the public system? Obviously that would not be fair.

If research can show that this can be done as well, then how could we object?

Dr. Hutchison: The major concern is with regard to the more complex and difficult cases that we have an insurance system to insure.

The Chairman: Dr. Sky, if we suggested to Mr. Radwanski, the federal Privacy Commissioner, to come and see your system, would you have any objections to that?

Dr. Sky: I have invited everybody and anybody to come.

The Chairman: That would be useful. I will send you a copy of the letter, but we will write a letter to him suggesting that.

Senator Morin: With the proviso that that is not the model we are working on.

The Chairman: Colleagues, if you did not read the page that was circulated to us on voluntary PCR, the facts, it is worth looking at.

I make an observation that at what is a minimum of a 16 per cent increase in income for family practitioners, and when you look at the other potential extras, I suspect the figure is closer to 20, I am surprised, in this day and age, that people are not clamouring to get on board. That is a pretty good price to pay in the ``Godfather'' approach of making them an offer that they cannot refuse.

I wish to return to the question that Senator Cook raised about the cost of looking after people at home. I do not wish to look at general home care; I want to ask you a specific question.

As people are sent home from hospitals earlier than they used to be, a number of patients in that sort of post-acute period incur home care costs and drug costs that, because they are provided outside of hospitals, are not covered under medicare, even though logically they ought to be because it is a direct result of a procedure that took place inside the hospital. Is there any way that we could get a handle on what the cost of the post-acute care is? Essentially, by sending people out of hospital earlier, the public sector has very neatly transferred a cost from the public sector to the private sector. I would love to find a reasonably defensive, ballpark estimate of that cost.

Dr. Barrett: I do not think that answer is available. The standard, if you like, of what was hospital care and home care has changed dramatically over the years simply because a part of it is that what we do in hospitals has changed. One example you heard earlier was of a less-invasive technique for gallbladders, which allows you to go home earlier. It becomes harder to come up with the standard of the drug that would be received in hospital and then received at home.

Researchers have looked at this situation. I know Colleen Flood in Toronto has looked at this. However, I do not know if anybody has the answer.

Senator Morin: It is not the same patient going out as it was before. It is not just cutting down the stay in hospital. The patient and the procedures have changed. It is not just a shift in cost. The entire thing is cheaper than it was before.

The Chairman: After listening to Senator Morin, perhaps I was not clear.

If someone is sent home from the hospital and must go through two or three days or a week, or something in that order of magnitude, when they need home care and drugs, can we get some estimate of that cost? In other words, these are costs that are directly attributable to that patient having gone through a hospital procedure. We can even put a maximum time on it of a week or something. Obviously, costs are being incurred by individuals from the minute they leave the hospital that, in my simple way of thinking, logically are a part of the fact that they were in the hospital and therefore, logically, ought to be part of medicare.

The example I give you is that my wife's oxygen, when she was being treated for cancer, was free in the hospital, but you have to pay for oxygen at home. It is very hard to argue that oxygen is not medically necessary and was not a direct result of what happened in the hospital. I am trying to get a sense of what the cost on that small piece of drug and home care would be.

Dr. Hutchison: There are two parts to the answer. The first is that it is possible to obtain it if you want to define a set standard for these procedures. When the patients go home, we will catalogue what medications have been prescribed and what those costs are. In addition to that, the other component that you are talking about, and you have referred to it previously, is the untested and unmeasured cost on the people at home who are caring for those patients.

The Chairman: I am not trying to quantify that. I am trying to quantify the actual cash cost as opposed to the stress cost.

Dr. Hutchison: You could say it is a cash cost if people have to take time off work to provide it. If you truly want a measure of that cost in addition to the pharmaceutical cost, you need a cost for the people caring for those patients. You could do that by measuring the costs of the VON or the allied health professionals —

The Chairman: Has anyone done any work on that? That is all I am asking.

Dr. Halparin: I do not know the answer to that. You also have not mentioned the family doctor portion.

Dr. Sky: Marcus Hollander in British Columbia has done some research work on this aspect.

The Chairman: Would you send that to us, please?

Thank you very much for coming. I know we kept you a little longer than planned but, as usual, it was a spirited discussion.

Honourable senators, our second panel is comprised of Messrs. Rochon, Brimacombe and Empey.

Thank you for coming, gentlemen. Please proceed with your opening statements.

Mr. Mark Rochon, Member, Advocacy Committee, Ontario Hospital Association: It is a pleasure for me to be here on behalf of the Ontario Hospital Association. I wish to thank you for the invitation.

My remarks will primarily focus on the two key themes raised in your latest report that we have been asked to consider, those being service-based funding and internal markets. The OHA will also be tabling a submission that addresses other aspects of Volume 5 today.

The views I will express on behalf of the OHA can be grouped into five key themes: the separation of roles — insurer, purchaser, provider and evaluator; the ability to understand the relationship between price, quality and quantity under service-based funding; measurement and performance; internal market considerations and managing change.

I come to you today having experienced roles on both sides of the equation. I have had the pleasure of being Assistant Deputy Minister of Health in the Province of Ontario on secondment for about 15 months. I am the CEO of the Toronto Rehabilitation Institute. I have held other senior leadership positions in hospitals and I was the CEO of the Health Services Restructuring Commission.

We need to consider and promote mechanisms that relate resources to outcomes and we need to find mechanisms to insulate, as much as we can and are able to, decisions concerning the provision of health services from politics.

At the Ontario Hospital Association we recognize that separating key roles in the delivery of health service has substantial merit. For example, separating funder and insurer from purchaser and provider will allow government to focus on issues of system policy, depoliticize provider issues and allow the government to focus more appropriately on macro issues.

However, we need to consider the relationship between insurer, funder, purchaser and provider so that we do not simply shift the same debate from between government and providers to between funders and purchasers. The nature of the debate needs to change so that the public understands the consequence of choice. Our existing relationships and the associated lack of accountability and vagueness as to who is responsible for what provides all of us with plenty of cover.

Separating purchaser from provider will allow purchasers to focus on price, quality and outcomes. There are some examples of service-based approaches in the Ontario context that relate price to quality. However, we need to consider ways to expand the basket of services paid on a per-unit basis in a fashion that aligns incentives with the health needs of citizens rather than the needs of suppliers or providers.

We also need to consider ways to understand how the system is performing. The notion of an arm's length evaluator has considerable merit. It allows the public to consider how the system is performing and to point to areas of improvement, and it will help moderate the crisis headlines that we see in newspapers.

With regard to separation of roles, we need to consider the specifics of the accountabilities between funder or insurer and purchaser and provider. For example, what is the purchaser accountable for and to whom? This could encompass areas such as resources, health services provided to populations, the consequences of emerging technology, the adequacy of payments made on behalf of citizens, and so forth. In separating the roles, this Senate committee ought to give consideration to proposing legislation that would define more clearly the basket of health care services that would be insured by both federal and provincial governments.

We also think there is merit in considering the insurer or government being obligated to finance health care entitlements that are defined within a basket of services. We should consider pooling resources to moderate fluctuations in government revenues. We know that tax revenues fluctuate with the economy, but health services do not fluctuate with the economy. In fact, some people might argue that there is a converse relationship, and how do we deal with paying for that? There may be some merit in considering pooling resources so that there is a fund to deal with fluctuations in government revenue. We need to make much more transparent the debate about which insured services are in and which are not in.

An entity arm's length from government would be responsible for purchasing or allocating resources to providers based on community needs and performance and it would allow for the development of agreements with providers that would define price, quantity, access, and so forth.

The importance of an evaluator cannot be overstated. It would report on system performance and quality, which is very important, particularly for policy-makers, and would allow purchasing organizations to make more informed decisions about who to purchase services from.

Service-based funding would enhance and improve the transparency and accountability of health service provision. It is one tool that purchasing entities could employ to promote transparency. I think we need also to recognize that there are some aspects of service that perhaps ought to be funded with other than a service-based approach. I am thinking, for example, of services that relate to health promotion and prevention. Perhaps the argument could be made that stand-by services such as emergency rooms could also be funded on a global basis. Again, that would help to depoliticize the system and the decisions.

In considering a move to more service-based funding, the OHA submits that we need to consider ensuring that price adequately covers cost. That is something that we would, I am sure, debate at the outset of this move, but it is something that is very important in terms of promoting the stability of the system. It is important that we consider this with a measured approach so that we do not destabilize the system and provide the grounds for even more raiding of our health human resources.

We also need to consider that service-based funding should not create incentives for providers to stop offering necessary services in communities. The needs of specific communities must be considered as well as the adequacy of service provided in those communities.

Moving to performance-based funding also increases the need for better information. Some of your reports deal with the issue of the need for better information to help measure the performance of the system both in terms of quality and quantity.

In thinking about this from the perspective of internal markets, we need to be somewhat cautious in that, while in theory we ought to be able to develop a system where purchasers are able to shift from one supplier to another, the realities of one-provider communities, human and capital investments may make shifting from one supplier to another extremely difficult in the short run. While analogies are dangerous in health service, the purchasing organizations we are contemplating are not operating a power grid. While the source of electricity is transparent to consumers, in health services the source of the service is where people go for help. We need to consider that in the context of the choices we have before us.

We need to consider that there are significant barriers to entry in both human and technical terms. There ought to be barriers to exit as well, particularly in sole-provider communities.

Another consideration in thinking about internal markets is the extent to which quality improvement can be factored into the relationship between purchasers and providers by being able to use what evaluation organizations say are opportunities for improvement and use the contractual arrangements between purchasers and providers to make improvements and, where those improvements are not made, to then take action, in particular where there are options to move services.

Finally, we need to consider what all this means in the context of change management. It is easy to think of these changes in conceptual terms. We have to be careful about what it will mean to the provision of service, in particular through the implementation phase. We suggest that there are ways in which we can consider quite measured approaches as we move from the current system to one that involves purchasing organizations and service-based funding.

Mr. Kevin Empey, Chief Financial Officer, University Health Network: I appreciate the opportunity to be able to speak to your committee today. It is not often that an accountant gets to participate in a discussion on policy. I would like to congratulate the committee for its efforts in what I see as your head-on attack on difficult issues as set out in your reports.

I am responsible for the financial and corporate areas in a large academic centre. I have been asked to give you a perspective of some of the issues of implementation that an academic centre would have, or which would affect an academic centre.

I have two introductory suggestions to make, after which I will turn to some specifics. I set out a number of specific examples in my submission to the committee.

I suggest that in your next report the committee be specific about its opinion and bias regarding academic centres. Do you support the combination of active teaching and research in a clinical setting? Do you acknowledge that such activity has an impact on clinical care and that there are differences in the environments as a result? Do you acknowledge that those differences need to be accommodated in any change to the structure, the formula or the way institutions are funded?

I also have a question regarding the term ``service-based funding.'' I ask the committee to define the objectives of it. Do you see service-based funding as a way to normalize service across the country and deal with the fact that there are inconsistent levels of service today? Or do you see it as a way to create incentives for the providers to grow volumes, if they are efficient? Or is it just a case of changing the model, causing efficiencies to be driven out of it by changing it to a lower rate than what they may be getting on a global basis today?

I support service-based funding. However, those are principles as to how we might go forward and implement some of your recommendations.

There are pitfalls in service-based funding. Mr. Rochon addressed a couple to which I had wanted to speak. As providers, we are quick to learn. We are bright and we adjust to the rules that we are given. As providers learn, they will evolve. Some providers, when it becomes a full rate-based or service-based system, will choose to specialize a little more or get out of something. Certainly, as Mr. Rochon said, in small communities you cannot afford the major providers, that is, the hospitals, to get out of something just because of the rates.

In particular, in my world, which is an academic centre, there are certain factors which I will talk about that I think will be required to incent academic centres to stay at that top, acute edge so that we do not naturally move to a lower level of services in order to be competitive with everyone else.

I have some broad thoughts to mention before I bring it down to the teaching centres. As the earlier group said, the system is underfunded. Funding will not address all of the problems. However, I think a change in funding must be part of the answer.

Currently, the providers are the gatekeepers. I think people reading your report would recognize that you acknowledge the point that a change in a system changes who becomes the gatekeeper for access or for volumes.

The problem we have in Ontario is one which we will face nationally in a rate-based or service-based system. The key aspect to that is understanding the rate and, therefore, the costing. Ontario has done a great deal of work on costing, as has the Canadian Instritute for Health Information, or CIHI. However, current costing is incomplete. There are many problems with it. The main problem is that there are too few hospitals. The costing which will be used this year in Ontario is based on input from Alberta hospitals and five Ontario hospitals. That almost makes it useless since it is not representative enough of the activity that is going on in the province, let alone the country.

What is worse is that few high-end teaching hospitals have participated in the input of the data which have led to the provision of the rates. Thus, you end up with low volumes of some procedures that are not appropriately affected in any structure because there is not enough mass, as a result of which they are, perhaps, ignored or massaged out of any formula.

We need a system which either creates an incentive or a penalty to motivate institutions to provide data and to participate in the inputting of it. This would end up with a better structure and better data.

Another factor is that there is inconsistent or, in some cases, no methods or logic as to how new technology is introduced into the system, meaning it tends to depend on whether a province chooses to fund it or not to fund it today. As a result, Canada tends to be behind in the introduction of new technologies. If I take the major diagnostic modalities, such as MRIs, we were well behind. In terms of PET scanners, we are now behind. As far as gamma knives are concerned, Manitoba announced that the first one will be going in, in Winnipeg. However, it is the first one in all of Canada.

There is a large opportunity here for federal leadership. The federal government provided funding for capital, which has raised a concern as to whether different provinces have spent it on the right thing. I still think it is an opportunity for federal leadership. Coming from the federal level, it has the benefit of creating a little more consistency across the country.

What is an academic centre? An academic centre tends to introduce new procedures, be they diagnostic, surgical or medical. Academic centres tend to be more complex. With that complexity comes two problems with which any formula struggles. That is to say, there is far more variability in individual cases. This can be because of the teaching environment or it can be because of the multicomplexities and nature of the patients we see.

Studies exist that show that there are improved outcomes in the academic centres for things such as breast cancer or acute myocardial infarction. As everyone acknowledges, academic centres conduct teaching and research. There are costs to both of those. Some of the cost is just for the facility. Most of the research funding does not provide for the administration and the facility costs of that research activity. Therefore, we, the institution, are absorbing those costs as part of our overall activity.

For teaching, the research is inconsistent, but everyone acknowledges there is some cost, perhaps in the form of longer OR procedures, longer length of stay, and increased drug or lab tests. However, there certainly is the support of physicians and surgeons in both those cases.

To go a little more specifically into some of your recommendations, I totally support service-based funding. The Ontario experience is showing us the difficulty in establishing rates that accommodate the teaching or academic environment. I tend to like, to a small degree, what Alberta has done, which is to establish separate rates for teaching, to absolutely fund the academic centres and say, ``Okay, that is covered.'' I also think there should be a separate method for looking at new procedures. Given that the current costing formula is using data that is three years old, it is nowhere near representative of the current activity, let alone the procedures we have all introduced in the last three years.

We must come up with a formula that allows for high cost outliers. We must make sure that hospital and doctor incentives do not go back out of sync. Right now, there is no costing, no method for the ambulatory part of our business, which, in most hospitals, is 30 to 38 per cent of the cost of that activity. There is no weighting formula for that.

On the competition side, I do not support competition if it becomes like the American HMO, where it is a competition of price. I do support competition if it is based on driving two principles: efficiency and outcome. The Ontario model does not take outcome into effect but it is an attempt to drive efficiency, that efficient hospitals get rewarded in funding the following year. However, it is not a case-by-case model. I do not know if it is the perfect example. I would prefer it to something that becomes individual case price negotiations. My fear is that academic centres will lose on that.

I prefer something that is tied to a funding model, not tied to individual volumes, but still gives an incentive to institutions to be more efficient and to drive their volumes.

In conclusion, I support the direction of the report. I would be happy to provide any more information or to do more studies or anything else the committee would require, as I indicated to Senator Kirby. I feel that special attention to determining academic funding and perhaps using an institution such as CIHI to take the leadership on that issue would be very well worth the effort. Some separate funding to incent new technologies and to try to move the whole country along at the same pace would be very valuable.

Incentives versus penalties will help keep the acute centres at the top end of the scale of the services they provide and not put us in the position of competing with the community hospitals and losing what we have now.

Mr. Glenn G. Brimacombe, Chief Executive Officer, The Association of Canadian Academic Healthcare Organizations: At this point in our country's history, the association appreciates the opportunity to make a significant and constructive contribution to the public discussion about the future of health care in Canada and, in particular, the federal government's role in heath. I should mention that our president, Ms Sheila Weatherill, sends her deep regrets that she was not able to attend. She is attending today a post-Mazankowski implementation committee in Edmonton.

The Association of Canadian Academic Healthcare Organizations, known as ACAHO, represents more than 40 teaching centres and regional health authorities with jurisdictional responsibilities for teaching institutions. Members range from single hospital organizations to multi-site, multi-dimensional regional facilities, and provide clinical programs ranging from primary care to highly specialized tertiary and quaternary health care services.

The distinguishing characteristic of the association is that its members represent all of the principal teaching and health research sites for Canada's health care professionals. This includes the faculties of medicine and other faculties of health including nursing, pharmacy, dentistry and many colleges with professionals in health, including physiotherapy, rehabilitation, laboratory technicians, respiratory therapists, speech therapists and social workers.

It also bears mentioning that the association was formerly known as the Association of Canadian Teaching Hospitals — or ACTH — and is over 50 years old. The name change reflects the different governance structures that come with the introduction of regionalized health care systems across the country, with the exception of Ontario.

While teaching centres appear to be relatively small in terms of numbers, it is important to keep in mind that our members have total health budgets in excess of $16 billion, of which more than 90 per cent is derived from the public sector. This means that approximately 50 per cent of public monies devoted to hospitals are allocated to teaching hospitals. Framed slightly differently, members of ACAHO account for almost $1 out of every $6 allocated to the health care system. In addition, they employ more than 150,000 Canadians across the country.

The mission and mandate of members of ACAHO is threefold: first, to provide Canadians with timely access to quality specialized health care services; second, to provide the setting wherein Canada's health care professionals of tomorrow receive their hands-on education and training; and third, to provide the necessary infrastructure to support and conduct basic and applied health research, medical discovery and innovation.

Given this unique combination of responsibilities, ACAHO is of the view that we are an essential hub in the health care system and can make an important and constructive contribution to the public dialogue on the future of health care in Canada.

It also bears mention that our members serve not only local and community heath needs but also respond to regional, provincial and interprovincial requirements. By virtue of our mission and mandate, members of ACAHO would agree with those who would define our role as a national resource in the system.

For today's session, the committee has asked the association to focus on three specific questions that arise from the recommendations in the committee's recent report. As set out in the committee's report, there is a sequence of recommendations that begin with a change in the manner in which hospitals are funded: that is, from a global budget basis to a service-based funding approach.

In the view of the association, it is essential that the recommendations be considered within two important and related public policy dimensions. The first is: What does the recommendation intend to achieve more clearly? What are its specific policy ends? The second is: By what mechanism will the recommendation be implemented? That is, what are the policy means?

Based on a preliminary assessment of the report, it would appear that a number of important policy objectives underpin the committee's recommendation. Issues of improved system accountability, performance measurement, increased efficiency and cost effectiveness and their relationship to improved health outcomes and patient access to quality health care are laudable and, in some sense, inviolable. Members of ACAHO have long been supporters of these system-based policy objectives and continue to work diligently to find ways to make teaching centres more responsive, accountable and innovative.

In this context, it should be noted that on an ongoing basis members of ACAHO are working to develop and refine clinical, operational, quality and utilization management indicators to maximize the cost-effectiveness of each dollar allocated.

The more complex question has to do with the series of initiatives that are required to achieve these important health policy objectives. When it comes to the proposition of introducing service-based funding, we note the committee's observation that another form of payment may need to be considered for teaching hospitals where clinical activities are intermingled with teaching and research, and services are frequently one of a kind.

This statement highlights two important points for ACAHO. First, the mission and mandate of teaching centres is unlike any other organization in the health care system. In addition to the provision of specialized health care services, teaching centres are critical to the training of the next generation of Canada's best and brightest health care professionals. They also provide the large majority of necessary infrastructure to support and conduct basic and applied health research, medical discovery and innovation.

Given that our members are unique in terms of their structure, they are also funded by a series of different actors in the system. It is also important to understand that the sources of funding contribute in different proportions to the fulfilment of the teaching centres' mission and mandate.

The second point that is noted by the committee is the fact that, by the very nature of teaching centres and their multiple roles and responsibilities, the notion of introducing a competitive funding model is not consistent with the fact that teaching centres are generally not in competition with the other institutions in the provision of services. Rather, if anything, teaching centres are viewed as an institution of last resort for the majority of intractable and complicated patient illnesses that cannot be provided by other acute care institutions.

In many instances, patients who receive care at teaching centres are presenting with a severe and complete multiple- systems illness. Given this reality, a service-based funding approach could be a challenge where an institution is to receive the same province-wide fee for performing a given medical procedure or service, notwithstanding the requirements of teaching, education and health research. At the same time, the number of recent health reform initiatives in Canada tells us that teaching centres are moving away from the notion of having overlapping or duplicative service structures. More specifically, they are looking to streamline and consolidate the spectrum of specialized health care services within an increasingly integrated organization and cohesive management and delivery framework.

The other issue that seems to warrant further discussion with the recommendation to introduce a more competitive environment in the provision of health care is its underlying assumptions. More specifically, under a competitive model it is assumed there are a number of suppliers or providers who are willing and prepared to bid on delivering a defined basket of health care services. To allow the model to function in terms of achieving additional efficiencies, there needs to be a critical mass of providers in relation to the demand for services.

On the basis of concerns that have been raised by a number of groups, including this committee, one would be how the model would function in a world where there are shortages in the number of suppliers who could compete to provide services. Under this scenario, one might envision a more limited competitive bidding process, with one result being the interplay of a concentrated or restricted group of providers in a seller's market.

Another practical issue that the committee's report identified is that the hospital should pay only after the service has been provided. Given the emphasis that has been placed on the need for financial stability and predictability in the system to effectively plan service delivery on behalf of Canadians, this approach could do more to destabilise the planning cycle of hospitals. Recently, in the Speech from the Throne, the Government of Ontario has committed to a multi-year funding framework for hospitals.

In sum, the Standing Senate Committee should be commended for placing another policy option on the table to be considered when funding hospitals in Canada. That said, ACAHO holds the view that there is limited application of this model's approach given the mission and mandate of teaching centres in Canada.

In closing, from the perspective of ACAHO, we are very supportive of the policy principles that the committee has identified when it comes to improving funding, organization, management and delivery of quality patient care services to Canadians. To continue our ability to effectively manage, we need to better monitor and measure how we allocate scarce resources in the system. At the same time, there is a need to ensure that the system has the needed health information infrastructure to ensure that sound policy decisions are based on reliable information.

We hope that these remarks of are of value to the committee and ACAHO looks forward to being an active and constructive partner in the national dialogue about the federal government's role in heath care.

The Chairman: Mr. Empey, you said the Alberta model for funding teaching hospitals involves a separate teaching component. Can you tell us how that works?

Mr. Empey: I am led to believe that Alberta struggled with the same issues as Ontario, and came up with what is called a ``super-teaching'' factor. Only the large teaching institutions received a set amount of funding, then it was removed from the rest of the provincial funding model.

Mr. Brimacombe: My understanding would be similar to Mr. Empey's.

The Chairman: Could you obtain a detailed summary of that for us?

Mr. Brimacombe: Certainly. I would be happy to do so.

The Chairman: That would be useful. It is particularly important for us to understand if they have, in some sense, separated funding the teaching exercise from funding the service exercise.

Senator Morin: I have three short questions. My first one is to Mr. Rochon. What do you see as the federal role in hospital funding reform in Canada?

Mr. Rochon: The federal government's participation in paying for services using that lever, particularly as the federal government's investment increases, will allow the kind of change you are suggesting in this report. The basic responsibility of provincial governments for the provision of health services should not change. However, you should use your participation in the funding of service to stimulate the kind of change you are recommending here.

Senator Morin: Can you be more specific? Are you saying the funding should be conditional to health services funding, or something like that?

Mr. Rochon: I think we do not specify what we expect for the money that is put into the system. All levels, whether it be a federal or provincial provider, can hide behind the vagueness of the current system. There is a real argument to be made that you need to specify what you are paying for and why, and make funding conditional on certain obligations being met. My understanding of your report is that you are suggesting clear accountability.

Senator Morin: How would you react to receiving conditional funding if you were assistant deputy minister of health in Ontario?

Mr. Rochon: I would have welcomed a clear signal from the federal government about what it expected for the money it put into the pool.

Senator Morin: That is a very clear answer. Mr. Empey, I am referring to the written report. You did not mention it this afternoon in your oral submission. It deals with physician remuneration in hospitals. We did not have a chance to discuss this point at any great length. The last paragraph of your submission states that some hospitals have already begun to move physicians to alternative funding arrangements. Most physicians, especially in teaching hospitals, have a pooling of fee for service. I did not know about that, and especially the last sentence here:

The experience, however, is that volume of service has typically declined where a centre has converted to an alternative funding plan.

That is my worry about alternative funding including family physicians. Do you have any specifics on that? Can that compromise the mission of a hospital as the volume of service decreases? At one point, would it be able to fulfil its mission towards a given community?

Mr. Empey: I have two different answers. First, let me provide a little more detail for you. There are two different examples in Ontario. The Hospital for Sick Children and the Kingston General Hospital have plans where the doctors are all on alternate payment plans, every physician and surgeon in those two institutions.

The Ontario government has made it a priority to negotiate plans at the academic centres, and my institution in particular asked to be one of the leading ones. We are under negotiations with the government right now for physicians, surgeons and anesthesiologists. We feel we need it as it does tie into the volume issue.

We have some services, such as our ENT, where we have three doctors specializing in head and neck oncology. They are handling all our cases that are from 8 to 12 hours in length. They do not make much money from that so they fill in their other OR day with very light cases, not the type of work that UHN should be doing.

We would like them to be well paid for doing those head and neck oncology cases that our institution should be doing. The consequence of that would be that our number of cases would drop, because if they only did those, and they would argue that they could never do just those cases and stay sane, they would be doing one surgical case instead of five, and the amount of cases would still drop.

What I am referring to in the other institutions is not so much the in-patient volume dropping, but rather the ambulatory volume dropping dramatically. Ontario is, as part of their negotiations, demanding that there be volume commitments as part of the commitment for payment under an alternate plan. We think that is a very good way to go.

The Chairman: What does ``alternate plan'' mean to the layperson?

Mr. Empey: Every physician, whether a GP, surgeon or neurosurgeon in an academic centre, is paid on a fee-for- service basis. An alternate payment plan turns it into a salary, which is a term they all dislike. They are committing to a certain volume and they are receiving a fee from the government directly. It does not necessarily have to go through the institution. You might agree that a neurosurgeon gets $300,000 a year, and he is allowed to allocate some of his or her time between teaching, research and clinical work.

Senator Morin: Is it a euphemism for salary?

Mr. Empey: Yes, that is why I used the word.

The Chairman: I am happy for you to call it ``alternate payment,'' if that makes people happy. How do you ensure the minimum service levels?

Mr. Empey: Ontario is putting forward a contract among, as Senator Morin says, the practice plan, the group of doctors and the government, and they will be contracting to deliver certain amounts of volumes for their payment.

The Chairman: The group as a whole, or individuals?

Mr. Empey: In our case, they are trying to keep it at the group level rather than individual.

The Chairman: Your contract is for a lump sum to the group, not to the individual, is that right? The group allocates it among the individuals?

Mr. Empey: Yes.

The Chairman: The analogy would be a law partnership where the partnership allocates partnership shares at the end of the year.

Mr. Empey: Therefore, the partnership is allowed to treat the members differentially, absolutely.

The Chairman: Which they cannot under the fee-for-service basis?

Mr. Empey: They can, under the fee-for-service basis. Every physician at UHN and Mount Sinai is in a practice plan, and all their billings and earnings, whether it be administration, presentations or clinical work, go into the practice plan, and they are paid a salary from that practice plan today. They get bonuses and other performances things, but they are getting a salary back from the practice plan.

Senator Morin: That is universal throughout the country.

Mr. Rochon: The other thing that has happened in Ontario to stimulate this, because it is voluntary among the academic health sciences centres, is that the government has allocated a little additional money to put into the pools that are established in academic health science centres for physicians. It is about $75 million. Estimates are that that equates to about 5 per cent of the total fee-for-service billing in academic health science centres, and the view is that it is not enough money. The first organizations into the pool will essentially empty it, and the government will have to make a decision about putting more money in.

The Chairman: In other words, increasing the carrot?

Mr. Rochon: That is correct.

The Chairman: You may have been here earlier when we were told that GPs in Ontario do not find 16 or 20 per cent a big enough carrot.

Mr. Rochon: In my spare time, I am a Director of the Ontario Family Health Network. We must do a better job of selling the lifestyle changes that physicians can experience through the development of family health networks.

The Chairman: A beneficial change.

Mr. Rochon: Exactly. We do not do a good enough job of selling that right now.

The Chairman: In economic terms, it would have value.

Senator Morin: My last question is to Mr. Brimacombe, and it deals with the academic health care centres. We did have a chance to talk about it, and I hope we will have a chance to come back to it. Mr. Jeff Lozon referred to it on two occasions, once in Toronto and here three weeks ago, that there should be a national network of academic health care centres. The federal government should support them directly, as we support, for example, the universities with indirect costs for research because of the very special role that these centres play in manpower, training and research innovation, information technology and so forth. There may be specific funding from the federal government for these academic health care centres. Would you like to comment on that, Mr. Brimacombe?

Mr. Brimacombe: It is worthwhile mentioning that it has been Mr. Lozon's view, but he is having a large influence on the association in terms of developing a document that will shortly be coming to you on this issue.

Given the trinity with regard to patient care, teaching education and health research, and by virtue of what teaching centres do in terms of it being national in each level of the mission and mandate, certainly, if teaching centres are a national resource and that there is a role for the federal government since it cuts across the country vis-à-vis those three areas, we will be putting forward a proposal that there should be federal funding. It is something that Dr. Barrett alluded to in the previous set of presentations, that there is a federal precedent with regard to an investment in this particular area.

Senator Keon: Mr. Rochon, you drew out the interesting concept of legislation on insured services. This is probably a worthy idea because things are very loose now, especially once you get out of the doctor/hospital area.

I assume that your thinking is that this does not interfere with the principles of the Canada Health Act. It would impact on universality and accessibility but, as far as I can see, it would not affect the other three areas very much — perhaps portability, somewhat. It could be stand-alone legislation that would not in any way infringe upon or alter the Canada Health Act. Am I correct?

Mr. Rochon: That is a reasonable reflection. One way to consider it, and I have no experience in drafting legislation, is that there ought to be a way in which we can consider what is in the basket through, for example, regulation that would be subject to debate and consideration, so that it is clear. There is a way for a group to be able to determine what is in and what is not, and to modify as technology changes and as the systems change.

Senator Keon: I would like comment on private delivery of publicly insured services. Once you get beyond the legislation, things will be left out, and that is a different basket of goods. People will have to cover that out of their pocket or buy insurance. Within the basket that would be inside your legislation, particularly for the non-hospital services, it would seem to me there would be considerable room for some private enterprise in the clinics. We are seeing it in some of the physiotherapy clinics now. I would like each of you to comment on the strengths or weaknesses of that concept.

Mr. Brimacombe: In fairness, the reflection of the Canadian system is that we already have private delivery, and for the most part you are referring to private delivery within the rubric of a publicly funded system. When you look at providers, whether they are physicians, physiotherapists or otherwise, we have private delivery within a publicly funded system. Many of them are incorporated. Not all, but many of them across the country have the opportunities that are extended to other small businesses as well in terms of the ownership and the factors of production, if I can put it that way.

What you are putting on the table clearly is contentious with regard to a number of views about the role of the private sector, but I do not think we can deny the fact that the private sector is already there with regard to ownership factors and productions, when it comes to core medical care in Canada that is publicly funded. ``Publicly funded'' implies that there are no user fees, no deductibles, no upfront, private co-pay that is associated. Access is unimpeded. From that standpoint, the idea you are putting forward is not new.

People are nervous around the issue of the for-profit sector: Is it not-for-profit or is it for-profit? We have Bill 11 in Alberta, and that has gone through a number of different litmus tests. I suppose the most interesting component or stage of that discussion will be the evaluation of Bill 11. That is a critical part that we have yet to see.

In terms of reacting just to the premise, I do not think involving the private sector is inherently evil, and it has not been, just by sheer reflection of the system, issues with regard to how it is regulated, monitored, quality assurance, standards, the role of the colleges in evaluating. The performance of these systems, perhaps, merits a look. That does not mean a system-wide complete rollout of the private sector but, in certain areas with the safeguards, there is nothing necessarily wrong, in principle, in taking a good close look at it.

Mr. Rochon: The distinction between who is paying and whether it is out of the public purse or the private purse is one that we continue to confuse with delivery. The distinction that you are drawing, Senator Keon, is very important. From my perspective, private delivery is an important feature of our system.

In our organization, it is a small part of it, but about 3.5 to 4 per cent of our total revenues come through competing for contracts. We go to the market. The main purchaser of service, if you will, is the Workplace Safety and Insurance Board of Ontario. They come to the marketplace and say, ``We need X services, defined as follows, and we would like proposals.'' In our organization we offer a large service to the Workplace Safety and Insurance Board that must make explicit performance requirements by the payer.

We have a different discussion when the people responsible for that program talk about development and what they want to do. As the CEO of the organization, I can tell you that it is a heck of a lot more fun to have that kind of discussion and to think about it in the context of clear accountability for that which you are being paid. If it means that someone else can do it better and we may lose a contract, we will get better and the next time around we will get it back.

I am not worried about the notion of competition, per se. I am worried that there are limits. You qualified competition by talking about non-hospital services as the starting point. I think that there are elements of the relationship between the purchaser and the provider that are close to being what you would find in a market. That relationship will allow you to push quality. You may not be able to say, ``If you do not provide, we are going to walk across the street,'' because in most communities, there is no ``across the street'' available. What you can say is, ``If you do not improve, maybe we can do something about changing the way the organization is operated.'' You can be clear about what you intend to do, however.

Part of the problem in health services over the last decade with shrinking budgets is that we were never clear what we wanted as that pie shrunk. Hospitals could continue to restrict service to the point where, theoretically, all they were paying at the end of the day could have been overhead. There was absolutely nothing in the system that would have provided intervention.

The Chairman: There was no outcomes-based measure at all, was there?

Mr. Rochon: No.

The Chairman: Do you have outcomes-based measures with the WSIB?

Mr. Rochon: Yes.

The Chairman: Do they know if you provide poor service?

Mr. Rochon: Yes.

The Chairman: By ``poor service'' I mean a poor outcome to a patient?

Mr. Rochon: Yes. They have managers who work with us on a regular basis and they are going to the market right now to discuss orthopaedic services. I believe it is a welcome change, and it is important for us to respond.

Mr. Empey: I totally agree with all the comments on WSIB. We are in the same market. We have a large contract with them for upper extremity and hand injury. As Mr. Rochon said, they are going out to tender for orthopaedic services and they actually want to see if hospitals will guarantee surgical services to them, in effect guarantee access to operating rooms. There are many aspects of our business that can be competitive, but that is because WSIB is funded to buy those services from anyone. It is not part of our ``OHIP-insured'' service in Ontario.

If I can return to the broader topic, I argue, when I am talking in my own institution, that to a degree we already are private. Everyone thinks public institutions, but we all have a separate board and we have a separate ``contract'' with our government to provide services. Let us say you establish a private hospital in Canada. A private hospital, as Mr. Rochon said, gets into the payer versus the funding entity; that is who is paying for the service. They will either charge the populace or they will receive a certain amount of funding from the government to run that private facility. To me, it is no different from what we are doing today.

The difference is that we have many handcuffs put on us as public institutions. I will give you a couple of examples. The hospitals in Ontario basically got into the private lab business in the mid-1990s, and the public labs, MDS and Dynacare — one of them I am in partnership with and we have a good relationship — managed to influence the government that these public institutions that were ``funded by government money'' were using that to have a competitive advantage against the private sector. We cannot win with that argument. We lose on that argument all the time, and so we get handcuffed and we are basically kicked out of that market. Therefore, the hospitals could no longer provide lab services to public entities.

There are other examples like that, one being outpatient care. If you had a sports injury, would you rather go to a private physiotherapy clinic or would you rather go to a sports medicine clinic attached to a hospital, with orthopaedic surgeons and anyone else you might need? The answer is pretty obvious, except to the institution. We are not allowed to charge for that because the patient is covered by OHIP, whereas the private clinic is allowed to charge. Therefore, most of us have chosen to rationalize the outpatient services we provide because we are here to provide inpatient services as a core.

I do not mind, and I think it would be a great thing to open it up to the ``private sector,'' but I think the system and the governments have to acknowledge that, to a degree, we institutions already are private. What is preventing us from acting like private is that we have rules put on us when we try to compete with the private sector.

Senator Keon: I want to ask you about a difficult issue. If you made a portion of your huge operation more privately based, how would you deal with the unions?

Mr. Empey: That is the biggest issue on a competitive nature, but there are ways that it can be dealt with. I was at Peel Memorial Hospital in Brampton when we outsourced our logistics function. The staff completely unionized. When it comes right down to it, the union contract says that no job will be lost due to outsourcing. It does not say that you cannot outsource. Depending on how the contract is written, you can just guarantee that no one will lose his or her job.

In today's environment, when there are so many shortages of staff, it is easy to say, ``We will just move you to another job.'' However, we still tend to be restricted if we are providing the service within the same legal structure under which the union contract should be applied. Therefore what the private sector does is set up separate legal structures.

Senator Keon: How much are you being inhibited by this phenomenon from what you think is best?

Mr. Empey: I do not know. I can tell you that when I was at St. Michael's Hospital in the early 1990s we lost $1 million in revenue when the lab business got shut down. That is one example. I really would not be able to quantify the total because I do not know where all those sources of money would come from and whether the whole system would just change if the hospitals were able to charge for more.

Let us put it this way: Between 65 per cent and 75 per cent of hospital funding comes from the government. Therefore, we are generating revenue for that other 25 to 30 per cent, be it parking or cafeteria or semi-private revenue or, in our two businesses, WSIB is a large contributor. Most hospitals have been creative in trying to find other revenue sources, especially in the years when government funding retrenched instead of advanced. I would argue that most of us have tapped that out because we are restricted in that you cannot charge for physiotherapy services, you cannot charge the same rate for drug dispensation as the private pharmacies do, and you cannot be in the private lab business.

Mr. Rochon: I wonder, though, if we pushed the point to include Mr. Empey's example of the idea that there may have been political interference in a reasonable decision that was made around lab services. I am not naive enough to think that there is not politics everywhere, but one would hope that organizations like the purchasing groups about which you are thinking would be less inclined to politically pressure through lobbying than is the case now.

In the experiences that I have had with the restructuring commission, the rules of the game changed dramatically. When lobbyists would call and say, ``We would like to come and speak with you on behalf of our client'' my response was, ``Well, why?'' We do not want to be elected, quite frankly. That is not our game. The rules changed dramatically. It is important to think about what happens to the rules of the game in organizations like the ones you suggest that create a distinction between the payer, the purchaser and the provider.

Senator Roche: I would like to follow up on Senator Keon's questions with respect to private delivery.

I will put my question to the panel in this framework: Last week I went to the Romanow commission hearings, in Edmonton. The first witness was Kevin Taft, a member of the Alberta legislature and the health critic for the Liberal Party of Alberta, which is not exactly a left wing in Alberta, I can tell you. I will table the brief if honourable senators wish.

Mr. Taft is a well-known author in his own right. The centrepiece of his presentation to Mr. Romanow was to emphasize that we must solve this market question. He said that the role of the market in health care delivery is the root issue.

Then he comes to a point that is directly relevant to the discussion that we have been having here. He said that the relationship between a patient and a caregiver should be free of market forces. He said that the ethic of care-giving is the opposite of self-interest; it requires placing the interests of others above one's own.

That leads me to the question of competition that Mr. Empey spoke about. Could we have more elaboration from the members of this panel as to how competition works, in their view, in protecting the quality of care that should be guaranteed?

If we go to private delivery on a profit basis, even if it is regulated, does that meet the criteria that Mr. Taft, for one, set down that the ethic of care-giving is the opposite of self-interest and requires the placing of interests of others above one's own?

I should like to be illuminated as to how far we can go in expanding health care services now, particularly as we move into the homecare field, in reaching out to the competition provided by the market. In the framework of that question, I should like you to differentiate between private care on a not-for-profit basis and private care on a for- profit basis.

Mr. Rochon: The premise that the ethic of care-giving is the opposite to that of self-interest is an interesting debating point. Quite frankly, to be able to succeed means that you must do the right thing. To be able to continue to offer service means that you must do the right thing. Self-interest extends far beyond the simple matter of self-gain. Self- interest is also embedded in ensuring that you are doing the right thing for people who come to you for help.

I do not see these as mutually exclusive concepts; I see them as quite related. When I look at this discussion in the context of private for-profit or private non-profit, which is how you could classify the organizations that Mr. Empey and I work for, as private non-profit organizations we have great examples of private for-profit organizations succeeding.

Most of the nursing home industry is an example of private for-profit care. The nursing home business is a very difficult one, but the organizations are succeeding, at least in Ontario. They succeed because the organizations understand what business they are in, and they understand that there is some competition. People can move with the expansion of services in Ontario. Patients or residents can move to other facilities if they do not like the service, assuming other facilities are available in their community.

My point is that profit in health care is not a bad thing if you are providing a competitive service. I measure competitive service in terms of price and quality. The difficulty is that we are not very good at measuring quality yet; however, we are getting better at it. That is an important precursor to being able to make informed decisions about whether the price, quality, quantity relationship in a for-profit entity is any different than in a non-profit entity.

We must understand where we are in the development of our information. Profit in health care is a good thing. Profits are reinvested; they help companies develop. I am not averse to it as a concept.

Senator Roche: Is it correct that you do not agree with the thesis that Mr. Taft presented to the Romanow commission?

Mr. Rochon: That is correct. Paying a physician for their service in effect deals with not only their self-interest, but also with the way in which they care for their patients?

Senator Roche: Mr. Chairman, I should be clear: Mr. Taft specifically said that when you pay a doctor who is delivering private care, that is a wage that the doctor is receiving, which is distinct from his owning shares in a hospital on a for-profit basis. He draws that distinction, as have others.

Mr. Rochon: You could argue that he owns shares in himself.

Mr. Empey: That doctor is allowed to hire a nurse, and the nurse could give the needle, instead of the doctor, and he still bills the same rate. He is allowed to create a business, in effect, and his investment is his time versus the staff he trains to do some of those duties. He can run the operation differently.

Mr. Brimacombe: More explicitly, if they can incorporate, there is a business model there where they can become a shareholder of an incorporated business, so that they can draw down, whether it is a physician or any other provider.

I wish to touch on the issue of not-for-profit versus for-profit. A not-for-profit business is one where surpluses are largely reinvested back into a particular entity, so that there is nothing that is drawn down and taken out separately by an individual. The issue there is what kind of incentives do we wish to build into this notion of, if there is increased competition with all the safeguards of price and quality that Mr. Rochon and Mr. Empey were talking about, how you have that balance with the mixing of incentives if you were to have increased for-profit involvement, vis-à-vis the bottom line and shareholder interest versus quality, access and patient care.

Senator Morin: I understand what happens if the profits are reinvested. If you have shareholders, that is a different story. All of the profits are reinvested in the institution; that is the best of all worlds. However, Senator Roche is talking about shareholders making a profit. You have looked at the American system and their problems. I would like your opinion on that.

Mr. Rochon: When we look south of the border, we must distinguish where the issues arise. If we were talking about private insurance, we would be having a very different debate today. I certainly would not be advocating private insurance for health services for the basket of goods we now think of as being covered under the Canada Health Act. At that point, the motivation is who gets in, pre-existing conditions, delisting, limiting choice — all sorts of issues that insurers use to ensure that they relate to their shareholders as best as they can.

On the provider side, assuming that organizations are competing on a price performance basis, if there is profit to be made in the private sector, I do not follow the argument that it is a bad thing.

Senator Morin: We are talking about corporation-owned hospitals, for-profit HMOs.

Mr. Rochon: I am not talking about for-profit HMOs. They are involved in the insurance business. We have to be clear what we are talking about in terms of private versus public.

Senator Morin: We are talking about corporation-owned hospitals.

The Chairman: The questions have all revolved around the single, public insurance ``company'', public funding, buying the service from or paying for the service. The private question has all been around private delivery. You made it very clear that you are not in favour of private insurance, and, as you know, we are not either. We do not care who owns the institutions, but we should do it in the most efficient way possible.

Mr. Rochon: I put myself in the shoes of the purchaser. If I were a purchaser in a particular community with one million lives as part of our purchasing group and we had put out a bid calling for a certain range of services, if the best proposal was from a private company, I would go for it. I would think that would be a good thing.

One thing we have to worry about, though, is the extent to which that approach compromises the ability of non- profit health care institutions to continue to provide services that are essentially being supported or that may be supported by what you might move into the private, for-profit provider category. In other words, you do not want to take high-margin services and move them into the private sector and have hospitals run into financial trouble because they are not getting enough money for the services that they are left with. You need to make sure that the rates are right.

The Chairman: Your lab example comes to mind.

Mr. Rochon: It is a reasonable one. There may be services where the barriers are so extensive that you could never move out into the private sector. Organizations have reasonable amounts of their cost structure that is invested in overhead. You cannot get that out.

The Chairman: This is a very interesting discussion.

Senator Morin: What about joint surgery? This is a crucial area where the waisting lists are long. Private, for-profit clinics are just waiting to embark on this segment. There is a demand for it, but hospitals say, ``This is creaming. They are taking the easiest cases, and so forth.'' Apparently, for some reason, the hospitals are not able to accept the volume that is out there. What is your view of having for-profit clinics for joint surgery, for example? Dr. Day wants to establish these clinics throughout the country on a for-profit basis. He says he can do it cheaper and better than hospitals.

Mr. Empey: He probably could, but he would only do the easiest cases.

Senator Morin: But hospitals are not doing them.

Mr. Empey: It is a by-product of the current funding method. I will talk about Ontario. Hospitals are funded on a global basis. That puts the requirement on our shoulders to choose what services we provide. Ontario tried to create an incentive to get hospitals to do more hip implants. They kept that incentive in 1993, and they have added more volume only once since then.

As well, their incentive just covers the hip itself. It does not cover the cost of surgery. If a private provider wanted to get into the hip business, then I would argue that that person or business is billing patients, or the government has just made a conscious decision to increase the amount of funding they are putting into hip provision. They do not need a private provider to do that. They could fund the hospitals more, and we could do more hips. Just tell us how many you want us to do, and we will do them.

The problem is that it is easy for a private provider to get set up because often the government comes up with a different funding stream for them than they would under the current institutional funding. I will give an example that is not private; it is public. The Province of Ontario just decided to fund Trillium Health Centre in Mississauga to do open heart surgery. All of the institutions in Toronto are feeling the impact of that because now Saint Mike's and Sunnybrook and QE have gone up because Trillium is doing all of the easy cases. It does not take a private provider to cause that impact.

You also do not want to go as far as to impact the teaching. We have a major teaching program in hips and knees. A private provider will not do the teaching and research aspect. You must leave enough volume to be able to have a mix of the easy and hard cases in order to facilitate those orthopaedic surgeons still making an income and being able to do teaching.

I am complicating the answer because there are three aspects to it. Is the government putting in more funding or not? If they are, we will do more. Right now, they are making us make a choice. Honestly, UHN wants to do cancer and transplants instead of hips. We have a wait list of eight months.

The Chairman: If you do it, along with the cost of doing it comes all of your overhead, all of your union contracts, et cetera. If a small institution does it, a new one — for this argument it does not matter whether the small clinic is public or private — they do not have all the overhead. They presumably can start off without having the same union contracts and all that cost. Therefore, they can probably do it significantly cheaper; right? Is that reasonable?

Mr. Empey: There are two costs to look at, which is what you are talking about.

The Chairman: Your overhead costs are much bigger than a small institution

Mr. Empey: I was about to separate the direct costs and the overhead costs. The overheads costs are a step function. When you open up one new operating room, which has probably been closed in our institution, you have almost no incremental overhead costs. It is a step function, depending on where your institution is physically today. If you are already at capacity, it is a massive incremental cost that is probably more than a small stand-alone.

Your direct cost is a very good point. A private entity today would probably try to set up as non-union, and therefore their labour cost would be much lower than ours. Right now, with staffing shortages, where is the nurse going to work?

The Chairman: I am trying to disagree with your previous sentence. You said to Senator Morin, ``If I am the payer, why would I not buy the cheaper service?''

Mr. Empey: Absolutely.

The Chairman: Why would I go to you?

Mr. Empey: You would not.

The Chairman: You said that therefore they ought to give you the money. I argue that that is an irrational decision on the part of a government attempting to manage its resources effectively.

Mr. Empey: That is one of the reasons I made the point in my submission as well as in my introductory speech that you must look at competition in terms of both efficiency and outcomes. You would not come to UHN to get your hip done, but you would if you had a complicated fracture. The problem is that if only the 5 per cent with complicated fractures come to UHN, UHN would not have sufficient volume to provide the service and pay the orthopaedic surgeons.

The Chairman: Or we would need to find a way to fund you adequately for the complicated cases.

Mr. Empey: Yes, and treat them differently.

Senator Roche: I want to give Mr. Rochon the opportunity to correct what may be a misunderstanding on my part. We were talking about private, for-profit care. The subject of nursing homes was introduced and with respect to competition you said that residents can move, as if they have mobility. I have a lot of personal experience in nursing homes and the people I see there do not have much capacity for making those kinds of marketplace decisions.

The central point I want to make is that dealing with the market requires education. In other words, the people who are best off intellectually or financially can make the best choices. That makes my point.

I am very uncomfortable with the idea of competition being introduced into the delivery of health services, particularly services for the aged, because the people who have money will be the best off under such a system. The principles of the Canada Health Act were to protect all Canadians, and certainly those who are most vulnerable. I am still at a loss to understand how we can guarantee quality care if competition becomes standardized and we move to the market. I am very concerned about this.

Mr. Rochon: In the absence of information about what ``quality'' means, I would argue that you are right. How do you differentiate? Part of differentiation is having information. We are getting better at producing information to help us differentiate between levels of quality. It must be better than gross mortality and morbidity statistics.

There is an argument that long-term care, as a service, is not covered under the Canada Health Act. It is in the same category as drug benefits. Provinces decide to invest in long-term care services. The distinction between a ``nursing home or long-term care facility'' and a ``retirement home'' is very blurry. It is true that someone with money can better provide for themselves as they age than can someone who does not have money. That is the situation that exists in our society today.

I believe I said that residents of nursing homes can move where there is choice. That is a reality in large markets like Ottawa and Toronto where we are developing more capacity for individuals who need nursing home care. People can look at a better facility with better care, and they can move if they feel that a change would be better for them. I understand it is difficult because it is like moving homes.

Senator Roche: It sure is.

Mr. Rochon: I am not understating the difficulty in that decision. However, if I were the purchaser, it would not matter to me that with reasonable measurements you can differentiate between providers and make decisions based on price, quantity and quality.

Our organization is entering into a private/public relationship with Extendicare to develop a nursing home on one of our sites. We are doing so because we think it is in the best interests of our community. We have confidence in the ability of the organization with which we are partnering to provide high quality care in conjunction with us. If we did not, we would not do this, because the reputation of our organization is linked to everything we do. There are other examples of investor-owned or for-profit organizations in health care.

We have another contract with Airmart to provide food services. They provide it at a profit. If we were not happy with Airmart, we could go to the market and get another provider. We could ask them to leave and hire the staff, if we wanted to. These are all options we have. We are making a decision based on the relationship between price and quality.

Senator Roche: With all due respect to the panel, I want the committee to know that I dissent from this philosophy.

Senator Fairbairn: Mr. Empey, you caused my ears to perk up when you spoke in your opening remarks about technology and the deficit that Canada had been suffering from in that area. Presumably that situation has improved somewhat. Could you expand on that a bit? Do you believe that the federal government itself should be primarily responsible for working out a process whereby Canada would not be at a disadvantage, and not only in terms of acquiring the equipment that uses this technology?

This underlies some of the concerns of the public about how they will get their treatment. As Senator Cook often mentions, in places such as Newfoundland, even if you have the equipment, it is not of much use unless you have a structure in which it can be operated. Could you enlarge as well on the specific role of the federal government in managing this particular problem? You talk about academic health science centres as ready partners. Perhaps you could explain that partnership to us.

Mr. Empey: I will try. I will start with one example. The federal government has provided funding in the last couple of years for medical equipment. Princess Margaret Hospital is the largest cancer centre in Canada, if not North America, located in one building. We have 17 radiation machines. The average age of those radiation machines was 11 years. These machines were funded in the first place by the provincial government. However, the provincial government was not coming up with more funding. We were partly being stubborn in wanting them to pay for them. The federal money has allowed us to replace six machines over the last two and a half years.

That is a perfect example of something that needs to be replaced regularly and, while it was deteriorating, everyone fought over who should pay for it.

Senator Fairbairn: Did people then go to the United States for treatment?

Mr. Empey: No. This changed volume a bit. We already had 17 machines. Putting in 17 newer machines would increase our capacity a bit because they are faster. We did not grow to 18 machines. We still have the issue of whether there is enough capacity to deal with the patient volumes.

I am talking about the modernization of the equipment and that one aspect of it. With modern equipment, usually, if it is the same service, you should be getting some improvement in efficiency or volumes, which is what we are seeing with the new radiation machines. That is an example where the funding has led to a good thing.

The reason that I and some of the people with whom I consulted thought I should put that in my report is that we thought it might be an area wherein the federal government has an opportunity to set some standards by offering funding. It creates more of a moral authority to take leadership. When the last funding was given to the provinces, the provinces were supposed to make their own choices as to how it would be spent on equipment. This is a valid issue since it is the classic turf problem of whether the federal government can be providing funding directly to any institution.

Given that that is a problem, I thought I would present it in the light of there being nothing to prevent it from a perspective of a standard. Let us call that standard research. We are about to start an agreement with the Ministry of Health to introduce a new PET scanner into Ontario. We want to put four PET scanners into the province. There are already three, but they are 100 per cent dedicated to research. They want ones that are more clinically focused. However, they do not want to open up the funding methodology to create, let us say, a free-for-all so that everyone can get a PET scanner. Most of us cannot afford one. Thus, they are placing it under the guise of a research trial to assess the efficacy of PET scanners for the province.

If the province is to approach a piece of technology that way, that is not far removed from the federal research world and the possibility of using the research arm to grant the same thing to do trials on the efficacy of introducing new technology. For example, this could happen with a gamma camera. There are now no gamma cameras in Canada.

Therefore, you are not overriding the provincial mandate to provide equipment and services. However, you would be doing the same thing that Ontario has started to do. You can say, ``We will find a way to get PET scanners without opening up the billing fee schedule for everyone to bill for them. Therefore, we will call it research.''

What I am getting at is that I doubt it will be simple. I wonder if there is a way, using research or other mechanisms, for the federal government to take more of a leadership role in this area. Hopefully, a by-product of that will be a little more consistency of access across the country.

I agree that you will never be able to have them in small centres because there will not be the mass of expertise, let alone the demand, to make a PET scanner, a gamma knife or even an MRI run efficiently. Perhaps some of them will only end up in major centres. However, if the federal government were more involved then, perhaps, it could be set up more as a national service as opposed to a regional service.

Senator Fairbairn: Where does the question of operating this equipment come in?

Mr. Empey: A PET scanner, including isotopes and physicians, will cost about $1.3 million per year to run. It costs about $2.8 million to buy one and about $1.2 to $1.3 million to operate it, including the radiologists' fees.

Senator LeBreton: What do you mean by operating it? Is that over and above the radiologists?

Mr. Empey: No. That is the cost of the technicians, heat, light, power and the isotopes. The isotopes are the major expense item. There is a reading fee for the radiologist.

Senator LeBreton: How much does an MRI cost an institution?

Mr. Empey: Around $2 million.

Senator LeBreton: Even if organizations raise money to buy these machines for institutions, they are not much of a gift when all these other factors are brought into it.

Mr. Empey: It is a legitimate question and a valid issue. The Government of Ontario funds hospitals. They do not fund the purchase of an MRI, for example. However, the government funds hospitals at the rate of $800,000 per year to operate them. They acknowledge that hospitals were not operating them as many hours as they wanted us to operate them. In a couple of instances the government has given direct funding to operate MRIs to ensure that there is more access to them.

Senator Fairbairn: We all talk about trying to get opportunities for people in all regions of the country. Coming from a small city in southern Alberta, I do not know what you qualify as a larger centre. Would St. John's, Newfoundland be a larger centre?

Senator Morin: It is a better centre.

The Chairman: I do not think Lethbridge qualifies.

Senator Fairbairn: We have our own MRI, which we bought ourselves.

Mr. Empey: I do not know how to answer that question. There are people who would be capable of analyzing the demand. What I am getting at is whether a region has enough demand to warrant the effective use of a facility. Is it 100,000 people or 500,000 people in a region? I do not know. I would hazard a guess that it is well below 500,000. It does not take the major eight cities of the country. St. John's is probably plenty big enough, although I do not know that for a fact.

Senator Fairbairn: At this current time we are still seeing quite a number of Canadians going across the border because they do not have access.

Mr. Empey: Yes.

Senator Fairbairn: In your view, would this particular funding, which would include the acquisition of equipment, its operation and evaluation, be a federal responsibility? Are you suggesting that the centres, however they are defined, would then provide the partnership to make the whole thing work? In your view would that give Canadians the ability to stay in their own country? What do you see in terms of expenses for individuals in dealing with this?

Mr. Empey: I do not think I could say definitively that it will prevent people from having to go out of the country. Even if you take cancer services, the demand is growing so fast that I do not know how much incremental capacity has to be created to prevent anyone from leaving the country.

Another piece of equipment that we are talking about with the provincial government — and again I am talking from my institution's perspective — is called a gamma knife for neurosurgery. That is a radiation machine that sends a tight beam and replaces the surgery. It costs a fortune. It costs $4 million to buy and about $1.75 million to $2 million to operate a year, apparently. We are just researching it now. There is not one in Canada. Any patient in Ontario who is deemed to need this service goes to the United States. Part of our proposal to the Province of Ontario is that it will cost less to fund the operating cost of our own machine than to send these people to the United States. We can handle the volume of the patients who leave Ontario today.

In this example, it would be very effective because the transport and living costs of patients sent to the United States are totally replaced. I do not know that that is always the case with the others. I have not researched the economics of the other examples. I am more familiar with the cancer situation because we are a radiation centre.

Mr. Brimacombe: What might be of interest to the committee is that there was a fairly detailed proposal put to the federal government in late 1999, early 2000, to deal with the issue of replacement of MRIs, radiation equipment, lithotripter and CT scanners, and what cost the government would be absorbing with respect to capital as well as three- year operating schedules. The Canadian Medical Association put that together with the Canadian Association of Radiology. That will give you a sense of some of the costs and assumptions that were built into the overall equation.

The Chairman: The rule of thumb is that two to three years of operating costs equals the capital cost. That seems to be the rule of thumb.

Senator Keon: I want to get a handle on what should be in an academic health science centre and what should not be. I know Mr. Rochon has spent a lot of time agonizing over this as head of the commission, but we have to come to grips with this matter. We have not even approached it yet. That, hopefully, will be one of our subcategories later on. This area has to be addressed.

Mr. Rochon: Agreed.

Senator Keon: The hour is too late today.

The Chairman: I ask Dr. Rochon to have the OHA get back to us on one point. I have read the part of your brief that you did not cover. I will refer my colleagues to this: The OHA recommends that the federal government establish a health care training and educational fund to increase health employee training and education, specifically doctors and nurses, and so on. It would help us if you could flesh out that idea and give us some more details on it.

Second, I would like to go way back to whichever one of you talked about the Ontario Workplace Safety and Insurance Board's current RFP for orthopaedics and whether you are prepared to guarantee service. Presumably, the guaranteed service means an element of maximum waiting times. Is that correct?

Mr. Rochon: Correct.

The Chairman: That is one of the conditions on which the bids will be evaluated?

Mr. Rochon: Yes, and performance downstream.

The Chairman: Logically, there is the outcome side of it.

Mr. Rochon: Exactly.

The Chairman: There is also an access side?

Mr. Rochon: Right.

The Chairman: Not to get into confidential bidding data, will people be able to guarantee access?

Mr. Rochon: We have put in a proposal, together with another organization.

The Chairman: It meets the stated conditions of the RFP. In that sense, this committee has said repeatedly that all is alive and well in the two-tiered world of WCBs.

Mr. Rochon: There is another tier, too, but again the hour is late. It relates to those individuals who may be insured through auto insurance.

The Chairman: However, the principle is the same. You make contracts with the big insurers such as All-State to deal with their cases quickly so that they are not left paying a huge bill. Is that correct?

Mr. Rochon: We made this point to Commissioner Romanow as well, that what led to your injury or disability determines your access to rehabilitation services.

The Chairman: If you are to be injured, is it far better to do it in a car or on the job than at home?

Mr. Rochon: You are absolutely right. It is probably better if you are working in your automobile.

The Chairman: On that basis, I should be allowed to use my cellphone in the car. Then I am absolutely safe.

Senator Roche: That is a liability.

The Chairman: Your testimony has been awesomely helpful, particularly in terms of talking about the negotiation that goes with WCBs or WSIBs. Thank you very much for coming. We will go back through some of these other recommendations. We may well get in touch with you, or David McKinnon, and ask to have it fleshed out.

The committee adjourned.

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