Patient First Review: Robbing Peter to pay Paul; CIHI report shows Sask. health care stacks up well; administration only 3.6% of total expenditure

“The Saskatchewan Party wants an audit of the entire health care system to ensure money is being used properly,” [Health Critic Don] McMorris said. “We also want to establish a single provincial health authority to replace the 13 health regions.”

“This would reduce administration, direct precious health care dollars to front line care, and encourage hospitals to work together on solving waiting list problems.”
– Saskatchewan Party News Release, June 9, 2005

“[W]e propose a patient care audit of the entire system to focus resources on patient care and away from administration.”
– Brad Wall, Saskatoon Saskatchewan Party Leader’s Dinner, March 2, 2006

“[M]aybe it’s time for a patient first audit of the entire system to ensure… that health care comes before administration… that patient care is always the priority over paper shuffling.”
– Brad Wall, Saskatoon Saskatchewan Party Leader’s Dinner, March 8, 2007

“[A] Saskatchewan Party government will undertake a Patient First Review of the health care system… to determine how best to… Direct more of your health care dollars from bureaucracy to front-line care.”
– Saskatchewan Party 2007 Election Platform

“[T]here are clear priorities which are to be addressed by you and your Ministry: Undertake a Patient First Review of the health care system… to improve front-line care for patients, direct dollars away from bureaucracy to front-line care and create quality work environments for health care professionals.”
– Health Minister Don McMorris mandate letter, Nov. 21, 2007

Regardless of how the Saskatchewan Party government or Patient First Review Commissioner Tony Dagnone spins it there is no denying the mandate that was given to Health Minister Don McMorris by Premier Brad Wall on Nov. 21, 2007.

Part of the health minister’s job is to cut administration costs and move that money over to patient care. This is consistent with the party’s 2007 election platform and with past statements made by Wall and McMorris. The only difference is that prior to the last election the Saskatchewan Party was calling for an “audit” of the health care system. That has since changed to a “review.”

Dagnone’s mandate is less direct. His Oct. 2008 contract with the provincial government states he is to “complete an administrative review of the Regional Health Authorities (RHAs), affiliate organizations, and the Saskatchewan Association of Health Organizations (SAHO) to assist in determining the overall effectiveness of resource use in the health sector, by identifying the current base of administration, operating efficiencies, constraints and opportunities for improvement, and to provide a report on findings and recommendations to the Minister of Health.”

Dagnone is also expected to, “Engage in discussions with Ministry of Health officials… to ensure the administrative review… is completed in accordance with the approved methodology and within the defined time frames.”

The government is selling the review as independent while Dagnone promises that it will be transparent. This is debatable on both counts.

Dagnone was first hired in spring 2008 to work with health officials and consulting firm Deloitte to prepare terms of reference for a Patient First Review and to develop “a scoping framework and methodology.” His contract stated he was to report on options and recommendations for consideration of the ministry.

On Dec. 10, 2008, however, in response to a freedom of information request, the health ministry refused to disclose the scoping and planning document because it “contains advice and recommendations to the Ministry of Health’s Executive Government; and… information pertaining to the deliberations of Executive Government and Senior Government employees within the Ministry of Health.” This is not being transparent.

As for independence it’s clear from Dagnone’s contracts that he has been in contact with government officials throughout the whole process stretching back nearly a year. It appears that both aspects of the review – the Patient Experience Component and the Administrative Review Component – are independent only so far as the approved framework and methodology allows, which the Wall government monitors to make sure it’s being followed. It should be remembered this is the same government that has publicly stated it expects the people it hires to follow the objectives and philosophy of the Saskatchewan Party and Premier Wall.

On Dec. 17, a presentation outlining the administrative review process was made to the regional health authorities (RHAs), the Saskatchewan Cancer Agency (SCA) and the Saskatchewan Association of Health Organizations (SAHO).

The presentation, prepared by Deloitte, contains a number of passages that are identical to what is contained in a Dec. 16 government briefing note that was released by the health ministry on Jan. 29 under freedom of information legislation. So whose presentation was it, the government or the so-called independent consultant?

According to the briefing note the purpose of the administrative review is threefold:

– To identify current levels and determine optimal level of administrative support for the system;

– To answer the question of whether the current health system is ‘over’ or ‘under’ resourced; and,

– To assess the enablers and barriers of system effectiveness.

“Using comparative analysis (benchmarking) and stakeholders consultation, the review will assess baseline administrative resourcing and costs, and then determine optimal levels for the province across RHAs, the SCA and SAHO,” the report states.

This is where things get murky. The task of determining what’s ‘optimal’ would seem to be a subjective one. The Merriam-Webster online dictionary defines optimal as “most desirable or satisfactory.” The word optimum is defined as “greatest degree attained or attainable under implied or specified conditions.” So what conditions or restrictions have been applied in this situation? Again, it comes back to cabinet and senior government deliberations and the direction given to Mr. Dagnone. The public is clearly not getting all the information because some of it is being withheld.

Over the years the Saskatchewan Party have suggested that health care money is not being used properly and that there is not enough accountability, or that too much is being spent on bureaucracy and not enough on front line care. This is not exactly true, however.

For one thing provincial auditor Fred Wendel hasn’t reported any gross misuse of funds or other serious improprieties at the regional health authorities. In his 2008 Report – Volume 3 released on Dec. 4 the auditor concluded that:

– The RHAs had adequate rules and procedures to safeguard public resources except for the matters reported in this chapter;

– The RHAs complied with the authorities governing their activities relating to financial reporting, safeguarding public resources, revenue raising, spending, borrowing, and investing; and,

– Financial statements for the RHAs are reliable.

Wendel’s main finding was that, “Six RHAs need to control bank accounts when making payments to employees and vendors and establish information technology processes based on threat and risk analysis. Regina Qu’Appelle needs to implement an internal audit function and establish complete financial management policies.”

The auditor also noted that the Five Hills Regional Health Authority has made progress on past recommendations to improve processes to achieve planned results “but needs to do more work to fully address our recommendations.”

Wendel also recommended “that the Ministry of Health give the Legislative Assembly annual reports including audited financial statements for the Saskatchewan Health Employees Pension Plan and the Saskatchewan Association of Health Organizations and its administered benefit plans.” If there’s a lack of accountability here it would seem to be on the part of McMorris’s ministry and not SAHO.

Furthermore, if you comb through Wendel’s reports, past and present, there are deficiencies to be found in nearly every corner of government – health is no different.

Part of Deloitte’s work on the administrative review includes a quantitative assessment, benchmarking of Saskatchewan RHAs against Canadian peers (British Columbia, Alberta, Manitoba, Ontario, New Brunswick, Nova Scotia and Newfoundland) and international health systems (e.g. Denmark, Australia, United Kingdom and United States).

One place to find reliable and independent information on health care in Canada is through the Ottawa-based Canadian Institute for Health Information (CIHI).

Canada’s federal, provincial and territorial governments created CIHI as a not-for-profit, independent organization dedicated to forging a common approach to Canadian health information. It tracks data in many areas supplied by hospitals, regional health authorities, medical practitioners and governments.

Each year the organization releases a report called National Health Expenditure Trends. The most recent report (released on Nov. 13) shows that Saskatchewan stacks up relatively well against other provinces and territories.

The report shows that Saskatchewan’s administration costs in 2008 as a percentage of total health expenditures is forecast to be among the lowest in Canada – a mere 3.6 per cent, the lowest it’s been since 1993. [Source: National Health Expenditure Trends, 1975 to 2008, CIHI, Series D – Health Expenditure, by Use of Funds, Source of Finance, by Province/Territory]

	Percentage Distribution: Administration (2008)
Nun.	11.0%
P.E.I.	8.1%
N.W.T.	7.0%
Y.T.	5.9%
N.S.	3.9%
N.B.	3.8%
B.C.	3.8%
Sask.	3.6%
Que.	3.4%
Alta.	3.3%
Ont.	3.2%
Man.	2.9%
N.L.	2.3%

From 2007 to 2008 Saskatchewan’s administrative costs increased 3.9 per cent, one of the lowest in the county.

	Annual Percentage Change, 2007 to 2008 Administration Cost
Nun.	17.1%
P.E.I.	11.2%
N.L.	11.1%
N.B.	8.7%
Ont.	7.7%
N.S.	7.2%
Alta.	5.5%
Y.T.	4.6%
Sask.	3.9%
N.W.T.	3.8%
B.C.	3.8%
Que.	1.7%
Man.	1.5%

In 2008, hospitals are forecast to account for approximately 28.0 per cent of Saskatchewan’s total health expenditure. This is more than what the country’s three largest provinces allot but less than the smaller ones.

	Percentage Distribution: Hospitals (2008)
N.W.T.	44.1
Nun.	38.9
N.L.	38.8
N.B.	34.2
N.S.	32.9
Man.	31.3
Alta.	30.4
P.E.I.	29.6
Sask.	28.0
Ont.	27.3
Que.	26.6
B.C.	25.3
Y.T.	20.6

In 2008, Saskatchewan is forecast to devote a higher percentage of its total health expenditure to other important institutions than nine other provinces and territories. The CIHI notes that these include residential care types of facilities (for the chronically ill or disabled, who reside at the institution more or less permanently) and which are approved, funded or licensed by provincial or territorial departments of health and/or social services. Residential care facilities include homes for the aged (including nursing homes), facilities for persons with physical disabilities, developmental delays, psychiatric disabilities and alcohol and drug problems, and facilities for emotionally disturbed children. Facilities solely of a custodial or domiciliary nature and facilities for transients or delinquents are excluded.

	Percentage Distribution: Other Institutions (2008)
Y.T.	18.2%
N.L.	14.9%
Que.	14.4%
Sask.	13.1%
P.E.I.	12.8%
Man.	12.6%
N.S.	11.6%
N.B.	11.0%
B.C.	9.7%
Ont.	8.3%
N.W.T.	6.3%
Alta.	5.4%
Nun.	2.2%

In 2008, only four other provinces are forecast to spend a higher percentage of their total health expenditure on physicians than Saskatchewan. The province is within half a percentage point of catching both Manitoba and Alberta.

	Percentage Distribution: Physicians (2008)
Ont.	14.6
B.C.	14.5
Alta.	13.0
Man.	12.9
Sask.	12.5
N.S.	12.3
N.B.	12.2
N.L.	11.7
Que.	11.7
P.E.I.	11.1
N.W.T.	9.9
Y.T.	9.1
Nun.	8.9

In 2008, Saskatchewan is forecast to rank fourth in Canada with 10.3 per cent of total health expenditures going to other health professionals such dentists and denturists, optometrists and opticians, chiropractors, physiotherapists and private duty nurses.

	Percentage Distribution: Other Professionals (2008)
B.C.	13.7
Alta.	12.0
Ont.	11.1
Sask.	10.3
Que.	9.8
N.S.	9.6
P.E.I.	8.5
N.B.	8.3
Man.	8.1
N.W.T.	6.3
N.L.	6.0
Y.T.	6.0
Nun.	4.2

In 2008, Saskatchewan is forecast to place in the middle of all provinces and territories when it comes to the percentage of total health expenditure spent on drugs (15.3%).

	Percentage Distribution: Drugs (2008)
Que.	20.7
N.S.	18.9
N.B.	18.0
Ont.	17.7
P.E.I.	17.2
N.L.	16.6
Sask.	15.3
B.C.	15.2
Man.	15.0
Alta.	14.1
Y.T.	10.2
Nun.	6.7
N.W.T.	6.3

In 2008, public health is forecast to account for 8.6 per cent of Saskatchewan’s total health expenditure ranking it fourth in the country. This category includes such things as food and drug safety, health inspections, health promotion activities, community mental health programs, public health nursing, measures to prevent the spread of communicable disease and occupational health to promote and enhance health and safety at the workplace. The province is less than half a percentage point from matching Alberta.

	Percentage Distribution: Public Health (2008)
Y.T.	17.8%
Nun.	9.3%
Alta.	8.9%
Sask.	8.6%
Ont.	7.8%
N.W.T.	6.6%
Man.	6.3%
B.C.	6.0%
P.E.I.	4.6%
N.L.	3.9%
Que.	3.8%
N.S.	3.7%
N.B.	3.3%

Saskatchewan is forecast to have one of the lowest ratios of total health expenditure to GDP in Canada in 2008. At 9.1 per cent it is below the national average of 10.7 per cent.

	Total Health Exp. As Percent of GDP (2008)
Nun.	26.8%
P.E.I.	15.3%
Y.T.	14.9%
N.S.	14.6%
N.B.	14.1%
Man.	12.8%
Que.	11.7%
B.C.	11.4%
Ont.	11.3%
N.W.T.	9.4%
Sask.	9.1%
N.L.	8.8%
Alta.	6.9%
Canada	10.7%

Saskatchewan’s spending on health care per capita ranks eighth among provinces and territories. Only Quebec and B.C. are below the national average.

	Total Expenditure per Capita (2008)
Nun.	$11,379
N.W.T.	$9,652
Y.T.	$7,837
Alta.	$5,730
Man.	$5,555
N.S.	$5,451
N.L.	$5,395
Sask.	$5,393
N.B.	$5,280
Ont.	$5,229
P.E.I.	$5,182
B.C.	$5,093
Que.	$4,653
Canada	$5,170

One of the more interesting statistics revealed in the CIHI database are the historical figures pertaining to administration costs.

The tables below show that during the Grant Devine Tory era from 1983 to 1991 the average annual percentage increase for administration costs was 9.83 per cent. In the subsequent 16-year Roy Romanow/Lorne Calvert NDP period the annual percentage increase of administration costs was quite a bit lower at 6.22 per cent. Perhaps the Saskatchewan Party government should consider this the next time it complains that too much is being spent on bureaucracy.

Grant Devine Tory’s	Annual Percentage Change Administration Cost
1983	12.0%
1984	15.2%
1985	5.0%
1986	9.2%
1987	7.8%
1988	-1.1%
1989	18.5%
1990	15.1%
1991	6.8%
Average Annual % Change	9.83%

Romanow/Calvert NDP	Annual Percentage Change Administration Cost
1992	-0.6%
1993	13.6%
1994	19.1%
1995	5.6%
1996	-0.7%
1997	-4.0%
1998	1.8%
1999	16.5%
2000	9.9%
2001	4.2%
2002	3.3%
2003	11.0%
2004	9.9%
2005	-1.6%
2006	3.7%
2007	7.8%
Average Annual % Change	6.22%

Like everything else the cost of administration has increased substantially over time. What was $13.4 million in 1975 is $195.2 million in 2008. And yet during that 34 year period the average percentage of the total health expenditure devoted to administration was 3.4. The 3.6 forecast for 2008 is not far off the mark. The 0.2 per cent difference represents $390,400 of the total spent on administration in 2008. Viewed within the context of the total health expenditure ($5.365 billion) the figure is microscopic. The Wall government could rob Peter (administration) to pay Paul (patient care) but unless the cuts are massive enough the savings might not amount to much in the long run. If that’s the case then how will the shortfall be made up?