Patient First Review: ‘Provincial shared services organization’ high on Wall government’s priority list

When Patient First Review Commissioner Tony Dagnone submitted his findings and recommendations on October 15, 2009, Health Minister Don McMorris said in a news release the provincial government will unfold an action plan and priorities on how to best implement the 16 recommendations from the review in the forthcoming weeks.

A September 9, 2009, health ministry briefing note obtained through a freedom of information request appears to identify the government’s top four priorities. These include:

▪ adopting a philosophy of patient- and family-centered care for the health care system;

▪ improving the surgical experience for patients, and addressing the backlog of surgeries;

▪ advancing the development, and implementing an electronic health record system; and,

▪ establishing a provincial shared services organization to take on supply chain management and possibly other functions.

In the Speech from the Throne on October 21, 2009, the government pledged that over the next four years, it will reduce surgical wait times in Saskatchewan to no longer than three months. The other three priority areas weren’t mentioned.

One issue that could be contentious is the provincial shared services organization (Recommendation 14).

The administrative component [conducted by Deloitte Inc.] of the Patient First Review was designed to determine whether the health system is “over-resourced, under-resourced or over-managed,” Dagnone states in his report. [p. 46]

“We heard numerous concerns from patients, frontline staff, and the public, that health regions were becoming a “growth industry for management,” ”he said.

“Questions were raised about the efficiency and cost effectiveness of functions that are duplicated across regions and about the capacity of small and medium-sized regions to respond to the demands of a changing and complex environment.”

Dagnone says it’s time things were done differently.

“Health regions must ensure best value is harvested province-wide in the purchase of goods and services required to deliver quality health care. In other provinces, numerous non-clinical and clinically-related corporate functions have adopted alternate service delivery models. Health regions would be well-advised to explore some of these successful models for possible applicability in Saskatchewan,” he said.

“A new, provincial, shared-services organization should be established to undertake supply-chain management and standardization at a provincial level. This would signal a new way of doing business on behalf of Saskatchewan people. All health regions, affiliates, and the Cancer Agency must be full participants if maximum value is to be achieved.

“An expert board of directors can work with the Ministry of Health, health regions and respective affiliates, and the Cancer Agency in defining the new organization’s mandate. Strong corporate leadership will be needed to break through traditional ways of doing business and enshrine a province-wide perspective. Only then will value-for-money be realized for Saskatchewan citizens.” [p. 48]

Deloitte’s recommendation in its report is a little more in-depth: “Establish a single Provincial Shared Services Organization for Supply Chain, Human Resources and Finance functions, which will require the following:

a) Detailed service model design, and business case, implementation plan, and transition support focused on people, work process, technology, and change management requirements);

b) Defined governance, mandate, role, organization and operating structure, for the Provincial Shared Services Organization; and

c) Alignment / integration plan for SAHO functions and staffing within the mandate of the Provincial Shared Services Organization.” [p. 29]

Deloitte states: “Potential savings from operations in this model will yield the greatest dollar reinvestment available for reallocation to enhance the patient experience.

“Savings estimates as percentage of operating costs are 14-20% for a shared service model versus 12 – 17% a managed service model – with a payback of 4 to 5 years. Estimates are high level and based on Deloitte’s experience in other organizations / jurisdictions.”

It’s unclear whether these savings will involve any job loss.

The Government of British Columbia implemented something similar a couple of years ago and we know how much Saskatchewan Premier Brad Wall likes to emulate that province.

On December 14, 2007, the B.C. Government announced the creation of a new Health Authority Shared Services Organization (SSO), an independent organization reporting to a board comprised of the six health authority CEOs and the chief operating officer of the Ministry of Health.

B.C.’s health authorities will examine the feasibility of providing greater shared services with the goal of maximizing available financial resources to direct patient care, Health Minister George Abbott said in a news release.

“In order to ensure that health-care dollars are focused on direct patient care, we are continually seeking ways of reducing overhead costs and duplication in non-clinical services across health authorities,” said Abbott. Sound familiar?

In a news release later that day, the B.C. Government and Service Employees’ Union (BCGEU) slammed the government for failing to consult with health unions.

The union said the new organization was targeting payroll, information technology, purchasing and other services in the health sector for centralization and possible privatization.

Even though the plans had been in development for the last eight months, government representatives chose not to disclose them to health unions until the last minute, despite repeated requests for information during talks on the implementation of the June 2007 Supreme Court of Canada decision on Bill 29.

“This bombshell by the provincial government places into question whether they are truly committed to the Supreme Court-mandated consultation process,” said BCGEU president George Heyman. “Dropping this on the table at the last minute, after months of planning in secret, demonstrates a significant lack of respect and commitment to their obligation to consult with affected unions.”

Bill 29 rewrote health care collective agreements and resulted in the layoff of thousands of workers - mostly women - to make way for privatization.

In its decision, the Court established collective bargaining as a right protected by the Canadian Charter of Rights and Freedoms. As a result of this decision, there is an obligation by government to engage in meaningful consultations and good faith negotiations, said the news release.

Heyman noted that the secrecy leading up to the announcement showed that the B.C. government seemed to have learned little from the Court decision.

At the federal level the Globe and Mail reported on August 11, 2005, that federal officials confirmed the existence of a two-year study that proposed to eliminate 41,000 jobs across the public service “in a bid to save as much as $4-billion a year.”

The study had been done at the request of Reg Alcock, the President of Treasury Board. According to the Globe, the report called “for staff reductions through attrition” and many of the jobs “would be transferred to new positions in a new agency tentatively called the Shared Services Organization.” Four areas would be affected: information technology, financial officers, human resources and office supply management.

Federal ministers tried to downplay the report saying it was merely an “internal study” that had “not yet gone to cabinet.”

Union leaders were upset nonetheless.

“I have not been consulted at all on any of this, so I’m pretty pissed off,” said Michèle Demers, the president of the Professional Institute of the Public Service of Canada, the union that represents many of the employees who would be affected.

The Public Service Alliance of Canada also condemned the study, demanding meetings with government officials to discuss its possible implications. [Civil servants up in arms over proposal to cut jobs (Globe and Mail, August 11, 2005)]

It will be interesting to see how the Wall government handles the matter given its deep hatred of anything even remotely related to labour.