OHA Analysis & Positioning Re: Bill 36, Local Health System Integration Act, 2005

1. OHA Analysis & PositioningRe:Bill 36, Local Health System Integration Act, 2005

2. Status/timelines • Introduced November 24th • Second Reading debates commenced November 29th; passed December 7th • Public Hearings to take place from January 30th – February 2nd in Toronto, London, Thunder Bay and Ottawa (Note: additional hearing dates may be added) • Clause-by-clause consideration currently scheduled for February 13th and 14th • Third Reading likely during special sitting of Legislature scheduled for February 13 to March 2nd

3. Overview of key provisions* 1. Governance/Accountability of LHINs 2. Role/Mandate of LHINs 3. Funding/Accountability Agreements 4. Integration Powers 5. Labour Relations implications 6. LGC/Ministerial powers 7. Implications for Providers 8. Consequential amendments *For additional information respecting these issues, see OHA Template PPT and Issue-Specific Backgrounders found at www.oha.com, “Communications – Legislative Issues & Analysis”

4. Key issues for amendment OHA supports development of LHINs to enhance system integration, but key safeguards are needed to ensure greater transparency and effectiveness of LHINs, and to mitigate against arbitrary decision-making. The OHA should therefore offer the following substantive amendments to the legislation • Governance/accountability • Ensuring the selection process provides for local representation and skill-based boards • Establishing when LHIN meetings will be in-camera • Role/mandate • Ensuring that objects of LHINs acknowledge the importance of patient choice, quality and access, and teaching/research • Identifying specific components of the LHIN “Integrated Health Service Plan” (IHSP) • Providing a definition of “community” with which LHINs must engage respecting the development of the IHSP and an articulation of what is meant by the term “engagement”

5. Key issues (cont’d) II. Role/mandate (cont’d) • Articulation of guiding principles re: funding of providers • Clarifying the role of LHINs re: provincial programs • Clarifying which agreements may be assigned to the LHINs • Ensuring LHINs do not have the ability to require financial reporting by foundations • Integration powers • Including criteria for making integration decisions or orders • Takes into account patient care (choice, quality, access, etc.) • Decisions must be evidence-based • Minister’s orders should be consistent with provincial and/or LHIN plan • Defining “public interest” that LHINs/Minister must consider when issuing an integration decision/order • Providing for due process prior to issuing integration decisions or orders (i.e., opportunity to be heard)

6. I. Governance/accountability Issue #1 – Selection of LHIN board members Background • Appointment of LHIN board members to be made by LGC but legislation fails to provide for any selection criteria for these appointments, nor does it set out any selection process Proposed positioning/amendments sought • Amend legislation to provide for minimum standards respecting board appointments to ensure that the selection process: • Provides for local representation • Takes into account skills, expertise and experience of individuals • To the extent possible, allows for open, transparent call for nominees • Permits LHINs to provide list of potential nominees for LGC consideration Rationale • To enhance effectiveness of LHINs and consistent with good governance practices, need to ensure that the LHIN selection process provides for local representation and skill-based board and role for the LHIN boards in succession planning

7. Governance/accountability (cont’d) Issue #2 – Open board meetings Background • The legislation stipulates that LHIN board meetings will be open to the public, unless regulations specify otherwise • Although there is a requirement that there be public consultation prior to the making of regulations, the Minister may shorten the time period for consultation or forgo it altogether where, “the urgency of the situation requires it,” the regulation clarifies the intention or operation of the Act, or is of a minor or technical nature Proposed positioning/amendments sought • Set out in legislation criteria for when LHIN boards may meet in-camera Rationale • To ensure clarity and consistency (regulations may be changed at any time), matters of a substantive nature should be reflected within the legislation. Meeting standards for hospitals are also set out in Bill 123, the Transparency in Public Matters Act

8. II. Role/mandate Issue #1 – Objects of LHINs Background • Although the legislation states that the LHIN is not to make an agreement or arrangement which restricts or prevents a patient from receiving services based on geographic residence, the 14 corporate objects of the LHIN do not speak to the importance of patient choice, quality and access. The legislation is also silent on the role of academic health science centres Proposed positioning/amendments sought • Amend the objects of the LHIN to explicitly acknowledge the importance of patient choice, quality and access, as well as teaching and research Rationale • Patient care should be paramount in LHIN decision-making • As important systemic goals, the value of teaching and research should be articulated within the corporate objects of the LHIN

9. Role/mandate (cont’d) Issue #2 – LHIN Plan Background • The legislation requires the LHIN to consult the community on, and prepare an Integrated Health Service Plan (IHSP) which will ultimately form the basis of LHIN integration decisions. However, the legislation provides little detail as to the required content of the IHSP • The legislation states only that the IHSP “shall include a vision, priorities and strategic directions for the local health system and set out strategies to integrate the local health system.” The IHSP must also be consistent with the provincial strategic plan, LHIN funding and regulations Proposed positioning/amendments sought • Amend the legislation to include a description of the specific elements or components of the IHSP (e.g. scope, timeframes, resources, expected outcomes and implications for providers) Rationale • Given that the IHSP will be the basis of community engagement and will play a central role of the IHSP in the development of integration decisions, it is critical that there be greater specificity respecting the scope and nature of this plan

10. Role/mandate (cont’d) Issue #3 – Community engagement Background • The LHINs are required to “engage the community of persons and entities involved with the local health system” in the development of the Integrated Health Services Plan (IHSP) and while setting priorities, but the legislation does not provide a definition of “community”, nor how such community engagement shall occur • The LHIN objects speak to the importance of “establishing formal channels for community input and consultation,” but the nature of community engagement is to be set out in regulation Proposed positioning/amendments sought • Provide a definition of “community” with which LHINs must consult respecting development of IHSP which includes among others, citizens and stakeholders such as health care providers • Set out the nature and extent of the community engagement (i.e., notice, meetings, opportunity to provide written comments, time limits, etc.) in the legislation Rationale • The consultative process will be critical in determining what programs/services will be offered within a community and will ultimately have a significant impact on health care providers. It is therefore vitally important that all stakeholders, including providers, be explicitly acknowledged as part of the consultative process • Because community engagement standards constitute a fundamental basis of the integration decision process, they should be clearly articulated

11. Role/mandate (cont’d) Issue #4 – Funding Background • The LHINs are empowered to allocate and provide funding to providers for services provided “in or for the geographic area of the LHIN” on terms the LHIN considers appropriate • LHINs are only required to allocate funding in a manner consistent with funding the LHIN receives from the Minister, its accountability agreement with the Minister and “any other regulatory requirements.” No further details are provided with respect to how funding will be allocated • Ministry of Health and Long-Term Care (MOHLTC) staff have advised that the policy with respect to funding of providers is still currently in development Proposed positioning/amendments sought • The legislation should articulate guiding principles re: funding to providers. These principles should include: (1) equitable access to the continuum of care and meeting health care needs; (2) effective, high quality care: (3) overall cost-containment: (4) operation efficiency within the context of value for money; (5) equitable and transparent allocation of funds; (5) stability and predictability in provider operations;*(6) consistency with the IHSP and provider roles; and (7) provincial standards Rationale • Providing some guiding principles will ensure that funding of providers builds on the collaborative work of hospitals and the MOHLTC through the Joint Policy and Planning Committee (JPPC) *For (1)-(5), SeeOHA, Stability and Sustainability: A Multi-Year Funding Policy Framework for Ontario Hospitals, 2002

12. Role/mandate (cont’d) Issue #5 – Provincial programs Background • Beyond the objects of the LHIN (“to participate and co-operate…in the development and implementation of…provincial health care priorities, programs and services”) the legislation does not address the question as to how provincial programs will be defined and managed, nor how facilities with a provincial mandate will operate in a LHIN environment • MOHLTC officials have indicated that the policy respecting provincial programs is still under development. However they have confirmed that: • The legislation is intended to signal a change; hospitals are to be primarily responsible to the LHIN • The intent is to ensure that hospitals with provincial programs are responsible to a single LHIN. However, the service accountability agreement with the LHIN will acknowledge the hospital’s mandate with respect to services provided to individuals outside the hospital’s LHIN Proposed positioning/amendments sought • Include provisions in the legislation clarifying the relationship between provincial agencies, LHINs and facilities with a provincial mandate and affirming the importance of the provision of appropriate care in respect of these programs Rationale • Including provisions respecting provincial programs will provide for greater certainty and clarity • Need to ensure that there are consistent standards for all LHINs with respect to provincial programs

13. Role/mandate (cont’d) Issue #6 – Assignment of agreements Background • Subsection 19(3) permits the Minister to assign to the LHINs his/her rights and obligations “under all or part of an agreement” with a health service provider. This overrides any contrary provision in the agreement • The provision for partial assignment allows the Minister to retain responsibility for certain functions (e.g. funding), but assign others (e.g. oversight and performance responsibilities) to the LHIN including agreements such as: • Hospital Accountability Agreements (HAAs) - As agreements between the Minister and a health service provider, they fall squarely within ss. 19(3). This is a reasonable delegation of authority • Hospital On-Call Coverage (HOCC) - Agreement and Alternate funding arrangements/plans (AFAs/AFPs) • Minister and hospital are parties; fact that OMA is also a party does not preclude application of ss. 19(3). LHIN provision overrides the current provision in the HOCC Agreement that prevents a party from assigning the Agreement without prior written consent of the parties Proposed positioning/amendments sought • Amend ss. 19(3) to ensure that hospital-physician agreements are not caught by the provision and therefore cannot be assigned to the LHINs Rationale • Agreements of this nature are centrally negotiated and should also be administered on a provincial basis • MOHLTC staff have indicated that the intent was not to include such agreements within this assignment provision • The amendment would simply provide needed clarity and would give effect to the MOHLTC’s intent

14. Role/mandate (cont’d) Issue #7 – Reporting by foundations Background • Legislation expands financial reporting by foundations to LHINs • PHA has been amended to permit regulations requiring a hospital foundation to provide financial reports to LHINs and to prescribe rules to follow in making and providing such reports • The Minister previously had this power under the PHA. Regulations were issued in 1996 and 1998, but were subsequently repealed Proposed positioning/amendments sought • Ensure that LHINs do not have the ability to require foundations to produce financial reports Rationale • Foundations do not fall within the scope of LHINs and previous efforts by the Minister to require such reporting were successfully challenged by foundations

15. III. Integration powers Issue #1 – Criteria for decisions/orders Background • The legislation fails to provide any criteria upon which integration decisions/orders by the LHIN or Minister will be made, other than they are not to be contrary to the IHSP and the LHIN’s accountability agreement with the Minister Proposed positioning/amendments sought • Amend legislation to provide for criteria re: issuing integration decisions or orders, such as: • Takes into account patient care (choice, quality, access, etc.) • Considers other factors such as safety; availability of health human resources; and obligations respecting teaching and research • Decisions must be evidence-based and consistent with provincial and/or LHIN plan Rationale • To guard against arbitrariness and in the interests of ensuring evidence-based decision-making, it is important that objective criteria be considered prior to issuing an integration decision/order

16. Integration powers (cont’d) Issue #2 – Defining “public interest” Background • The LHINs and the Minister must consider the “public interest” when issuing integration decisions or orders, but the legislation does not provide a definition of “public interest” • The Public Hospitals Act (PHA) definition includes: (a) the quality of the management and administration of the hospitals; (b) the proper management of the health care system in general; (c) the availability of financial resources for the management of the health care system and for the delivery of health care services; (d) the accessibility to health services in the community where the hospital is located; and (e) the quality of the care and treatment of patients • Commitment to the Future of Medicare Act (CFMA) definition includes: clear roles and responsibilities regarding the proper management of the health care system and any health resource provider; shared and collective responsibilities; transparency; quality improvement; fiscal responsibility; value for money; public reporting; consistency, trust; reliance on evidence; a focus on outcomes and the quality of the care and treatment of individuals; timely access to care; accessibility; and any other prescribed matter Proposed positioning/amendments sought • Include a definition of “public interest” similar to that found in the PHA and CFMA Rationale • Including a definition of “public interest” ensures that patient care and community needs are given due consideration and provides some safeguards against arbitrary decision-making

17. Integration powers (cont’d) Issue #3 – Due process Background • The legislation permits LHINs and the Minister to issue integration decisions or orders without having first provided affected providers with due process (i.e., an opportunity to be heard). The Statutory Powers Procedures Act which provides for minimal procedural standards does not apply. Providers have only 30 days to request reconsideration of the integration decision/order and there is no legislative requirement for LHINs to consider the submissions of the affected party • The legislation does not provide for any 3rd party appeal process for integration decisions/orders by the LHIN or Minister. These are subject to judicial review, but such reviews are limited Proposed positioning/amendments sought • Amend the legislation to provide for minimum procedural standards. This might include: (1) notice of an intended decision to affected provider; (2) opportunity for the provider to respond prior to the issuance of a final decision/order by LHIN/Minister; (3) a requirement that the LHIN or Minister take into account submissions made by the provider; and (4) issuance of decision Rationale • Given the potential impact of integration decisions/orders, affected stakeholders, including providers, should have an opportunity to be heard in advance of the decision/order, particularly if no right of a third party appeal is made available

18. Other issues for consideration • Labour provisions • Beyond increased costs to the system, it is yet unclear as to the potential impact these provisions will have on the hospital sector. However, the proposed use of PSLRTA to facilitate integration is appropriate and we do not believe that there are any fundamental issues which would merit advocating for amendments in this regard • Accountability for quality of care • While LHINs will assume operational responsibilities and may direct the hospital through the service accountability agreements to meet specific performance standards respecting quality of care, hospital boards will continue to be held accountable to patients for quality of care. The LGC, may in turn, upon recommendation by the Minister, appoint a supervisor under the PHA if the board has not discharged its duty, but this power has not typically exercised in respect of quality of care • Hospital governance • Legislation does not alter the voluntary governance of hospitals and states that LHINs cannot require a provider to change composition or structure of its membership or board. CFMA provisions respecting CEO compensation now apply only to hospital CEOs. • Post-proclamation implementation issues • Not all provisions come into force at the same time; may be source of confusion, uncertainty • Labour provisions will likely result in significant costs to system • Resources of LHINs may not be sufficient to fulfill mandate

19. Issues for further examination and discussion with MOHLTC • Potential impact of amendments in PHA to definition of “hospital” and “patient” respecting payments for drugs • Role/impact on speciality hospitals • Potential privacy concerns • Resolution of cross-border LHIN issues • Need to retain provincial standards

20. Questions and Discussion