Leaner health care budgets prompt hospitals in Toronto area to pool resources

Holly Bannerman
Holly Bannerman is a freelance writer living in Richmond Hill, Ont.

Canadian Medical Association Journal 1995; 153: 669-670

[résumé]


Abstract

Tighter health care budgets are prompting dozens of hospitals in the Toronto area to work together to become more efficient and save money. Projects range from sharing physicians' expertise to combining forces to make equipment purchases. As budgets become tighter, more large-scale projects are likely.

Résumé

Le resserrement des budgets de la santé incite des dizaines d'hôpitaux de la région de Toronto à se concerter pour réduire leurs dépenses et devenir plus efficients. Les projets vont du partage de compétences spécialisées de médecins aux achats groupés de matériel. Plus les budgets diminueront, plus les projets de grande envergure devraient augmenter.

Two mornings a week, Dr. Albert Kirshen leaves his office at the Baycrest Centre for Geriatric Care in Toronto to assist health care providers in community hospitals in York Region, north of the city. Kirshen is supplementing geriatric services in hospitals in Newmarket and Richmond Hill, thanks to an expanding network of innovative hospital partnerships working to identify opportunities for improving hospital services and saving health care dollars.

The initiative by the Baycrest and hospitals in the York Region, which began in 1994, was made possible through Healthnet North, a formal alliance of 15 health care facilities and community agencies in the North Toronto area. This group is one of many hospital-planning bodies in Ontario that are now coordinating hospital services, reducing the cost of hospital-support systems and collaborating on integrated regional hospital planning.

Although partnerships among hospitals in Metropolitan Toronto have existed informally for many years, until recently institutions still maintained vigorous competition as "freestanding, full-service organizations." By 1990--91, frozen budgets and overcapacity in acute-care services were forcing hospitals to change their management practices and launch cooperative ventures. Lately, the impetus for the growing number of hospital alliances has been the expectation of further cuts in health care funding and growing emphasis on the integration of hospital and health care services. Also fuelling the growth are recent advances in medical and information technology.

Those involved in the hospital groups report positive results in first-generation shared initiatives involving materials management, staff development and benefits programs. Some hospitals have also improved clinical services through physician cross-appointments, common credentialling and integration of some programs. Most groups are waiting to tackle more serious issues, such as restructuring and reshaping of the workforce, until the Metro Toronto District Health Council (MTDHC) Hospital Restructuring Report is released this year.

York Central Hospital, a 243-bed facility in the Toronto suburb of Richmond Hill, has enjoyed a number of service improvements and costs savings through its membership in Healthnet North and other partnerships. President Ken Tremblay says the agreement with the Baycrest Centre provides a value-added service to his community hospital that it would have difficulty achieving on its own.

"How do you translate the value of Dr. Kirshen's services to our hospital into monetary terms?" he asked. "It's difficult, but the affiliation with a leading geriatric research and teaching facility is invaluable."

Tremblay has calculated some of the savings his hospital has achieved through its alliances. "We have already accrued $150 000 in savings from stockless inventory systems," he says. And as chair of Healthnet North's pharmacy committee, he foresees significant savings for the group as members begin to share some money-saving techniques identified in a group survey. In 1994, for instance, York Central saved almost $250 000 by pooling its capital-equipment purchases with hospitals in Hamilton, Guelph and Kitchener.

The hospital has also benefited from a government-funded Tri-Hospital Multicultural Project involving staff training, cultural interpretation and pastoral service to improve care to multicultural communities. In March, York Central and the region's two other hospitals signed a collaboration agreement that will allow them to "pursue opportunities for shared services where cost reduction or quality improvement can be achieved." Tremblay says the group expects to save money on staff education and benefit programs and enhance services through physician cross-appointments.

Healthnet North Planning Coordinator Shelly Haber believes that while each member of Healthnet North benefits from the alliance in different ways, the group as a whole is continually learning "how to improve the health of our communities.

"It really is a significant accomplishment in having these institutions collaborating because until recently they were competing with one another. But now it's not enough for hospitals to work together. The business of hospitals is changing -- it's about what happens to clients before and after the hospital. It's about creating a healthy hospital system at a down-sized price."

Healthnet North's next major initiative is the creation of a client-centred referral network that will electronically link hospitals, physicians' offices, community-service agencies and laboratories. The group has applied for partial funding through the Ontario Ministry of Economic Development and Trade because the project is expected to create a number of new jobs. "This proposal will go a long way toward creating a more coordinated health care system," Haber says.

On Metro Toronto's east side, a group of hospitals in Scarborough is finalizing a strategic plan to provide a "series of options to reconfigure hospital services" in the area. In the last year, Scarborough has been hit particularly hard by a significant number of bed closures and downsizing in hospital workforces. Trustees, chief executive officers and chiefs of staff have begun a review of clinical programs, such as mental-health and emergency services. This may lead to a transfer of services and the elimination of some programs.

Last summer, the hospital group successfully coordinated the closure of pediatric beds; there was little disruption to patients and the hospitals saved money in the process. Dr. Paul

Truscott, chair of the group's Medical Advisory Coordinating Committee, says the initial accomplishments have meant improved services and cost savings. "But physicians are still concerned about how quality patient care is going to be [affected] with the changes that are going to have to happen to meet further health care cuts."

Truscott says physicians in the Scarborough area have generally "been willing to make changes when given the facts because they recognize that they must be involved in the clinical-program planning process."

Other joint efforts by the Scarborough group include filling gaps in the region's mental-health services, achieving savings of $500 000 in materials management and developing joint proposals to obtain a computed-tomography scanner and magnetic-resonance-imaging equipment.

Scarborough Hospital Group chair Norm MacLeod says group planning has escalated in recent months. "Individually, hospitals have only been able to go so far in finding cost savings and health-delivery improvements," he says. "We're prepared to make further changes but not without clear direction from the Ministry of Health."

Planning within a hospital alliance is much more complex for the University of Toronto and its affiliated teaching hospitals, which have formed the Toronto Health Sciences Centre Council (THSCC) to maintain quality care and continue to advance research and education of health care professionals. In its 3 years of operation, THSCC has examined joint initiatives in purchasing, waste-management and conservation programs.

Chief executive officer David Sheddon says that in the process of the group's work, member hospitals "are just coming to terms with their social and economic contributions in Canada." He says that a recent THSCC study placed the value of Toronto's medical-research business at $200 million, with potential for further growth.

One of the most visible outcomes of the THSCC alliance is the consolidation of Metro Toronto adult trauma services to special units at the Sunnybrook Health Science Centre (in the north) and St. Michael's Hospital (in the south). The teaching hospitals also hope to benefit from the Toronto Shared Food Services Project, which is expected to produce significant savings by centralizing almost all levels of this hospital-support function for 20 institutions.

The project, which is expected to be implemented in early 1996, originated in the Westcare Consortium, an alliance of six west-Toronto hospitals that has ambitiously ventured beyond changes in hospital-support systems to transform dramatically hospital-based services. After more than 10 years of informal partnerships, the consortium is close to finalizing a strategic plan for a "regional hospital network."

The network model under review could include the following elements: consolidation of all or some hospital-management functions, redistribution of clinical and diagnostic services, reduction in the number of acute-care sites, and a single network operating plan and budget.

The consortium is expected to complete its plan this year for review by the hospitals' boards of trustees. If approved, the strategic plan will be submitted to the MTDHC Hospital Restructuring Project in hopes that it will influence the committee's final report.


CMAJ September 1, 1995 (vol 153, no 5) / JAMC le 1er septembre 1995 (vol 153, no 5)