Defend Public Healthcare

The Drummond Commission into the reform of public services in Ontario has proposed the province shrink and privatize hospital services.  Funding:  Drummond has recommended that health care funding be limited to 2.5% until 2017-18.  This is considerably less than the 3.6% increase proposed by the Liberals not long before the election.  Notably, even that proposal caused the Auditor General to observe in his pre-election review of Ontario's finances that  $1 billion in hospital savings  would have to be made (in addition to a two year wage freeze). This would be a drastic reduction in health care funding increases, which have averaged 7% since the Liberals came to power eight years ago.  Health care costs are driven by inflation, population growth, and aging.  Together these factors are significant cost drivers, likely over 4% per year.  But costs are also driven by a public that wants new health care services. When new services become available that prolong or improve their

As expected, the Drummond Commission has proposed the province shrink and privatize hospital services. Drummond has recommended that health care funding be limited to 2.5% until 2017-18.  This is considerably less than the 3.6% increase proposed by the Liberals not long before the election.  That proposal caused the Auditor General to observe in his pre-election review of Ontario's finances that $1 billion in hospital savings  would have to be made. The main target for Drummond cuts in health care spending are hospitals. Drummond is recycling ideas from the Harris era, when the government justified hospital cuts with the claim that they would improve care in the community.  Eventually, after repeated crises, the Harris government quietly changed their policy and began funding hospitals again. Initially, Drummond had tried to distance himself from the Harris policies, but today he only noted that the cuts would be longer than in the Harris era. Like Harris, Drummond su

The Drummond report on public services is coming out tomorrow (Wednesday) between 2:25 pm and 3 pm, reportedly. Drummond has said that many of his proposals will not be supported by the government.  So some of the proposals are non-starters right from the get go.  But they may provide cover for the Liberal government when they come in with their own package of cuts. Drummond is being used to set the government up as the voice of "moderation" I reckon. Incredibly, Mop and Pail columnist Andre Picard suggests that the objections to these proposals from some (like the Ontario Health Coalition) are based on "mock outrage".  Does Picard actually believe the outrage is mock?  No doubt his comment pleased Picard's editors' at the Globe , but it is far from the truth. It is not 'mock outrage' that is driving the Ontario Health Coalition (OHC) and others to work so hard to respond to Drummond.  It is real fear about the future of public healthcare.  T

Carol Goar at the Toronto Star demonstrates that health care spending has actually shrunk as a percentage of total Ontario government program spending. It has fallen from 46% to 42% of program spending over the last ten years. This despite repeated claims by Ontario finance minister's that it would increase. Don Drummond, who is preparing a report on public services for the Ontario government, has also made dire forecasts about health care spending as a proportion of the provincial budget ( claiming it will hit between 70% and 80% ). Unfortunately there is little likelihood that the reality of health care spending will impact Drummond's report. He is a man on a mission -- too bad for health care. Goar's article, "Health budget math doesn't add up" is available by clicking here .

Don Drummond continues to speak to all and sundry media about the approach his Commission into Ontario public services will propose.  A Mop and Pail columnist suggests that at " the heart of the new spending model would be a much tighter clampdown on health costs than Dalton McGuinty’s government has previously forecast." The current funding plan from the government is to increase health care funding by 3% per year.   Drummond told  The   Toronto Star columnist Martin Cohn :   “There are going to be a ton of things in our recommendations that the government is not going to be pleased with.    And the public should also brace for bitter medicine: “There will be lots of negative reaction, lots of anger.” Cohn suggests Drummond may propose health care funding increases be scaled back to 2.5%, instead of 3%. As for the other parts of the public sector -- well they face deep cuts, according to Cohn.   Cohn also suggests that Drummond wants have public hearings on his pro

The Toronto Star reports that the Drummond Commission is looking at the Saskatchewan hospital closures of the 1990s as a model of reform, with the support of the Minister of Finance, funding hawk Dwight Duncan. Next month, the treasurer will get some political cover from a commission engineering a massive overhaul of Ontario government services, headed by influential economist Don Drummond. Health care is at the top of the hit list. After working on two recent studies of health-care inefficiencies, Drummond's reform agenda is no secret: reintegrating the system; and reallocating more money to health promotion, community care, home care and long-term care.... They are also looking at a far more painful and protracted restraint exercise, one that gets relatively little attention: In the early 1990s, Saskatchewan's new NDP government faced a financial reckoning when credit rating agencies started downgrading the province's debt. Then-premier Roy Romanow resolved to close

Star columnist  Martin Cohn reports that the Drummond Commission into Ontario public sector reform has taken a major interest in the thoughts  of the Ontario Hospital Association. The OHA reportedly claimed to Drummond that " Ontario's current situation is much more challenging than in the 1990s...   With regard to hospitals specifically, the current situation is much more difficult than in the past. " Cohn concludes:  The government could save billions with coordinated strategies to  avoid  institutionalized care for the frail elderly, for example with homemaker services. That's why the OHA suggested to Drummond that  funding  for community care, mental health and addiction services should increase by 5.5 per cent - far more than now budgeted. Where would the money come from? This is where the big hospitals are showing leadership by sticking up for the little guys - likely at their own expense: " Given that this sector has the smallest overall budget

Amidst all the hysteria over public sector wages (Tim Hudak has again demanded a wage freeze for public sector workers) it is useful to ask if public sector workers are taking more than their fair share of the economic growth in Ontario --or if they are falling behind. OCHU's comments to the Don Drummond Commission on public sector reform in Ontario, reviews just that question and finds that since 1995 hospital wages have risen less than half as quickly as the nominal growth in the economy. Wages are paid in "nominal dollars": they are not, unfortunately, protected against inflation.  So you might have a higher dollar wage than you did ten years ago, but if inflation has increased more rapidly than your wage, you are actually less well off.  As a result, the comparison between "nominal wages" and "nominal growth" (economic growth including inflation) is appropriate.  Are the nominal dollars we are paid keeping up with the nominal growth in the On

Don Drummond, who is developing a report on public sector reform for the Ontario government, does not want to attack the Canada Health Act (CHA) -- or at least not directly. The CHA is the federal government legislation which enshrines the five principles of Canadian public health care:  Universal, comprehensive, accessible, portable and publicly administered health care for all Canadians. Drummond made this plain in an interview with CBC television about the Canada Health Act and privatization: "[P]ut the word privatization, say the word Canada Health Act and you've got a heart attack, you've got an increase in people going to the hospitals just at the mention of those words. You have to be so careful how you approach this thing. So you have to roll some things off the table right at the beginning and then really focus that all this is about is improving the efficiency and that what we're actually trying to drive up the quality of the care, we're not tryin

Don Drummond’s ' lecture ' for the C.D. Howe Institute does not propose too much new, but does raise some possibilities of what his Commission on Ontario public services might recommend for health care.  The main point Drummond makes is that health care restructuring must happen more quickly.  Although Drummond has tried to distance himself from the health care reforms of the Mike Harris government, the two are united in many ways.  Both are driven to system redesign by a goal of implementing austerity.  Drummond doesn’t quite have the nerve to say that public health care is unsustainable, but the threat of unsustainability sustains his argument.  Here are key parts of Drummond’s proposals in his C.D. Howe Lecture: Like the Harris reforms, a key part of the argument is to cut hospitals and increase home care.   This is a very old proposal that has been worked on for, literally, decades. It’s often presented as a new idea, especially when austerity is in the air.   Whi

Martin Cohn added some more today from his interview with Bay Street one-percenter Don Drummond who is developing  recommendations for government on public sector reform. And the news is not good. On interest arbitration (which hospital workers are forced by law to use to settle collective bargaining disputes) here is Cohn's report: Drummond discounts public-sector pay freezes because unions inevitably earn catchup increases down the road. But he is mindful of criticism by Hudak’s Tories that a broken arbitration system needs reform: “Broken might be a bit strong, but I will definitely be making some recommendations for change.”  Arbitrators should reflect private-sector wage trends. But they are wrong to think government can easily meet pay demands merely by raising taxes: with labour costs ranging from 50 to 80 per cent in some sectors, arbitrators must take account of deficit constraints and the lack of additional tax room. Private sector union wage settlements have been

Don Drummond says his Commission on public services in Ontario is spending 40% of its time on  health care “structural redesign”, Martin Cohn at the Toronto Star reports.    Drummond adds,  “We do not even have an integrated health care system”.    "Structural redesign" and more "integration" could mean a lot of things, but it sure sounds like he is contemplating more restructuring of health care employers.  Proposals to move money out of hospitals are also  possible (and perhaps even privatization  -- although Drummond was told not go there).  Drummond claims his reforms will be more 'strategic' than past system redesigns that failed.  But the Mike Harris government also tried 'structural redesign' of the health care system.  Ultimately the costs of the Harris redesign went through the roof, many of the the plans to shutdown or merge hospitals were abandoned, and the Harris government began providing funding increases to hospitals again.

Here's a surprise: Now that the election is over with, Dalton McGuinty and the Liberals are breaking their election funding promises.  And, STOP THE PRESSES, they are saying it is due to the advice they are getting from Bay Street 1 percenter Don Drummond.  The Ontario government will limit spending increases to one per cent a year for six years, the Canadian Press reports.  That would mean that much lower program spending than the Liberals promised just weeks ago.  In year one (2012-3) program spending would fall $400 million short of the amount promised, by year two $1.5 billion.  By year six, program spending would be $5.2 billion less than promised. This was transparently  the plan for Drummond's work right from the get go.   The Liberal funding plan already included cuts in real dollars in most departments , while others (like health care ) would get less than inflationary pressures.  It remains to be seen where they will find the new cuts.   Drummond's fina

Progressive Conservative leader Tim Hudak has weighed in on the upcoming report on public services from Bay Street "1 percenter"  Don Drummond: "Here's a concern I have: I want it unfiltered. I want his direct honest advice on how to control spending so we don't keep doubling the debt. I worry if we don't get it directly, it might get edited. I want the unfiltered facts." "I worry the government may not like everything in Mr. Drummond's report. The government will ultimately control how this report is released." Hudak (who spent time during the election calling for the privatization of public services while also attacking unions, public sector wage settlements, and interest arbitration) apparently believes that Drummond's unvarnished opinions will serve his ends.  That does not sound good.  But given Drummond's long Bay Street background, it is probably just about right. Hudak has written Drummond and asked for a meet

If we needed any more evidence that Don Drummond's Commission on public services (scheduled by the McGuinty government to report after the provincial election) will be used to bash rather than build public services, it was provided by John Ivison, a columnist for the always conservative National Post .  Ivison   turns to Drummond to bolster his attack on the provincial NDP and their policy to reverse some corporate tax cuts: The overwhelming consensus is that cutting corporate taxes is good public policy and encourages investment. Capital is mobile and responds to falling or rising rates. As former TD Bank economist Don Drummond put it: "Theory and considerable evidence suggest corporate tax cuts deliver strong benefits to all Canadians." In fact there is a lot of debate among economists over the value of spending on corporate tax cuts.  Drummond's position simply represents one end of the spectrum, a rather ideological one at that.    Without undoing som