Ontario Health Care: A Model to Be Emulated or Avoided ?

By Blum, John D. | National Forum, Summer 1993 | Go to article overview

Ontario Health Care: A Model to Be Emulated or Avoided ?


Blum, John D., National Forum


With the development of a more cohesive approach to health-care reform, studies of the merits of other national health-care programs seem less relevant. Proposals calling for the adoption of a Canadian or a German solution no longer capture our attention as an American solution emerges. Still, we should not be too quick to dismiss lessons that can be learned from other health-care systems. Although we have identified a direction in health-care reform, myriad details need to be addressed, and many difficult decisions are yet to be confronted. Managed competition may be only a weigh station on the road to a very different type of health reform. Health-care problems, and closely related economic factors, present universal concerns that all nations must confront. In particular, how nations with long-standing health-care systems deal with current problems of cost, quality, and access should be of continual interest to policymakers. This article will present a discussion of current reform initiatives in Ontario, Canada's largest province, focusing particularly on changes in the hospital sector, and will conclude with insights the United States may gain from observation of North America's largest regional health system.

Categorizing the health-insurance plan in Ontario as a system is something of a misnomer in that it really is a mechanism of payment that was superimposed on an already-developed private sector. While universal coverage has given great power to the Ontario Ministry of Health, the overseer of the Ontario Hospital Insurance Plan (OHIP), provincial regulators have been forced to contend with a delivery system that has grown outside the bounds of governmental regulation, and, hence, has not been the product of careful, centralized planning. But the ministry has recently expanded its role beyond that of a funding agent and has adopted a wide range of regulatory initiatives geared toward creating a more rationalized delivery system.

The Economic and Political Context. It is difficult to understand the current state of health care in Ontario without some appreciation of the economic and political context within which it functions. Since the Ministry of Health is dependent on funding by the government, the manner in which it is able to meet its mandates is tied to the provincial economic climate. Until 1990, health care in Ontario experienced a 10 percent annual growth reflecting a robust regional economy. But since the early 1990s, Ontario has been affected by a deep recession that has strained the province's ability to meet its obligation for social programs. Coupled with a downturn in Ontario's economy has been the struggle of the federal government to cope with a growing deficit and to meet debt payments that consume more than 35 percent of budgetary revenues. Ontario has experienced a leveling of federal transfer payments while overall health-care costs have risen by 50 percent in the last four years. This decline in federal support has raised interesting questions about whether Ottawa will be able to hold Ontario to the dictates of the Canada Health Act.

It would be one-sided, however, to attribute recent health-care changes to economics alone. In the mid-1980s power shifted in Ontario from a Tory to a Liberal government. The Liberals introduced a social philosophy that was community- and public-health oriented, sowing the seeds for many of the changes that would occur in the 1990s. Liberal Premier David Peterson convened the Council on Health Strategy (CHS), which, in a 1992 report entitled "A Vision of Health: Health Goals for Ontario," identified five broad wellness goals and drafted three reports directed toward moving health care out of institutional settings. The report identified a number of areas as particularly problematic: uncontrolled costs, discordant funding, lack of provider and consumer incentives, lack of alternatives to institutional care, poor treatment coordination, and the need for a long-term health-care system.

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Ontario Health Care: A Model to Be Emulated or Avoided ?
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