Legislative Assembly of Ontario

MINISTRY OF HEALTH

CONTENTS

Tuesday 10 June 1997

Ministry of Health

Hon Mr Wilson

Ms Margaret Mottershead

STANDING COMMITTEE ON ESTIMATES

Chair / Président: Kennedy, Gerard (York South / -Sud L)

Vice-Chair / Vice-Président: Bartolucci, Rick (Sudbury L)

Mr RickBartolucci (Sudbury L)

Mr MarcelBeaubien (Lambton PC)

Mr GillesBisson (Cochrane South / -Sud ND)

Mr Michael A. Brown (Algoma-Manitoulin L)

Mr John C. Cleary (Cornwall L)

Mr EdDoyle (Wentworth East / -Est PC)

Mr BillGrimmett (Muskoka-Georgian Bay

/ Muskoka-Baie-Georgienne PC)

Mr MorleyKells (Etobicoke-Lakeshore PC)

Mr GerardKennedy (York South / -Sud L)

Ms FrancesLankin (Beaches-Woodbine ND)

Mr TrevorPettit (Hamilton Mountain PC)

Mr FrankSheehan (Lincoln PC)

Mr BillVankoughnet (Frontenac-Addington PC)

Mr WayneWettlaufer (Kitchener PC)

Substitutions present /Membres remplaçants présents:

Mr SeanConway (Renfrew North / -Nord L)

Mr DanNewman (Scarborough Centre / -Centre PC)

Also taking part /Autre participant:

Mrs MarionBoyd (London Centre / - Centre ND)

Clerk / Greffière: Ms Rosemarie Singh

Staff / Personnel: Ms Alison Drummond, research officer, Legislative Research Service

The committee met at 1535 in committee room 2.

MINISTRY OF HEALTH

The Vice-Chair (Mr Rick Bartolucci): Ladies and gentlemen, before we start, I'd like to introduce the legislative staff. Rosemarie Singh is of course the committee clerk. Alison Drummond will be taking Steve Poelking's spot for the next little while, as he has sought and received other employment. Our Hansard person today is Carolyn Brown. We welcome you all to the committee.

We went through the introductory presentations last day and now we're at the question-and-answer stage. The customary thing to do here at estimates, I understand, is for each party to have 20 minutes to question the minister and the minister's staff. If we have no disagreement, we will continue with that procedure, and the rotation will be as follows: the official opposition first, the third party, and then the government. Any discussion? If not, I'd like to welcome the minister back.

Hon Jim Wilson (Minister of Health): Thank you.

The Vice-Chair: We'll begin with the official opposition. Mr Kennedy, will you be starting the questioning?

Mr Gerard Kennedy (York South): Yes. Thank you for your presence, Minister. I'd like to direct my first questions around the general amount of health expenditure and some of the presentation of that there has been to the public. There was reference made throughout the course of the last quarter of the year to exceeding commitments made with health expenditure. When we finally received the budget, it looked as though something like $17.8 billion was being spent in health care, but I think the minister himself has already acknowledged that that's only by an accounting trick. In fact, quite a bit less money was expended last year.

It's very important for the credibility of the ministry that we understand what has occurred here. I think the deputy would be helpful, but I'd like to hear from the minister as well. Do you not agree that last year there was an accounting entry of about $415 million which constituted the 25th payment to hospitals? What that really means, if you concur, is that while it looks like more money was spent, there was no extra money available to hospitals; it simply pumped up the amount of money that seemed to have been spent last year. Would you agree that's the case?

Hon Mr Wilson: This will take me a minute, if I may. The ministry's practice for many years was that hospitals were on a bit of a different fiscal year than the rest of us, given that about three weeks of the fiscal year was held back every year. You're right, Mr Kennedy; that was about $400 million. We decided on a one-time increase in hospitals' base budgeting last year, and they actually received an increase -- one time; no press release -- of about $400 million. Not only did they get what we had announced in estimates in the Ontario budget last year but also a one-time increase. There's no accounting trick. We decided it didn't make sense to hold back money three weeks after the fiscal year had closed.

Moving to the PSAAB system as we have, it made sense to flow all the dollars in the year in which they're announced. To make that adjustment, there was a tremendous benefit. In fact, what it did -- and we never bothered to announce this, because it was just accounting, although it was real, one-time cash to hospitals -- was that the two years of 6% and 11%, with all growth reinvestment and with the one-time money back in, the average was not 11% over two years; the average would be a lot closer to 8% or 9% across the province.

It was real cash. I would bore you, but I could certainly make available the about seven letters we got from hospitals who said thanks very much for the accounting change.

Mr Kennedy: Yes, but I will quibble with you around the basic implication of this money. It was not extra money that the hospitals could spend. Is that correct?

Hon Mr Wilson: It was last year. It was real cash of about $415 million.

Mr Kennedy: But what the hospitals said to us was, "Finally the government is paying its bills on time." This money was not additional money to their budgets. Is that correct?

Hon Mr Wilson: It wasn't permanent money added to their base budgets, but it was real money. A number of them spent it as they received it.

Mr Kennedy: Because the holdback has been a feature for the last number of years, do you not agree that what you did was provide $415 million three or four weeks earlier than you normally would, that there's no increase, as the budget accounting would suggest, in the amount of money hospitals had to spend? Alternatively, are you suggesting that hospital budgets were increased by $415 million? We've talked to 25 hospitals and not one of them has said that. I'd like you to clarify that today, if you could.

Hon Mr Wilson: I never said that. I never put out a press release. I've never pretended otherwise.

Mr Kennedy: There was an article in the paper that suggested that. I'm not holding you accountable for that. I just wanted to find out today.

Hon Mr Wilson: There was an accounting change to the benefit of hospitals of about $415 million.

Mr Kennedy: The accounting change has implications, though, because what it means, Minister, I think you recognize, is that the real level of health care spending, if we were to not do the accounting change and were to compare apples and apples, went down last year. The amount of money being spent by the ministry on programs in operating went down. You recognize that in 1994-95 it was $17.69 billion, in 1995-96 $17.64 billion, and then last year $17.52 billion. This is in contradiction to what we've been hearing. On page 7 of the Common Sense Revolution it says health care spending will not be cut. That clearly looks like about $165 million has been cut. Do you agree that's the right and proper way to read what has happened in terms of the budget?

Hon Mr Wilson: No. In fact, what I read is that interim actuals were $18.111 billion, so well over $18 billion. That includes the one-time cash. Subtract $400 million from that and you're still significantly above the $17.4 billion.

We're not the ones, by the way, who kept saying we spent $17.8 billion last year. That was your party, and it was your spin on the budget that said we only added $1 million. The actual planned amount last year was just above the $17.4 billion. Add in the one-time money and a few other expenditures -- the drug program was up last year and other pressures -- and we ended up spending a lot closer to the $18-billion mark than the $17.4 billion.

Mr Kennedy: Again so we're not mixing apples and apples, we take the capital money out when we discuss operating. We'll come to capital in a minute.

Hon Mr Wilson: That isn't capital.

Mr Kennedy: In your $18.11 billion it is. If you take out your capital money, you're looking at an operating expenditure of $17.9 billion which, after $415 million is deducted, drops to $17.528 billion. If you agree that the $415 million is accounting, that's what it is.

Hon Mr Wilson: If I may say, the Common Sense Revolution talked about the total health care budget of $17.4 billion, which meant actual operating of $17.2 billion and close to $200 million in capital. That was the commitment when I helped write that section of the Common Sense Revolution in May 1994, a year before the election. Subsequently, we've exceeded that. We've taken capital out of that figure, so the true operating dollar is now in the $17.8-billion range, plus unprecedented amounts for capital that will be spent as a result of not only regular capital programming of close $160 million this year, but also $2 billion of new money over the next three to four to five years to ensure that we get the restructuring done properly.

Mr Kennedy: This is important, because the people of Ontario want to know what's happening to their health care system. Last year, there were less dollars spent on operating, the part of the system that reaches the patient right away; less than the year before and less than the year before that. There was a cut of $165 million. Do you not agree that's the case? You can consult your deputy and so on, but we need to know. Unless that $415 million has some other value, indeed health care spending has been cut, and we need you to confirm that.

Hon Mr Wilson: No, it hasn't been. I'd ask you to point to some line that indicates that.

Mr Kennedy: I'll refer you to the operating summary.

Hon Mr Wilson: I'm looking at it.

Mr Kennedy: The line that reads "Ministry Total Operating," if you deduct from that the accounting change --

Hon Mr Wilson: Page 8 in the book, for all members.

Mr Kennedy: Sorry; I don't have a page number on mine. If you deduct the accounting change from $17.943 billion, it's $17.528 billion. Minister, you've agreed it was an accounting change.

Hon Mr Wilson: Could you point to the line?

Mr Kennedy: Column (e), interim actuals for 1996-97; $17.943 billion is the published figure, $415 million of which is an accounting change. You're looking at the line reading "Ministry Total Operating," in 1996-97 interim actuals, column (e).

Hon Mr Wilson: You must have a different book.

The Vice-Chair: Mr Kennedy, I can't find it in mine either.

Mr Kennedy: Sorry. That's the wrong book.

Hon Mr Wilson: Mine all show well over $18 billion.

Mr Kennedy: Sorry. I don't have a page number, but there is a page entitled "Ministry of Health Operating Summary." I'm looking for the pagination.

The Vice-Chair: It would probably be page 10 of the estimates, 1996-97.

Mr Kennedy: Thank you for that facilitation. In column (e) on page 10, interim actuals read $17.943 billion. What I'm asking you to clarify is that if $415 million is an accounting entry, the balance is what we should take to be the comparable. Is that not correct? The effect is that we're getting 25 payments to the hospitals instead of 24. There is no extra increase in the budget. You have agreed to that.

Hon Mr Wilson: But even if you do that math, it's still well above the commitment. Health care spending is still way up.

Mr Kennedy: I won't quibble with you on that, but a reasonable figure -- I would like your ministry to perhaps provide us with the figures so we can have them. It's very important for this committee to have comparable accounting figures. The figures I would submit for your consideration are that the comparable figures for 1994-95 are $17.69 billion, and for 1995-96 it's $17.64 billion, which you can see in your 1995-96 actuals on the same page, and then $17.528 billion. I think it is important. Health care spending has gone down, not up, by any reasonable calculation of what impacts patients in Ontario today.

Hon Mr Wilson: No, there's no evidence of whatsoever in any of these estimates books.

Mr Kennedy: You're contradicting yourself. The $450 million either is or isn't an increase in budget. If it's not, it's simply an accounting entry, and that should not be used to delude people about how much money is being spent on the services they need.

Ms Margaret Mottershead: May I? There is a distinction between ongoing operating costs and one-time costs. We do have in the Ministry of Health budget, in some of these costs, some one-time costs that are not capital costs. An example I would give is in hospitals. When they do dialysis or when they do cardiac, it's based on volume; we actually pay for the number of cases done at the hospitals. In some years it's higher, and in some years it's lower, all reflective of the need and how many procedures are done.

The point I would like to make for the committee is that in the year in question, with that one-time expenditure for hospitals, there was total spending. The money that was spent from the budget was for health care; it was for no other purposes. Therefore, to suggest that there was less spent if you were to take out that amount for the holdback is not accurate. The taxpayers actually spent that amount of money on health care.

Mr Kennedy: Ms Mottershead, I have here the memo you sent, and in it you refer to an accounting change. In the comment in the Toronto Star, the executive assistant to the minister refers to it as accounting changes, as the minister does in the same story.

The minister, in the last session we had, said it was "an accounting change as we change our accounting system." What we're trying to get at here is, if there had not been an accounting change, what is the comparable figure? Are you not in a position to provide us with what the comparable expenditure really was? In your memo you make it very clear this is an accounting change and it doesn't impact the budgets. It doesn't give any extra money to hospitals, it's simply money that's parked there for the purposes of changing the accounting practice.

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Ms Mottershead: It is an accounting practice change. It is money that was given to the hospital earlier, as I indicated. It is extra revenue they would have had in the year that they did not anticipate. It gives them in this year, 1997-98, their full value of 12 full months of operations. There is no holdback involved in this year. If you were to compare actual hospital spending and availability of revenue to them from the government, this will be the first time in about 30 years they will have the full year of operations, and that's a significant commitment.

Mr Kennedy: But Deputy, you're not contradicting the minister. They can't increase their budgets to take advantage of that. This only saves them any borrowing charges they might have because they're waiting for the government to make its final payment. Is that not correct?

Ms Mottershead: Or pay someone on costs that they have. They actually use the money for their operations.

Mr Kennedy: Deputy, this is very, very important here. This is not incremental money, is it? This is not additional budget money for these hospitals, is it?

Hon Mr Wilson: We have said very clearly it was one-time money in that fiscal year. We made no bones about it. We didn't even put out a press release. The other choice was to change accounting systems and keep the $415 million, and I said to the deputy: "No, give it to the hospitals. I'm sure they'll put it to good use."

Mr Kennedy: But it's not extra money they had, Minister, and it is not fair.

Hon Mr Wilson: It is extra money.

Mr Kennedy: It is not fair to suggest, if there's any implication left dangling here, that that money was able to be utilized by the hospitals, because it was not, and in truth, it should not be used as a comparison to what they had the year before. Twenty-five payments were made to the hospitals. It's a simple accounting change and it's not extra money they had to spend. If you're able to compare apples and apples, Minister, I'll leave you with this assertion: I would welcome if the ministry would produce its own figures in this regard, comparable figures to tell us how much money was really spent in the health system this year and last, save for an accounting change that doesn't affect the bottom line but could -- and I'm sure you don't wish for this to happen -- distort people's perception of how much money is being spent. The real expenditure, I would suggest to you, is closer to $17.5 billion and the result I think is that people need to know that is there.

Minister, could you or the deputy produce figures that would show us what would have happened had that accounting change not taken place, so that we don't take up more of your valuable time here today?

Hon Mr Wilson: Yes, we'd be happy to. I don't know how you can explain it further than by what's in front of you or looking at the auditor's report.

Mr Kennedy: We talked, by the way, to the auditor's office and they question some of this. We would be happy to refer it to them for explanation if that would be agreeable to you.

Hon Mr Wilson: Absolutely. You're free to do that without my permission. I regret now, I suppose, that I didn't brag about this because I'm sure our assistant, Bill Hawkins, is off running and getting the letters from the hospitals that say thanks. I know one hospital got $1.9 million it wasn't expecting, one-time money. It had nothing to do with our ongoing operating dollars. Their budgets are as announced by the finance minister for this year. Any piece of paper you look at in here indicates that the health care budget is up well above the $17.4 billion, well above what we inherited, and we're hitting a record level this year.

Mr Kennedy: But it's $160 million --

The Vice-Chair: Mr Kennedy, we're moving to the third party now.

Mrs Marion Boyd (London Centre): I'd like to take a different tack on it. It's the same number and it's the same problem. If the hospitals were as grateful as you suggest and the dollars were flowed in that way on an accounting basis, are they in a position to be prepared to see what instead of being an increase is going to be a decrease?

One of the problems you have, Minister, I think, is that if you are going to tout that $17.9 billion as being real money and real proof that you're spending more on health care than any other government ever has -- and that's what you've just done -- then how are you going to explain that your funding is dropping next year? You can't really have this both ways. This is either an accounting issue that puts us on a track we haven't been on before, where it's strictly an accounting issue and it looks like you've spent $17.9 billion but in fact you've spent $17.5 billion, or you've spent $17.9 billion this year and it's a drop in your budget next year rather than the increase you've touted in your budget. It can't be both. It's got to be one or the other.

Hon Mr Wilson: If we look at column (e), the interim actuals, what was spent last year, 1996-97, it's $17,945,000 and change, and we then look at what we plan on spending this year, it's $17.849 billion. I you just compared those two, your point would be correct, except we've explained that in (e) is contained that one-time cash to hospitals.

Also, because nobody's estimates ever come in bang on, the Ministry of Health always ends up at year-end spending -- we will probably end up spending more than the $17.849 billion because we don't deny people service. For example, recently we flowed millions of dollars to St Mike's, Sick Kids, Toronto Hospital, a whole list of hospitals. They finish their year-end on March 31, then they give us their actual operations performed. Remember, these are estimates. Hospitals put in an operating plan. They project they'll serve X number of dialysis patients, do X number of cardiac surgeries, and when those surgeries are actually performed or, in the case of St Mike's recently, we just gave them over $2 million a couple of weeks ago to reconcile their books because they did more trauma cases; more people came through the door by helicopter or ambulance and needed service. One of the things that's frustrating, I suppose, all ministers of health is these cases that are raised in the House that somebody isn't going to get service. Everybody gets service in Ontario and every government reconciles with the hospitals after year-end and all the bills are paid. The government has never skipped out on paying its bills.

Mrs Boyd: I certainly agree with you, but when you look at these estimates, and particularly when you look through at the detail in these estimates, we are seeing in fact a situation where the way you account for that overrun, which it really is -- if you're looking just at a hospital flowing itself, we're looking at almost a $500-million overexpenditure in health care. Either Mr Kennedy is right and that was all flowed to the hospitals to do an accounting change, or in fact you spent $465 million more, whatever the actual number is, on hospital care and next year you're going back to almost the level that was in the estimates for the year before.

I'm saying if hospitals needed that, if the actual expenditure was such that those represent real services that were done and that what they actually need is that extra $450 million to $500 million in order to offer the services on the level we have, why does your estimate not reflect that? Are you being honest when you tell us you're increasing your funding for those services, when it would be an actual decrease if you met your estimates next year?

Hon Mr Wilson: Perhaps, Ms Boyd, we'd go through that line of institutional health. If we look at the estimate, we estimated when I was before you last year that we would spend on institutional health, which includes hospitals and some other institutions, $7,480,753,400. We ended up, with the accounting change, some pay equity adjustments and a few other things we had to do, spending in real money $7,926,006,360. So if you take the $7.9 billion and subtract the $400 million one-time, plus some one-time pay equity adjustments -- I think the deputy could explain in great detail what's in there, but that's what comes to mind for me -- you end up that we're estimating this year we'll spend on institutional health $7,487,000,000.

Mrs Boyd: Minister, I think we would help ourselves if we look at page 66, which is the detail on institutional health. I think this is an extremely important issue for us to be talking about. When you look at the detail here what we see is, if we are looking at hospitals and related facilities in 1996-97, that they were overspent by $445,252,960. We're over your estimate by that much. The actual difference from what was spent to the estimates for that line, leaving out the hospital restructuring issues, is $656,613,360. In other words, there's over $656 million less, leaving out the restructuring thing, that will be available for hospitals to operate in 1997-98.

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That is not what the people of Ontario have been led to expect. You explain the $218-million hospital restructuring as helping the hospitals to meet their obligations around closing hospitals. That means severance pay. We all know that. It means severance pay; it means the human resource plans; it means the legal agreements, legal services that are required to transfer hospitals. We know what that means. That is not hospital care in that $218 million.

I would say to you very clearly that Mr Kennedy has asked you a question that you have answered by saying the difference between the estimates last year and the expenditure this year is services. Then if we look at next year and what the actual dollars break down to in detail, we are looking at a situation where hospitals, which have been told that next cut is not coming -- people in Ontario who have been told you're spending more than you've ever spent before -- are going to see a huge drop in services, because $656 million is a huge drop in services.

Hon Mr Wilson: The deputy will explain further, but of your $600-million figure, we've already explained $400 million. We also are being I think more honest in this set of books. We actually have line called "Hospital Restructuring." The $218 million has been booked as a result of some of the decisions that have been taken by the commission at the time that the estimates were to be prepared, at the time the budget was being prepared. We booked that so hospitals would know that the commitment of the government is to pay for every decision that comes out of the Health Services Restructuring Commission.

Given that no restructuring has occurred yet, we have a rather miscellaneous item called $218 million in some restructuring dollars. You're right, they are retraining costs; they are other costs built in there. I think it's a more honest way to show restructuring as a separate item. Remember that hospitals under your government paid for a lot of this internally and it was all jumbled up in the figure. So it wasn't necessarily going into front-line services either. We're the first ones now to take it out and show what the added costs are of restructuring. In addition. you can see the base budget of the hospitals is fully intact there as per the finance minister's announcements, and perhaps the deputy would like to elaborate further on that.

Ms Mottershead: I'd just like to add a comment. If you look at the estimate from 1996-97, $7.480 billion, compared to the estimate of $7.269 billion, it indicates a reduction of $211 million. The hospitals actually were targeted for a 6% reduction in 1997-98. That 6% reduction was equal to $435 million. What this shows you is that the hospitals are only getting a 2.8% reduction rather than the full 6%. In other words, they're not taking $435 million; their only reduction is $211 million and that's more than offset by the $218 million in terms of the reinvestments in restructuring.

Mrs Boyd: But it isn't hospital care. You keep saying that you are providing the same level of care to the people of Ontario and when we look at this --

Hon Mr Wilson: We're providing more care, actually. All our stats indicate our surgeries are up, our dialysis is up, our transplants are up. We're providing more care with slightly fewer dollars. We review the operating budgets and we're making sure, to the best of our human ability, that the funding reductions come out of administration, duplication and waste. I would like to see the evidence of less care in the system. None of the experts, none of the hospitals will tell you they're serving fewer patients; they all report serving more patients.

Mrs Boyd: You misunderstood me. I didn't claim less care; I said fewer dollars going to patient care. Please listen carefully: fewer dollars going to patient care. You're right: In 1995-96 real expenditures, and in 1996-97 estimates and actuals, your government has not taken out the amount of dollars that have actually gone to restructuring. You haven't done that.

We don't know how $218 million stacks up against what we do know have been big severance costs to hospitals in the restructuring they've already done. We've given you examples of that. Hospitals have delayered; they have gone from having seven administrators to three and there's a severance package attached to that; they have changed the way in which they deliver services and nurses have lost their jobs as a result. We know that has happened because of the figures available in terms of lost staff. All that means there have already been huge restructuring costs that have not been accounted for separately.

If you're going to take advantage of that in terms of telling us how great your budget is and your estimates are, then you owe it to us to answer the question that we certainly have asked you before: What percentages of the budgets in 1995-96, when you were in government, and 1996-97 actually were already restructuring costs, and when you take those out of the overall costs, what was the actual amount spent on patient care?

It's a simple question. It simply means that when you spin it that your whole budget is giving more patient care, all we're saying to you is that you need to be very clear with people that in units served, in some areas, yes, you can show some increase, but those dollars you're so proud of are not necessarily all going to patient care; they are covering a whole lot of costs that have nothing to do with patient care.

Hon Mr Wilson: This is a very good-news page and very different from the way your government conducted itself. The Toronto Star and others reported a 6% decrease in that budget for hospitals; the actual was 2.8% because of our growth funding and our reinvestment in priority programs. I've said 100 times, "Yes, we're taking money out of hospitals, and we're putting it right back into those same hospitals." So could somebody please write a story saying it wasn't 11%, it certainly wasn't 6% last year; it was 2.8%, actual audited figure.

Rather than a reduction of $435 million, they received a reduction of $211 million in actual dollars. We more than made that up by adding in $218 million. This line item called "Restructuring" has never existed in the Ministry of Health estimates before. Your government didn't have it. Your government made them out of that first line item of $7 billion; paid for all their legal fees, for the layoff of nurses, for retraining, anything that was outside of --

Mrs Boyd: As did yours for the last two years.

Hon Mr Wilson: No, ours didn't. This is to pay back hospitals for restructuring that was ongoing as we came into office. We've separated it out for exactly the reason you said. We don't want them dipping into their operating dollars. We're giving them separate money, $218 million, plus a total of $2 billion over the next three to four years -- you'll continue to see this line item on ever-increasing numbers -- because we felt it was unfair for them to dip into their operating budgets, which would affect patient care if it went beyond getting rid of the waste in administration and duplication. Hospitals, compared to what's out there in the public's mind, are being funded on a far higher level than this government is being given credit for.

Mrs Boyd: So this is a retrospective amount. In other words, you're saying that you've changed the accounting so that there isn't this holdback, but what you in fact are doing -- I understood you correctly -- this $218 million is the cost they've already incurred. In fact, when you stand up in the Legislature and tell us we have all this money, "Don't be afraid of restructuring because this money is already allocated," that's not true, is it? In fact, this money is retrospective. This is the cost they've already incurred and that you're repaying them for, if I heard you correctly.

Hon Mr Wilson: The $218 million is for restructuring that was booked up to March 31 and hospitals very clearly made the point that previous governments were making them become more efficient and weren't paying for it. We came in and said: "We'll pay for it. In fact, we'll pay for it more than you've seen in a reduction, so you're ahead. But we're going to be honest. We're not going to call it patient care. We're going to call it hospital restructuring and it's to do with legal fees, retraining and all that sort of stuff."

I can't explain it any better. You can't spend this any other way. Hospital budgets on net are up, but we've been honest in saying, yes, we've asked them to reduce administration and duplication and we will put money back into priority programs and we will pay for restructuring. It's actually very good news and the hospital association is extremely pleased with the approach the government's taken.

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Mrs Boyd: But there's actually no more money in this budget for next year to give anyone any comfort about the massive restructuring that's happening across the province and where the dollars are going to come from to pay for that. In fact you have not allocated dollars for this year at all. This is retrospective. Do I understand you correctly?

Hon Mr Wilson: The deputy will explain the restructuring.

Ms Mottershead: In the Ontario budget there was an amount indicated of $850 million for restructuring costs that were booked for 1996-97. The $218 million, because we now have different accounting rules, represents what we think is the cash drawdown by the hospitals on expenses incurred to the end of March 1996-97. The Ontario budget also has in it a figure of $450 million which is our estimate of restructuring costs for 1997-98. That amount would be in addition to the $18 million -- or $218 million, but it can't be accounted for on a cash basis until you start drawing on it.

What you have is an accrual accounting system in terms of the budget and what you have in these estimates is a lag between catching up of the accrual system to the estimates process. We're still on a cash basis.

Mrs Boyd: I beg your pardon, but you gave me two figures there.

Ms Mottershead: Yes.

Mrs Boyd: First you said $400 million and then the minister corrected you and you said $218 million.

Hon Mr Wilson: No, she said $18 million; I corrected her.

Ms Mottershead: No, $850 million is the accrued amount of potential restructuring costs incurred to March 31, 1997. The cash expenditure that we estimate from that particular accrual of the restructuring change is noted in the 1997-98 estimates of $218 million. That's the number you have on table 66.

In addition to this, which doesn't show up in the estimates because it hasn't yet been converted to a cash number, is a commitment in the Ontario budget of $450 million related to ongoing restructuring on an accrual basis. In fact, there's a further commitment of increasing that total amount and you now have $850 million and $450 million for $1.3 billion that will grow to more than $2 billion in the next three or four years.

Hon Mr Wilson: Let's do oranges to oranges. Oranges to oranges are the government has been accused of cutting hospitals $1.3 billion, which is now absolutely untrue because we've delayed or postponed the third year --

Mrs Boyd: I noticed that was the same figure.

Hon Mr Wilson: Oranges to oranges, it's the same figure, $1.3 billion for restructuring. Unfortunately one has to live through this period of criticism, but at the end of the day when historians are reading the books, they'll find that the hospitals' restructuring was paid for, that hospital cuts in fact didn't occur, that the money was reinvested and, by the way, the rest of the book almost on every page shows our close to $1 billion in reinvestments that we've put back into the system, which is why the health care budget is at a record level.

Mr Trevor Pettit (Hamilton Mountain): I'd like to talk about the deal with the doctors, if I might. Ever since the deal with the doctors was reached, I've read a lot of stories and I've heard a lot of comments. Some of them, I believe, are truly outrageous, and not only from opposition members but from a lot of the so-called experts, how the government was perhaps fleeced by the doctors and how the deal with the doctors does nothing to improve things for the patients as opposed to being more on the side of the doctors. I'd like to get how, in your view, this deal benefits perhaps not only the doctors, but more importantly the patients, and second, how the deal with the doctors, in your view, is an improvement on the previous deals with the doctors negotiated by the previous government.

Hon Mr Wilson: An excellent question. I appreciate the opportunity in all sincerity to clarify this because I've been running around the province clarifying it and, surprisingly enough, the press have never asked me a question about it, except Jane Armstrong did one day, since the deal was signed.

First of all, doctors did not get a free increase. Those who wrote editorials obviously didn't read it. They get paid exactly the same when you walk in their offices today as they did the day before the deal was signed. Every service is exactly the same. The only possibility of a fee increase is in the third year and that is if they help us modernize the fee schedule. It hasn't been modernized in decades. We're still paying for surgeries that originally took an hour and a half and they take 20 minutes now. We're still paying at the hour-and-a-half rate because the fee schedule's not been modernized in years.

You hear it all the time when doctors come to your offices, they say, "Jeez, Dr So-and-so who doesn't have to do deliveries at 2 o'clock in the morning, but has a nice 9-to-5 practice doing a particular specialty, is getting paid at archaic rates," when lasers have made the job so much easier, when all the technologies came in in the last couple of decades and yet the fee schedule's not been adjusted one iota.

We have also signed in the deal -- it's an element of the deal that doesn't get much attention, but should -- that the doctors have agreed for the first time in many years to tackle this fairness question. We, for example, increased the delivery fees for obstetrical -- that was the only adjustment in the fee schedule in many years -- deliveries by 30% last year because we felt it was very unfair for doctors delivering babies to receive so much less than other doctors doing less onerous tasks and getting paid more money for it.

In this deal, although the fee schedule doesn't change one iota, doctors are paid exactly the same, and this is a great advantage to patients. It is consistent with the way we fund hospitals and other institutions and health providers. For the first time in many years the government, after two years of negotiating -- this is the toughest round ever in the history of the province. I had 11 weeks off and a lot of scars to pay for it. Caving in is something where I just cringe when I hear that because it was two years of sweat, blood and tears on our behalf to finally agree that we would fund, over the next three years, 1.5% a year to recognize the growing and aging population, which hasn't been done since about 1992-93 for doctors.

That's exactly the way we fund hospitals. Every hospital gives us a projection of the population in cases it will serve. It gives us this age-sex mix for tertiary care. It fills out all kinds of forms and that's how we decide their funding formula, which by the way is an improved funding formula in the last two years because we're actually trying to move, as we said in the Common Sense Revolution, towards patient-based budgeting. So it's, "Hospitals and doctors, tell us the patient population you're serving and we will recognize that in our funding formulas for the first time in many years."

What does it allow doctors to do? It allows them to see more patients. The 1.5%, they would argue as part of their negotiations was far too low, it doesn't recognize the actual growth in aging, but again it's a negotiated amount and we think it's a sufficient amount to see the new Canadians who have joined us in the past, since 1992, and clearly an aging population.

If we look at all our statistics -- dialysis was supposed to grow at 10%; it's a lot closer to 15%. Hip and knee replacements you can barely keep up with. Cardiac surgeries: We've had to put $35 million this year and $8 million last year, unprecedented amounts to try and get the waiting lists down because these scholars who keep telling me that the growing and aging population has yet to come aren't actually running a system.

Our system right now is experiencing the growth in the aging every day and doctors have been trying to tell government that since 1992. We finally, after two years of negotiations, agreed, so they'll be able to see more patients but not an excessive number of patients. They'll have to continue to be prudent. They cannot start the treadmill because all the mechanisms to keep doctors' caps in line are still there.

Remember the NDP's caps were $400,000 for everyone. Our caps now are $380,000 for specialists and $300,000 for GPs, significantly lower than the previous government's agreement. Doctors are capped at a lower level and in that they also have to accommodate a growing and aging population, which means certain doctors will hit their caps and other doctors will pick up that slack within the global budget of about $4.1 billion. When you add 1.5% to that, my calculation is that's $60 million a year. The reason we said the deal costs about $100 million a year is that we're also going to continue to pay, although do an extensive review, including perhaps self-insuring or having a new insurance company -- because we don't have an insurance company right now for the CMPA. It's just a group of doctors and a billion-dollar fund. It is not regulated by any government. There is no law that regulates the CMPA.

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I had quite a time to say, "Look, this government doesn't pay" -- when I came to office, the first bill I think I received was about $40 million to go into the CMPA. I looked at the fund and I said, "It's $1 billion and, by the way, where's their books?" Margaret many times phoned Dr Stuart Lee at the CMPA, who's the secretary of this committee. It is a committee, not regulated by any government. It's not an insurance company. It's not an insurance fund. It doesn't report to any government. It doesn't report to the public. We went through a terrible time of saying: "Docs, maybe other governments paid your $40 million a year in malpractice insurance. This government doesn't."

Mind you, it was a deal. The Liberals in 1986 didn't want to look like they were giving the doctors an increase, so they said quietly, "Get off our front lawn and we'll pay any increase in CMPA above 1986 rates." Lo and behold, ladies and gentlemen, when the government got involved in paying malpractice insurance, the rates quadrupled -- to an unaccountable body.

By the way, I was the chair of Canada's health ministers during that entire year and I have the endorsement of every health minister, including the federal health minister, in this country, to do what we did on CMPA, which was to have the honourable Charles Dubin review it. He made some recommendations and we're working on those recommendations to bring some accountability into this. Mr Sheehan, for example, you were in the insurance business. I mean, how could you set up billion-dollar fund that's not accountable to anyone?

I also tried during that year to have doctors scream about it. Why would doctors continue to pay? Remember they pay their portion of malpractice insurance up to the 1986 rates and we're paying everything above 1986, and the rates went up exponentially as soon as the public pockets were involved. Also, we should continue to encourage our doctors to ask for some accountability in their fund, a billion-dollar fund, and all the advice I get, for example, is far more on a per doctor basis, far more in reserve than most of the large US fund holders are holding on behalf of their doctors.

The excuse given in 1986, for example, by politicians who drummed this up was, "We're going to have California-type lawsuits in this province." We've not seen those. The excuse for building up a billion-dollar reserve in CMPA was to somehow address all these lawsuits. The former Attorney General who's here knows that our courts do not award what US courts give for life and limb. We don't have the multi-tens of millions of dollars in awards being given out; nor do we have the frequency of malpractice cases that we see in the US.

My view to this day, and perhaps I'll go to my grave, is the fund needs to be justified, it needs to be accountable. What we've done in the agreement therefore is a very firm commitment in writing, obviously a legally binding agreement, that both parties now will sit down and thoroughly review the CMPA, because taxpayers are paying everything above 1986 rates and we need accountability; and doctors need accountability in that system so that they know it will be there to cover malpractice insurance.

In a nutshell, Mr Pettit, the agreement recognizes the growing and aging population. It does not give a raise to doctors and it starts to deal in a very serious way with some of these malpractice insurance issues and other issues that are important to the profession and important to patients.

The final thing I'll say about the agreement is that it also provides about $45 million in new money to try and get doctors out to rural areas and northern areas. We announced just last week globally funded group practice contracts. We now have quite a menu of new types of contracts that doctors may want to enter into to help service our small towns in the areas of the province where we've having a great deal of difficulty in retaining and attracting doctors.

Plus, the final thing is that the agreement contains the 25% discount for doctors. We're just having our first class graduate now under this agreement. This clause in the interim agreement came into effect in December. So from December, for the life of the agreement -- the next three years -- any graduating doctor who wants to go into an overserviced area like Metro Toronto, like Ottawa, like London -- these are general practitioners we are generally talking about, family doctors -- will receive a 25% deduction after the fact. They'll bill at regular levels but they'll receive a 25% cut. Each month when they get their remittance cheque, 25% will be taken off if they choose to graduate from medical school and go into an overserviced area.

I think it's already having an effect. You've got doctors now clearly coming out and saying, "Where can I go other than Toronto?" I know in my area, because I represent an area just an hour to two hours north of here, we have a new doctor in Beeton, we have four new ones in Alliston, because they're starting to graduate, as they do from April until the end of June every year. We get about 400 to 500 year and they're starting to say, "Gee, it's not worth my while to go into an overserviced area," as in the past, and they're starting to migrate; it's going to take some time. They're starting to more and more inquire about, "What towns need service that are near Toronto?" That's our first stage we're at now, and I think you'll see an eventual migration of doctors to where they are actually needed in the province.

I apologize for the lengthy answer but I appreciate the opportunity to explain it.

Mr Ed Doyle (Wentworth East): Minister, you had mentioned earlier that $1 billion has been reinvested over the two years since we've been in office. I'm wondering if you can translate that into numbers as far as patients are concerned; for example, patients not only in hospitals but also patients who are community-based. Do you have any numbers on that?

Hon Mr Wilson: I just happen to have a few numbers on that.

Interjection.

Hon Mr Wilson: No, every one of our announcements. We've done a compilation here and it's available for all members. I know the opposition parties are doing a good job in their research departments of tallying these things.

We've tried to put a human face on these announcements. For example, the $170 million for long-term care creates about 4,400 jobs for nurses and other front-line providers. That's important. But also, it helps to serve about 80,000 to 100,000 more seniors, or frankly people of all ages with disabilities who need long-term-care community services.

In addition, the community investment fund, which was announced by the previous government -- but not $1 had flowed and the projects hadn't been approved yet, the $23.5 million there provides community supports to about 6,000 people suffering with mental illness. These are new cases. This is new capacity being built into the system, above current delivery numbers.

The $35 million for cardiac care, which isn't just surgeries but is on top of the $8 million provided last year, should see about 11,700 more cardiac patients served in the province. Cancer care: It's close to 13,500 to 14,000 more patients with the dollars we've put into cancer patient care. The list goes on and on. Dialysis services: $36 million so far invested since August 1995. I think that gets us close to the 600 mark of new dialysis patients. I know $25 million represents 580 patients and $36 million must represent well over 600 or 700 new patients.

Those are tangible benefits of restructuring. We're now able, because we've been in office long enough, to go back to communities where we made the announcement maybe 18 months ago, and the clinics are up and running today, or the new MRI machines are coming on line and you're now able to see them and patients; for example, out at Oakville-Trafalgar with a brand-new MRI there. They've been serving patients for a number of months.

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Transplants: About 80 more people will benefit in terms of transplants this year, which is a very expensive but necessary area. Our limitation there is not so much money as it is the availability of organs. I actually had a wonderful discussion this morning, briefly, on some of the research that's going on at the Robarts Research Institute in London, on where our organs may come from in the future. There may be other types of animals to provide those organs. I asked them if the controversy has died down on that. They said it hasn't but the fact of the matter is that we have such a shortage of organs in the province, we're going to have to venture beyond our current availability and try and do something else. Whether that's artificial organs or whether that's pig hearts or other things, the fact of the matter is there's a great deal of tremendous research being done there. A long answer.

Trauma patients: We've just injected some money into the system for about 200 more trauma patients to be served.

Every investment not only creates jobs, because approximately 80% of the money in health care -- and this isn't OHIP money, by the way. The $35 million for cardiac surgery isn't doctors' money; 80% of that goes to nurses to provide overtime. When we made the announcement up at the catheterization lab at Sunnybrook hospital about 12 weeks ago, the cardiac surgeons and the cardiologists stepped up to the microphone -- it wasn't reported in the paper; I thought it should have been; it was the most astounding thing I've heard in 14 years -- and said, "We don't have enough surgeons or trained OR cardiac nurses to catch up to $35 million. We will have to work overtime every Saturday and Sunday," which to their credit they're doing.

Their challenge and our commitment is to get those waiting lists down to the lowest levels they've ever been by this time next year. The money is there. It's now a question of human resources, and frankly there was a discussion at the press conference, one doctor saying, "The biggest challenge is going to be to make sure we don't burn out over the next year meeting this challenge and getting the waiting list down, because there are only so many heart surgeons in the province."

Eighty percent of that money goes into human resources, and it's not OHIP money. The other part goes into the devices and we've also put -- how much have we put into stents, into laboratory work? -- it's hospital money anyway and hospital-based money, the $35 million. Plus we announced -- and I can't remember off the top of my head; you asked about announcements -- cardiac stents, which if you ever get a chance to see them are these little wire cages. I'm sure many members have seen them. They were very expensive when they first came on the market. They were averaging about $1,400 to $1,700 apiece. They're now down to $600 to $700, about half of what they were. They're even lower than that now, apparently, mainly because some competition came into the system -- there's more than one firm making them -- and also the volume discount that hospitals are getting. That's not part of the latest $35 million. We funded that at one time separately too.

Mr Kennedy: Minister, I want to bring you back a little bit to the overall perspective. There's $165 million less being spent on health care; I think that's been established.

Hon Mr Wilson: No, it hasn't been established.

Mr Kennedy: Minister, it has been because you have not provided us either -- I'll direct you now to page 71.

Hon Mr Wilson: You remind me of a reporter the other day who told me it was my opinion.

Mr Kennedy: I appreciate that but I've offered you the opportunity to produce different figures, and it's important for people to know that the key question here is that some sloppy accounting leads to some sloppy interpretations of what's going on in health care. There's $165 million less being spent on operating in comparable dollars this year. Your ministry should be able to provide us with those comparable figures. and if for some reason you do not, then that has to stand unchallenged.

On page 71 there's a table that shows hospital spending. Your ministry has recklessly cut hospitals and they've done that in a very demonstrable way. You have, for example, on page 71 the column showing that you've cut $693 million from hospitals for next year. At a minimum, you're looking at the kind of cuts that were talked about. You've tried to finesse and talk about 2.8%. The reality is that in 1997-98 hospitals are going to be getting $6.69 billion -- that's in column (a) of that page -- and that's down from $7.278 billion in 1994-95.

Minister, that is your responsibility: less money -- a net of $580 million -- going to hospitals, net of everything you've been filling the air with in the last little while. All those expenditures that you're talking about still add up to a huge, mammoth, historic cut to hospitals.

I want you to tell us how you can believe that this somehow isn't affecting the care in hospitals. I want to give you a specific example to respond to in terms of what I think has been some of the mismanagement of hospitals. This year hospitals were given three different allocations by your ministry. They were given an allocation in February, another one on March 27, four days before the beginning of the fiscal year, and they were given an earlier one when you published a list.

The hospitals have been cut $435 million, but originally, in the first allocation you made to hospitals in February this year, you cut hospitals $453 million. Your predecessor was in office then, but the deputy should be aware of this issue. I'd like to ask you, why did your ministry provide three different allocations to hospitals? You gave them their original appendix A that said, "Here's how much money you've got." Your ministry issued a public list that was completely different; for each and every hospital a completely different list was issued. Then finally, after a lot of prodding and pressure, on March 27 you issued a corrected list which matched almost exactly the list my office published.

The point is you are cutting hospitals this year. That's why your health expenditures are down. They're down because you've cut hospitals by $435 million for next year. It's a huge pressure on hospitals. If you look at the estimates, it suggests that the money flowing to them -- you've declined the opportunity to clear up the accounting part -- is $693 million less in the hands of public hospitals next year. Don't you agree that cut is harmful, and secondly, will you explain why, even as those cuts are taking place, your ministry is unable to be secure to hospitals about how much money they're getting?

Hon Mr Wilson: What am I supposed to say to you? You have your own opinion. You're obviously not going to change it. I've already explained that the hospital reduction this year nets out. You can see it in the book on page 70 ahead of you; it's on every other page you referred to. It's rounded up to 3%; it's actually 2.8% on the more detailed pages.

We've being accused of a 6% cut. That adjusts for the one-time money last year too, the 2.8%. We've also separated out the restructuring money so there would be no fudging in terms of saying those are patient operating dollars; they're not. I think a review of the Hansards will show that we've more than answered everything. You have an opinion that you're obviously sticking to, and over the last hour I haven't been able to change it.

With respect to the three allocations last year -- a very good question -- the deputy will explain that, because two of those allocations were done in my absence.

Ms Mottershead: If you look at the record, my recollection and certainly my experience in the ministry is we've never, ever sent out one allocation to a hospital and only one. There have been interim allocations going on for a number of years. There are adjustments that get made, so they get an adjustment for that. The second announcement to hospitals included the growth funding. The final allocation, which was the all-up numbers as we knew them at the very end of the day when all the accounting and the budgeting was done, included all the reinvestments. Therefore, there are three announcements that went out to the individual hospitals.

I just want to point out that on an individual hospital basis there will be even more calculations and perhaps further adjustments that will be made in-year as well, as hospitals refine some of their volume-based numbers or give us more information around their restructuring. The restructuring fund that's available to them now wasn't even mentioned in terms of the interim allocation or the final allocation, so there will be refinements made to the individual hospital allocations, Mr Kennedy. That's nothing new. I think those refinements have been going on for years.

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Mr Kennedy: Well, Deputy, my office had to speak because you refused to give us a list of the allocations, the corrected allocations or anything like that. We raised it, Minister, with your predecessor three times in the Legislature. Hospitals told us this is unprecedented for them to have such a wide variance. Every hospital received a 5% additional cut in their allocation than what should have happened, to add up to $435 million. Unless it had been brought to public light, there is no suggestion on the part of hospital administrators that such a correction would take place of that magnitude. It was up to a $1-million difference for individual hospitals; $22 million in all.

I'm offering an opportunity here for an explanation, to build some confidence. The public needs to know that hospitals have been left in a state of confusion about how much money they would receive. Yes, there will be even more confusion this year because some will be restructured and some won't. Many of those hospitals still don't know what it means. We've checked with a number of them that are supposed to be restructured. They do not know when the negotiations will start with the ministry about how much they're getting paid. Layoff notices have been made and reserves have been dipped into.

Deputy and Minister, I'm sorry that at least the responsibility isn't acknowledged. I believe a serious error happened on the part of your ministry and I'm hoping you would acknowledge that, so we would know that in future it wouldn't recur.

Ms Mottershead: Mr Kennedy, we are conducting, through the JPPC, and through the OHA in terms of their educational programs, sessions with each hospital CEO, each hospital COO and finance departments, to go through the methodology that was developed with the JPPC and the subcommittees, to explain to hospital administrators and chief financial officers exactly how the methodology worked.

That is the methodology that was used in terms of the final allocations that were made. It involves not just one set of methodology but a number of methodologies. The methodology that looks at growth is different than the methodology that looks at the whole global funding of hospitals and all of their cases. The methodology we use in terms of dialysis and allocating the resource allocation intensity weight is different than the other two methodologies. Therefore, it does take a little bit of education of the chief financial officers and CEOs to let them know exactly how we arrived at those methodologies and the final allocations.

We have nothing to hide. We've agreed to do all of the forms with those people. I don't know for a fact if they've happened, but the intention was that they were to be launched in April and May and we'll find out if they did in fact occur.

Mr Kennedy: The fiscal year has been well under way. Those sessions started in May for a fiscal year that started April 1, and many people, including the restructuring hospitals, didn't even have their allocations until the end of the month. The hospital in Lambton, the one in Petrolia, wasn't even told how much money it could spend until after the end of April. It is chaos out there and it's unfortunate that we don't have a clearer explanation of how they can get three allocations. They get sessions to explain how those allocations were arrived at only in May of the year they're supposed to be spending the money.

Minister, I want to move on. It's unfortunate as well that there isn't any acknowledgement here. We want you to acknowledge, for the public interest, at least where the various directions of funding are going. For example, I'd like you to confirm for me that out of the $1.3 billion promised in the budget for restructuring, what you explained earlier to the honourable Mrs Boyd is that only $218 million of that will be spent in the next fiscal year, and that's what a cash basis of that shows. Is that correct?

Hon Mr Wilson: That will pay for restructuring that occurred in 1996-97, yes. You can't pay for something you don't have an invoice for.

Mr Kennedy: What it means, though, is that the corrections or the investments or whatever you wish to call them aren't taking place until far after the cuts have taken place. The cuts are certain; you're reinvestments are timed. In this case, I'm absolutely surprised that the practice still continues, that there's only $218 million of offsetting expenditure that's going to take place in this fiscal year while we're going to have, by these figures, $693 million less available to hospitals. It doesn't balance out and it leaves us with a great apprehension.

Minister, I'd like to again offer to you, if you have any other interpretation to put on it than that we find on page 71, we'd be happy to see it forward. You say I can't be persuaded, but I can be persuaded. If there's something different than $693 million that is being cut between this year and next year at the hospitals I'd be happy to see that, and I leave that as a bit of a challenge for you.

I'd like to turn to the individual hospitals that you claim are so well served. Just for your hopeful follow-up, the difference between the actuals --

Interjection.

Mr Kennedy: Minister, it's not ghosts. It's very important money that hospitals are missing thanks to your decisions.

Hon Mr Wilson: They got more money. They got $415 million, more money last year, because of the accounting change, than they were expecting. By the way, in their allocations, if I may answer that question, hospitals give us an operating plan. It's their best guess of what they're going to spend. We adjust their budgets throughout the year, as you'd expect. If they have sudden increases in volume, if they have found some efficiencies and want to reinvest in a particular area -- for instance, if they decide that they would like to expand the cardiac program, or something, then yes, we do another allocation for that.

It's a very dynamic process. There aren't the old days of: "Here is your global budget, Hospital. Board, spend it whatever way you want." Our outcome measurements were non-existent, I'd say, prior to the mid-1980s in terms of what the taxpayers were getting. How come the population isn't as healthy as it should be, given that we spend more money than anybody else on health care? All of those things now, growth and aging and priority programs, all of that type of funding -- Ms Mottershead is a member of the joint policy and planning committee, but if you don't believe us, maybe you'd like to have some CEO pick a hospital that's represented on there, have him in here before the committee and they can explain a very exciting and dynamic funding formula that was developed when we came to office. We didn't believe you should give hospital X an historic budget without actually asking them, for example: "Who are the people you're serving? Are we giving you enough money?"

Mr Kennedy: Minister, I'd really like to come back to the question. I did ask you about the figures. You're unwilling to address them.

Hon Mr Wilson: I've already addressed them several times.

Mr Kennedy: I would challenge you to try to provide us with any different interpretation than the fact that you've slashed hospitals almost $700 million for next year. You've precipitated a crisis in a number of those hospitals and there are individual cases that have happened to people for which you are responsible.

There was no excitement on the part of the head of the OHA three months ago in front of the finance committee, or the head of the hospital restructuring commission who said it was stupid to cut hospitals first rather than leave it for the restructuring. There's no excitement on the part of the nurses who believe this is damaging health care.

I put to you, there was no excitement on the part of the medical staff at Civic Hospital in Peterborough when they alerted you in October of last year of conditions there that were going awry due to your cuts. They told you in October, and unfortunately they had to remind you again in February.

You have a report on the Peterborough hospital. We would like that report to be released to this committee so that we can see what has happened. You know the case of Mr Whitehill. You know he died in the hallway in that particular facility. I would like you to tell the Whitehill family and the people of Peterborough how the patient care which he received -- which was a direct result of bed closures, which were a direct result of your cuts to hospitals -- how you can still sit here as you did on June 3 and tell us patient care has not been affected.

Hon Mr Wilson: Okay. Let's back up. Let's do the Ontario Hospital Association. Let's do the first meetings I had with them, not only as critic for four and a half years, but in coming to office. Let's review David Martin, the president of the Ontario Hospital Association for most of the first period of time I was in office. David Martin said in his Canadian Club speech, in his Empire Club speech, in a whole pile of speeches that I am aware of, that I saw, that the government is setting fiscal targets to get rid of the waste and duplication. You're welcome to ask him to come to the committee. He's a wonderful gentleman who said to me privately and he said it publicly many times: "Jim, you've got to set a target over three or four years or our hospitals won't restructure. We'll be doing what we've been doing for the last 20 years."

We set an 18% target. David MacKinnon now has come along and his argument in front of the finance committee was: "The first two years, fine. I think we can find that waste in the system, that duplication. But the third year is going to be difficult if it doesn't coincide with the savings found through actual, on-the-ground restructuring as guided by the commission."

That is the history of the targets that were set. They weren't set in isolation. They were set in cooperation. You should be giving credit to the hospital association. These are their members that are very directly affected and they're the one who have said -- Dennis Timbrell said it many times when he was president: "We have to restructure. Could the politicians get with the game?" I recall a very famous speech one time, saying, "We're ready to restructure, but you politicians don't want to restructure."

The second thing is the Peterborough case. Obviously I can't talk about the individual case. All I can do is tell you there's completely another side of the story to this. I will tell you the story about Peterborough. That was on the CBC on the Thursday night, I believe, of the week before I came back, so I was at home watching the CBC. I happen to have been in that hospital a couple of times when I was in opposition. I happen to know they have a whole pile of empty rooms on the other side of that nursing station that the camera didn't show. I phoned the deputy on the Friday and I said, "Margaret, they must have lined those patients up in the hallway," which is exactly what we found out they did, "and called in the media." I've said this publicly --

Mr Kennedy: Minister, that's not true.

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Hon Mr Wilson: Excuse me, it is true. We have an investigator in there now whose report we'll talk about in a minute. I phoned Margaret and I said: "Phone the CEO of that hospital. They have a bunch of empty space on the other side of that nursing station. What in the world are patients doing in the hallway, 14 patients or 17 patients?" Lo and behold, calls were made on the Saturday and all the patients were put back in their rooms.

I'm telling you what I have said, as I am probably one of the most honest ministers you've ever met, to the hospital and what I have said many, many times publicly as an example there: The government has a responsibility on behalf of patient care, on behalf of taxpayers, not to put up with those antics.

As result, though, of that, I think a very cooperative mood has resulted. The hospital itself welcomed the investigator because they want to continue to serve patients in the best way they can. We have that report now. We're working on the recommendations and when it's appropriate, when the board has had a chance to respond, because the community board needs a chance to respond to the recommendations -- there have already been changes in management there. I think there'll be more as a result. There are some significant changes that hospital, as a result of the investigation, will have to put in place. We need to give them a period of time for their corporation to respond to those recommendations before I make those recommendations public.

Mr Kennedy: Minister, I am thunderstruck that you are unable to give us a better answer than that. The Whitehill family deserves to know the conditions under which he died. I can assure you I met with the hospital staff in Peterborough, and to accuse them of creating those conditions is absolutely irresponsible. You can't explain it away that way, and if you won't table the report, you're really giving us no other choice but to believe what has happened there, what has been well documented by the people in the local area.

There are other cases. There is a case of a woman in Queensway who spent seven days in the emergency hallway waiting for a bed -- 93 years old. There are other hospitals whose patient care has suffered and has been attributed to your cuts.

We look at the case of Elizabeth Gerono, who waited 51 hours to have her wrist set -- 51 hours for a one-hour procedure because of the rationing that you've forced to take place. We have Stephanie Amey, who is a master of nursing living in Kingston, whose mother received terrible care there because of some of the changes forced upon them by the cuts they've undertaken in order to meet your financial targets.

I think we need from you at least some level of acknowledgement. If you don't take responsibility for these events that are happening to patients around the province, then there is no confidence people can build that you will look after them. There is Susan Gosnell, who is also an RN. She had her sister stay in Hotel Dieu Grace in Windsor. Frank Bagatto, whom I know you've spoken to on a number of occasions, says he is responsible for the care that happened. He accepts a fair share of responsibility, but he's working in a framework of provincial policy, and that's your policy, Minister. When you tell us here today that those cuts are harmless, that they're coming out of administration, you're wrong. Not only are you wrong, you're denigrating the health care system because you're causing people to lose respect for it.

Mrs Boyd: I want to go back, if I can, Minister, to the doctors' settlement. I think it's important for us to talk about some of the issues you didn't raise. I really am quite curious: Without a clawback system -- you have made very clear in this agreement you're not going to claw back any fees -- how are you going to maintain the kind of cap on the amount you have set in your budget?

Hon Mr Wilson: I'll answer it this way and I won't be pressed into answering it any further, because we've agreed in the agreement in a legally binding way to discuss these matters with the OMA before any action would be taken. The Ontario Medical Association, on behalf of its members, knows what the ceiling is; they know it's only 1.5%. If we happen to have utilization above that, the only measure we've ruled out is the clawback, and again the previous government is the only government I've ever heard of that does a clawback after services are rendered. They're doing it I think now; another NDP government in BC had about a 3% clawback. I`d have to be corrected on what it is today. But again, no other government that I'm aware of -- the deputy may want to correct me on this -- ever said, "Go and serve hundreds of patients and then, after all is said and done, at the end of the month we'll decide what we're going to pay you." It's very unfair to people trying to provide services and it was extremely damaging to the morale of the physicians in the province.

As a matter of policy, yes, and as a matter of this agreement we've said we won't do clawbacks. They weren't used as a utilization tool ever, to my knowledge, prior to your government coming to office, but all the utilization tools that have been used in the past are still available. I'm not going to list those because that may lead to speculation of some sort. The commitment is to have those discussions with the OMA and together we will monitor utilization, which is not new. I think that was in the 1992-93 agreement and we're continuing that also. I think it's a good commitment that the previous government did, which is to work together on utilization measures.

As you know, certainly in Bill 26, opposition critics and that said they didn't want the minister to micromanage medicine, to go back to Mr Kennedy's comments. We don't admit patients -- politicians don't do that -- we don't discharge patients. We don't have hospitals today reporting cuts in patient care. They're all reporting impressively, many of them anyway, much higher levels of care and greater volumes, certainly.

The fact of the matter is that we want to know about individual cases. Every single case raised in the Legislature since I've been Minister of Health has been followed up, usually within an hour, and in no case that's ever been raised before the Legislature that I've had the opportunity to investigate personally did we ever find anyone at the other end of the case saying it was because of cutbacks.

The cases at Sick Kids -- was it radiation or chemo? Chemo. When I phoned down to Sick Kids during question period, it turned out that the two nurses were sick that day. They had colds, that's why the chemo was cancelled. It had nothing to do with the fact that budgets were cancelled. Going off the top of my head, you name a case and we looked into it that day. We had another case of a child who supposedly was denied heart surgery at Sick Kids. I phoned Dr Goldbloom and he told me, "We have no record of this child ever being registered at Sick Children's, never been seen by a doctor at Sick Children's." This is the guy who's head of the cardiology department.

Unfortunately as Minister of Health you can never say an individual's name or an individual case, but I'd be happy to look into those cases you've mentioned. That's why we have the Public Hospitals Act. That's why we have the ability, on behalf of the people of Ontario, to work with those hospitals.

Mr Kennedy: On a point of order, Chair --

Hon Mr Wilson: If we find out there are corrective measures that the ministry should be taking, we would act on those too, not just punitive to the hospitals. With the operational reviews we have going on across the province, many of them are going to work out in the hospitals' favour. Many of them are saying, "Look, your volume funding needs to be adjusted midyear as part of an operational review, a program review." Our goal is to serve patients and to work with the hospitals, and I think we're doing a very good job of that.

Mrs Boyd: A point of order.

The Vice-Chair: Mr Kennedy first.

Mr Kennedy: We don't wish to get into debate on a point of order. I want on record that we cannot get a phone call returned from the minister's office or from the deputy to deal with cases, to deal with briefings, to deal with anything. I think when it comes to something as serious as some of the -- and I know of a case at Sick Kids that has not been attended to -- cases where people have died, and cannot get appropriate response, it is extremely unfortunate to have the minister suggest otherwise. I take that as very problematic. We have not had one phone call returned from your office in the past three weeks, and the ministry will only refer us to your office.

Minister, I think you should retract some of that information you provided today because it is creating the wrong impression about how we deal with the problems in the system. There is not an openness there, and in fact it's extremely unfortunate. I don't wish to trifle with it because these cases are certainly, at the minimum, experienced as very serious events in people's lives.

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Hon Mr Wilson: Just one quick response, and very quick. If you're not satisfied with the customer service in my office, fine; our political staff is about a third the size of the previous government. There are case managers who are bureaucrats --

Mr Kennedy: They will not talk to us, Minister, on your staff's instructions.

Hon Mr Wilson: Case managers are there to deal with individual cases. If they feel you're being political or something, they'd refer it to our office.

Mr Kennedy: Not at all.

Hon Mr Wilson: If it's a straight case, then they --

Mr Sean G. Conway (Renfrew North): That is not true.

Hon Mr Wilson: -- are not to refer it to our office.

Mr Conway: It's unprecedented. It's never been dealt with this way.

Hon Mr Wilson: It's not unprecedented. That's the way previous --

Mr Conway: It is. The department of health has had a good reputation --

The Vice-Chair: Mr Conway.

Mr Conway: -- and on very few matters I call the ministry and get nowhere, and referring to the sinkhole of your office, I understand --

Hon Mr Wilson: Excuse me. I happen to know about your calls with Mary Catherine Lindberg, the assistant deputy minister, very directly. I happen to know exactly who you talk to. They're all bureaucrats. I could name them. They're all logged, so that's just blatantly untrue.

Interjection.

The Vice-Chair: Mr Conway, please, and Mr Minister. Your point of order is noted, Mr Kennedy. I think there was a commitment made by the minister that he would follow up on every case that is presented. Obviously we have this time to ensure that happens. Ms Boyd, you had a point of order as well.

Mrs Boyd: Yes. My point of order was that the minister took up my time for my question, answering, and this time --

The Vice-Chair: No. I've noted the time already, Ms Boyd.

Mrs Boyd: That's good, because I think we need to be a little bit more orderly in our process here.

You began to answer my question, Minister, about how you intend to do this, and you have now made a very strange comment that you can't even list the possible ways in which utilization might be addressed because that might disturb your negotiations. We've been through a very lengthy period of time, as you mentioned yourself, while you were going through negotiations with the doctors, where every time we asked you about utilization in the system and what measures were going to be dealing with utilization within the system, every time we talked to you about primary care reform, your response was that it's under negotiation with the OMA and basically there are all sorts of things you can't talk about because they might give rise to speculation.

The reality is that if you don't have a hard cap and you don't have a clawback system, there are only a few ways in which you are going to be able to maintain the budget limit you yourself have set in terms of doctors' payments. The real tragedy of the way this fee-for-service works is that unless there is some disincentive for physicians to go through a rolling referral kind of situation, to see patients three times when twice might deal with the problem, or to see patients about issues the physician can't deal with, what we have is a utilization problem that may mean there is no incentive for physicians to work with patients towards health and every incentive to ensure that illness continues. I'm not the only one to say this. Very reputable physicians say that is the result of that kind of system.

You've got a problem that has been shared by all governments before you in terms of trying to deal with this problem of turning the system around as long as it depends on fee-for-service. I think what your agreement has done and the way you are negotiating with the physicians have resulted in the possibility that every other regulated health profession is likely to pay the price for the doctors, and the doctors remain in charge of the system with no incentives to improve the kinds of treatment patterns that have developed over many years.

We know that delisting of services is one of the issues that has to be considered. We know from optometrists, for example, from physiotherapists, from occupational therapists, from all of that group of regulated health professions that their very real concern is that the doctors are going to end up getting paid and they are not. There has been a very strong recommendation from the physicians that we know of to cut out the yearly eye test that's charged to OHIP by optometrists -- that's an example of a delisting -- even though we know those eye tests have two functions, and the largest of those functions is a preventive medical function which if not performed can take you into, far into the future, real difficulty.

I'd like you to help me understand how you think that by negotiating with the physicians, who have every incentive to download their utilization responsibility on to those other health professions, you intend to block that, you intend to make sure that's not the case.

Hon Mr Wilson: I'd remind you that a very important ingredient in the negotiations, in the deal is the caps, which are lower than your government's were. Individually, doctors will bill lower than the potential they had under your agreement. That is firm. Unless they're in a remote area or in a certain specialty, where they apply for an exemption, it's $380,000 for a specialist and $300,000 for general practitioners and family medicine. It was, as per the previous government's signed, sealed and delivered agreement, $400,000 for everyone. We actually have the potential to have greater control on utilization, certainly within individual physician practices.

I just want to correct one thing too, Mrs Boyd. I'm sorry if this is the impression out there, but primary care reform is not exclusively under negotiations with the OMA. I've never said that. We have answered every question on primary care reform. I am somewhat frustrated that we haven't got the pilot projects up and running. I've said very honestly that the funding formulas and negotiations there with the various towns that have expressed interest are far more complicated than I had anticipated; and perhaps I shouldn't have off the cuff -- as happens to politicians -- a few months ago, prior to Christmas, said that we hoped to have it up and running by Christmas. That has been what's playing out there. You are allowed to make mistakes once in a while, and that was clearly an underestimation of how much we could proceed.

The OMA's task force, led by Dr Wendy Graham, is just one element. As you know, there are a myriad of proposals out there, including nurses', to deal with primary care reform. We're reviewing all those.

The agreement doesn't limit us from entering into more alternative payment programs, to go off fee for service. There are no limitations in the agreement there. In fact, with the announcement of the globally funded group practices added to the menu of about five different things that now all come under the umbrella of alternative payment plans, or APPs, we're trying to put greater incentives out there for physicians to move off fee for service.

One reason I think people have the impression that optometrists and chiropractors, for example, are going to pay for the doctors' deal is -- well, they don't have that impression, actually; interest groups seem to have that impression, outside of themselves. We've taken the clawback off the chiropractors and optometrists, and we are currently in negotiations with those groups that receive some money from OHIP. They're not paying for the doctors' deal. They're getting very fair treatment along the lines of removing the clawback. You had clawbacks on all the professions that had anything to do with OHIP. That has done more to hurt morale out there in these professions than anything else.

There was never a discussion by anyone I'm aware of in the ministry or in the working group of experts that has been set up about getting rid of the yearly eye test. The discussion is exactly the same discussion your government brought to cabinet during your time in office, and that was to limit, for certain categories, the eye test to once a year. Many medical experts -- again, they will make the final recommendations -- are saying you don't need more than once eye test a year. We have to ask ourselves, in terms of utilization, why people, at $39 a crack, are going to their eye doctor more often than once a year. I've only been to the eye doctor once in my life. A normal, healthy person up until -- I'm not a doctor, so I won't say -- a certain age when your eyes start to naturally deteriorate probably never has to go to the eye doctor. Other people seem to go a little more often than perhaps they need to.

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The one control measure I will mention that I know you would agree with, because your government set up the Institute for Clinical Evaluative Sciences as part of the 1992-93 agreement with Dr David Naylor, who's just a fabulous individual whom we all have a great deal of respect for, is we're putting more money and more emphasis on clinical practice guidelines. He's done two atlases now that tell us the variations in surgeries and procedures and why Caesareans are done so frequently in London versus Sudbury, trying to get guidelines across that are agreed upon by the medical profession, and indeed set by their experts and the scientists, as to what is appropriate, so we don't have that treadmill, that at some point OHIP may not pay for the third eye exam, because unless you can prove it was medically necessary, what were you doing telling the patient to come back the third time in three months, for example?

That's the sort of thing we would like to do with cooperation, and every government's talked about it. I think you'll see more progress in this term and the next term than we've seen in a number of years, because we've gone past the buzzword stage about clinical practice guidelines and have the professions, including the OMA, I think sincerely interested in moving forward in this area. They realize there's only a limited amount of money taxpayers can afford to pay for health care. It's in their interests now in this day and age to make sure that money is used appropriately. That's what clinical practice guidelines do for the system, and we're putting more emphasis on them.

Mrs Boyd: I'm sure you're going to see a lot of that, because now you've got the data. The problem before always was that we didn't have the data. Yes, we did set that up so that instead of floundering around and making guesses about how we could change utilization, we actually would have something to base that on. That is very important.

I'm not quite clear how that fits with the kind of statistical and mathematical formulae that are included in the restructuring commission's reports. I have some concern around how the restructuring commission's formulae fit with some of what we've learned recently. I'll give you an example: In the mental health field we did all agree 10 years ago, all of us, all parts of the system, with the exception of the Ontario psychiatric institutions, the staff there, that 30 beds per 100,000 was a reasonable number. We based that on moves that had been made in other jurisdictions like Great Britain, like New Zealand, like some of the United States. We all thought we had the right formula.

It has since transpired of course in those other jurisdictions that started long before that report that many years ago that this has not proven to be an acceptable level, that 50 to 55 beds, depending on the jurisdiction, is a much more appropriate level. They looked at the broader socioeconomic impacts of having people released at 30 beds per 100,000. But we have the restructuring commission clinging to that old number of 30 beds per 100,000, and that's a problem for us. We're perpetuating an error that we made in all good faith -- and all supported it -- that we now know because of the experience in other jurisdictions was not the best error, and it was done because the study was done. Over time it proved that was too low a figure and it had to float upwards. Yet we're going to perpetuate that mistake with the work that's being done here in Ontario; the restructuring commission is clinging on to that number.

I would ask you about the same thing around surgical beds, surgical procedures. I worry that there are too many surgical procedures in some areas -- the studies have clearly shown that -- but it is not clear to me that when the restructuring commission makes its recommendations around hospital restructuring, it's basing its decisions on the actuality in that area or on the ideal that is produced out of the studies that have been done at the centre.

I'd like you to discuss that a little bit, because I worry when we're in such a massive restructuring that we've got pieces of information but they're not being brought together in the most effective way. We could make terrible mistakes if the restructuring commission is using assumptions about the number of surgical procedures. If the number of surgical procedures in that region has traditionally been much lower than anyplace else and should be higher -- and that may be because of lack of physicians; who knows -- then the assumptions may prove wrong over time and it'll destroy the whole restructuring process. Can you help me with that?

Hon Mr Wilson: If you don't mind, I'm going to ask the deputy to comment on the mental health beds, because in her letter to the commission, which is the government's response to the commission during the 30-day period, we have the same concern. The 30 beds: We're not sure we're at 55, but it looks more like a range of 37 to 40 may be more appropriate than when those studies were done by previous governments; and frankly, by the same experts out in the field, so there's nothing political there.

Mrs Boyd: They just learned something different.

Hon Mr Wilson: I'll ask Ms Mottershead to get into the details, but generally we've expressed some concern down in your area that they be careful and that we not ask people in the system, providers, to do anything that's going beyond what's reasonable or going beyond what other jurisdictions are doing, because other jurisdictions have already restructured. With that, I think it would be appropriate if Margaret said a few words about the mental health situation.

Ms Mottershead: We did look at receiving the best advice possible from experts at the time we were putting together that document, Putting People First. You're absolutely right; they told us we should have a ratio of 30 beds and we should totally flip our funding from institutions to community -- more community and less institutions.

We've had some second thoughts on that, from the experiences you've indicated, and we've done two things. One, through the JPPC, is to initiate another research project that actually looks at what kind of beds, what level of care is needed in those beds -- because they vary from rehabilitation to psychogeriatric, to a number of clinical, forensic and so on -- and what kind of care, how intensive is the care and should it belong in a particular setting. That information is going to be really quite important. ICES is also looking at research in terms of best practices.

Independent of those two research activities, we've also gone out to a number of very progressive states in the United States that are looking at a different kind of care. Michigan, for example, has a wraparound program where they have a clinical team. You don't have to be in the hospital. You have a psychiatrist, a psychiatric nurse, a social worker, other players, including chaplains, for example, who actually as a group work together to maintain that person in good mental health in the community. It doesn't have to happen in a hospital setting.

When you look at those models, you have to ask the question, is the bed target number appropriate? It all depends on what the needs of the community are, and you shouldn't have one number across the province as a benchmark for every part and every region of the province. Therefore, in our response to the commission I've certainly indicated that it should be a little bit more cognizant of the kind of planning that's required, knowing the population, and one of the issues I was most concerned about was the lack of emphasis on the outpatient population. That is by far the largest group of patients we look after.

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Mr Wayne Wettlaufer (Kitchener): Minister, as you know, I come from an area where health care is first and foremost in everybody's mind. Long-term care is one of the major issues. Last Friday I met with two people from the health care industry, and they verified what I have been learning in my discussions with seniors in my area.

Mr Kennedy was recently in my riding. He has this mantra that the sky is falling because costs are being cut from hospitals. He's making the seniors in my area very concerned that they won't get the necessary care they may need down the road. I've been trying to deliver the message that there will be long-term-care institutions. But many of these people want to be cared for at home; more and more of them want to be cared for at home.

I see that you have built in an increase in the budget of roughly $177 million in long-term care. One of the things I've been asked for is what our government's philosophy is on long-term care. I point to the fact that we have increased the amount of money we are going to be spending this year, but the seniors are looking at the cost of drugs etc. I was wondering if you could fill me in on the philosophy on long-term care.

Hon Mr Wilson: I appreciate it. This government really can't take any great credit for the philosophy, because the philosophy has been out there for many years and lots of politicians of all stripes have talked about it. Where we can take some credit is for actually flowing the dollars now to the community agencies that provide care.

I can recall that in opposition -- this goes back to Elinor Caplan's time as minister -- there were lots of chats about the $170 million; actually, at one time it was far more than that. To the credit of the NDP, they did start the investments. They were about $170 million short of what they had announced. Every time in the House, the politics that confuse people is that different parties try to take credit for the same announcement. Where I make the distinction is that it's great to announce things -- they announced $3 billion worth of sod turnings in hospitals over the last 10 years -- but they didn't flow the money. We've had to correct all of that on the capital side and actually send out "no" letters, which nobody would send out for the last 10 years. There are members who still haven't forgiven me for that. I guess that's part of the job, but we want to be honest with people.

Of the $170 million, I think you'll see in the books that about $130 million or so has flowed since we've come to office. That was talked about a lot. I'm happy to report that across the province, and I think we can say this with a high degree of confidence, certainly in your area -- by the way, congratulations today to St Mary's hospital for opening up new services there and paying for it out of the foundation and not out of Queen's Park's taxpayers' money; a tremendous day for St Mary's hospital.

We don't have waiting lists in the province that we're aware of. We check every month with our long-term-care area offices for in-home nursing. Anyone who needs in-home nursing is getting that as per the community investments. These are the long-term-care services that help people stay at home. We've made a tremendous expansion, building on the volunteer base throughout the province, with the friendly visiting program, transportation programs, Meals on Wheels. That's all been part of the $170 million.

Where we have some waiting lists right now, though, is in occupational therapy and physiotherapy. Those come to mind. It is not that there isn't the money there, that governments aren't spending the money; it is that we have a shortage of occupational therapists and physiotherapists, so I encourage young people to go into those professions. For those in-home services we just don't have enough therapists around the province, and they're certainly not spread evenly around the province. There are some areas where the waiting lists are quite long.

On the in-home care side, we're flowing the dollars. I suppose where people get concerned is the criticism that we're not doing enough on the prevention side versus flowing money on the illness side. What I said two weeks ago to the Ontario Nurses' Association, for example, is, "There is a real Mrs Jones at the other end of every one of these announcements," and no one could just deny services for a time and switch the whole system overnight to a preventive system. It's always a balancing act to make sure that we're trying to keep the population from getting sick, but also providing those services.

I'm very proud of our record. Services are being provided. We're not doing it alone and we're doing it in isolation any more. It's now not just the VON and the Red Cross and the 1,200 agencies. In many of our communities, they're working together. Many of them now are housed in hospital buildings where they have their offices so they're able to work together. Over the last five or six years, the trend has been that hospitals are actually sending teams of nurses out. Mount Sinai has a very good program where a nurse is sent home with you, upon discharge, after having your baby. When I mentioned that in remarks with the hospital association a few days ago, I had a number of CEOs come up from region 3, Metro, each of them saying, "We have a similar program now in our hospitals." When people are discharged, whether it be a senior or whomever, it's not necessarily any more just that you phone home care through our community care access centres, which is one-stop shopping, one phone number, but also hospitals themselves are going beyond their own bricks and mortar and providing more and more of those in-home services and therapies.

I think we can assure the seniors of the province that they'll get the services when they need them and they'll get them like nowhere else on the face of the earth. We're very fortunate that we have a province that has the revenues. We've set priorities, the number one priority being health care, and we've been willing to make sacrifices in government in many other areas and put all that money and more into the health care budget, in spite of the federal government's cuts.

Mr Bill Vankoughnet (Frontenac-Addington): Minister, to follow up on the same concern Mr Wettlaufer just mentioned about our aging population, coming from the area I do in eastern Ontario, with an above-average population of aging people, having recently visited a nursing home, I know they are very appreciative of recent investments that have gone into one particular nursing home to help them with their capital costs. This facility now is being used partly to alleviate the problem of people in these remote areas spending less time in the hospitals. For example, one gentleman I know has had knee surgery and he's in that facility now taking therapy, and that cost should be much less than it would be otherwise, in the hospital. I certainly want to commend the ministry on this type of move in reinvesting and getting better use of public funds for the public in general.

My concern, from talking to the front-line caregivers in this particular facility, is that the hours are being cut, and as you know, there are sometimes people with bed care disabilities and so on who need lifting. It's very difficult. I would like you to expand on what your ministry is doing in this area and how its going to handle this.

Another concern, coming from small-town rural Ontario, is that I would like to ask you about your health policy on restructuring small hospitals in these rural areas, if you could comment on that.

Hon Mr Wilson: I appreciate the opportunity, and I will try to be brief. Just a note to take back home to the nursing homes and long-term care facilities: We're very much aware of and are working with both the non-profit association, OANHSS, the Ontario Association of Non-Profit Homes and Services for Seniors, and also the Ontario Nursing Home Association. We've made a commitment to them that in the next few weeks we will make an announcement with respect to an investment in the 57,000 beds we have now. We've gone through the social contract, and it has been about four years since any additional dollars have gone in.

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What we did on coming into office was to implement legislation on long-term-care facilities that had been passed by the previous government and bring in levels-of-care funding, so you have seen a redistribution of dollars within the almost 500 homes we have in the province based on the actual care the residents need.

That's a very fair system, and it's going to vary each year. We've had articles in my local paper. We have to watch for where a home may be funded at one level one year and the next year dip a little or actually go up a little because a team of nurses from the home down the street or from another town assess the residents of a home that isn't the one they work in; so another team comes in and fills out a classification system of A to G of the Alberta classification system -- or it was called that originally -- and we fund according to the actual needs. During the year, the home at any time may notify us that so-and-so died and someone with a higher level of care or a lower level of care came in, and their funding is adjusted in a very fluid way on an ongoing basis.

But we are going to make an investment in -- the average is about $95 a day now, so you're talking about lower-cost care. That's quite true. We need to make a reinvestment in that and we're going to do that very shortly, as we need to add some more beds to the system.

I was out in Georgetown. The Halton area is the most severely underbedded area in the province, and Metropolitan Toronto is a close second, in terms of needing more beds. There haven't been new beds added in the province in the last 10 years. We've added some in the past few months, just a couple of hundred or fewer than that, but we need to add more.

With respect to rural health care, the story there is very simple. I think we were all the meeting. Each of the caucuses was invited to have a generic briefing with the Health Services Restructuring Commission. When they appeared in front of our caucus, they informed us that the no government ever had a rural health care policy. Rather than do nothing, we immediately asked a group of experts to come together, and they're wonderful people, physicians and nurses, a representative from ROMA, the Rural Ontario Municipal Association, a whole pile of groups; they came together and started to put together a rural health care policy to try and recognize the weather conditions and the driving distances and to get away from the strict data-driven benchmarks that were set for these multihospital towns, towns or cities with more than one hospital.

We are just about finished that process, and I think I will be able to send out very soon the policy framework to the district health councils. Anywhere where there is a district health council study going on now, we will ask them to take their studies and to apply the new rural health policy to it. In general, it will recognize the driving distances. It doesn't exempt anyone from restructuring, so I would hate anyone out there to oversell this thing. In Grey-Bruce, it's still going to require a sharing of resources among hospitals. We are saying that in rural Ontario we will guarantee 24-hour access to care, but some of those hospitals will still have to reinvent themselves. We're going to encourage common governance where possible. When you have Grey-Bruce, for example, with 10 hospitals, do you needs CEOs, do you need 10 boards, do you need 10 of everything?

We're going to encourage and use both incentives and financial levers, frankly, to try and squeeze every dollar out of the administration, the duplication and the waste, and actually ask our hospitals in rural Ontario -- many of them are already doing it, so it won't be anything new for many of our hospitals, but some have resisted change. Some have not formed a network. We've actually had hospitals in the province somehow exempt themselves from DHC studies. They've totally pulled out of studies and hired their own consultants, which is a waste of taxpayers' money, frankly.

We need everyone pulling on the oars in the same direction. They will be encouraged to form networks and to give an ironclad guarantee to their constituents that they serve as a public entity that there's 24-hour access and no more confusion in our small towns and villages of where you go for care. Is hospital emergency room X open?

There was a case in Durham when I had been on the job four days as health minister where the lady died in the parking lot because it hadn't been widely enough publicized -- that's what the coroner's report said -- that even though the blue H is still on the building, the hospital emergency room was closed, as were 69 emergency rooms when we came to office. They were either just closing or on the verge of closing. The Graham Scott report and the $70-an-hour sessional fee reopened, or kept open, those 69 emergency rooms in rural Ontario.

The idea in terms of rural health care policy is, over the next few years, to make sure everybody who lives in rural Ontario knows where their first line of access to care is and what you can expect with the hospital in that town. There'll be very clear guidelines on what that H means in that town. Other provinces have moved to different levels of hospitals; they have different colour Hs on their highways.

We're having that discussion with the Ministry of Transportation now. Is it fair today to follow a blue H, when you're in cottage country, and you get there and the emergency room has been closed for years? That is not good for anybody, certainly not good health care. When I travel to New Brunswick and other provinces they've got red Hs and they have other Hs that say "No emergency or urgent care" or whatever.

We need to clear that up, because it's time we caught up with some of the changes already happening in rural Ontario. In this province less than 10% of our money is tied up in these rural hospitals, in these single-hospital towns, so we can afford to keep them open, but it has to be very clear what their role is. They can't all continue the way they've been continuing for a number of years, trying to be everything to everyone in their community. They're not all going to be full-service centres, and we've got to stop fooling the public that that blue H in every town means a full-service centre. We have requests now for cardiac labs out in the middle of nowhere where they'll never get the cardiac surgeon to go with the lab, or the cardiologist.

We have to have centres of excellence. We have to keep our world-class teams together. They're not going to exist in every town but they are going to exist as part of a network. Those rural hospitals will have to have in place not only the computerized networks and linkages with a base hospital, but everyone who lives in that area or cottages in that area needs to know what those arrangements are and what they can expect. Really, that's what we're trying to do, clarify the roles of these hospitals in our small towns and villages.

Mr Kennedy: Minister, did I just hear you say that small rural hospitals, single-town hospitals, will not have to close?

Hon Mr Wilson: I as minister have never talked about closure of a hospital in rural Ontario. That has never come from my lips. It has never been suggested by this government. It has come from DHC studies, each doing their own thing. God love them, they were sent out to study their areas and they aren't given any guidelines.

Mr Kennedy: Minister, it was also in a hospital restructuring commission report study for Lambton, this follow-up report, the final direction, in which I believe you intervened and stopped, or at least gave indication to the commission that there would be a rural policy. Are you announcing today what that rural policy is?

Hon Mr Wilson: No. I'm sharing with you what stage we're at. I was asked to shed some light on what we're doing. There's no secret. You could ask any of the experts who are working on it. Why would it be a secret?

Mr Kennedy: What I would like to ask you is, will there also be a policy for mid-sized urban centres like Kitchener-Waterloo? St Mary's was recommended in the early report to be closed. Will there be policies for women's health? Will there be policies for urban centres? Will you be providing those things so that the commission doesn't operate in a social, economic and cultural vacuum when it tries to look at the opening and closing of hospitals? Will you commit to do that?

Hon Mr Wilson: Yes, and that commission has all that. The only fault in the system that the commission felt it needed help with was rural Ontario. There are well-established benchmarks for the urban centres and the teaching hospitals, well established across Canada and in Britain and in Australia, which is what the commission is drawing on.

Mr Kennedy: Minister, will you be issuing Ontario policies for the kinds of health care which you say now you're prepared to ensure for hospitals in small rural communities? Will you also issue policies that will meet the particular needs that have been identified, for example, for large urban areas, for middle-sized urban areas, for 905 types of areas with high growth? Will there be policies that will guide the commission forthcoming from your ministry or through some cooperative means that you've described as being under way for small rural hospitals?

Hon Mr Wilson: Those policies already exist.

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Mr Kennedy: Could you provide this committee with copies of those policies?

Hon Mr Wilson: Yes. The commission can explain --

Mr Kennedy: Could we have copies of those before the next time we have an opportunity to discuss with you? Is that possible? If they exist --

Hon Mr Wilson: The commission has not identified any policy void other than rural Ontario. It would be appropriate, given that the restructuring is being done by the commission, for them to provide that information to this committee. I think the Chair should ask them to provide that information.

Mr Kennedy: Those policies exist as far as you're concerned?

Hon Mr Wilson: Yes.

Mr Kennedy: Okay. I want to return you to the cuts to hospitals, which are acknowledged on page 71 to be in the amount of $435 million, if you look at the top of the page. You agree that those are the cuts which took place to hospitals this year in their base allocations?

Hon Mr Wilson: Which?

Mr Kennedy: Sorry. Right at the top of the page, the second figure in the column.

Hon Mr Wilson: The $435 million?

Mr Kennedy: Yes.

Hon Mr Wilson: It's not the net figure, no.

Mr Kennedy: It is the cut to the base allocation of hospitals. Is that correct?

Hon Mr Wilson: No.

Mr Kennedy: I have a list here that shows hospital by hospital a cut in base allocation adding up to $435 million, base allocation before growth.

Hon Mr Wilson: You're going to go out and say that's what they were cut. That would reflect the 6%. It's 2.8% net. If you want to argue one figure on one page, fine; it's not $435 million.

Mr Kennedy: We will argue the other figures. I'll give you a chance to do that. I just want to confirm.

Hon Mr Wilson: The net effect of all the investments is about half that.

Mr Kennedy: But you've cut base funding for the base services of hospitals by this amount. Is that correct?

Hon Mr Wilson: Not necessarily.

Mr Kennedy: It's here in black and white that $435 million has been cut. I have a list of 200 hospitals that add up to $435 million.

Hon Mr Wilson: Do you have a list of all of the reinvestments and the money they were given back?

Mr Kennedy: I have that as well, yes.

Hon Mr Wilson: In the priority programs? Well, then, it doesn't add up to $435 million, does it? It adds up to about half that.

Mr Kennedy: But your cuts to hospitals have been significant in this past year. There is no suggestion on your part that you have reinvested all the money you've cut to hospitals. Is that correct?

Hon Mr Wilson: No. I'm saying about half has gone back into hospitals, but more than that, about twice as much, has gone back into the whole system.

Mr Kennedy: I would put to you that you have a deficit of at least $115 million to $165 million this year that you have not reinvested. We'll establish that at a later date. But I want to establish, for the cuts to hospitals that have taken place this year --

Hon Mr Wilson: I wish that were true. I wish I did have that kind of money sitting around. I can tell you we don't.

Mr Kennedy: I'd be happy to spend some time with you outside this meeting and show you where it's coming from, because it's certainly there.

Hon Mr Wilson: No, you do it here. I'm finding this very fascinating.

Mr Kennedy: I would wish for you to be familiar with that.

Hon Mr Wilson: I'm pretty familiar with the books of the ministry, thank you.

Mr Kennedy: Well, I won't comment in a general way except that these cuts to hospitals were taken by you. You attributed them earlier to the OHA, one an 18% cut. They get a little rankled, as they should, when it's suggested that was their idea.

You have suggested that these cuts have not harmed patient care. You recognize and you refer to Ms Mottershead's membership on the joint policy and planning committee. Earlier this year that committee produced a study, and that study showed that the cuts could not be done without hurting patient care.

I submit that you had a report that showed last year's cuts had a deficiency of $136 million that could only come from patient care, and that deficiency this year is going to rise to $288 million that can only come from patient care. This is a product of your joint study, you and the ministry and the Ontario Hospital Association. Are you aware of this report, and did you go ahead with those cuts to hospitals notwithstanding that report which was available to you in January of this year?

Hon Mr Wilson: First of all, I don't have any such report. Second, what we received from the JPPC, the advice it gave to the government was the same as what David MacKinnon as president of the Ontario Hospital Association was saying, that is, the third year would be very difficult if it didn't coincide with actual on-the-ground restructuring, and we've responded to that.

Mr Kennedy: I would like you to respond to, in the report they indicate very clearly that --

Hon Mr Wilson: I don't have the report, so if you want to table it I'd be happy to respond to it.

Mr Kennedy: I have a summary of the report. I would like to ask you to table the full report here and any reports the JPPC has done around hospital funding cuts, because I would like to ask you, do you have documented proof, have any studies been done to show that the cuts you're making to hospitals are not harming patient care?

I'll use the language of the JPPC. They say that even with the most aggressive formulas -- and that means theoretical formulas that may not work in the real world, when I spoke to one of the people involved in that -- you cannot secure the savings in the time line you're talking about. In their report the extract I have shows clearly it's not just about year three. In year one, if I may, $136 million is a shortfall that you can't get unless it comes out of patient care. By year two, that grows to $288 million.

Will you agree with those figures and explain why, if they're true, you went ahead, or will you table any studies you've done, your ministry in conjunction with JPPC, with anybody, to protect the interests of patients in Ontario that would demonstrate that those cuts aren't hurting patients in this province? Will you do that?

Hon Mr Wilson: Every hospital in this province by law must fully protect patient care. They are not allowed to cut patient care. If you're saying some hospital did that, then you had better take immunity.

Mr Kennedy: Just to be clear, I am saying something much more serious. I am saying that your panel of experts produced a study, and I'd like you to answer the question: Will you table the study here? Are you familiar with its findings, but if not, will you at least table the study here, and if that study shows that your experts said you can't do these cuts without hurting patients, how do you explain yourself? First of all, will you table the study here?

Hon Mr Wilson: No, because I don't have such a study. There was never a study submitted to me, my office, the ministry, that outlines that. Second, every hospital has a quality assurance committee. They are obligated to monitor quality. Everything's not written by dollars. It is possible to do better with the same amount of money. It's even possible to do better with less. Hospitals are proving your theory is wrong every day as they get rid of the waste and duplication. Nurses said in their ads in the newspapers that there's 30% waste in hospitals, and I keep arguing with them that it's not 30% waste --

Mr Kennedy: I just ask you to respond to my question, Minister. If you're saying there's no such thing, I have in my hand a copy of a study --

The Vice-Chair: Just a second. Would you please allow the minister to finish his sentence.

Mr Kennedy: Yes, Mr Chair, but I asked a rather succinct question about the study and I would like to be able to follow that up.

The Vice-Chair: Allow him to finish the answer and then you can go back to the question.

Hon Mr Wilson: I gave you the answer about the study.

Mr Kennedy: I appreciate that; I do.

Hon Mr Wilson: There's no study I've seen and which I based a decision on. People produce all kinds of things all the time. To say that's a study that went to me and it was validated by some other group -- I don't know what you're talking about, first of all.

Second, I remind you that every hospital has a quality assurance committee as part of its corporate structure -- and nurses sit on these committees, and their association reminds us that we have to ensure that nurses have the time to attend the meetings and to properly participate, and we want to continue to work with them on that. These committees are there to check to make sure of the outcomes, make sure the patients are served according to the guidelines and the quality standards that are set by the province. I'm not aware of any of those committees reporting to us that the quality of patient care has suffered.

Mr Kennedy: So you're saying this study cannot be tabled. I have a copy of a letter here which I've previously tabled. I'm surprised you're unaware of it. It's dated January 10, 1997, it's addressed to Ms Mottershead and Mr Muir and it talks about a study that is being tabled that shows the impact. I have a summary of the discoveries and conclusions. In that there is a table. The table demonstrates the estimated savings from all strategies and it shows in every case significant shortfalls.

Minister, I wish we could at least agree this study existed and I ask for your cooperation, and perhaps Ms Mottershead's, in tabling such a study so that we in this committee can understand how the cuts you've engineered to hospitals are or are not hurting patients. If this study does indeed exist, it would be useful for us to be able to have it.

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Hon Mr Wilson: I've not seen the study you're referring to. The JPPC produces myriad reports and has all kinds of committees. When they're prepared to present me with a study, they don't do it in a clandestine way --

Mr Kennedy: No, it's here.

Hon Mr Wilson: There is a meeting that is held and we have it. I don't have that letter. Ms Mottershead is free to speak about this. She's on the JPPC.

Ms Mottershead: The report you referred to was commissioned by the JPPC through an independent confidential group of people to have a look at what-if situations. Clearly they were mandated to do that. I believe you're referring to the Jeff Lozon letter. He was the chair of that subcommittee. They did the report and presented it to the JPPC senior committee. We looked at it and the report included that cover letter, which was never officially transmitted to either Bob Muir or myself.

When we looked at the report, we looked at the data and we looked at the way they had approached the study, we did have serious concerns. One of the examples I will give you is the fact that this particular study clearly did not look at the issues of reinvestments, did not look at the subcategorizations of acute services. There were some serious flaws, and we asked the committee to go back and have a look at addressing the flaws we had identified. The report has never come back. We've never accepted it because it had flaws. We asked for more work to be done and --

Mr Kennedy: Ms Mottershead, the letter of conveyance talks about a final report of the committee. I have to accept your word on this. It is startling in the extreme that you would not have by this time -- November 1995 is when you began to cut hospitals by $1.3 billion -- studied the matter in some fashion that could give us assurance here today. It is very startling to believe that your ministry has no studies they could provide to this committee on that score. I just want to confirm that's the case.

Hon Mr Wilson: Because the approach we took was a very reasonable approach, we didn't cast in stone the $1.3 billion; in fact nothing could be further from the truth. Yes, an announcement was made. At the same time that announcement was made, no one would be asked to do the impossible: "You're not allowed to affect patient services and our door is open all the way along through this process."

We hear there's duplication and waste in the system. The nurses and doctors have been telling us about that for years. Are you suggesting we should have just kept the status quo and done nothing? The reason you didn't have to do a study ahead of time is we're working in cooperation with the hospitals, one by one by one, reviewing their operating plans. We're listening very carefully to their daily needs and we are working with them to get rid of the duplication, which is very difficult for them to do too, and the excessive administration, and take that money and put it back in. On a daily basis, I can assure you, we're studying the hospital system.

Mr Kennedy: Minister, again, my disappointment is profound in that studies that have been done, partial and complete -- there's a letter of conveyance -- can't be portrayed. But it strikes me as passing strange that you have cut exactly the amount of money you said you would two years ago. There has been no change. You say you're listening to hospitals. You still cut this year $435 million. The reinvestments don't make up for that. The money you put back does not make up for that.

The amount of money being cut next year, depending on whether -- I guess we've agreed now it's an accounting change of $450 million but it's still a mammoth amount of money, hundreds of millions of dollars less that the estimates show will be going towards hospitals, and we have no protection to be able to say whether patients will be harmed.

Minister, I'd like you to respond to some of the concerns that have been raised by individuals in this province here today in terms of how you explain -- particularly in the case of registered nurses. You say you're listening, but when Susan Gosnell sent a letter to Mr Bagatto in Windsor, in a case I've already mentioned -- her sister received care that was substandard -- Mr Bagatto, in some careful language, agreed that had to do with the restructuring, the cutbacks, the restraint that's occurring in this province.

Quite frankly, it's not my position to give you overarching advice, but I think things would be more credible if you agree there were some problems and you had some mechanism in place to deal with those problems that are taking place because of your cutbacks.

I wonder if you could tell me how, when you've cut some $21 million from Mr Bagatto's hospital, and you've done that, you can explain they're able to do that from administration efficiency when I have right in front of me a case from Mrs Gosnell about her sister who had poor care in that hospital as a direct result.

Minister, just to advise you, there are other cases I would at least like you to comment on the general circumstance of. How can these be happening in Jim Wilson's Ontario if your cuts aren't harming patient care?

The Vice-Chair: The minister will have a minute and a half to respond to the first case and then later, Gerard, you'll have to present the other cases.

Hon Mr Wilson: Very quickly. You've picked the wrong area of the province to even talk to this government about restructuring because we haven't swayed from their own report, called the Win-Win report, one iota. It's a made-in-Windsor report --

Mr Kennedy: Minister, it's the cut that I asked about, not the report.

Hon Mr Wilson: Sorry, but you're talking about restructuring, blah, blah, blah --

Mr Kennedy: No, the cut to funding is very different.

Hon Mr Wilson: -- in one area of the province. I dare you to go down there and tell them that they got it wrong because, I'll tell you, they're very proud of their restructuring report.

Mr Kennedy: It's a $21-million cut, Minister, please.

Hon Mr Wilson: They're proud of their report, believe me, and they want it to move forward. If anything, we get criticisms that our capacity at the ministry to keep up with all the good things they're doing in Windsor is the limiting factor.

We've offered a program review to that particular hospital, because I've read -- now, mind you, I met recently with that hospital. I was down there and, by the way, they don't say the same thing to me. But since I've read in the Windsor Star several times that there are these problems, we've offered a program review and, as I said earlier, about half the time that works out in favour of the hospital. They may get a few more dollars in a program because they're able to make a case based on the population they're serving. That unfortunately was on and now it's off and hopefully it will be on again with that particular hospital.

Again, individual cases. Tens of thousands of people receive world-class health care in this province, and there are going to be, no matter who sits in this chair, cases. We happen to be in a political climate where every time something happens, whether it would have happened or not in the system, the government gets blamed. I accept that. Every health minister did it and I spent four and a half years doing my fair share of that too.

The fact of the matter is the system is improving. More patients are being served. Quality is being maintained or enhanced and the evidence around the world, and particularly in Canada, is that first of all we have to do this to prepare the system for the growing and aging population. Second, it has been successfully done by provincial governments of all three major political stripes in this country, and Ontario is behind.

If we're going to have even a better system in the future, we have to move forward with the restructuring. Yes, fingers will be pointed at the minister because of some deficiencies in service in individual cases. The best I can do, and the best any parliamentarian can do here, is to hear those concerns and to respond immediately upon hearing those cases and make sure that corrective measures are taken. That's what we do in each and every case that's brought to our attention.

The Vice-Chair: Thanks very much, Minister. Before we adjourn for the day and reconvene tomorrow, Mr Kennedy, can you just clarify what you'd like us to request from the restructuring commission?

Mr Kennedy: I would like the restructuring commission to provide -- the minister indicated that policies existed across a range of areas. I specified large urban areas, women's health. I would like to include as well francophone health, the middle-sized urban areas, and I specifically mentioned Kitchener, to see if there were policy directives to that degree. The minister suggested that each of those areas were covered.

Without limiting it, I would like to extend the generality to any policy directions they have of that nature, with the concurrence of the committee, so that we could see the basis on which -- and I know there are members on this committee who are interested to know how the restructuring commission will base its decisions, as is apparent in the instance of small rural areas.

The Vice-Chair: The Chair will request that.

Mr Pettit: I think the minister also said last week he would table the study from Winnipeg and the Centre for Health Policy and Evaluation. I wouldn't mind seeing that.

Hon Mr Wilson: Could I make one point?

The Vice-Chair: Very quickly because we have a vote.

Hon Mr Wilson: There are two areas the commission may report back that they're still working with all of their partners on, and that's further reinvestment in long-term care, because they will tell you in Metro they haven't figured all that out, and transitional care, which is a new type of subacute bed, where the policy isn't totally fleshed out. Otherwise, the policies are in place.

The committee adjourned at 1800.