The Silo Strategy – Part Two

On January 31, in “The Silo Strategy: Part One,” I wrote about the exclusion of the for-profit laboratories from Ontario’s regional health authorities, the LHINs, and the negative effects of this exclusion on recent attempts in Wallaceburg, Thessalon and on St. Joseph Island to control laboratory costs and maintain local access.

The silo strategy, securing all the community laboratory work for the for-profit laboratories, was first voiced in 2000.  It was a change from their 1997 position when the CEO of the Ontario Association of Medical Laboratories (OAML) argued for a competitive process to determine a single supplier for all medical laboratory services in each region.  A 1999 pilot RFP in three regions failed to produce a successful bidder. In part the for-profit labs realized that the competitive process meant “winner-take-all” and any one company could lose all their business: the big three private labs have a very comfortable oligopoly with stable incomes and profits.

So the private labs blinked and decided to limit their goal to providing, as a group, all the community lab work in Ontario. This strategy required that the private labs maintain their separate funding, have direct negations with the province and stop non-profit labs, primarily hospitals, from performing community work.

The first major legislative hurdle for the new silo strategy came in 2003 when the province introduced the Commitment to the Future of Medicare Act.  The initial version of the Act treated the private laboratories the same as hospitals and subjected them to the same financial, accountability and transparency provisions.

The OAML fought this inclusion.  They argued that the legislation was draconian, that it allowed the province to micromanage the health care system and they argued that all sectors should negotiate separate agreements with the province: the antithesis of an integrated system.

When the Commitment to the Future of Medicare Act was passed the private labs got most of what they wanted.  They were included in the provisions barring extra billing but they managed to escape the requirements on accountability and transparency.  This victory laid the basis for the exclusion of many for-profit providers from the regional health authorities.  It also limited the use of hospitals as providers of community medical services, even where it would clearly increase access and decrease cost, like in Thessalon, Wallaceburg and on St. Joseph Island.

For the OAML’s position see their brief, “Commitment to the Future of Medicare Act, Bill 8/2003: the Community Laboratory Perspective,” January 2004.

Update on Thessalon and St. Joseph Island

The facts as we now know them:

Despite what the hospital web site says there are no lab facilities at the Mathews Memorial Hospital or the Thessalon Hospital. Neither has a laboratory license.

Blood is taken at these facilities by hospital staff and sent to the main lab at the Sault Area Hospital for processing.

Both hospitals have been taking blood from community patients for years under these conditions.

If there is now a concern about the legality of this service there is a simple solution: the Sault Area Hospital could apply for a specimen collection center license at the Mathews Memorial and Thessalon sites.  It is an easy process, with minimal cost – less than the cost of gas paid by all the patients that will now be forced to drive to the Sault each year for their blood taking.  The buildings are all ready there, the equipment is there, the skilled staff is there and the transportation network back to the Sault is in place.  It seems like a no-brainer.

If some solution using the hospitals is not found we could end up with one of those “fact is stranger than fiction” situations.  What we could have in these northern Ontario communities is laboratory specimens being drawn in Mathews Memorial and Thessalon hospitals and being driven numerous times a day back to the main Sault hospital laboratory for processing.  Simultaneously, community patients from these same communities are being expected to get in their cars and drive 80+ kilometres to the Sault so they can have their blood taken at a private lab. And, to add to the traffic on the highway 17, the new best interim solution is that Lifelabs will set up a one hour clinic once a week in these communities and drive the blood to the Sault.

On the way back to the Sault the Lifelabs drivers will probably pass the vehicle driving the blood from the patients in the satellite hospitals as well as all the community patients who were not able to make it to the one hour clinic. The big winners are the oil and gas companies and the private labs.  It is craziness for public resources, patient’s time and access to an essential medical service.

LHINs Undercut Integration

Even though I have not met the CEO of the Sault Hospital in northern Ontario I expect he is an honorable person with a difficult task: to justify the unjustifiable.  It is on his orders that the Thessalon Hospital and Mathew’s Memorial Hospital, small rural hospitals, closed their doors to the local community for blood taking. Residents now have to drive 85 kilometers to a for-profit specimen collection center in Sault Ste. Marie.

A column in the Sault Star reports that the CEO said that the Laboratory Licensing Act somehow restricts hospitals from collecting specimens from community patients.  The fact is facilities with laboratories, like hospitals, are explicitly excluded from specimen collection center licensing.  It is this exclusion that has allowed hospitals to collect blood samples from community patients since licensing began in 1973.

The second reason given is that the hospitals need to focus their resources on providing acute care in line with the Public Hospitals Act. I initially thought the reference to the Public Hospitals Act was as much of a red herring as the Laboratory Act reference.  Many hospitals in Ontario still provide x-rays, CT scans and MRIs to community patients and public hospitals have provided lab access for decades. In the many discussions about hospital lab closings around Ontario no one had given a new directive, regulation or legislation as a reason.

It seems, after some more research, that the reference to the Public Hospitals Act has some basis. Ironically, section 52 of the 2006 legislation that established the Local Health Integration Networks (LHIN)(emphasis added) also changed the definition of a hospital.*  Hospitals used to be facilities set up for “the treatment of persons afflicted with or suffering from sickness, disease or injury”: simple enough and broad enough to be of maximum benefit of the community.  In 2006, the Liberal government changed the “purpose” of a hospital to serving inpatients and outpatients registered with the hospital.

I can find nothing in the Act that prohibits hospitals from serving community patients.  Hospitals still do serve many community patients who need a variety of diagnostic and other procedures.  Under whatever provision this work is done it would seem that a similar rule could be applied to lab services.  The Public Hospitals Act also allows the government to make directives in the public interest, for instance, to improve access.  The government could use this very reasonable provision and direct hospitals to provide needed services to their local populations.  This is particularly important in smaller communities where there are no other specimen collection centers.  If all else fails doctors could register all the local residents as outpatients or patients could simply go the emergency and register as patients: a much more expensive but workable option.

But all these machinations miss the point.  The LHINs were set up to integrate, rationalize, amalgamate and restructure health care and it is incongruous that tagged onto the LHIN legislation were restrictions on what services hospitals can provide.  This section reinforces silos within health care and undercuts integration efforts.  For example, community patients must use an out-of-town for-profit lab while hospitals have a local laboratory for inpatients that the community could use.

There is also a broader issue.  To make best use of all our health care resources, we need flexibility to use our core facilities, like hospitals, to maximum advantage and this is inhibited by the change in the definition of a hospital.

The Public Hospitals Act explanation may not be a total red herring, maybe just a little pink, but it still is not justifiable.  It does not pass the smell test.  It is rank that our government restricts the use of a public facility forcing residents to drive 85 kilometers to go to a for-profit lab to have their blood taken.  It may work for the labs shareholders, but the residents of Thessalon, St.  Joseph Island and dozens of other communities in Ontario probably feel differently.

*An Act to Provide for the Integration of the Local System for the Delivery of Health Services, assented to March 28, 2006.  The sections amending other pieces of legislation are left out of further amended acts on the LHINS.

No Legal Requirement to Cut Lab Services

Residents around Thessalon and on St. Joseph Island, both east of Sault St. Marie in northern Ontario, have been recently told that their community hospitals will no longer be taking blood samples ordered by their family doctors. This follows a trend across Ontario to force all non-hospital patients to use for-profit laboratories, even if, as it is in the Algoma region, it is much more inconvenient for patients and more expensive.

The communications officer for the Sault Area Hospital, the mother ship of these two local hospitals, gave as the reason for cutting lab services that conditions of their laboratory’s licence and provisions of the Public Hospitals Act prohibited hospitals from servicing community patients.  According to a newspaper column in the Sault Star this information had been given to the hospital by a spokesperson for the Laboratory Licensing Branch of Ontario’s Ministry of Health.  Nothing about this story rings true.

I can find nothing in the laboratory’s licence, found on-line at http://www.qmpls.org, that restricts what patient’s provide the samples to be tested and it would be very much out of line for the quality assurance service to make this ruling.  Their job is to ensure that the tests results are accurate, not who can provide the blood.  Also, I can find no prohibitions against performing community patients’ tests in the Public Hospitals Act or its regulations.

I also read the current Hospital Service Accountability Agreement between the Sault Area Hospital and the North East Local Health Integration Network (LHIN) and could find no reference to who can use hospital faculties to have their samples taken or restrictions on what tests can be performed in the hospital’s laboratory.

The story from the Ministry of Health also does not ring true because hospitals in Ontario take requisitions from family doctors for diagnostic imaging on a daily basis.  Hospitals in Ontario have been performing tests on community patients since their inception, many since the middle of the last century, and I can find no recent substantive legislative changes that would restrict these activities.

All of these factors point to the conclusion that the hospital’s spokesperson was given misleading information to justify reducing access to needed laboratory services.  The real question is where did this order come from?

The coordination of these service cuts across Ontario strongly suggests that it is a Ministry of Health directive, but so far no one has come forward and provided the evidence.  Until this happens local hospital executives will continue to take the flack and provide stories to cover someone’s butt, probably the Minister of Health’s. So much for openness, accountability, strengthening the public healthcare system and improving access, all stated goals of the Ministry of Health.