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This blog delves into what Bill 74 will really mean for the Ontario health care system – what exactly is changing? What powers will the Minister have, what powers will the super agency (Ontario Health, or OH) have, and what if any powers will remain with the LHINs? What are integrated care delivery systems (ICDSs) and how do they fit into the scheme of things?

Specifically, this blog answers the following questions:

• What is Ontario Health?
• How are the rules for OH different than the rules for LHINs, CCO, TGLN, etc.?
• What is happening to the LHINs under Bill 74?
• What’s the impact on HSPs?
• What’s the impact of Bill 74 on those HSPs like public hospitals and LTC homes that were exempted from some of the LHINs’ powers under LHSIA?
• Are integration powers broader/different than under the LHIN legislation?
• What’s the impact on the ability to issue binding directives to HSPs?
• What’s the impact on the ability to appoint investigators and supervisors over HSPs?
• What’s the impact on funding of HSPs?
• What are these new ICDSs?
• What exactly happens when the Bill passes, and what may happen later?

Note of Caution

As I write this, we’re only at second reading. Details in the Bill may change.

This analysis is not intended to be comprehensive.

Overview – The Evolution of Power Distribution

Bill 74 is essentially a redraft and revisioning of the LHIN legislation (the Local Health System Integration Act, 2006, or LHSIA). Of course, the current government isn’t a fan of the LHINs. So Bill 74 (the Connecting Care Act) is LHSIA on steroids.

As the LHINs evolved under the Liberal government, day-to-day integration decisions about health service providers (HSPs) were devolved from the Minister to the LHINs, along with the responsibility for funding of HSPs. The Minister gave over significant power, reserving for the Ministry powers over integration orders that create what I call “extinction level events” (ELEs). When I refer to ELEs in this blog, I’m referring to integration decisions that require a HSP to:

• wind-up, dissolve or cease operating
• amalgamate
• transfers all or substantially all of its assets to another entity.

The 2016 Patients First Act amended LHSIA so that the LHIN had even greater powers unilateral powers:

• To issue binding directives to HSPs
• To appoint investigators and supervisors over HSPs (with notable exceptions for long-term care homes and hospitals).

The 2016 Patients First Act gave the Minister parallel new powers over LHINs – showing that the way the Minister would control the health care system would be by using the LHINs as its operational agencies. The Minister could issues directives to the LHINs, and the LHINs could then pass them down to the sector, in addition to the LHINs’ own unilateral powers. And if the LHINs got out of hand, the Minister had the ability to appoint investigators and supervisors to turn things right. Government also controlled LHINs through the appointment of their board members through Orders-in-Council.

Fundamentally, Bill 74 is repatriating powers back to the Minister. And the Minister may then delegate all of those powers (except for regulation-making) to the new health care “super agency”, OH.

Bill 74 will dissolve the LHINs – not immediately, but eventually and with certainty.

1. What is Ontario Health?

OH is the new “super agency” that is going to assume the mandates of the 14 LHINs and the following other six government agencies:

• Cancer Care Ontario (CCO)
• Trillium Gift of Life Network (TGLN)
• eHealth Ontario (eHO)
• HealthForce Ontario (HFO)
• Health Shared Service Ontario (HSSO)
• Health Quality Ontario (HQO)

OH is going to be a hugely powerful agency. The Minister may delegate all of her powers (except for regulation-making) to OH. Depending on the extent of delegation by the Minister of her powers to OH, it could become all-powerful over Ontario HSPs. We will have to see how this evolves.

Current status: Even though OH only comes into existence as a Crown agency when Bill 74 is passed, the government has incorporated a non-profit called Health Program Initiatives and has already appointed its first 12-person board of directors:  https://news.ontario.ca/mohltc/en/2019/03/ontario-health-board-of-directors.html

As of Friday, March 8^th, by Order-in-Council, the OH board members became the board for all the 20 agencies it will ultimately inherit. The Orders-in-Council of the then-existing directors of the 20 agencies were revoked, allowing them to be replaced. The OH board is now doing initial due diligence to determine what decisions need to be made for the 20 agencies over the immediate next months.

2. How are the rules for OH different than the rules for LHINs, CCO, TGLN, etc?

Importantly, OH is not required to hold its board meetings in public or to give public notice of its board meetings. This is very different from the public mandate of the LHINs in particular.

Interestingly, the OH board can delegate to its employees any of its powers, except the power to appoint investigators and other powers that may be prescribed by regulation. This allows the OH board to delegate to staff the ability to exercise the following powers that were previously required to be performed by the LHIN boards:

• Imposing a service accountability agreement (SAA) on a HSP after a negotiation period
• Issuing directives to HSPs
• Appointing supervisors over HSPs
• Issuing a facilitated integration order to a HSP
• Issuing a required integration order to a HSP
• Vetoing a voluntary integration by HSPs.

This level of delegation means that the senior staff of OH could be hugely powerful themselves.

Unlike each LHIN currently, there is no requirement for OH to have an integrated health service plan that is publicly available and for its funding decisions to be consistent with that plan.

Unlike some of the existing agencies (such as TGLN), OH will not be able to give indemnities in contracts. This is status quo for CCO and the LHINs.

OH must be audited by the Auditor General. Previously some of the agencies (like LHINs, TGLN and HSSO) engaged their own auditor.

No OH annual report is required to the Minister – this was a requirement for some of the agencies, such as LHINs and TGLN.

Notably, Bill 74 does not include the powers given to the Minister under the Patients First Act in 2016 over LHINs – the Minister cannot appoint an investigator or supervisor over OH.

3. What is happening to the LHINs under Bill 74?

LHINs are going to disappear, but not immediately. LHIN boards have already been taken over by the OH board as of March 8, and the LHIN mandates will be eventually assumed by OH, with their assets, employees, operations and liabilities being transferred to OH by Ministerial order, mirroring how the CCACs were transferred to the LHINs in 2017.

Bill 74 repeals LHSIA, but that repeal does not take effect on passage (Royal Assent) of the Bill. Instead, the Bill contemplates that LHSIA may be repealed in different provisions on different dates by proclamation. This is clearly intended to be an evolution – over what period of time, we can’t say.

There are a couple hints about how that evolution may play out, embedded in Bill 74:

• The Bill contemplates amending one specific section of LHSIA (again, not at the time of Royal Assent, but later) that takes Health Quality Ontario out of the reporting loop for LHINs. This suggests the LHINs will be around for a bit.
• There’s an existing exclusion in LHSIA – the community services (home care services) purchased by a LHIN from service providers under the Home Care and Community Services Act were not themselves HSPs. This exclusion remains, but the LHINs are no longer the ones purchasing the community services – it’s the HSPs or ICDSs directly purchasing community services, with no mention of LHINs. That suggests to me that the LHINs will not be operating the home care services for very long, if we’re plotting out how this is going to evolve.

4. What’s the impact on HSPs?

If you are an HSP under the existing LHIN legislation, you are a HSP under Bill 74.

And congratulations to independent health facilities – you are joining the fold of HSPs.

It is important to note that physicians still are not HSPs, what I have always considered a fatal flaw. I get the political rationale behind this, but it’s hard to integrate a health care system without physicians.

5. What’s the impact of Bill 74 on those HSPs like public hospitals and LTC homes that were exempted from some of the LHINs’ powers under LHSIA?

Exemption Table

 

Exemption	LHSIA	Bill 74
LHIN Directives	Public hospitals LTC homes University of Ottawa Heart Institute	None   Note: Directives now issued by Minister unless power delegated to OH
LHIN Appointment of Investigator	LTC homes	LTC homes (even if they are part of an ICDS subject to an appointment)   Public hospitals – but the Minister can recommend to Cabinet the appointment of an investigator for a public hospital or the ICDS it is part of (recall that the Minister can recommend the appointment of an investigator to Cabinet under the Public Hospitals Act)
LHIN Appointment of Supervisor	Public hospital Private hospital LTC homes	Public hospitals – but the Minister can recommend to Cabinet the appointment of a supervisor for a public hospital or the ICDS it is part of (recall that the Minister can recommend the appointment of a supervisor to Cabinet under the Public Hospitals Act)   LTC homes (even if they are part of an ICDS subject to an appointment)   Note: Supervisors now appointed by Minister unless power delegated to OH
Voluntary Integration Orders	LTC homes, to the extent the Minister or director the Long-Term Care Homes Act had approval right in that legislation	Same
ELE Integration Orders	The Minister could not issue an ELE integration order to a Board of Management.   The Minister could not issue an ELE integration order to a stand-one LTC home (one that is not also a hospital or other type of HSP).   The Minister could not issue a ELE integration order for wind-up/dissolution only to a HSP such as a hospital that also operates a LTC home, where the ELE order is only in respect of the LTC home.	Same.   Plus ELE integration order includes an order to co-ordinate services with or partner with another person or entity that receives funding from the Agency

 

6. Are integration powers broader/different than under the LHIN legislation?

The definition of “integration” is exactly the same.

Integration orders are almost the same, with a few tweaks.

Recall that LHSIA divided integration orders into four categories:

• Section 25, integrations negotiated/facilitated by the LHIN
• Section 26, integrations required by the LHIN
• Section 27, voluntary integrations proposed by HSPs that could be vetoed by the LHIN
• Section 28, integrations required by the Minister.

These same orders exist but are now framed as:

 

Type of Integration Order	LHSIA	Bill 74
Facilitated	Section 25(2) – LHINs issue	Section 32 – Facilitation decision by OH
Required	Section 26 – LHINs issue	Section 33 – “Integration order” by Minister*
Voluntary	Section 27 – LHINs issue	Section 35(8) – Decision by the Minister* not to proceed with an integration
Ministerial	Section 28 – Minister issues (ELE orders)	Section 33 – grouped with Ministerial* orders under “required integrations”

 

LHSIA had defined “service” very broadly, so that the integration of services included front-line, supportive services for front-line services, and back-office services. Bill 74 does not define “service”, and this is a significant omission. Note that Cabinet can pass regulations defining terms in the Bill not otherwise defined, so it may be the intention to define what constitutes a “service” under the regulations.

As pointed out above, there is a new required integration order the Minister can make (or can delegate to OH to make): to co-ordinate services with or partner with another person or entity that receives funding from the Agency. This is classified with the ELE integration orders above, because the Ministry cannot issue such an order to LTC home licensees that are boards of management or to stand-alone LTC home licensees. I’m a bit puzzled why coordinating services is being grouped with the ELE orders – it’s not like the other ELEs that end a HSP’s existence. It’s not that burdensome to coordinate with another organization – in fact, this is the heart of integrations. I’m not sure what the rationale is here, unless the intent is that integration of services and partnering be done primarily through the ICDSs.

7. What’s the impact on the ability to issue binding directives to HSPs?

The Minister now assumes the powers to issue directives to HSPs. OH does not have the power to issue binding directives to HSPs, unless this power is delegated by the Minister.

LTC homes, public hospitals and the University of Ottawa Heart Institute are not exempt from binding directives.

Note that the LHINs had to issue a binding directive in draft. This is no longer a requirement.

LHSIA referred to “operational” or “policy” directives. There is no longer this distinction. There is just a reference to “directives”. I don’t think this is material.

LHSIA gave the Minister the power to issue “provincial standards”. This is gone, but the ability to issue directives is so broad it would encompass this former authority to set provincial standards.

Interesting thought:  Given that OH also will include the mandate of eHO, directives could be issued relating to standardized use of EMR systems in Ontario in order to move forward a provincial EMR.

8. What’s the impact on the ability to appoint investigators and supervisors over a HSP?

OH assumes the power to appoint investigators from the LHINs.

Public hospitals are now exempt from the appointment of an investigator, but the Minister can recommend to Cabinet the appointment of an investigator for the public hospital or the ICDS it is part of.

OH does not take over the power of appointing supervisors from the LHINs. This is now a Ministerial power, which can be delegated to OH.

Public hospitals remain exempt from the appointment of a supervisor, but the Minister can recommend to Cabinet the appointment of a supervisor for the public hospital or the ICDS it is part of.

Recall that the Minister can recommend the appointment of an investigator or supervisor to Cabinet under the Public Hospitals Act.

LTC homes remain exempt from the appointment of investigators and supervisors, even if they are part of an ICDS.

9. What’s the impact on funding of HSPs?

OH takes over the role of the LHIN in funding HSPs or ICDSs directly. OH may fund both health services and non-health services that support provision of health care. There is no longer a geographic component to the funding as there was with the 14 geographically situated LHINs.

The Minister can assign to OH or any other person or entity an existing funding agreement. Under LHSIA, the Minister could assign funding agreements only to the LHINs – recall the fuss this created in the negotiation of the FHT funding agreement and the concerns about the LHINs taking over funding for the FHTs.

Unlike each LHIN currently, there is no requirement for OH to have an integrated health service plan that is publicly available and for its funding decisions to be consistent with that plan.

Negotiation of the SAA is more expedited than under LHSIA. Recall the 2016 Patients First Act gave HSPs extensive and escalating negotiating rights over the SAA. That negotiation period is now 90 days from first notice. After the 90 days, OH can issue a notice of offer (take it or leave it), and there’s a further 60-day period to finalize. At the end of the 60 days, OH can impose the SAA on the HSP, copying the Ministry. The process no longer includes a written issues statement from the HSP, escalating involvement of CEOs and Chairs, and the funder’s need to consider the HSP’s issues before imposing the SAA.

I’ve tried to summarize how powers are distributed under the Connecting Care Act in this table:

Power Chart

Power	LHSIA	Bill 74
Funding	Minister – power over LHIN LHIN – power over HSPs	Minister – power over OH OH – power over HSPs and ICDSs
Directives	Minister – power over LHIN LHIN – power over HSPs	Minister* only – power over Agency, HSPs and ICDSs
Investigator	Minister – power over LHIN LHIN – power over HSPs (with exceptions)	OH – power over HSPs and ICDSs (with exceptions)
Supervisor	Minister – power over LHIN LHIN – power over HSPs (with exceptions)	Minister* – power over HSPs (with exceptions) and ICDSs
Designate an ICDS	n/a	Minister*
Facilitated/negotiated integration decision	LHIN – power over HSPs	OH – power over HSPs
Required integration decisions (including ELE integration decisions)	LHIN – power over HSPs	Minister* – power over HSPs and ICDSs
Voluntary integration decisions	LHIN – power over HSPs to veto voluntary integrations	Minister* – power over HSPs and ICDSs to veto voluntary integrations

*Recall that the Minister can delegate all powers under Bill 74 (except regulation-making) to OH.

10. What are these new ICDSs?

These are referred to in some media reports as “Ontario Health Teams”, which will, according to government media, provide:

• one integrated team of health care providers working together to meet your needs
• a medical record that both you and your providers can access easily
• help in navigating the public health care system 24/7

The Minister has new powers to designate one or more persons as an ICDS to deliver at least three of the following types of services:

• hospital
• primary care
• mental health or addictions
• home care or community
• long-term care
• palliative
• services prescribed by regulation.

There may be further regulations established by Cabinet that prescribe conditions and requirements that must be met before a designation of an ICDS by the Minister. Again, a reminder that the Minister can delegate this designation power to OH.

ICDSs will be directly funded by the Agency, which may reduce the number of SAAs across Ontario. OH may provide overarching funding to an ICDS with a constituent board (or all constituent boards?) of the constituent HSPs being required to determine how to allocate funding amongst themselves. We will see how this plays out.

Any power in the Bill relating to a HSP can be extended to an ICDS and each constituent HSP in that ICDS.

Do ICDs have any powers over other HSPs? No, not on the face of the Bill. But note that Cabinet can pass regulations respecting “any other matter that the Lieutenant Governor in Council consider necessary or desirable for carrying out the purposes and provisions of this Act” – which is very broad and would allow Cabinet to devolve/delegate Agency powers to ICDSs.

11. What exactly happens when the Bill passes, and what may happen later?

Very little actually happens when the Bill receives Royal Assent.

Under the Connecting Ontario Act, nothing happens on Royal Assent (not even creating OH as a crown agency). Everything happens by proclamation.

Schedule 3 of the Bill sets out the impacts on other pieces of legislation. On Royal Assent:

• The composition of CCO’s board changes under the Cancer Act to align with OH
• The Cancer Act can be repealed in different parts on different dates
• The composition of HQO’s board changes under the Excellent Care for All Act to align with OH
• ECFAA can be repealed in different parts on different dates
• LHSIA can be repealed in different parts on different dates
• The Lung Health Act can be repealed in different parts on different dates
• The composition of TGLN’s board changes under the TGLN Act to align with OH
• Mysteriously, the non-existent section 246 of ONCA is repealed. Anyone who figures this out gets a gold star. Why would anything in ONCA be repealed immediately when ONCA itself isn’t in force yet?

This will be an evolution. The question is, how fast or how slow?

 

Questions? Please contact Kathy O’Brien @ kobrien@ddohealthlaw.com.