Bill 74 – What Does it Really Mean?

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:

  1. What is Ontario Health?

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

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

  4. What’s the impact on HSPs?

  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?

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

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

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

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

  10. What are these new ICDSs?

  11. 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:

  1. wind-up, dissolve or cease operating

  2. amalgamate

  3. 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:

  1. To issue binding directives to HSPs

  2. 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:

  1. Cancer Care Ontario (CCO)

  2. Trillium Gift of Life Network (TGLN)

  3. eHealth Ontario (eHO)

  4. HealthForce Ontario (HFO)

  5. Health Shared Service Ontario (HSSO)

  6. 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 8th, 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.

  1. 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:

  1. Imposing a service accountability agreement (SAA) on a HSP after a negotiation period

  2. Issuing directives to HSPs

  3. Appointing supervisors over HSPs

  4. Issuing a facilitated integration order to a HSP

  5. Issuing a required integration order to a HSP

  6. 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.

  1. 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:

  1. 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.

  2. 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.

  3. 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