The province is in the process of transforming its public health system and many of the changes will put a larger financial burden on municipalities.
CEO of the Northwestern Health Unit (NWHU) Marilyn Herbacz, spoke at the Rainy River District Municipal Association (RRDMA) AGM a few weeks ago, where she explained how changes to the system will affect townships throughout the region.
She told municipal representatives that Ontario is changing its cost share model with health units, from being 75 percent provincial and 25 percent municipal to a 70/30 split.
“But this cost of that change isn’t the biggest factor,” Herbacz noted.
“The biggest factor is during this change to the cost share formula, the ministry is bringing in what was previously 100 percent provincially funded programs and . . . municipalities now have to pay 30 percent of those.”
The approximate cost of the programs municipalities will have to pay 30 percent of, is $2.4 million.
Programs that will remain 100 percent provincially funded include Indigenous Partnerships, Ontario Dental for Seniors, Unorganized Territories Grant, and Medical Officer Compensation.
Because provincial funding is directly tied to municipal funding, for all other programs, townships will need to give $1.1 million more to the NWHU this year, so the province can kick in $2.56 million to avoid a budget cut of $3.66 million.
While these numbers are estimates, Herbacz said public health and preventative medicine would suffer greatly if the health unit faced a budget cut of that magnitude.
“A cost like this for the NWHU would bring us back to 2002, when our budget was $7 million,” Herbacz stressed. “It would be horrific. We would be taking a major step back in time.”
The NWHU would have to revert to a central service delivery model, close smaller health units and eliminate large amounts of staff. There would be a significant negative economic impact on the whole region, Herbacz warns.
In Fort Frances alone, there are 28.5 full time employees paid just over $2.5 million in salary, which has an economic impact of $3.79 million, according to the Northern Policy Institute (NPI) Economic Impact Calculator.
All of the NWHU’s offices operate under leases and the economic impact of those isn’t included in the NPI’s findings.
“If jobs are lost in our communities, it’s way bigger than the job loss, it’s the leases, the people that go to the grocery stores, shopping stores, it will impact invariably,” Herbacz noted.
The looming $3.66 million cut to the NWHU’s budget is expected to take place if townships refuse to pay the additional $1.1 million by 2021, which represents a 45 percent increase from prior municipal levys.
Since 2012 the municipal levy has remained the same at $2.46 million, while annual inflation increased by 12.8 percent, providing towns with better value for their buy-in each year.
Although this year some municipalities have written to the NWHU asking them to absorb the budget cut entirely, which would be detrimental to northwestern Ontario’s public health system, according to Herbacz.
She said the value of the services public health provides is significant in reducing the strain on Ontario’s already overburdened healthcare system.
Every $1 spent on public health services such as:
• immunizing children saves $16 in healthcare costs;
• early childhood development programs saves $9 in future spending on health, social, and justice services; and
• mental health and addictions programs saves $7 in health costs and $30 in lost productivity and social costs.
“It is really important to understand that public health interventions repeatedly demonstrate cost saving through evidence based programming,” Herbacz stressed.
“This is how public health can help reduce hallway medicine.”
Meanwhile, the 25/75 to 30/70 cost share model for the NWHU was set to happen in April of last year but the change was pushed to Jan. 1, 2020.
“The ministry is also committed to providing $900,000 in transitional money, and that is so that no municipality in 2020 would have to pay more than a 10 percent increase.”
The Ontario government’s delays and changes to initial public health cuts came after significant public pressure, municipal pressure, and health unit pressure across the province.
Letters were sent to MPPs and the minister of health Christine Elliot. Delegations were also held at municipal and public health conferences, where the NWHU sat at technical tables and shared its concerns.
“We were able to bring with us a northern perspective to their decision making and we hope that they’ve heard all the things we had to say,” Herbacz noted.
She called on municipalities at the RRDMA AGM to lobby the government to further pause and provide transitional funding for looming changes to public health.
“$1.1 million in a very short time is difficult for any municipality, especially for the size of ours,” Herbacz reasoned, adding that the cost share formula should differ in northern Ontario due to its unique geographical challenges.
Although, when municipalities buy into that extra cost of $1.1 million, the return on investment is 133 percent back to the community, in the form of $2.33 million from the province.
Meanwhile, the NWHU has yet to receive letters of confirmation from the Ministry of Health, indicating what their budget will look like this year.
“Our budgets are due to be submitted on Feb. 28, so we’re already operating on our previous years budget,” Herbacz explained.
Internally the NWHU will have to come up with $350,000 to balance their budget, outside of the cost share model.
The province’s budget will be approved by the end of March, at which time they will begin looking at budget submissions from government organizations such as the NWHU.
Herbacz said the best hope is to have an approved budget by July, but as of right now the future of public health is uncertain.
“We really are on a path where we don’t know where we’re going to end up,” she remarked.
Looking ahead to 2021, Herbacz said it’s going to be a “difficult budget year” as they’ve already “cut operating costs to the bone.”
As well, staff are being cross trained to ensure there’s always someone available to pickup the work and cover for others.
“We’ve been doing this kind of stuff every single year and we try to do it better and come up with new ideas, so we can balance our budget and still provide services in our communities,” Herbacz noted.
“We also have had very inspiring managers,” she added.
“They’ve gone out and done the legwork, they’ve put grants in for everything you can think of and we’ve actually been able to achieve five percent of our budget in grants that are outside of municipal and provincial [funding].”
Other positive news for the NWHU is the province has cancelled its original plan of going from 35 health units to 10 in Ontario, that it announced last April.