September 21, 1994

PUBLIC ACCOUNTS

COMMITTEE

The committee met at 9:30 a.m. in the Legislative

Chamber of Colonial Building.

MR. CHAIRMAN (Windsor): Order, please!

Ladies and gentlemen, if we are all ready I will

call the meeting to order. The first order of business is the Minutes of the

meetings of; February 9, 1994, April 21, 1994, June 27, 1994, June 28, 1994 and

June 29, 1994. May I have a motion to adopt - or is there any business arising

from those Minutes, first of all?

On motion, Minutes adopted as circulated.

MR. CHAIRMAN: I would like to welcome everybody

here this morning. The purpose this morning is to deal with comments in the

Auditor General's report relating to the Department of Health. Let me say for

the benefit of those who are here for the first time that this is not an

inquiry, it is simply an opportunity for the committee to receive evidence. We

are neither judge nor jury, neither are you on trial. Although from time to time

you may feel like it before the day is out; if so, our committee will have done

its job well. But we are simply here to receive evidence and to enquire into

matters commented on in the Auditor General's report. In this particular case,

the committee is not bound to items referred through the Auditor General's

report, indeed, the committee may have other matters referred by the House of

Assembly or matters that the committee itself feels are of merit for its

consideration. In this case, we are dealing primarily with certain references

from the Auditor General's report.

We hold these hearings as part of the House of

Assembly, basically, but we are a little less formal. As you can see, I very

quickly removed my jacket. I hate wearing jackets and ties. I will continue with

the tie but I get the jacket off as quickly as I can whenever I get the

opportunity. Please feel free to do so and to help yourself to a coffee. We will

have a coffee break mid-morning but you're welcome to help yourself in the

meantime.

For the purposes of Hansard who have the job of

transcribing everything, let me ask you to speak clearly into the microphones

and if I fail to do so, identify yourself before you speak because the people

back at Hansard have difficulty identifying, particularly the witnesses who are

here for the first time. Members of the House, these people have listened to ad

nauseam and they can normally recognize our voices, but you people are a little

more difficult for the people at Hansard. So I ask you to speak clearly into the

microphone and to identify yourself if I fail to do so.

Members of the committee are, to my left, Mr.

Crane, the Member for Harbour Grace; Mr. Oliver Langdon, Fortune - Hermitage;

Mr. Penney, Lewisporte; Mr. Tobin, Burin - Placentia West; Mr. Hewlett, Green

Bay; and I am Neil Windsor, Mount Pearl. I'll ask the Auditor General if she

would like to introduce the people who are with her this morning.

MS. MARSHALL: Yes, thank you, Mr. Chairman. To

my right is Mr. Bill Drover, an Audit Principal with the office and to my

immediate left is Mr. George White, Audit Manager of the office.

MR. CHAIRMAN: Thank you very much and from the

Department of Health we have Dr. Williams, Deputy Minister. Thank you for being

here, Dr. Williams, I know you had other commitments this morning and were able

to reschedule them - the committee appreciates it. Perhaps you would like to

tell us who you have with you this morning.

DR. WILLIAMS: Okay, Sir, first of all, just

sitting behind here we have Derek Penney and Gerry Stowe. Derek is on the left

and Gerry on the right, they're Financial Managers in the Institutions branch of

the Department of Health. On my immediate left is Mr. Chris Hart. Chris is the

Assistant Deputy Minister of Finance and Administration in the Department of

Health. On Chris's left is Ms. Primrose Bishop, the Assistant Deputy Minister

for the Institutions branch of the department.

MR. CHAIRMAN: Thank you very much. Evidence

taken here is taken under oath. So I'm going to ask the Clerk if she would swear

in the witnesses who have not been sworn before, the Auditor General has, and is

considered to be still under oath.

SWEARING OF WITNESSES

Robert Williams

Chris Hart

Primrose Bishop

MR. CHAIRMAN: Thank you very much. The matters at

hand this morning, as I indicated earlier, are items referenced in the Auditor

General's report, various sections as listed primarily dealing with grants to

hospital boards, and of course, the House of Assembly is very concerned. I think

hospital boards have a total of $568 million in 1992-1993; that's quite a large

sum of money and the accountability of that, of course, is very important. The

Public Accounts Committee is almost a final step in the accountability process,

I guess, being the committee of the House of Assembly charged with the

responsibility for enquiring into and making recommendations on such matters, so

this is an important process.

There are many items here in the Auditor General's

report where some concern has been expressed relating to the time limits of

reporting and, I guess, the degree of reporting of information, the accuracy of

information that is being brought forward to the department, and subsequently,

the actual reporting to the House of Assembly and the requirement of the

minister to report to the House of Assembly by way of an annual report. These

are matters, no doubt, that we will get into.

We will begin with the questioning. Most questions,

Dr. Williams, I guess, will be addressed to you as the permanent head of the

department. You are entirely free to refer them to any of the other members of

the department, the staff there. In fact, if a detailed question is required you

can take notice and provide information to the committee at a later date, so

that's the light in which we proceed with the enquiry.

We will proceed with the questioning. Mr. Hewlett has

to leave us early this morning because he has very urgent meetings taking place

in his district later today, and he has to travel very quickly. I'm going to

give him an opportunity to begin the questioning so that he is free to leave

when he must. Mr. Hewlett.

MR. HEWLETT: Thank you, Mr. Chairman, for your

indulgence. I just have a few quick questions.

With regard to the Department of Health, did the

department do an annual report for the year ending 31 March 1993, and for 31

March 1994? Is that process now in place?

MR. CHAIRMAN: Dr. Williams.

DR. WILLIAMS: We have the 1992-1993 report here,

and it is printed. The 1993-1994 report is in the final stages of processing. We

should be able to go to print in October. As you know, the year ends at the end

of March, and to get all the statistical information together is quite a lengthy

process.

We have established a format of the report for future

years, so that helps us in getting it out more quickly. We are also, over time,

reviewing the format to bring it up more in keeping with an accountability

document.

We have published annual reports every year up until

1992-1993 and we intend to publish an annual report for 1993-1994. We have

changed the format somewhat in the annual report from 1993-1994, and are working

at changing it in future years as we refine the report, to not only give a large

amount of information but to try to put it into an accountability format.

We have a table of contents drafted up for our

1993-1994 report, which I have here in a draft form. By the end of next week, we

have targeted to have all the information. Most of the information is in from

all the branches of the department. We have targeted next Friday as the final

deadline for getting all of our information in so that we can start the printing

process in October. Our target date is to have the annual report ready by six

months after the end of the fiscal year.

MR. HEWLETT: I presume your minister would table

this report in the House of Assembly. When do you anticipate, roughly, that

might occur?

DR. WILLIAMS: I'm not aware that there has been

any policy decision to table annual reports in the House of Assembly, that is a

decision the minister would make.

Our report is a public document available to anybody

who wishes a copy of it, whether it is members of the House or members of the

general public. We had a wide circulation list for our annual report, both

within and external to the Province, so it is a public document that anybody can

have.

This year we intend to have a letter of transmittal

going to the minister to present the report to him formally, but the issue of

whether the minister will make the report a formulae and table it in the House

is something I have to discuss with him.

MR. HEWLETT: Thank you, Mr. Chairman.

For the record, I would like to note, I know that

certain departments of government, through their ministers, do table reports.

Perhaps it should be looked at as to whether or not it should be recommended

that it become standard practice with government.

MR. CHAIRMAN: Mr. Hewlett, could I just interrupt

for a moment?

MR. HEWLETT: Sure.

MR. CHAIRMAN: Maybe we could ask the Auditor

General if - I understand there's nothing in the Department of Health Act that

requires -

MS. MARSHALL: No.

MR. CHAIRMAN: Are there any provisions in any acts

that you are aware of? I know you are not (inaudible).

MS. MARSHALL: In some departmental acts there was

a requirement that an annual report be prepared and tabled in the House of

Assembly, but several years ago when government amended some of the departmental

acts they removed that requirement.

I realize that there's no legislative requirement for

the tabling of the report in the House of Assembly, but I still feel that part

of the accountability process requires that something go back to the House of

Assembly, that the departments go back and report on the monies they have

received from the House of Assembly to carry out their mandate.

With respect to the Department of Health, a lot of

their money is going out to various health care institutions, and I think really

the Department of Health should set a process or framework in place whereby they

are setting the objectives of the department, they are setting their own

strategy, they are informing the institutions of what the department's strategy

is, what the department's objectives are, so those institutions, in turn, can

also set their objectives to be in line with the department's objectives.

At some point in time, the institutions should report

back to the department and say: Here is how we spent the money and here is

whether our objectives were met. Then, the Department of Health, in turn, should

take that information and along with departmental information, go back to the

House of Assembly and report on the $100 million that they have spent over any

particular fiscal year.

MR. CHAIRMAN: It seems most unusual to me, I must

confess, that we go through all of this and we don't report to the House of

Assembly. We are the final people, I guess, responsible to the taxpayers for

accounting for the sorts of funds that are collected. But I realize it is not

something peculiar to this department so perhaps we shouldn't waste a lot of

time on it. Maybe it is something the committee might wish to consider as a

general -

MR. HEWLETT: A general recommendation, yes.

MR. CHAIRMAN: - issue to put into our report.

Perhaps we could do that at our next in camera meeting, to consider a policy

recommendation to the House of Assembly.

Mr. Penney, you wanted to comment?

MR. PENNEY: One quick question as it relates to

that same issue. In reply to the Auditor General's recommendation that there be

accountability to the House of Assembly, the department replied: The issue of

whether annual reports should be presented to the House of Assembly is a matter

of government policy. Accordingly, your comments in this area should be directed

to the appropriate government officials.

I would like to know who you consider those

appropriate government officials to be.

DR. WILLIAMS: I would think that type of a

recommendation in terms of an annual report should be made maybe to the House,

but I think this is one process by which to make it. Certainly, through the

Public Accounts Committee to the House is one process that could be looked at. I

think that is a policy decision basically with Cabinet and not with a particular

official in the department. Because our act does not require it, it has not been

the normal process since I've been deputy minister or before I was deputy

minister. That may be one approach. It is a broad policy decision, I guess, of

government rather than an individual department, in a sense.

MR. PENNEY: Yes, okay. Thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you Mr. Penney.

MR. HEWLETT: Mr. Chairman.

MR. CHAIRMAN: Mr. Hewlett.

MR. HEWLETT: Just as a follow-up to that. I guess

it is one thing for the government to make a general policy by way of Cabinet

order that departments should submit reports. Certainly, that is something our

committee could recommend, maybe even to the effect that as a standard

legislative drafting procedure when departments are named and often renamed in

the current situation, when you've seen Cabinet sizes change and departments

being split, amalgamated, and so on, and therefore appropriate legislation

bringing that about. It may be just an oversight that certain things with regard

to reporting are not included so I think it is important that our Committee make

some sort of recommendation to that effect.

Just one more specific question, Mr. Chairman. Page 9

of our notes here indicates that twelve of twenty-four hospital boards submitted

management letters in the year ended 1992. I presume these management letters

are to give the department itself a better handle on what the institutions'

auditors are saying about their performance and so on, and thereby providing the

department with more useful information. Has that performance improved, number

one? Number two, does the department find this sort of information to be useful

in doing its job, in compiling its own report, et cetera?

DR. WILLIAMS: I will just answer it in a general

sense and maybe I will just turn it over to Mr. Hart to get into the specifics

of the matter.

Yes, we do view management letters as a valuable tool

in the accountability process. We also require of hospitals that we have a copy

of their response to the management letters so that we can see what actions

they've taken in response to the management letters. Sometimes, as well, we may

follow up with the hospital ourselves on some points that have been made in the

management letters and in the reply that we need further information on. Having

said that, in a general sense, I might ask Mr. Hart if he has any more specific

information.

MR. CHAIRMAN: Mr. Hart.

MR. HART: Thank you. The question of management -

and it is just so everybody understands clearly what we are referring to. When

auditors - in this case, we are talking about the external auditors who go out

and audit the various hospital organizations - when they complete their audit

they generally, if there is anything of significance, apart from issuing an

audit statement saying that in their opinion the expenditures are properly

presented and that sort of thing, they will generally then issue a management

letter of significant findings. For example, weaknesses in internal controls, or

if they see something that is not legally done, they will refer to that in the

management letter. You will see a lot more information in the management letter

than you might see in just looking at the financial statements and the audit

report.

What we've done is we have taken that process - and

one of the pieces of information in our accountability process with institutions

is that we require them to submit to us not only the audited financial

statements but we have asked them to send in to us their copies of the

management letters, and also, as Dr. Williams mentioned, responses to them. We

follow up with them internally then, if there is anything there of significance

that we find in our review of it, we will follow-up and ask what things they

have done to correct the deficiencies and in a follow-up audit of that

particular institution one of the things we would do would be to review the

management letters issued and see what action was taken in that regard.

MR. HEWLETT: Is there still delinquency in the

number of institutions actually reporting, or is that pretty well up to par

these days?

MR. HART: Well, we have taken measures to improve

that. We have set up a new reporting regiment, I guess you would call it, of

institutions, itemizing certain information that we require from them. That

would include their audited financial statements, their organizational

structure, their admission statement, and their statistical information, part

one and two. So there is a whole package of information we require. And this was

implemented with the first year being the 1993-1994 fiscal year. The requirement

is that they submit that information to us within six months of that fiscal

year. What we are doing within the department is we are keeping a checklist, a

track of that information as it comes in. The first due date is September 30 of

this year so we are looking at next week actually, when all that information has

to be in.

A lot of the information has come in from various

institutions so we have a system in place now to track it and monitor it. There

has been improvement in receipt of information generally. I can make that

statement basically.

MR. HEWLETT: So, you are expecting relatively good

compliance in that regard now that you have a more sophisticated system in

place?

MR. HART: That is correct. The system is there now

and it is up to us to make sure that the system is adhered to and followed.

There has been some discussion as to what method we have to ensure that they

comply. We had originally considered - when we issued a policy statement

regarding the information we wanted from them, we had considered stipulating, if

they did not have the information submitted within the required time frame that

we would withhold their monthly operating funds, but we looked at that again

internally and we made the decision that it would be much more positively

accepted if we went out initially with the policy and gave them an opportunity

to comply.

There were certain things that we as a department had

to do as well. It was sort of a negotiated thing whereby we were somewhat

negligent, I guess, in the completion of final settlements, so we made a

commitment that we would get those up to par, and at the same time we asked them

that they have this information to us, so we felt at the end of the day, let's

leave the option of withholding their monthly grants alone. It is something we

can always revisit at a later date and if we find we have problems with

particular institutions we can put that there. That would be a rather drastic

measure to have to take and we feel we can get compliance without going that

step.

DR. WILLIAMS: Could I just add a comment?

MR. CHAIRMAN: Dr. Williams.

DR. WILLIAMS: This issue was discussed fully with

the Newfoundland Hospital and Nursing Home Association, the parent organization

for hospitals and nursing homes in the Province, who concurred with this

approach. We had support from the Newfoundland Hospital and Nursing Home

Association for the package of information that we requested hospitals to

provide within six months of the end of the fiscal year.

We had a fair bit of discussion on it and support from

the association that represents hospitals and nursing homes before we

implemented the policy.

Thank you, Mr. Chairman.

MR. CHAIRMAN: Mr. Tobin, do you want to carry on?

MR. TOBIN: I have a few brief comments.

What action does the Department of Health take against

boards who fail to comply with submitting their reports on time?

DR. WILLIAMS: Well, there are a number of reports

that we require. One area that we require on a monthly basis, by the 20th of

each month, the following month, is a detailed report on the financial status of

each hospital. In the past, and currently, and I guess Chris can correct me in

terms of the detail, we have given the hospitals a grace period in terms of

complying within twenty days of the end of the month, but where we have given

them a grace period and they have gone over that, we withheld payments for the

monthly advance.

We phone them and try to ascertain if there is a

viable reason, why they are late in getting the reports in on a monthly basis,

and giving them a grace period to get it in, depending on the circumstances, and

if there is a problem and we feel that the problem was within their control,

then we have actually withheld monthly advances.

That has been done and it is done, I understand, on a

routine basis.

MR. TOBIN: Do some boards appear to be more

negligent than others in terms of meeting deadlines? Are deadlines not important

to certain boards in this Province?

DR. WILLIAMS: I would have to just defer to our

people who are actually on the front lines on a day-to-day basis to see if there

are any particular organizations that are common offenders. It certainly hasn't

been brought to my attention that there is one particular board or two

particular boards that are always doing this. I think, on occasion, there is a

variety of situations that occur. Sometimes there is a person, especially, in an

organization, who is responsible for this type of activity. The person might be

away or sick or something like that and sometimes that causes delays. We, when

we talk to the hospitals and find out the circumstances, grant them - if there

is a good reason we certainly adhere to that. I'm not aware that there are one

or two or three or four particular boards that just flout the department and

don't get the information in on a routine basis.

MR. TOBIN: In your report I think there is

something like - how many hospital boards are presently in the Province?

DR. WILLIAMS: It changes. I think the current

number is about forty-three hospital and nursing home boards. That includes some

of the home care boards that are currently in existence in the Province.

MR. TOBIN: You hope to get it down to how many?

DR. WILLIAMS: We are looking at around, I guess,

nine or ten or eleven, in that range. That is based upon current policy

decisions that have been implemented by government. There are a couple of other

areas that are not finalized yet.

MR. TOBIN: The Burin Peninsula - Clarenville, that

area, would be one of those considered not finalized?

DR. WILLIAMS: Government made a policy decision on

that and there has been further discussion on it.

MR. TOBIN: There is reference in this, on page 17,

to the savings incentive program. I'm wondering if you could just give us some

indication of how that works, and if you could tell me what hospitals have been

saving money and how much they have been saving.

DR. WILLIAMS: That is very specific. Maybe I will

refer the matter to Mr. Hart and Ms. Bishop on that particular question.

MR. CHAIRMAN: Mr. Hart.

MR. HART: Thank you. In terms of defining the

savings incentive program I should say that I guess it had its beginnings with

the Royal Commission on hospitals and nursing homes that was carried out some

years ago. One of the recommendations from that commission that was implemented

was that hospitals be given a budget based on their needs, and then, if they

could make some savings within those budgeted figures while still maintaining

the program services as required by the department, that we would - for example,

through good expenditure monitoring and introducing efficiency measures where

they could - that there would be some means of rewarding those efficiency

measures.

The specific formula that was devised from that was

that where they saved $50,000 over their approved budgets - if their budget was,

for example, $1 million, and their actual audited financial statements showed

that they expended $950,000 of that, they would then be able to retain that

$50,000 to keep within the organization. It was a structured thing. The next

$50,000 they could only retain 75 per cent, and 50 per cent of any savings

beyond that. So you start - they would get 100 per cent of the first $50,000,

then 75 per cent and 50 per cent of any remaining. Those funds were then to be

retained within the organization to be expended for programs to enhance the

hospital's patient services and that sort of thing.

Generally speaking, I think your question was to what

extent has there been savings -

MR. TOBIN: Which hospitals.

MR. HART: Specifically which hospitals, I guess we

would have to defer on that, one of the reasons being that I don't have that

information in front of me. I can't tell you specifically which hospitals. The

other thing relating to that is before you can determine exactly how much

savings they have, you must have completion of the final settlement for that

institution. That is one of the other issues that we are talking about here

today. In many instances the final settlement has not been completed and

therefore we can't tell you specifically -

MR. TOBIN: Is it fair to assume that you don't

know if there have been any hospitals that have had savings?

MR. HART: No, there have been hospitals with

savings. I've seen a number with savings. If you wish I can get that information

and get it back to you specifically, but I don't have it.

MR. TOBIN: I would like to see that.

MR. HART: Yes.

MR. TOBIN: You made reference in your answer that

basically the hospitals are given the budget based on their needs. Who

determines the needs, government or the boards?

MR. HART: I will answer that as best I can, but I

think it is more on the program side. Generally, the needs are determined

through reviews with the Department of Health in conjunction with the specific

boards that are affected. I don't know if Primrose wanted to talk in more detail

to that.

MR. CHAIRMAN: Ms. Bishop.

MS. BISHOP: Yes. When we look at a hospital, we

look at that within the region. We have identified some parameters of what

programs and services will be carried out within certain regions of the Province

- like for instance, you take the central region, we have determined what

primary, secondary and limited tertiary care services would be provided there.

In some instances we have decided that certain tertiary care programs will only

take place in St. John's, such as brain surgery, for an example, because we

don't have the population base, we don't have the ability to attract qualified

personnel in terms of surgery, and so on, and equipment is so expensive that you

can only have certain programs on a limited basis with the population we are

serving.

The Minister of Health, is the ultimate person

responsible in terms of what programs and services an organization carries out.

If we have a new organization or we are changing a role, that role is determined

co-jointly between the Department of Health and the board and from that would

flow the budget to carry out the programs and services that were agreed to

within an organization. No organization can start a program without the approval

of the minister.

MR. TOBIN: So then, when you say, given a budget

based on the needs, the ultimate decision that the needs are based on, is the

minister?

MS. BISHOP: Ultimately.

MR. TOBIN: You know, you make reference to brain

surgery and things such as that, because we have been hearing stories in the

media, in the past few weeks, of people who have died because the service they

needed was not available to them due to long waiting lists. Obviously, if

budgets are to be given based on needs, there must be a need for more equipment

to be placed in some hospitals, if that is a problem. And I was just wondering

if the hospital boards were negligent by not making the request in their budgets

to have these type of equipment purchased or, if it was a decision of your

department.

MR. CHAIRMAN: Ms. Bishop.

MS. BISHOP: Mr. Chairman and Mr. Tobin, often

organizations feel that they want something but you have to look at the

problems, whether or not there would be qualified people to carry out programs

and services, and we would be equally negligent if we said that a hospital in

Labrador City could do brain surgery, for instance. Without having all the

back-up materials, we would be negligent, because you couldn't get the properly

trained people, you would not be able to have a critical mass that people could

maintain their competencies, there are a number of factors, so it is not an easy

answer; yes, no, or yes, we do that, and we have to look at needs in a more

broadly defined fashion that just saying, yes, they need that; no, they don't

need that. It is not an easy answer.

MR. TOBIN: I don't intend to be critical of you or

anyone else on staff, but I mean, there comes a point in time when people who,

for example, are needing the MRI service that is not available, probably because

the specialists are not there, but it is my understanding, because the equipment

is not there and there is a list of three different categories of people: those

who are emergencies, or at least that is what I am hearing and reading in the

media reports of late, and I am just wondering. Take the answer that Mr. Hart

gave, given a budget based on the needs, but then, who is ultimately responsible

to see that there is at least another piece of equipment and the necessary

professional staff to deal with that? Who has the ultimate responsibility for

that? Would it be the Health Sciences Board or would it be the Department of

Health?

MS. BISHOP: Certainly, Sir, the Health Sciences

Board would be dialoguing - or maybe not the board directly, but the specialists

within that facility would be dialoguing with the Department of Health, because

we have to take into consideration when there is seen as a need for a program.

If you go back to the MRI machine, it was only a year or so ago that we

introduced that piece of equipment in the Province, before that we did not have

that.

AN HON. MEMBER: What is the cost of that, by the

way?

MS. BISHOP: The cost is in the order of $2.5

million for the piece of equipment. The standards for the use of MRI would be

one MRI machine for every one to one-and-a-half million people, that's all you

need. We have looked at, very closely, the utilization by provinces and certain

standards that you put in place for that type of piece of equipment, and what we

have put in place in terms of guidelines are no different from the standards

that are put in place in other provinces across Canada.

MR. TOBIN: You said a ratio of one to

one-and-a-half million?

MS. BISHOP: Yes.

MR. TOBIN: Why would there be such a back log in

Newfoundland?

MS. BISHOP: I couldn't answer that Sir, I am

sorry. I mean, I don't make the decision, the doctors -

MR. TOBIN: (Inaudible).

MS. BISHOP: Well, I guess when a new piece of

equipment is available, sometimes people want to use that piece of equipment

before they do other things; I can't answer. Dr. Williams could probably give a

little better response.

MR. TOBIN: I read an

article in the weekend paper

by a doctor in Bonavista. There is a full-page

article and some reference made

to MRI use and the waiting list and things such as that.

AN HON. MEMBER: I didn't see that article.

MS. BISHOP: I'm sorry, I didn't see it.

MR. TOBIN: Why is there such a substantial waiting

list according to what we hear on the media.

MS. BISHOP: It is not substantial.

DR. WILLIAMS: My understand from Dr. Parsons is

that the waiting list in Newfoundland in fact is less than in other

jurisdictions in Canada, that is the information I have from him. Before we had

an MRI machine here last year, people went to Halifax or Montreal for MRI. I

think ours is only the second machine in Atlantic Canada. I don't think New

Brunswick has an MRI. To my knowledge, Nova Scotia - Halifax - and Newfoundland

have the two pieces of equipment in the region.

MR. TOBIN: Mr. Chairman, I certainly don't want to

hog the time of the meeting but I'll pass it on to one of the other members.

There are some other questions I'd like to get back to later.

MR. CHAIRMAN: Mr. Crane, would you like to carry

on from there?

MR. CRANE: Yes, in the report, Page 43, it shows

some of your final settlements from hospital boards and since 1983-1984 six of

the boards have never had a final settlement. One of the biggest hospitals in

the Province, St. Clare's, hasn't had a final settlement since 1982-1983. Has

that improved or what do you do to try to force final settlements upon the

hospitals again? From 1982-1983, that's eleven or twelve years now.

DR. WILLIAMS: Mr. Crane, the issue of final

settlements is something that goes back a number of years in the department,

obviously, as you can see from this. We are attempting to improve the final

settlement process and this chart doesn't give you a full picture of the exact

position that we're in so I'll ask Mr. Hart in a minute to bring you up to

speed.

I'll sort of make an analogy to a house in the sense

that there is a lot of work - it's either yes or no here, either the financial

settlement is done and completed or it's not done and completed but when it says

no - to make the analogy to a house, you're building a house and you might have

everything done but the sparkling and painting or something and so the house is

not finished but yet there's a lot of work - and a lot of progress was made in

these financial settlements. I'll ask Mr. Hart to go into the details of where

we are with these - St. Clare's in particular, since you asked about St. Clare's

- and when we feel we'll have that settlement process brought up to date. It's

our objective to do that and we agree with the Auditor General, that is

something we should be current on and we have set in motion a series of

procedures to do that.

Two years ago - essentially, a number of years ago

when the Auditor General made a recommendation that some of the major

departments have a senior person, a senior financial officer designated in the

whole area of finance and administration, we accepted that recommendation. In

fact, we approved Mr. Hart's position several years ago and since that time he

has worked with his staff diligently to improve the process. I will ask Chris

now if he could provide you an update, particularly on St. Clare's, where we are

with that process, but where we are with some of the other processes.

MR. CRANE: Gander is another that has never had

one.

DR. WILLIAMS: Yes.

MR. CRANE: I'm just thinking about those two.

DR. WILLIAMS: Well, Chris will probably take you

through those, give you an update on where we are and what needs to be done to

finalize those.

MR. CHAIRMAN: Thank you very much, Dr. Williams.

Mr. Hart.

MR. HART: Maybe what I should do at the outset

here is explain exactly what a final settlement is. Essentially, it goes back to

this Royal Commission on hospital and nursing homes. The final settlement

process became important at that stage because of the - if there were any

savings there was an incentive that was retained by the hospital boards. So, as

a result of that, then there was a process implemented which involved basically

comparing what the hospital-approved budget was with what their actual

expenditures were. So the process would involve taking the audited financial

statements issued by the external auditors and adjusting those, because when an

external auditor prepares a set of financial statements they, for example, are

required to record expenditures in accordance with generally accepted accounting

principals which aren't always in relation to governments budgeting which is on

a cash basis primarily.

One good example there is the severance pay. Hospital

boards now record an accrual for the estimated liability that they have at a

point in time for severance pay,

whereas the department wouldn't recognize that

as a cost because it's not an actual cash outlet. We'll only pay the actual

severance pay that occurs during that particular fiscal year. So we have to take

the audited financial statements and adjust them. So having done that, then it's

compared against the actual budget and if there's a savings the incentive

formula kicks in. If there's an excess, our policy is that we do not fund

operating deficits. The hospital board has to look after that through their own

particular means.

So I just thought it would be important to understand

the process because we're dependent upon - one of the reasons for the delay in

some of these is the fact that we have to gather all this information before we

can sit down and actually start doing the calculations but I'm not putting that

forward as an excuse. I recognize, since I've gone into the department - as a

matter of fact, I guess I was sitting in that chair over there when I made the

recommendation in the first instance. I call it the boomerang effect because I

had to come back now and deal with some of the problems that I pointed out

initially. The final settlement issue is one that I have been very aware of.

There is a considerable backlog there and we have made a lot of progress in it.

It isn't where I want it to be but we have a plan in place to have all final

settlements for 1992-1993 completed by June of 1995.

One of the other things we have done in the last

couple of years is develop specific mission statements for the department, and

goals and objectives. One of the major goals within this division, for me, is to

have those final settlements completed by June of 1995.

Having said that, getting down to some of these

specifics, you ask about Gander and you ask about St. Clare's. The

schedule that

you have before you says `yes' or `no'. `Yes' means that the settlement has been

completed and is issued to the institution. `No' means that it hasn't been

issued to the institution, but in between the two there are a lot of things that

have happened, and it isn't obvious from looking at this schedule.

I think the analogy Dr. Williams used of building a

house - the house is not complete until the final nail is driven, yet, there is

an awful lot of work that goes on in between.

In respect of St. Clare's, for example, there are all

`no's' right across the board, except for 1982-1983, which was the only `yes'. I

can tell you that for 1983-1984, up until 1990-1991, which takes in seven or

eight, those have been substantially completed. We are estimating in the range

of 80 per cent completion, and by that I mean that our staff have gone and

gathered all the information they need to develop the formula for calculating

the final settlement process. They have done all of their work and have

submitted the file up the ladder to the next level of review, and all those

final settlements are now basically ready for review at the director level.

Unfortunately, another monkey wrench, I guess, was

thrown at us in that our director, who is responsible in this area, left the

department at the end of July, and that put behind their

schedule somewhat.

Those probably would have been out at this stage except for that, so I just

wanted you to understand that even though it says `no' it doesn't mean that

there hasn't been any work done on them. They are at the very close to being

finished level, and Gander, the same thing applies there. As a matter of fact, I

think you will note on the Gander one it says `draft' all the way along.

What we did there, and that is another process we have

just started doing, is the final settlement involves agreement with the

institution as to the final settlement. They may come back and say: Well, what

you've done here is not fair. You have made a commitment to us that you would

give us additional funding to cover off this area, and that isn't reflected in

here. So what we have done, in situations where there have been any concerns

like that, is that we've issued the report - the final report as it is going to

be - in draft form to them, to give them an opportunity to look at it and come

back to us and indicate whether they are in agreement with it or whether there

are other factors they would like to bring to our attention before we finalize

it.

With Gander, again we have basically completed the

bulk of the work up to the end of 1989-1990, so it will be the last three years

where there will be no work started on those particular ones yet.

I hope that helps you understand it a little better.

MR. CRANE: Yes, the boomerang effect - I couldn't

let it go without saying that's the advantage of getting promotions, right?

MR. HART: Well, I don't think I'll get into that.

It probably wouldn't serve me any.

MR. CRANE: You keep recommending things; it will

come back to haunt you somewhere down the road.

MR. HART: Well, I think they were good

recommendations.

MR. CRANE: Anyway, during the Auditor General's

review, she also noted that the purchase procedure form which is used by the

department is the control for major purchases over $10,000. She had forty-seven

of fifty-seven firms checked that did not have prior approval to purchase such

equipment - forty-seven of fifty-seven. That's a big percentage.

DR. WILLIAMS: Mr. Crane, maybe I'll ask Ms. Bishop

to talk to you in detail about what goes on in terms of equipment purchases, and

maybe we can have a bit more discussion after that.

MR. CHAIRMAN: Ms. Bishop.

MS. BISHOP: Thank you.

With the capital equipment budget, the hospital, at

the commencement of the fiscal year, has a budget allocated to them as to the

extent of monies that they can spend for the year on capital equipment.

Hand-in-glove with that is a procedure that we put in place about three years

ago whereby we have a listing, a five-year cyclic listing, of what the major

pieces of equipment are that a hospital needs to replace over a five-year time

frame. For instance, we would know that within Carbonear Hospital there were two

X-ray machines that are probably in excess of twelve years old, and if the

lifespan of that machine is ten, then we know we are heading for trouble.

We have had a lot of dialogue with the organizations

to indicate that we know that this is an issue that we are going to have to

address, and when we are trying to allocate our budgets in capital equipment we

do take these things into consideration, that they have special needs, because

we know that the X-ray machine in room number one is going to have to be

replaced this year, so there is a lot of preliminary dialogue that goes on with

the organizations out there before they ever get their capital equipment budget.

Similarly, with organizations that are into Meditech software, we have approved

that particular program for them in the beginning so any applications that have

to be bought for that, they automatically have to get these on a phased-in type

basis and we have agreed to that sort of thing in advance.

Another example is sterilizers. We would not have any

prior approval for operating room sterilizers for sterilizing instruments. They

have a lifespan of fifteen to twenty years and I know that in the last three

years there have been five that have called me, or some of my staff saying their

sterilizer had just died. They had a repair man in and they had a major problem.

Verbally over the telephone we are in dialogue with them and tell them they had

better get one in immediately because the impact on the surgical program in an

organization would be greatly affected if they had to start transporting their

instrumentation and packs to other facilities.

Where we have the breakdown and where the delay is, is

that a lot of this is a verbal telephone-type approval, but our existing PPF

form, Purchase Procedure Form, of course, will follow after that, because they

have gone ahead, so we have to put into place a mechanism whereby we probably

verbally approve this in advance. Certainly, it is something that we have to be

more cognizant of, that we have given verbal approval prior to the form having

come in.

We recognize there is a weakness there and maybe we

need to revamp our form so that we have an appropriate area to mark in where we

gave the prior verbal approval before the form came in, because if we approve

something today they call the tender tomorrow and it is gone.

MR. CRANE: So it is not as bad as it really looks?

Ms. BISHOP: It is not as bad as it really looks.

The other thing, too, is that we keep - while we have this five-year plan in

terms of replacement of equipment, we don't want facilities going out and buying

pieces of equipment for which they don't have a program approved, so with our

having this five-year plan for major pieces of equipment, we avoid somebody

trying to slip in something, and trying to get the better of us. In a couple of

instances where they did that we have disallowed equipment and made them return

it to the supplier, because they never had a program in place to use that

equipment.

MR. CRANE: So any equipment bought by a hospital

foundation would be approved by you, too?

MS. BISHOP: Yes. The other thing is, we have

consultants we use who are working with the hospitals in ascertaining what type

of equipment is needed, or if you are going to replace a piece of equipment. We

say, yes, that is in line with the program and service that you are putting in

place, then consequently, they complete the PPF form out there. It comes in to

one of our accounting clerical people who, in turn, passes it on to that

consultant who had talked to these people for their signature on it.

Now, that person could be out on the road for ten days

and not see that form until he comes back, so we have to look at some sort of

mechanism whereby we can change this type of thing, and I haven't resolved

within my mind yet what is the most appropriate way of addressing this, but we

are thinking about it.

MR. CRANE: Thank you very much.

DR. WILLIAMS: Could I just make an additional

comment?

I think, on reflecting on this issue, as Primrose

says, we need to strike a balance between making sure there is accountability,

getting the proper forms filled out, and recognizing that hospitals and boards

are in the business of providing care to patients - we have to strike that

balance. We can't tie their hands completely, yet, we have to have

accountability built in, so we are going to have to reflect and revisit on that

policy, although we have taken a fairly hard line in the March 4 memo to all

administrators that we are not going to fund anything that has not been approved

by the PPF prior to.

I agree with Primrose that we have to reflect on that

and try to make sure there is accountability and completion of forms, and

balance that off against having the hospitals, and other boards, deliver

services to people.

MR. CRANE: It is not as simple as it sounds to

co-ordinate it all.

I am aware of that.

Thank you.

MR. CHAIRMAN: Thank you, Mr. Crane.

Mr. Langdon.

MR. LANGDON: I would just like to pose a question

to Mr. Hart, I guess. On the number of dollars that has been in the Health

budget in any one year, how much of the budget is spent on ambulance services? I

know that is probably very technical and you might not be able to give the

answer. And out of the money that is spent on ambulance services, how much of it

goes to private versus community-based?

MR. HART: Thank you very much, Mr. Langdon.

I will do the best I can to answer it and any

information that I don't have I will certainly make sure that we get it for you.

We have three services. You mentioned two. You mentioned private and

community-based services. The third element would be some of the hospitals that

have their own ambulances and that funding goes in the form of the grants to the

hospital so it wouldn't be evident.

In terms of the private - let me see now, I'm looking

at our document here, 1992-1993, the road ambulance program. Under the mileage

subsidy there was $480,000 to the community services and the private operators

was $2.7 million under the mileage subsidy. Then we go to the capital side. We

have a program in place where we subsidize 50 per cent of the cost of required

ambulances for community services. In 1992-1993 we spent $113,000 for that. For

the private operators, we have a process there where we provide them a monthly

operating grant in addition to the mileage subsidy on approved vehicles, and

that was $1.3 million. That covers the major part of it, so if you add those up

you should -

MR. LANGDON: We are looking at roughly $4 million

for the private operators -

MR. HART: Versus $500,000.

MR. LANGDON: - $500,000 for the community-based.

I've talked to you a number of times on this before. I understand that you are

working with someone within the department - Mr. Davis or whomever - to see what

steps, I guess, can be taken to improve the financing for the community-based

services. I wonder if you could elaborate on that.

MR. HART: Yes, I can comment generally on that. We

have been looking at the whole area of the road ambulance program and there are

a lot of things happening on it behind the scenes. I think it is important to

recognize that the private operators represent a much larger group, so

naturally, you are going to have more significant funding in that area. The

community operators generally arose in areas that required emergency coverage

but for which it wasn't economically viable for an operator to go in there and

actually operate as a business. Therefore, the department recognized that and it

was sort of a bit of give and take. Every community is unique, I guess. In some

communities they depend heavily on volunteers and they are willing to provide

their services free of charge and you go to the other end of the spectrum where

they can't attract volunteers at all; therefore, there is a bigger cost to them.

We have been grappling with the problem, one of many

problems, and have dealt with it somewhat recently. One of the things we did as

part of last year's budgetary process was we looked for increased funding for

better levels of quality trained staff on board the ambulances, and we equated -

at that same time what we did was we revised our policy to make community

services receive the same subsidy, the same mileage, for having trained people

on board. Prior to that the community service didn't avail of the attendant's

package, as it is called, they just basically got their mileage subsidy at an

untrained level. We recognize that we must have equally trained people in all

services, regardless of their form.

I would call that an initial step in the process. We

have a long way to go with it yet. There has been an association recently formed

which we were trying to get off to give the community operators, as well as the

private sector operators, an opportunity to voice their problems. They have now

formed an association and they are part and parcel to meetings with the private

operators. Any specific issues related to the community operators are dealt with

with them as an individual group. That just recently started.

One of the items on their agenda is a review of the

funding formula. I think it has to be something different from what it is right

now. Because, as you know, a lot of them can't make a go of it on the basis of

the grants because they just don't operate in a sufficiently broad enough area

to generate enough revenue to be viable. The days of volunteers are not like

they used to be, and that sort of thing. There are a lot of issues there and we

are actively working on all of them and making small progress as we go along.

MR. LANGDON: I'm pleased to know that you are

doing it, because particularly the Connaigre Peninsula and the South Coast - you

are looking at 250 kilometres from Grand Falls, and rough terrain and so on. The

ambulances are used quite extensively and the community-based people are having

problems with the finances. I'm pleased to hear the department is doing

something about that.

MR. HART: We have looked at specific areas where

problems have arisen, and they are cropping up from all areas of the Province.

What I'm trying to do is develop something that is going to solve the whole

issue rather than just deal with these isolated incidents as they crop up.

Because it is really a band-aid treatment each time you have to help somebody in

a particular problem.

I think if we can develop something that basically

takes the same level of funding, and allocate it on some criteria, for example,

depending on the population of an area and the usage that area gets, and the

proximity to hospital and the availability of private services within the area

and that sort of thing - so there are a lot of issues. But it is something that

we are working diligently at, and I think you'll see a lot of things happening

over the next year or so.

MR. LANGDON: Thank you very much.

MR. CHAIRMAN: Thank you, Mr. Langdon.

Mr. Penney.

MR. PENNEY: Thank you, Mr. Chairman.

The general areas of concern have been thoroughly

covered by my colleagues. If you would bear with me for just a few minutes, I

would like for you to go through this information packet with me. There are

half-a-dozen specific areas on which I would just like to have clarification.

First of all, the Auditor General refers to

thirty-nine boards managing a total of fifty-four facilities.

AN HON. MEMBER: What page is that?

MR. PENNEY: That's on page one.

In reply to a question from Mr. Tobin, Dr. Williams,

you said that there were forty-three boards. Now, this was done in January and

February of 1993. If you could tell me, I would like to know how many hospital

boards and how many long-term facility boards make up that total of thirty-nine,

or if it is forty-three?

DR. WILLIAMS: In the boards, we included in that

forty-three a number of community boards responsible for home care, so they're

included in our board section. The Gander and District Continuing Care Board and

the St. John's Home Care board are two that come to mind that probably wouldn't

be included because we are just sticking strictly to hospitals, but for auditing

purposes, management letter purposes, these kinds of things, we include them in

our board-operated grants area; so there are a few of those.

I can get you, if you wish, a current listing of all

boards and what particular facilities they manage. Sometimes, for instance, we

have a board like in Bonavista which manages two facilities. It manages the

nursing home there and it also manages the hospital facility, so there's an

overlap there.

If you want, I can get for you a full listing of every

board in the Province and what facilities they manage, if that's acceptable.

MR. PENNEY: Okay. Could you also break down the

figure fifty-four for me? It says fifty-four hospitals, long-term care

facilities and health care centres. How many hospitals are there?

Now, going through this, I've concluded, based on the

figures that are here, if you could verify this, there are thirty-four hospitals

and twenty long-term facilities and health care centres; that would make up the

fifty-four - there would be thirty-four plus twenty.

DR. WILLIAMS: It looks like sixteen long-term care

boards and twenty-seven hospital boards.

Again, I would prefer to give you a listing after the

Public Accounts hearings on all the details, every board in the Province and

what facilities they are managing, and I will do that for you.

MR. CHAIRMAN: Thank you, Dr. Williams.

Mr. Penney, will you continue?

MR. PENNEY: The specific areas of clarification,

if you would turn with me, please, to page 3: The Auditor General says that in

1991 there were six hospital boards that submitted an annual report to the

minister, and the current review in 1993 - now, that's dealing with the year

ending in 1992 - there were only three hospital boards submit annual reports.

So, in two years, the accountability of the boards to the department has gone

from six to three. Would you care to comment or elaborate?

MR. CHAIRMAN: Mr. Hart.

MR. HART: Mr. Penney, I guess I'll start at the

approach of what is an annual report. The Auditor General's position has been

that an annual report is a document of this nature that's produced by all the

various hospital boards throughout the Province.

The Hospitals Act, if you read it, specifically under

that section, requires that the hospitals issue annually to the minister a

report showing the work done and showing some financial information. It doesn't

say that the hospital has to produce a glossy annual report in any particular

format.

We have gone to the Department of Justice to get it

clarified, because we felt that we were, in fact, complying with the intent of

the section. We get reports from the hospitals that include various information.

We get audited financial statements, we get statistical information, the number

of beds operating, and that sort of thing. In any event, I suppose, to cut a

long story short, the Justice opinion that came back to us said that as long as

we get a report from the boards showing the work done for the area, and

indicating the financial data, that we have, in fact, complied with it. So, from

that perspective, we feel that we have complied. I think the Auditor General's

reference to annual reports deals specifically with this type of report.

The other comment I guess I would like to make on that

is that the numbers are probably not reflective of all of these reports that we

had. I think it's the reports that the field auditor may have been able to

locate at the time. I think they sat down with the director of Institutional

Financial Services at the time and received what reports they may have had in

their files, but sometimes they come in directly to the minister, because

they're supposed to be tabled with the minister. They may have stayed with the

minister. Some were in my office, so I think I wouldn't put a whole lot of

credence in the actual numbers. I think that number doesn't reflect the number

of annual reports that were produced but is more a reflection of the number of

reports that the audit office were able to observe at the time. They may wish to

comment on that.

MR. CHAIRMAN: Mr. Penney.

MR. PENNEY: Mr. Chairman, I would like to ask the

Auditor General if she would comment on the answer given by Mr. Hart.

MS. MARSHALL: I don't think the (inaudible) what's

required in an annual report should be left up to a legal

interpretation. I

think it depends on what the Department of Health is looking for, an

accountability document. I don't think a conglomeration of financial reports and

some statistical information is a sufficient accountability to the Department of

Health. They're giving out, I think, around $600 million or $700 million a year

to these institutions, and I think the institution should be coming back and

saying what their objectives were for the year and whether, in fact, they had

met their objectives. I think they should be giving back some information on the

performance of the individual boards and of the individual hospitals so that the

Department of Health is satisfied that the money is well spent.

MR. CHAIRMAN: Mr. Penney.

MR. PENNEY: Thank you, Mr. Chairman.

Dr. Williams, are you satisfied with the

accountability process? Are you satisfied that the $560 million that is being

transferred to those boards is being fully accounted for to your department? Are

you satisfied with the process today?

MR. CHAIRMAN: Dr. Williams.

DR. WILLIAMS: Yes. Mr. Penney, in the packet of

information that we submitted to the Public Accounts Committee it includes

correspondence from the Minister of Health to the various hospital board chairs

throughout the Province, laying out what the department feels is the appropriate

information that we would require in order to have what we feel is a level of

accountability that's satisfactory, and we have laid out that matter. If you

want, I can just go through it again.

MR. HART: If I could just interject for one

second, Dr. Williams, if you look at page 42 of your material you will see, I

think, the area to which Dr. Williams is going to be referring now, the

information that we feel will satisfy our requirements as far as making

institutions accountable is concerned, and certainly satisfy the requirements of

the Hospitals Act as it stands right now.

DR. WILLIAMS: Some hospital boards have been in

the habit of producing a short, glossy annual report which, in my view, may be

more for public consumption than some of the detail that we would require. We

certainly feel that we need the level of detail that we get in these two

documents here. Primrose, do you have them - the HS 1 and HS 2 documents which

are very, very detailed. I don't know if you have seen the level of detail that

we require in those annual reports of returns. We feel that we still have to get

those because they provide details on the number of beds, the number of staff,

the kinds of admissions that were made to hospitals, the number of out-patients.

They are very, very detailed, and we want to continue getting those

documentations.

The second

part is detailed financial information that

is audited, that is required as well for national data purposes. Combined with

the information we requested from the minister to the board chairs that we've

asked to be put in place this year, we feel that with all that information in

place, a brief overview of the organization's activities, including highlights,

the audited financial statements, the management letters, responses to the

management letters, annual returns of health care facilities, parts one and two

which we're now getting, the organizational chart, the mission statement and

organization, together with applicable goals, objectives and strategies for the

year under review, and any other information that the board feels would be

valuable to the minister - we think having all that information will serve us,

at the department, well. I think it will serve government well and the

Legislature well, and probably will serve the general public well. The

production of a short glossy annual report which some hospitals have been

sending in to us, I think that is for public consumption. It is not the detail

that we would need in terms of an organization, in terms of accountability. We

feel now that we have a package that we've asked to be put in place with the

support of the Hospital and Nursing Home Association that will address the

accountability issues.

MR. PENNEY: Mr. Chairman, I would like to ask the

Auditor General if she would again comment on that, whether these changes, as

have been articulated, would satisfy the Auditor General's department as far as

accountability is concerned.

MS. MARSHALL: Yes. I only recently received a copy

of this letter but my initial reaction relates to item No. 7 on page 2 where

they are referring to the mission statement of the organization and the

applicable goals, objectives and strategies for the year under review. I think

it would be very informative to the Department of Health if these institutions

would, in this same report, indicate whether in fact those goals, objectives and

strategies had been met.

DR. WILLIAMS: I would think that they would

provide comments on those as they submitted the report. I would think they

would. That would be our intention anyway. We set an objective and strategy when

you say: Look, you set out to achieve this objective. They would probably

provide some commentary on how far they got with it or if they achieved it. So,

we would expect that.

AN OFFICIAL: Yes, that is what we would expect to

see.

AN HON. MEMBER: Item one would probably cover

that.

MR. PENNEY: One final question, Mr. Chairman. On

page 7 of this report it says that the department is responsible for

expenditures of over $880 million. Of that, $560 million are transfer payments

to the hospital boards, the health care facilities, long-term care facilities.

My quick calculation shows that there is another $320 million. Could you give us

some idea what that other $320 million is spent on?

DR. WILLIAMS: Yes, Sir. About $130 million is

spent on the Medicare plan, both fee-for-service and salaried physicians.

Another $50 million or so or maybe $60 million - I'm going off the top of my

head now, Sir - would be on the drug programs.

MR. PENNEY: Yes, I realize we could have gotten

this from the Estimates.

DR. WILLIAMS: Yes.

Those are two big areas.

MR. PENNEY: Okay.

DR. WILLIAMS: Then you have the road ambulance

program. Some of this is capital. I'm not sure if we talked - if you took the

whole budget - the $880 million, I'm not sure if that includes some capital

dollars or not. I would have to ask the Auditor General in terms of what figures

she used - but the other two big areas that are not included here - the other is

approximately $18 million for the medical school, so that is another big area.

Those are the three biggies.

MR. PENNEY: Thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you, Mr. Penney.

Mr. Dumaresque, do you have any questions before we

break for coffee?

MR. DUMARESQUE: I haven't very much, Mr. Chairman.

From what I've been able to gather, my colleagues are doing an admirable job and

have covered quite a bit of the subject matter.

MR. TOBIN: (Inaudible).

MR. DUMARESQUE: It includes you, too, Mr. Tobin,

I'm sure. I don't have any specific questions. I would like to take the

opportunity, though, to thank the Department of Health for the work they've done

in Northern Newfoundland and Labrador and for the excellent recommendations that

came out of the work done by Ms. Bishop and the former Minister of Health. I can

tell you, it is being very well received up there. It is the first chance to be

able to do so. I know a lot of work went into it, and I would like to -

[technical malfunction]

Recess

MR. CHAIRMAN: Now that we have finished our

coffee, I will call the meeting back to order. Perhaps I will just proceed with

a couple of things myself.

We had an interesting discussion earlier about the

whole accountability process, I guess, and reporting to the House of Assembly. I

think it is important that all departments and all agencies be accountable to

the House of Assembly. In this particular case, we were talking $568 million

here for 1992-1993. That is a significant piece of the provincial Budget which

is going out. Questions were asked before as to whether or not we felt that the

whole accountability process is sufficient to report to the House of Assembly. I

guess, what has really come out of this is the fact that not every department

provides an annual report. There is a tremendous amount of information in an

annual report other than just financial information which is of great use, I

think, to members of the House of Assembly and to departments and to Treasury

Board, to Executive Council, the Cabinet, in assessing the effectiveness and the

efficiency of various operations.

Unless we have these detailed reports, as

time-consuming and burdensome as they can be, I guess they are very, very

important. And I guess the bottom line is: That information is available, it is

simply a matter of compiling it in a reasonable form and presenting it for

presentation to the House of Assembly. I think it is a matter that the committee

will consider as a general policy for all departments at our next meeting and

see what kind of a recommendation, if any, we feel appropriate to make to the

House of Assembly as part of our final report. I think it is a very worthwhile

area.

Certainly, I guess, both this

section and the one that

we are dealing with this afternoon, the Department of Education, we have similar

comments made by the Auditor General, in that reports are not in the final form

that one would expect and are not perhaps as detailed and complete as you would

expect to be presented to the House of Assembly. We will move on with that.

I want to get into an area I hesitated to get into,

and I spoke with Ms. Bishop about it over the coffee break. It is a matter on

which I have been dealing personally with Dr. Williams and Ms. Bishop. I

wouldn't have brought it up except that we get into the area here of deciding

how funds are being spent. It's an issue that deals with a couple of patients in

the Province, and you know where I'm coming from here - deals with hyperbaric

oxygen treatment which is provided for people who have the bends; it's very

commonly used for that. And we're aware that a facility has been established by

MEDICOR at the Health Sciences Centre through the oil and gas agreements

funding, so that we now have a state of the art facility for anybody who has

difficulty while diving. Basically, I think, it gets nitrogen into the

bloodstream. So you breath oxygen under two or three atmospheric pressures for a

period of time and you depressurize slowly. But it is also being used for other

things, and particularly, for infections.

I have a constituent - not a constituent, in fact,

but, I guess, a patient who used to be a constituent - who has a condition known

as chronic refractory osteomyelitis, which is a painful and lingering infection

in the bone, in this case, in her leg. Everything possible has been done

medically and surgically for her, but she is in grave danger of having an

amputation as the result of this. There is a treatment being used in various

parts of Canada which is the hyperbaric oxygen treatment. I'm aware that - it is

not totally scientifically proven that it is a final cure, certainly there is no

evidence that it isn't. There is some evidence that it may at least help. Dr.

Williams is far more qualified than I.

I guess the position I'm coming to here is that we

have had a discussion on it as to whether or not that treatment should be made

available. Now, the interesting thing to me is that her doctor could very

legitimately refer her to Halifax, which is the nearest centre providing that

treatment on a regular basis in Nova Scotia, and MCP would cover the costs, very

significant costs. Her doctors estimate - and I've had both correspondence and

conversations with him - that it would cost upwards of $100,000 because you're

talking two hours of treatment a day for about a three-month period. So

relocating this particular patient to Nova Scotia, having those treatments, plus

the cost of the medical care and the disruption to her and her family, we're

looking at something like $100,000. To treat her here in the facility that we

now have and with the technology and the expertise available, you're looking at

$15,000.

Now, I can appreciate, the department's position and,

I guess, the hospital's position is that they haven't yet accepted this

technology as being a final treatment, something that is totally effective.

There are those who believe very strongly that it is, I am told, and there are

those who are sceptical. I guess my question is: when you're deciding how best

to spend your money - and it's very critically important, and I can accept that

- if there is no evidence that this technology would help, then I guess it's

incumbent on the department not to provide funding for that technology, but if

there is so much scepticism, why are we paying through MCP? If we are accepting

it to the degree that we will pay $100,000 to MCP to treat this patient, yet we

won't spend $15,000 in our own Province to utilize the expertise, personnel and

facilities that are already in place - if they weren't in place it would be a

different question. If we had to spend, I don't know, a couple of million

dollars or whatever it costs to put that facility in place, which fortunately

was done through Medicare, then I would agree, there certainly it is a question

on which we need more proof before we would proceed to cover that particular

procedure. But the facilities are in place, the expertise is in place and I

suppose it creates some of the basic jobs here in the Province in doing it

rather than sending the people to Nova Scotia.

Now there's concern that you're opening a floodgate.

I'm told by medical people and I stand to be corrected by the department, I'm

told that they're looking at maybe three, four or five maximum patients per year

at a cost of treating all four or five of them, in fact, you can treat four in

the chamber at one time, therefore you're not talking $15,000 per patient. If

the scheduling can be such that you can put four in at one time you're talking

$15,000 or maybe $20,000 to treat all four patients. So I think the concern that

we're opening a floodgate may be a little extreme here.

Could you tell me where we are on that? I know I've

been dealing with you on it. I know that a committee has been struck to look

into it. Could you tell me how soon we would expect a response and a decision on

that? Specifically, if it is going to take some time before the committee,

government and the hospital boards are satisfied that this is a legitimate use

of public funds, as you must, and I have no quarrel with that, but if we would

agree to spend $100,000 to have this person treated in Nova Scotia, why would we

not spend the $15,000 now to treat this person on an experimental basis to see

if indeed it does work? Let's use, I think there are two patients at the moment

who are waiting and that the doctors - at least that I'm dealing with - are

recommending to use this treatment. Why would we not use those two patients,

even as an experiment? It's still $15,000 (inaudible) $200,000 if you were to

send both of them away and (inaudible) a longer question of whether or not to

put a full scale program in place, why could we not do that? I hesitate to bring

that up here because I've been involved in it personally but it does tie in with

this whole question of deciding how to best utilize money. Dr. Williams would

you care to respond to that?

DR. WILLIAMS: Well, I'm sort of glad that, to be

honest with you, you brought up this issue because it really - what we've been

dealing with in terms of the Auditor General so far. I know that the Auditor

General has a different perspective on this, it's the whole issue of financial

accountability in the strictest sense of the word. Are we getting audits done,

are we doing this, are we doing that?

The other important issue in health care, where we

spend, you know, $800 million, approaching $1 billion now - is the issue of how

wisely the money is spent. How effective are the services and how efficacious

are the services that we are funding with this money? which brings in the bigger

question, the question you have really introduced here, that you have introduced

in the specific sense, and I will get to that in just a second. Are we doing too

many of certain procedures? Are the right indications there?

For a number of years, for instance, we have done a

Caesarean

section study in the Province and we are working on that issue right

now. Our Caesarean

section rates are a little higher than we would like them to

be. Over the years there have been good indications for Caesarean

section but to

get that translated into changes of behaviour and changes in rates is quite a

different matter.

What about our prescribing practices for people,

physicians' prescribing practices in the seniors area? There are physiological

changes as you get older and maybe they are not amenable to drug therapy. We get

into that area. They are very difficult areas to deal with.

The area of hyperbaric medicine has been on the go for

at least thirty years and maybe longer. We have only recently become aware,

through an organization that was set up by the conference of deputy ministers

called COHTA, Canadian Office Of Health Technology Assessment, and they have

been asked to look into the issue of hyperbaric medicine, so this has only come

to the department's attention in the past three or four months.

As well, there was a detailed study done in British

Columbia on the use hyperbaric oxygen and what its usefulness is in terms of

what kinds of conditions it is useful to treat. It is clear that for certain

conditions, such as the bends, as you referred to, which is the nitrogen bubbles

that divers get when they are down too long, or in another condition called gas

gangrene, hyperbaric medicine is very efficacious. It has been advocated in a

number of other conditions because hyperbaric medicine theoretically can

increase the supply of oxygen to the tissues - that is how it works.

Whether it should be used for other conditions such as

strokes - people who have had strokes, people who have peripheral vascular

disease, people who have what you referred to as chronic refractory

osteomyelitis, which is a bone fracture that somehow got infected and the

infection just can't clear up with our modern antibiotics; it is felt that by

increasing the blood flow to the fracture site, you will get more antibiotics to

the fracture site and you have a better chance of resolution.

Another area that has been advocated is

orthoradionecrosis - that is when somebody has a tumor in his face and has part

of his face removed, a mandible, this bone here, and then had radiotherapy.

Where there is difficulty in healing, they have used it for that.

The latest indications are that it maybe has some

benefit in orthoradionecrosis. There is not a lot of indications about chronic

osteomyelitis. There are no number of studies that have consistently confirmed

that it is efficacious, that it does provide any resolution. We are dealing with

a chronic disease that is difficult to treat. So that information has only newly

become available to the department. I understand, over the past ten years or so,

we may have referred only one or two people outside for hyperbaric medicine.

Primrose can correct me if I am wrong.

MS. BISHOP: We have referred two in ten years from

our hospital.

DR. WILLIAMS: There is currently debate in the

medical community about the efficaciousness of this particular procedure so

before we adopt any policy in terms of getting into this holus-bolus - once we

start, we know from experience that, although there is only going to be two or

three patients now, or four or five patients, I would predict that we will find

a lot more patients of whom physicians will say, well, we should try it on this

patient.

I think it has a tendency to grow and before we make a

final decision - and by the way, we hope to make that decision within the next

one or two months. It has been referred to the General Hospital's Medical

Advisory Committee, which is the committee of physicians - includes all

physicians - in terms of looking at this particular procedure and should it be

introduced at the General Hospital in terms of another program. Should we get

into a hyperbaric medicine program, set out the parameters, what the parameters

should be, what treatment protocols we are going to use, and who will supervise

it?

Before we get into that, if we do get into it, we have

to have a program that, I guess, in terms of doing the program, has to be done

at the high level so that patients - there is a risk of people getting injured

in this treatment, too. We have to have a program that we know we can commit the

appropriate funding to, staffing to, and have a high level program and service.

There has been a subcommittee of the Medical Advisory

Committee created at the General Hospital, whose role is to look at this in

detail and then advise the hospital board, and, in turn, the Department of

Health, as to how we should approach this particular issue for these particular

patients - I understand there are a couple at this particular point in time,

now, and maybe for the future, and should the General Hospital get involved in

this program.

We are hoping to have an answer on that. I talked to

Eric Parsons about three weeks ago. The committee was set up and they were

hoping to get back to the next meeting of the MAC in September but I do not know

if they will actually make that deadline. It maybe October before we get a final

position from them. We then intend to act on the basis of that recommendation.

That is where we currently are but I guess it introduces really the question of

how the $800 million or $900 million we now have spent is spent in terms of

efficiency of treatments, effectiveness of treatments, and efficacy of

treatments.

MR. WINDSOR: Thank you, Dr. Williams. I appreciate

the department's position on it and take the opportunity of pointing out how the

thing can grow. No doubt that is a concern and as you quite correctly said, we

are here talking about accountability and the best use of money.

The information I have from the doctor who has been

dealing with this is that last year the chamber in Toronto treated 130 patients

- a catchment area of 10 million people - and of those, 100 cases were

considered emergencies which you would treat anyway. These would be the

bends-type things which you would treat.

So, you are talking thirty cases in Toronto last year

which might be considered elective or something, whatever term you might want to

use. If there were thirty in Toronto I don't think we are talking huge numbers

in Newfoundland. Obviously, surely controls can be put in place to ensure that

the thing is not abused. My point is - and I appreciate your wanting to look

into it properly and make the right decision, by all means, and we would have

you back here next year criticizing you if you didn't, for us to recognize that.

But we have two patients there now, and there is one particular one that I'm

dealing with who is in grave danger of having a leg amputated and being a burden

on society for the rest of her life. She is not able to work now because of her

condition and with an amputation she certainly won't be able to work.

What I'm asking you, I guess, is let's look at that on

an experimental basis and do it forthwith. I don't know how urgent this is,

whether two weeks or three weeks is going to make that much difference. I've

been dealing with it for a month. The lady is in great discomfort. Anyway, I

don't know if you want to respond to any of that.

DR. WILLIAMS: Well, chronic osteomyelitis is not

critical in terms of a time frame. It is an ongoing condition that people

usually have for years before other decisions are made. It is something that we

should be addressing within the next month or two, I can assure you of that.

MR. CHAIRMAN: In the meantime, next week her

doctor might send her to Halifax if he feels it is critical.

DR. WILLIAMS: I think her doctor is probably aware

of - because he works at the General Hospital.

MR. CHAIRMAN: Yes.

DR. WILLIAMS: Both her physicians, actually. The

physician is the primary physician. I'm sure they are aware that this issue is

being looked at with a view to resolving it.

MR. CHAIRMAN: Thank you very much.

I will move on to Mr. Tobin. Would like to carry on?

MR. TOBIN: I just have a couple of questions to

the Deputy Minister, I guess. Back some time ago, the department brought in the

policy I guess to save money whereby specialists - and I'm thinking about

hearing specialists who used to go to the various hospitals throughout the

Province, such as Dr. Edgecombe and Dr. Chang, who used to go to the Burin

Peninsula. There was some sort of a cap put on it, where they were no longer

able to go for financial reasons or whatever it was.

Had the department done that strictly as a cost-saving

measure? Do they really recognize the hardship that they have created for those

people living in rural Newfoundland who have to pay out of their own pockets to

try to get to St. John's to see these specialists? They have to stay overnight

in hotels, they have to take taxis and, in some cases, boats, back to their own

home town. Why did the department budget to save that kind of money by imposing

this type of hardship upon Newfoundlanders?

DR. WILLIAMS: Mr. Tobin, that was a recommendation

that came from the Medical Association a number of years ago when we moved to a

capped global budget. The Medical Association, as partners with government in

the joint management committee, recommended, and it was accepted, that a ceiling

be placed on incomes of physicians. In terms of specialist physicians, I think

the ceiling was $400,000. Once they made more than $400,000 then they would get

only to keep a certain portion, and then above $450,000 it would be another

portion they would get to keep. I don't know the exact proportions, I would have

to look that up and tell you.

That is the basis of where that came from. Subsequent

to that there have been some adjustments in some of the components of the fee

schedule for ANT specialists. We have also told them that they can recruit

additional specialists. I think they have, in fact taken that upon themselves to

get an additional one or two specialists in St. John's that should be able to

provide that service. I would expect that with the additional specialists that

the physicians who are there will be below the cap anyway. I'm not certain of

that but certainly it was done on the recommendation of the Medical Association.

It wasn't an initiative started at the department. It came from the Medical

Association from their own members who felt that was a reasonable thing to do in

the circumstances.

MR. TOBIN: Does the department (inaudible) the

Medical Association?

DR. WILLIAMS: No, it is a partnership. We work and

reach a consensus on it. That is one that we did accept and it is one that

continues to be supported.

MR. TOBIN: I've seen (inaudible) a meeting

in-house where rural doctors have differences (inaudible) Newfoundland Medical

Association (inaudible) Department of Health (inaudible) so I'm not surprised

(inaudible) -

MR. CHAIRMAN: Mr. Tobin, could you move your mike

a little closer to you and speak into the mike? Because we are not picking it up

on tape.

MR. TOBIN: I'm not surprised that the Newfoundland

Medical Association would make that type of recommendation. The question that I

would like to ask you, as the administrator of health in this Province, is: Are

you aware of the hardship that is imposed upon people living in rural

Newfoundland as a result of that cost-saving measure by the department and the

Newfoundland Medical Association - when people in some parts of this Province

have been - Oliver Langdon's district in particular, and some cases in my own -

have to leave by boat, they are gone for three or four days, to come to St.

John's or Corner Brook to have hearings tests done before they can get home. Is

there someplace where health care takes precedence over the bottom line?

DR. WILLIAMS: Well, they still have to have

hearing tests done anyway. They don't do them in an outlying centre. There are

only certain areas where we have audiologists in place to do hearing tests and

those hearing tests would have to be done as part of the consultation process. I

think a number of physicians are still doing out-reach clinics in the Province.

MR. TOBIN: Yes. Well, I speak as a person with a

hearing problem and for that reason I am able to relate to people who have that

problem. I deal with specialists and all of that. And everybody is aware that

this action, by whomever is responsible, has placed tremendous hardship on

people living in rural Newfoundland who have hearing problems, speech problems

and so on, and I am wondering, is it reflected anywhere in your budget, how much

money you would save by doing this?

DR. WILLIAMS: Yes, it would be reflected in the

Medicare budget and would be reallocated to other areas. The budget in Medicare

is a capped global budget.

MR. TOBIN: Would you have any idea how much money

has been saved by capping these specialists' services with respect to the people

in rural Newfoundland?

DR. WILLIAMS: I will have to look at the

specialists; maybe they didn't exceed their incomes last year, I am not sure, I

will have to see the cap.

MR. TOBIN: I know that some of them didn't travel

to the Burin Peninsula who used to travel there before. I do know that because

of what happened and I have had some discussions with some of these specialists

myself, who have always offered their services and find it difficult that they

can no longer offer services, now that someone decided to prevent their going

down there.

DR. WILLIAMS: Well, they can still offer their

services, Mr. Tobin, if they wish to; there is nothing preventing them.

MR. TOBIN: Yes, but today, people who are

volunteering their services in this Province are few and far between. They can

offer their services if the Department of Health removes the cap.

DR. WILLIAMS: Well, if they could offer their

services down there, then they wouldn't be offering them in St. John's, so there

wouldn't be any difference, they will still be working. You know, if they don't

work in St. John's they will be working down there, so they are still offering

their services. So, it is just that it didn't matter where they offer.

MR. TOBIN: Yes, but you know, the people in St.

John's, great, they have that service but there are people in rural

Newfoundland, there are other institutions in Newfoundland, like, let's say, Dr.

Edgecombe's firm, they always travelled to the Burin Peninsula. They were

prevented because of the recommendation whatever it was, and the people in rural

Newfoundland are being denied a service, but surely, people in St. John's are

having it.

The people in rural Newfoundland shouldn't be denied

it and have to travel all the way to St. John's because someone is going to save

a few bucks. I wouldn't want to see the people in St. John's having to travel to

Burgeo to get this service and I don't think people should always be expected to

do that. I hope when you are doing your budget next year that, Mr. Hart, or

whoever is responsible, consciously that will click, that there are people in

rural Newfoundland who are penalized because of that measure.

I also have another question for you. How much money

is government saving by amalgamating hospital boards?

DR. WILLIAMS: Mr. Tobin, I think that figure over

time will become apparent. First of all, when you set up a hospital board, you

have to work with the new board and the old boards in terms of - one thing is

consolidating services in terms of certain areas. That won't become apparent

until the actual things are done and put in place and the new organizational

structure sets up. That is one reason, I guess - and not the primary reason -

why the move is towards regional institutional health care boards or regional

community health boards. It's a delivery service and co-ordination of service

type thing.

MR. TOBIN: Will there be any savings?

DR. WILLIAMS: Yes, there will be savings, in terms

of the support structures in place and this time of thing, finance,

administration, those support service areas, yes.

MR. TOBIN: For example, if I can refer to, take

one, The Burin Peninsula, again, Clarenville Burin Peninsula - Bonavista is

closed (inaudible) hasn't been done yet. Does anybody know what the savings is

going to be there? Surely, the department hasn't plunged into amalgamating all

these boards without knowing what the financial side of it is going to be?

DR. WILLIAMS: There will be financial savings, but

as I said, it is difficult to quantify them until you get the organizations

together, develop your organizational structures, look at areas that can be

consolidated.

MR. TOBIN: But if you are consolidating boards you

would have had to look at what benefits there are, and you said there is going

to be a financial benefit. Well, if there is going to be a financial benefit,

government obviously has done some sort of study to know that there is going to

be a financial benefit and can someone tell me how much that is going to be?

DR. WILLIAMS: We haven't, in terms of quantifying

what the financial benefit is - quantified financial benefits, no, we have not

quantified them; we know there will be savings from where we have merged other

boards some years ago, but the main purpose, again, of consolidating boards on a

regional basis, is co-ordination of service and delivery of service.

MR. TOBIN: How do you know there will be savings?

DR. WILLIAMS: We know there are areas that can be

consolidated, certainly in the support areas.

MR. TOBIN: But you have done nothing to quantify

it.

DR. WILLIAMS: No, we haven't done a detailed study

to quantify the exact amount. We have had previous experience and we know that

there will be, but I can't quantify them nor will I get into quantifying them

today.

AN HON. MEMBER: It's called common sense.

MR. TOBIN: Pardon?

AN HON. MEMBER: Common sense, it is called.

MR. TOBIN: Well, there is common sense -

AN HON. MEMBER: Do you have any of that?

MR. TOBIN: Tell the people of the Burin Peninsula

it is common sense when the board is going to be amalgamated and someone tells

them it is going to save money but yet didn't tell them they haven't had a study

done, and I certainly don't want to be argumentative with you here this morning,

but I want to know how someone can tell me that the government is going to save

money without any studies or some sort of report being done.

DR. WILLIAMS: Well, we had one report done, it was

the Dobbin Report, and obviously, it didn't quantify the savings but we know

that there will be savings in certain areas when you consolidate areas in the

support areas, but I am not prepared to quantify that amount because I don't

have it quantified in terms of saying it will be this amount or that amount.

MR. DUMARESQUE: And all the changes haven't been

done yet?

DR. WILLIAMS: No, that will be worked through.

Depending on the size of the organizational structure, it will take some time to

see what these savings will be, but that's only one of the reasons, I am saying,

for doing it. The other more important reasons are the issues of co-ordination

of service and service delivery to patients.

MR. TOBIN: Have you had a study done to that

effect, besides the Dobbin Report?

DR. WILLIAMS: We had the Dobbin Report done, yes.

We have had discussions with organizations around the Province in follow-up to

the Dobbin Report and before the Dobbin Report.

MR. TOBIN: Do you feel then, that the people who

are directly involved in hospital boards in this Province, who have operated

hospitals throughout this Province - they, and particularly the people I deal

with, are saying the exact opposite to what you're saying. Who determines who is

right or who is wrong?

DR. WILLIAMS: Well, the ultimate decisions are

policy decisions that are made by government.

MR. TOBIN: Well, then, we can assume that

everything everybody else is saying, the whole boards that oppose it and argue

everything you've said -

DR. WILLIAMS: I'm sure that government takes into

consideration people's comments and concerns, but ultimately government has to

make the final decision.

MR. TOBIN: Okay.

DR. WILLIAMS: It's a policy decision.

MR. TOBIN: That's it for me.

MR. CHAIRMAN: Thank you, Mr. Tobin.

Mr. Crane, do you have any further questions?

AN HON. MEMBER: Nothing further.

MR. CHAIRMAN: Mr. Penney?

MR. PENNEY: No further questions.

MR. CHAIRMAN: Mr. Dumaresque?

MR. DUMARESQUE: No, Mr. Chairman.

MR. CHAIRMAN: How efficient are we this morning?

I have a couple of things I wanted to raise, one

dealing with - you touched briefly on the $10,000 issue, in fact, I guess we

dealt with it at some length, of prior purchasing without that.

I noticed before, and it's mentioned here as well,

that there have been a tremendous number of exemptions to the Public Tender Act

from hospital boards, and every month when these are tabled in the House of

Assembly, a very high percentage come from hospital boards. I look at them; one

of the things that I do, as part of my responsibility in the House of Assembly,

is monitor the Public Tender Act fairly carefully, and I look at these every

month carefully. Most of the items are specialty items and so forth. I look at

them and say: Well, I don't see an area for great concern there.

What concerns me is that surely there must be a better

process to deal with it than having these reported every month, if these are

legitimate, if there is only one supplier that can provide this specialist piece

of medical equipment, or replacement part for this particular thing. Surely

there must be something on it. Maybe the Auditor General would like to comment

on it. I will ask Dr. Williams to respond and we'll let the Auditor General

think about it. Surely there must be a better way of dealing with both of these.

We talked about the verbal approval to go ahead with

the $10,000. Surely that's a simple matter of saying you now have - verbal

approval is as good as approval. If the assistant deputy minister is prepared to

give you verbal approval to go ahead, that's approval in my books; you've got

your authority in accordance with the budget and so forth. Perhaps we could do

something similar with the Public Tender Act.

Would you like to comment, Dr. Williams, on that?

DR. WILLIAMS: Yes, I think that's a valid comment.

Many times in the health care system in certain very

specialized equipment there is sometimes only one supplier that can meet the

specs. You have the other issue, too, in that you have very technical people

such as physicians, specialists, and other technical people, who have a lot of

experience with equipment, with it's reliability, and these other things have to

be taken into consideration when the specs are done up, so I guess the Public

Tendering Act is

an act that should be followed, has to be followed, and it

requires - and I don't want to get into the policy on reporting to the House of

Assembly, this type of thing, but that issue is recognized and we have noted

that in previous audits by the Auditor General, in pretty well all organizations

there was concern expressed by the Auditor General to the issue of the Public

Tender Act legislation.

We sponsored, with the Government Purchasing Agency, a

seminar which was given last year in Gander to all people in the institutions,

nursing homes and hospitals, who had the responsibility for purchasing - the

seminar by the Government Purchasing Agency - to talk about the Public Tender

Act and what was required of institutions. I presume, in the discussion, the

issues that you're raising would have come up, and probably some advice was

given about how that could be handled in a reasonable manner.

We have also written, on February 10, again to the

CEO's of hospital and nursing homes, talking again about the Public Tendering

Act and some of the issues there, too, and in correspondence that the Minister

of Works, Services and Transportation had.

We sometimes get caught in the middle at the

department when various suppliers feel aggrieved in the Public Tendering Act

process and this type of thing. We've got involved, on a number of issues,

usually through Chris Hart, in terms of was the act followed?

It's a very technical act. I'm not familiar with all

the piece of it myself, and I don't work with it on a day-to-day basis, but

there is recognition, at least from a health care side, anyway, that there are,

on many occasions, some single source suppliers who can meet all the specs; yet

there are other areas that, as focused on by the Auditor General, things are not

always done that could be done in keeping with the Public Tender Act. So we try

to provide a good overview through a seminar process with the Hospital and

Nursing Home Association people who are involved in purchasing, and also send

out some correspondence that we got from Works, Services and Transportation with

our own slant on it in February of 1994.

MR. CHAIRMAN: Could you tell me if there are, in

your opinion - I realize it is difficult for you to quantify - are there many

instances where perhaps doctors or administrators specify a particular piece of

equipment because they're familiar with that piece of equipment, or they have

some particular desire to have that particular type of equipment, even though

there may be four different manufacturers of equipment that will do the same

job, but the person wants that particular piece of equipment? If you had to have

that to tie in with other existing equipment then that's clear, but are there

many instances where it's simply a preference of a doctor that we're talking

about?

DR. WILLIAMS: Certainly the doctors, if they're

using the technical equipment, and the other technical people have a major input

into it, sometimes the argument is - and we've heard it and it's valid in many

cases - that `We have already purchased other equipment and this is just a

module that can only adapt to the other equipment.' So that makes it almost a

sole source item.

We challenge, when we're involved - we were involved

on a couple of occasions before some things went to tender - a few years ago we

had a number of hospitals get together to have a CAT scan tender. Instead of

having one hospital tender and another hospital tender and another, they decided

to get together and tender for one package of two or three CAT scans because

they'd get a better price. So we had to go and discuss it, on that case because

there were some concerns raised before the final tender process, in terms of the

equipment that the doctors wanted. When we really got into it, it related to not

only what the equipment can do but the service contracts that were in place and

the reliability of the equipment over time that the doctors in these hospitals

have with pieces of equipment by one of the manufacturers. So you have to take

that into consideration, too, prior experience, can it do the job, how much

downtime are you going to have and this type of thing because again, you're

dealing with patients and if you get downtime in your equipment then you have a

problem. So you have to consider those aspects, too, prior experience as well,

with that particular manufacturer or pieces of equipment.

MR. WINDSOR: How much of it is PR and pressure

from manufacturers to the doctors?

DR. WILLIAMS: Well, we're involved - we try as

best as we can to sift through that, obviously, and discuss it with people. I

guess you're relating that to the drug industry where there's a lot of PR and a

lot of money spent on advertising the positions. There may be some of that, but

the cases we've been dealt with, we felt that a lot of it was due to - in the

one circumstance I remember dealing with, the hospitals could document to us

that there were problems, and had some other material at their hand to say there

were problems as well. But I think a lot of attention needs to be paid when

hospitals are grafting the specs to go out in the public tendering process to

these issues before the specs go out and a lot of problems could be avoided. I

would hope that some of these issues came up again at the seminar.

MR. WINDSOR: Okay. Did you want to add anything?

Ms. Marshall.

MS. MARSHALL: The comment you raised earlier was

on the reporting exceptions to the House of Assembly, when organizations are

purchasing from a sole source, that's a requirement of the Public Tender Act.

Section 10 says, if you buy from a sole source that you do have to go back and

notify the House. I think the option is there that the House of Assembly could

amend that

section of the act if they wanted to do so, so that those exceptions

do not go back to the House or exceptions over a higher dollar value go back to

the House. So that's the option.

MR. WINDSOR: On the other hand, the fact that they

have to be reported, I guess, ensures that they are indeed a sole source,

otherwise, lots of exemptions could be taken under the guise of sole source.

I'd like to get into one other area of interest. It's

not in any of the information here but it deals with an area that, I guess there

is an over accountability or very little accountability yet involves tremendous

expenditure of money - we happened to touch on it over coffee, although that's

not the reason for my question, I had intended to ask it. It deals with

referrals by doctors. There are two things; one is, when you go to a doctor

today - you start off with a GP, of course, as you must, and the GP will refer

you to a specialist and the specialist will report back to your GP. So you end

up with, I guess, three visits that are being paid for.

Whereas, I suppose, many

patients could say, I really need to see a specialist about this, and could

start off going to a specialist, but as I understand it, you can't do that

unless you're referred by a GP. You can't go to a specialist, so you have that

problem. But there are other tremendous costs as well. I am aware of a number of

cases where doctors have said: `Come back and see me in thirty days', which is

probably unnecessary. In many cases, a doctor will say: `If it doesn't clear up,

come back and see me in thirty days', but that's not what he's saying - he's

saying, Come back and see me in thirty days. You walk in in thirty days, `How

are you?' `I'm fine.' `Well, that's grand, boy, good luck to you', and that's it

- but that's another visit.

The other area of concern I have - and I've had some

personal experience with this over the last number of months - is patients from

out of town being referred to St. John's and then called back again. Now, the

cost of that is quite significant, either to the patient, or to the Province if

that person is on social assistance or getting some transportation provided

through any government program. I'm aware of a number of cases where a patient

has been given an appointment in St. John's, has travelled in from Central or

Western Newfoundland for thirty seconds with a doctor who said, `Yes, well, I

have your return and we're going to

schedule your surgery in three weeks time.

Come back again in three weeks.' I actually saw that case, where the doctors -

the nurse could have said: Well, we have the information now, we're going to

proceed with the surgery, or whatever. The doctor said absolutely nothing,

didn't examine that person or anything else.

I know of another particular case where a patient here

in St. John's was referred to a specialist who hardly even looked at the woman

and said, `Well, here's your problem; take this and go to bed for ten days, then

go back to your own doctor.' What I'm asking is this: Is there any way to

monitor that? I know it's an extremely difficult problem but it appears to me

that to some degree there's a club there, the Old Boys' Club between doctors -

they're referring each other back and forth but maybe that's just a small amount

of involvement. My greatest concern is the lack of appreciation by doctors of

the cost of referring people, not only the cost to government but the cost to

patients. You take a patient who comes in say, from Central Newfoundland; you're

talking at least two days, half-a-day to drive in, half-a-day to drive back and

half-a-day waiting around a doctor's office to get in to see him. I went last

week to see a doctor on a check, I waited for three hours and was told I had

another three hours to wait so I left and came back the next week, paid my

parking ticket that I had the first week and waited another two hours then to

get back to see him. You know, there seems to be a lack of appreciation by

medical practitioners of the cost to individuals. I realize that's not your

problem. Doctors don't seem to know how to

schedule their time. If I were to

treat my constituents as doctors treat their patients, I'd never get elected,

let me tell you, if I had them sitting there for three and four hours like that.

My biggest concern is this matter of referring multiple times when that patient

really probably didn't need to come back, but there seems to be a lack of

concern. Can you address that? Are you aware of that problem? Is it something

you are dealing with?

DR. WILLIAMS: They are issues that are being

discussed with the joint management committee, obviously. They are not only in

Newfoundland but they are issues that are being discussed across the country in

terms of what is appropriate medical practice. Should somebody with high blood

pressure come back every month or is every two or three months sufficient? Then,

not everybody with high blood pressure is the same. Some people have a mild case

of high blood pressure and maybe every three months with a - a low dose drug can

do the trick. If the doctor knows the patient's history he can manage the person

that way.

There are other people who may need to be back every

month with hypertension. Hypertension is difficult to control and they may have

multiple drugs, a history of complications, and this type of thing.

MR. CHAIRMAN: That is a good example, if I could

just interrupt. Maybe that patient needs to go down the road to the medical

clinic and have a nurse check the blood pressure once a week or once every two

weeks, and if there is a change -

DR. WILLIAMS: Then go back.

MR. CHAIRMAN: - then that nurse says: Better go

back, see your doctor. I mean, there is surely - anyway, I'm sorry.

DR. WILLIAMS: There are various things being

looked at at the national level, and actually started in terms of clinical

practice guidelines as to what are the accepted norms for different clinical

conditions in terms of seeing physicians. There has been some work done in this

Province with the primary nursing care program on the Southern Shore, which we

are now in the stage of evaluating. What implications does that have for

utilization of health care services and medical services on the Southern Shore?

Having other providers of health care become involved, people who have less

training but can be used for monitoring, and then when things are out of whack

in their monitoring, can be referred to a higher level of care.

I'm concerned, certainly, with somebody coming in who

has been referred in - after I presume a great deal of thought gone into it by

their family physician before they refer people; I hope they don't refer people

frivolously - and then having a doctor spend one or two minutes with the person

and not even examine him, and send him home. Maybe they need to see the patient

to confirm the diagnosis before they put them on their list for surgery. I'm not

sure of the particular circumstances involved. If it were happening all the time

well, obviously, I would like to know what the physician is billing for. If the

physician is billing for a consultation fee, then it may not be appropriate if a

certain amount of time and effort are not expended on examining the patient.

You've heard, of course, that we had an audit program

at MCP and still do have an audit program at MCP, to look at situations on a

regular basis. Letters are sent out to patients and they are asked to provide

information to MCP: Is this service provided, or was it provided and when, and

this type of thing. How much time did the doctor spend with you? Did the doctor

do a general assessment? Did the doctor not do a general assessment? If a

certain number comes back, then that triggers MCP to go further, and go out and

talk to the physician and follow up from there.

There were some concerns with that particular program

when it started but a committee of the Medicare and the Medical Association were

put in place and they made some modifications and recommendations. That process

now has the full support of the medical profession in terms of looking at how

the money is spent, in terms of, I guess, the Medicare program, if physicians

and patients and the public are getting value for the money they spend on

physician services. Those are a couple of areas that are being looked at.

There is no easy solution. You have still - the

program relies basically on the integrity of the practising physicians. Whether

those physicians are on salary or on a fee-for-service basis you still rely on

their professional integrity to deliver the services and provide a reasonable

amount of service for the salary they get or for the billings they submit to

Medicare.

MR. CHAIRMAN: Thank you very much. I don't know if

there are any other questions from members of the committee - apparently not.

Normally, at the beginning of a session, I give the

Auditor General and the spokesperson for the witnesses an opportunity to make an

opening statement. I decided this week to change that because generally the

opening statements are simply reading out what we have been presented in the

data sheets, the fact sheets we have been given. I'm told that in this case,

both groups had prepared very interesting and informative opening statements

that would have been very good, so I chose the wrong time to do it.

Perhaps it is more appropriate now to give them both

an opportunity to make a closing statement, as I do anyway, but perhaps anything

that they wished to have said they have an opportunity to say now.

Ms. Marshall, would you like to make final comments?

MS. MARSHALL: Basically, I just wanted to draw to

the attention of the committee that the issue here for me is the framework of

accountability over the Department of Health and the various health care

institutions. The Department of Health has already put in place a framework of

accountability. They've used the hospitals act, they've also established their

own policies and procedures. They are requiring certain information,

documentation, from the various hospitals on the boards and they are also

carrying out an internal audit function.

There are two areas there where I had, I guess,

significant concern. One was the reporting by the various institutions to the

Department of Health. I felt that there should be more accountability. I

understand from the information that was presented here this morning that the

department has made some motion in that direction. They are going to require

accountability documents from the institutions.

The second issue is the accountability to the House of

Assembly. The House of Assembly is voting hundreds of millions of dollars for

the Department of Health, and they, in turn, use this money and give funds over

to the institutions, yet there is nothing in the way of information or very

little going back to the Members of the House of Assembly, and I think really,

the accountability process should go full circle. If the House of Assembly is

voting the funds for these programs, then the House of Assembly should get

information on the programs that are being delivered.

MR. CHAIRMAN: Thank you very much. I guess we do

get some information through your audits and so forth and through this committee

but, as we said earlier, there is certainly room for a lot of improvement there.

Dr. Williams, any final remarks from you?

DR. WILLIAMS: Thank you, Mr. Chairman.

Mr. Windsor, I don't propose to take up the time of

the committee with any lengthy remarks but I would just like to say a few

things.

We are aware, of course, that a significant amount of

the provincial Budget is allocated to the Department of Health, some 25 per

cent, and a significant amount of that is provided for grants to institutions

and other agencies, and I think my staff and I have appreciated the opportunity

to be here today to discuss some of those issues with you, not only the grant

section but other issues that you brought up.

As I said, the department is aware of, and takes very

seriously, its responsibilities to ensure these funds are used for the purposes

for which they are voted, and that there are appropriate controls in place for

the effective monitoring of these transfer payments to which the Auditor General

referred. The system of controls, I guess, are in five particular areas and we

talked about some of them today. One is the very detailed budget review and

preparation process that goes on in the preparation of budget and discussion

between departmental staff and the hospitals.

The expenditure monitoring process that we put in

place on a monthly basis; the internal audit functions which the department has

instituted and which are supplementary to the work that the Auditor General has

done over the years, to some supplementary auditing processes we put in place

and to the hospital audited financial statements and management letters and

other things and response to the management letters that come in.

We have also been involved in operation reviews and

programs and services reviews and your detailed reviews with the various health

care organizations out there from time to time, and from year to year, and we

have effective reporting and monitoring mechanisms that we put in, in terms of

taking the Auditor General's suggestion of changing our audit mandate in the

sense of the documentation that we require and bring it up to reviewing it and

making any necessary modifications and targeting more intense audits at the

whole issue of the Public Tender Act.

In recent years, with the help of the Auditor General

and her staff, we have taken a number of measures to strengthen and improve this

accountability as we have talked about before, and we are pleased that the

Auditor General has acknowledged that some improvements have been achieved. As

we said earlier, some years ago, in response to recommendations from the Auditor

General at the time, the departments had senior financial officers in place. We

recruited such an individual in the person of Mr. Hart, and we structured our

financial services

section of the department so that they report directly now to

Mr. Hart, and we feel that is helping us in achieving the accountability that we

must have, in which the boards, I think, must be accountable to us and, in turn,

to the minister.

I guess, Mr. Chairman, we have not been able to

achieve all the controls that the Auditor General would like to see and that we,

too, would like to achieve, but I believe we have made significant progress over

the past few years. Again, I want to close by saying we have appreciated the

opportunity to be here today and explore with you some of your concerns and

hopefully, we have been able to provide you with information as helpful to you

in doing your job in reporting to the House and I want to thank you for that.

Thank you.

MR. CHAIRMAN: Thank you very much. On behalf of

the committee, I want to thank the witnesses and the Auditor General and her

staff, and my own staff for their assistance here today and for the manner in

which you have dealt with the questions put forward to yo