BIG PAYOUTS IN HEALTH CARE
TransForm spending $500M a year
A little-known local health care organization that spends half a billion dollars in taxpayer money annually — and which has 20 employees on the Sunshine List — could double in size over the next year. TransForm, which launched in 2013 and has an annual budget of $25 million and about 150 employees, is known as a shared service organization.
In other words, it works for several institutions, in this case purchasing supplies and managing information technology for five Southwestern Ontario hospitals: Windsor Regional Hospital, Hotel-Dieu Grace Healthcare, Erie Shores HealthCare, ChathamKent Health Alliance and Bluewater Health. TransForm, based in Chatham but with staff in all five hospitals, could soon grow by 10 to 100 per cent, depending on new projects, according to CEO Paul Audet. “Over the next year we could potentially double our size, depending on what happens,” he said. “Our future from a growth perspective is not unlimited, but we could do a lot more in the months and years ahead.”
Virtually every Band-Aid, tissue and big piece of equipment at the five hospitals in the Erie St. Clair Local Health Integration Network is bought by TransForm, which also runs their IT services. Soon TransForm may expand into doctors’ offices and clinics, and provide even more managerial help — which Audet says will let health care professionals concentrate on patients.
But NDP health critic France Gelinas warns against the growing use of shared service organizations.
“This entire sector that spends billions in taxpayer money is completely opaque,” said Gelinas, noting that most people have never heard of shared service organizations, which she believes allows them to operate under the radar. “There is no accountability or transparency.
“They find technicalities ... to exempt themselves from scrutiny whatsoever, including the Sunshine List and the auditor general. But the technical reasons to me are not reasonable.”
Some of the nine provincial health care shared service organizations don’t post salaries publicly in Ontario. TransForm had posted its salaries till last year. A spokesman said the organization was exempted from publicly disclosing salaries because it received less than $1 million in direct ministry funding — despite that it runs on public cash.
After a question about the Sunshine List from the Windsor Star last month, however, TransForm posted 16 of 20 salaries above $100,000 — the employees who gave permission to disclose their numbers.
The TransForm list includes Audet’s $237,000 2017 salary, which is a little less than City of Windsor CAO Onorio Colucci, who earned $247,144, and police chief Al Frederick, whose salary was $241,144. It was the same as that of Erie St. Clair LHIN CEO Ralph Ganter, who earned $237,723, and higher than Mayor Drew Dilkens, at $174,289, and fire chief Stephen Laforet, at $151,129. Besides salaries, Gelinas said, it’s hard for the public to check into spending by shared service organizations.
She also notes that the chemo drug scandal — in which 1,202 cancer patients in Ontario and New Brunswick received diluted chemotherapy drugs in 2012 — resulted from a lack of due diligence at a national shared service organization, Medbuy.
“What we learned from the diluted chemo drugs is that there is a lot of money not accounted for,” Gelinas said. “Hospitals have a lot of accountability and transparency. The minute they send these same activities to the shared service organizations, it becomes completely opaque.”
Gelinas likes the idea of buying in bulk to save money. But creating less-transparent corporations out of public entities — Tarion, Ornge, Enwin, to name a few — is happening in more than just health care, she said, which should cause citizens concern. Executive salaries tend to balloon.
“They continue to grow and morph and become just about anything they want to become,” Gelinas said.
“And there is a growing number that have decided, no, we don’t have to be subject to the Sunshine List. I disagree.” Windsor Regional Hospital CEO David Musyj agrees that shared service organizations should disclose top salaries, but disagrees that they have lax rules. “Shared service organizations are mandated to follow the same public sector procurement guidelines as hospitals,” said Musyj. “Since 2008, the rules have become more rigid every year. Pretty much, if I want to buy a pencil (for the hospital), I’ve got to go to an RFP (request for proposals).” The strict rules make shared service organizations even more necessary, he said.
“All five of our hospitals would have to have people in house who had expertise in the broader public sector procurement guidelines,” said Musyj, noting that TransForm helps cut costs with overhead, prices and expertise. “Could we have gotten some of those prices on our own? Possibly, because Windsor Regional makes up over 50 per cent of TransForm. But could the other hospitals have gotten those savings? No.” TransForm offers a slick website, perhaps benefiting from all the IT people it employs, though the explanation of what it does might seem rather vague for the average person, with lines such as: “We take pride in developing and implementing advanced initiatives that improve efficiency and help clients focus on providing outstanding patient care in the Erie St. Clair region.” Audet says the value is clear: saving the health care system money and freeing up hospitals to concentrate on patients. He said TransForm saved the LHIN $7 million in the cost of supplies last year alone.
“What I can say with 100 per cent certainty is the mandate we get from our hospitals is that we are to act as though we are still part of the hospitals,” said Audet, who works in a nondescript office at Hotel-Dieu Grace Healthcare. “Our hospitals hold us to the same standards of accountability that they’re held to.”
The added value is why Audet believes it makes sense to increase the use of shared service organizations such as TransForm: “How do we do what we do but do it better? We want to be innovative to take costs out of the system.”