Each Canadian province has created somewhat different structures to manage health service delivery. Through the 1990s, most adopted some form of regionalization and devolved a certain amount of responsibility for identifying and meeting health care needs to these regional structures. But in 2008-2009, two provinces took sharp turns away from regional models. Deputy Minister of Health Don Ferguson, describes why New Brunswick cut the number of health regions from eight to two. —Report from a presentation at the 2009 conference of the MUHC-ISAI

New Brunswick has a population the size of Ottawa’s. Health care employees make up half of all the public servants in the province. The system is expensive and growing, with problems that do not bode well for the future. In the past few years, New Brunswick has been trying to understand problems in the system and lay the groundwork for improvement. Problems fall into three main categories: system governance, financial and clinical unsustainability, and culture and attitude.

A system in need of reform

In terms of governance, until this year we had eight Regional Health Authorities (RHAs), which operated as eight almost independent health systems: eight boards, eight different payrolls, eight different staff training programs. Care was not standardized, wait times were different, patient flow from a small hospital in one region to a tertiary hospital in another was not smooth. There was a lack of focus, a lot of competition for services and resources, significant recurring annual deficits, too much administration, and too many silos for such a small province. Health care spending, including senior care, will exceed 50% of total provincial spending in four or five years. The system is growing at 8.6% a year, much higher than growth in provincial revenues. Even if we had great outcomes this would be bad news, and we do not.

What is going on in the system to produce this rate of growth? There is unplanned, unapproved and almost unrestrained growth. Last year, the system grew by 300 full-time equivalent positions during a hiring freeze, a number equal to the whole Department of Finance. Costs for everything are going up, sick days and overtime cost $63 million a year, and productivity in terms of unit-producing hours is the lowest in the country. We do CAT scans significantly more than anywhere else in the country.

There was very little financial discipline in the regional system. Large and growing deficits in the system, which were covered year after year, brought on more deficits. The self-importance of health trumped everything and rolled over other departments. The prevailing attitude among those managing health care was that they did not need to pay attention to dollars.

In terms of culture and attitude, there was a lack of focus on respective roles. The RHAs quietly grew the system on their own, while the Department of Health micromanaged the system to such an extent that it owned just about every problem in it and bounced from crisis to crisis. And this bouncing really took away from a strategic look at the system. There was also an extreme lack of trust. The relationship between the Department of Health and the RHAs was atrocious; the relationship between doctors and the Department of Health was also very poor. You cannot do anything in health care without working with physicians, and you cannot have a relationship based on disrespect. The latest reform in New Brunswick was carried out without any consultation, because there was no trust.

Fixing the system

The plan we have developed in New Brunswick over the past few years involves reorganizing governance, setting growth goals, making sustainability a focus, aligning systems for improved performance, and addressing culture and attitude. Implementation is still at its early stages.


The Department of Health started with governance and undertook a fairly major reorganization by reducing the number of RHAs from eight to two and adding three new entities: the Health Council, Ambulance New Brunswick, and the Shared Service Agency. The goal is to have one fully integrated system. These entities are to work together, plan and create one system, and stick to their roles. The Department of Health is responsible for vision, strategic direction, planning and design, setting funding levels, setting and monitoring standards in cooperation and consultation with the RHAs, and getting out of the RHAs’ business.

There is now one mainly francophone RHA and one mainly anglophone RHA (almost twice as large) with non-elected boards. They develop regional health and business plans, manage clinical and health services, and work in consultation with each other. The Health Council is a new arm’s-length body, responsible for system performance and providing a forum for citizen engagement. Ambulance New Brunswick consolidated into one system the 54 emergency medical service providers in the province. The Shared Service Agency is meant to consolidate and manage all non-clinical services for the two RHAs and save $20 million a year.


Targets for growth are decreasing and, if met, will become even more aggressive. The aim is to have $600 million more to spend on things other than health care four or five years from now than we would if we did not do anything. This approach is politically attractive because even though there will be less money in the system than if we did not restrain growth, we will still be increasing from $6 million per day to $8.2 million per day.

Sustainability is about making reasonable and informed choices for the best affordable and equitable health care now and in the future. It has four elements: It is citizen centred; it achieves optimal health outcomes both at the individual and population level; it provides quality and timely service delivery; and it is efficient and affordable.

We have created an Office of Sustainability within the Department of Health, and are planning to implement a sustainability lens. The aim is that every time we make an investment in technology, programs or services, it is put under that lens to ensure alignment with the essential components of a sustainable system. It is an evaluation tool meant to focus attention on strategic priorities and sustainability right at the initial planning stage. We are giving the Health Council a mandate to evaluate our performance every year against the four elements of sustainability.

We are also working to redesign our nursing strategy. Only about 75% of our nursing positions are filled, which leads to overwork and the $63 million in overtime and sick leave.

The knee-jerk response is to add more money to encourage more people to become nurses. But even the president of the nurses’ union does not think that 10 years from now we will be able to fill 100% of our nurses’ positions. The solution may be to create a system that needs 80% of the nursing positions we currently have, and we are now piloting a “lean” process in one hospital in each RHA to redesign the wards and see if we can build a system that requires fewer nursing positions.

Community involvement in health care brings energy and money into the system. But it also encourages the type of piecemeal expansion that makes our system inefficient and expensive. Government has to work closely with the Foundations to build the system coherently rather than add onto it piecemeal.

Aligning the system for performance will take hundreds of thousands of actions, some big enough to exact a political price, but many others so small that people will just notice that the system is no longer such a hassle to use.

We have a roadmap to guide our work over the next five to 10 years. We have formed a joint planning framework of the six entities with two purposes: to integrate the system into one through joint planning, and to work on sustainability. A complete review of clinical programs was started by the previous government and is ongoing. We want to identify all the programs and services developed over the years, because we have created a monstrosity. We now need to review the mandate of these programs and services, their operational model, their integration or linkage with other programs, the duplication of services, and expectations for performance and outcomes. Funding needs to be aligned with performance expectations, and we need to look at ways to provide incentives. We must also eliminate perverse incentives: funding deficits, which only serves to encourage more deficits; funding volumes, which encourages more inputs; global funding, which encourages the status quo and discourages cost control because the Department of Health gobbles up any savings.

Ask what before how

Distinguishing the what from the how is critical. The tendency is to go right to the how. But when money and human resources are scarce, innovative delivery mechanisms are needed and bringing these in is much less explosive if you start with the what. Take, for example, the challenge with small rural hospitals. They are clinically and financially unsustainable, are of uncertain safety, and face staffing shortfalls. The Health Council is engaging the population to look at their needs, and encouraging them to look at what those needs are carefully before venturing into how they might be fulfilled. We might come up with a radically new model for health care delivery.

Cultural evolution

Culture and attitude are the biggest challenge we face. We need to put our personal and professional agendas aside and recognize that things cannot go on as they were. Leadership is needed from the politicians, the RHAs, the Medical Society, the unions, and the professional associations. We need leadership that can harness the effort, the energy and the knowledge of those working in the system and encourage them to share their work and try to improve the system. Back in the 1980s, governments knew that budget deficits were unsustainable, but it was only in the 1990s that they could do anything about it, because the public started to demand action. We need the same thing to happen in health care.

Everyone needs to understand that outcomes matter, that evidence is mandatory, that we need a good balance between micro, meso and macro issues, that advancing one institution might actually weaken the whole system, that New Brunswick cannot afford more than one of everything, and that there is more to government services than just health care. We should expect more from our system for all the money we put into it. I believe we can change the culture if we work together. We have no choice really: The viability of New Brunswick as a province if we do not solve health care is not looking good.


Reorganization in New Brunswick: Why and how?

Challenge: Reduce costs, reduce duplication, eliminate regional differences in access and increase mobility of doctors and patients within the system.

Approach: Eight elected volunteer RHA Boards were eliminated in 2008 and replaced by two appointed, competency-based, compensated Boards of Directors, accountable directly to the Minister of Health. The Minister acted as Trustee in the interim. The two new RHAs have a broad mandate to deliver health services within New Brunswick. They are responsible for managing and delivering a variety of services including hospital, community health centre, extra mural, addictions and mental health and most public health services.

The Government of New Brunswick also consolidated non-clinical services such as administration, finance, information technology, purchasing and laundry, under the mandate of a single public sector company called Facilicorp NB. A provincial Health Council is to be created as watchdog for the system.