The Waterloo Wellington Local Health Integration Network (LHIN) was scheduled to consider the appointment of a facilitator to work with governors, staff and the community “to further integrate the governance structure of hospitals” in Wellington at a meeting on Aug. 13.
The recommendation is contained in a report that calls the partnership between North Wellington Health Care (NWHC) and Groves Memorial Community Hospital “fractured and dysfunctional.”
The report states NWHC is planning to leave the alliance, yet it also outlines a path to full amalgamation of the two organizations’ board of directors.
The county’s two hospital corporations, NWHC, which operates hospitals in Palmerston and Mount Forest, and Groves Memorial Community Hospital in Fergus, already share a single CEO, Jerome Quenneville.
However the LHIN is pushing for further integration, specifically in the area of governance.
“Over the past eight months a disagreement between North Wellington Health Care (NWHC) and Groves Memorial Community Hospital (Groves) has resulted in their partnership becoming fractured and dysfunctional,” states the report presented by Gloria Cardoso, the LHIN’s senior director of health system integration.
“The dispute pertains to the renewal of the CEO’s contract and how best to move forward with opportunities to strengthen the health service in Wellington County.”
In 2013, the LHIN board endorsed the Rural Wellington Health Services Integrated Plan, which “focused on achieving optimal health and well-being for rural residents through a truly integrated health system.”
Highlights of the LHIN’s May 28 board meeting note “Rural health care providers agreed through a memorandum of understanding to implement the report’s recommendations.”
In an update to the board at that time, LHIN CEO Bruce Laukner pointed out the plan included a review to consider progress, structure and governance and identify the next steps in integration.
“While there is evidence that some progress has been made, other elements, including integrated governance, has not yet been completed,” Laukner reported.
Noted in the highlights package is that, “The Waterloo Wellington LHIN has been working with both the North Wellington Health Care and Groves Memorial Community Hospital boards on how best to proceed with implementing the plan as it relates to enhanced health outcomes, better access to care and value for money.”
The LHIN also engaged consulting firm KPMG to conduct a review of progress on the plan and address “the governance issues to support a truly integrated rural health system for residents.”
In an Aug. 7 telephone interview, Quenneville confirmed both the NHWC and Groves boards discussed the KPMG report during in-camera sessions in July. He also indicated amalgamation of the corporations under a single board of directors is among the options in the report.
“I imagine that would be one of the options. (There’s been) one CEO across the two corporations for the last 10 years or so and that, certainly from most accounts, has worked out relatively well.”
Regardless of the direction taken on governance, Quenneville anticipates little impact on hospital operations.
“Operationally we’ve been acting together across our three hospital sites for the past 10 years. It’s more of a governance issue. Operations, I don’t think is envisioned to change much, if anything changes,” he said.
The report before the LHIN on Aug. 13 notes that in addition to the CEO, the corporations also currently share a senior management team and approximately 20 other staff.
“This operational alliance has allowed for administrative savings to be reinvested back into frontline hospital care for Wellington County residents,” the report states.
“This current dispute between hospital boards is driving the hospitals further apart and puts at risk the financial and operational stability of the hospitals as NWHC indicated they would be leaving the alliance.
“Neither corporation can afford its own administrative staff and both corporations need a strong partnership with each other and with other health and social service providers in Wellington to provide optimal health services for Wellington County residents.”
The report explains the LHIN intervened after the hospital boards were unable to resolve their differences – despite having sought mediation and facilitation, both independently and together.
“The WWLHIN has been clear that this is a governance issue to resolve and the collapse of the alliance poses a high risk to the future of integrated care in rural Wellington,” the report states.
KPMG’s report provided an analysis of five different options, ranging from terminating the NWHC/Groves alliance, to amalgamating into one corporation.
Among the findings in the consultant’s report are:
– “a lack of trust and poor communication” between the parties;
– actions not in keeping with governance best practices; and
– a perception that one party to the hospital alliance agreement has the advantage over the other or is moving ahead at the expense of the other.”
Calling the challenges “a risk to the sustainability of health care services provided by the two hospitals,” KPMG laid out a potential path forward should the boards choose to consider amalgamation.
The steps include a due diligence review, a resolution in principle to move forward, the establishment of a joint steering committee, and community and staff engagement.
In response, the Groves board stated “amalgamation with NWHC would, in their opinion, resolve the risks identified … in a very short period of time.”
NWHC’s board indicates it is committed to the hospital alliance but noted “there are many faults in the current design of the hospital alliance and as a result communication and trust between the boards of two corporations have deteriorated.”
NWHC recommends “a more robust hospital alliance” that would provide “a supportive joint approach” to governing health care in the region, rather than a full amalgamation. The LHIN’s response to the KPMG report states, “If the hospital alliance dissolves (which it will shortly without a joint CEO), both hospital corporations are at financial risk as neither can afford to pay independently for their own leadership and staff without impacting patient care.
“The WWLHIN cannot let that happen to the residents of Wellington.”
The network’s response also stresses hospital closures are not under consideration.
“To be clear, the WWLHIN is not considering closing Palmerston, Louise Marshall and/or Groves hospitals nor does the LHIN have the authority to do that,” the report states.
The report makes clear LHIN staff favor a single-board option.
“WWLHIN staff are of the view that integration of the two boards at the governance level would better serve the interests of Wellington County residents,” the report states.
The LHIN report, which runs over 300 pages with appendices, concludes with a recommendation from staff that the board appoint Mark Rochon of KPMG as a facilitator to work with governors, staff and the community “to further integrate the governance structure of the NWHC and Groves Hospitals.”
The report described Rochon as “a seasoned health care executive.” He has served as CEO of Georgetown and District Memorial Hospital, supervisor of Stevenson Memorial Hospital in Alliston, CEO of the Ontario Hospital Association and Health Quality Ontario, and Assistant Deputy Minister.
