Government & policy
Ontario to curb pay increases for
TORONTO – The
Ontario government is planning measures to control the salaries of
hospital CEOs by installing new accountability rules that link pay
increases to the quality of care and outcomes in their facilities.
Until now, Ontario hasn’t meddled in the compensation packages of
hospital chiefs, and has allowed hospital boards to set salaries,
bonuses and other forms of remuneration.
However, healthcare CEOs have been in the public spotlight of late over
their relatively high pay packets and salary increases, all at a time
when cash-strapped hospitals have been cutting services and laying-off
Indeed, 14 hospital CEOs made more than $500,000 last year, according to
the annual sunshine list of public sector workers who earned more than
“If a CEO has an enormous pay increase and talks to employees about
holding the line, it undermines their credibility,” Ontario Finance
Minister Dwight Duncan (pictured) told the Globe and Mail newspaper.
“You cannot expect a front line nurse or clerk to just accept the notion
that you’ve got to restrain your pay when they see CEOs getting huge
Exploding healthcare costs are one of the biggest challenges faced by
provincial governments across the country. In Ontario alone, healthcare
costs will rise 6 per cent this year to $46.1-billion.
Salaries for hospital executives, doctors, nurses and other health-care
workers will account for nearly two-thirds of the additional
$2.6-billion in spending.
The proposed legislation is part of the government’s call for a wage
freeze for one million public sector workers to help Ontario erase its
record $21.3-billion deficit.
Healthcare in Ontario now accounts for 46 cents of every $1 in program
spending. Left unchecked, Mr. Duncan said, it could account for 70 cents
of every $1 in 12 years.
The government is also introducing changes to the province’s
prescription drug system to lower costs for generic drugs. But Mr.
Duncan said healthcare is primarily driven by the cost of services
provided by “human beings.”
As a result, he said, wrestling with compensation – something he
acknowledges won’t be easy – is the single most effective way to curtail
the rate of growth in healthcare spending.
He has not assigned a target regarding how much money the province would
save through the proposed legislation. But he said the push to rein in
compensation has to start at the top.
The government froze wages for two years for MPPs and 350,000
non-unionized public sector workers in the March provincial budget. It
also put teachers, nurses and other unionized workers on notice that
there will be no money for wage hikes when their contracts expire.
The government will save $750-million from the wage freeze with
non-unionized workers. By fiscal 2012-13, it aims to reduce the overall
growth in healthcare funding to 3 percent a year.
Posted April 8, 2010