Second City, Second Metro: The Civic Hospital Wants [More] Independence

Civic Hospital in the 1940s. Image: City of Ottawa Archives, CA002489.

When a small team of administrators from the Ottawa Civic Hospital appeared before the Jones Commission on March 31, 1965, it was pretty clear that they did so with one thing in mind: money. Unlike many others to appear, they did not come with ideas for local governance, with (much of) a vision for the future, or with technical critiques of the practice of local government in Ontario. To be certain, all of these themes were present in one way or another, but it was the lack of money and inefficient administration requirements that were at the front of mind. 

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The Ottawa Civic Hospital, with 1100 active treatment beds and 125 bassinets, serves as a metropolitan general hospital, a medical teaching institution, a regional referral centre, a research agency and a developing community health centre. In 1964, about 25% of the 34,251 hospital patients and 387,885 patient days were due to non-residents of the City.

Respecting this, the municipalities should, on a fair and equitable basis, contribute by participation in the Hospital's capital financing; the City's participation in underwriting the Hospital's capital expenditure should continue.

The Hospital's position is untenable due to the payment of preferred accommodation differential funds to retire its capital debt of $3,513,000.; the payment of principal and interest on debentures is not refundable from the Ontario Hospital Services Commission. Financing of current capital requirements by City tax levy should continue.

The 1964 Out-Patient Clinic deficit of $205,000. is due to the lack of City of Ottawa or Commission authority to offset deficit financing in Out-Patient Care. The surrounding municipalities, responsible for 10% of the 52,000 visits, should also reimburse the hospital for the actual cost involved.

Since 1959, the Ontario Hospital Services Commission has been responsible for most of the Hospital's $13 million annual operating costs with 3.1% of the 1963 total assumed by the City.

The Review is requested to determine any necessary changes in the existing relationship between the City Corporation and the Hospital and the merit of transferring the responsibility

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for the Hospital's management to an independent, non-profit citizens' corporation. Such an autonomous organization would remove political involvements, "red tape" and duplication in hospital operation.



Presenting the submission were Mr. Douglas R. Peary, Executive Director, Mr. Donald Moffatt, Administrative Assistant, Mr. Sydney G. Anderson, Assistant Director and Mrs. John A. Aylen, Chairman of the Board of Trustees. The brief related to the financial aspects of the hospital rather than to clinical problems.

The Hospital has operated since 1924 under an Ontario Legislative Act passed in 1919. Of the total patients in 1964, 69% came from the City of Ottawa, 29% from municipalities adjoining Ottawa (including Quebec Province) and 2% were transients or visitors. It is concluded that these municipalities should reimburse the hospital and/or Ottawa for those costs not covered by the Ontario Hospital Services Commission, for capital financing, and for money spent for education and research.

The average out-patient (indigent or poor sick) visit cost is $6.00 of which the Ontario Hospital Services Commission pays $1.50; the remaining $4.50, assumed by the Hospital, amounted to $187,000. in 1963. It is recommended that the municipalities assume some responsibility for this deficit which the hospital incurs through performing a public health service.

The Hospital's outstanding capital debt from former debenture issues (in 1963, $434,737. principal and interest was repaid to the City) of $3,513,000. will not be retired until 1982. Previous to 1959, the hospital was deriving about $1 million annually through a taxpayer subsidy on rates to retire capital debt and cover

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indigent expense. With rates now set by the Ontario Hospital Services Commission, hospitals are permitted to keep 60% of the difference between cost and rates. In this case, the differential is applied to the capital debt and money for equipment, purchases, etc. must be bought from the City. Three years ago, Ottawa made future capital financing for the Hospital a year to year provisio through the city tax levy rather than debenture issue. One a five year capital program, this amounts to about $350,000. annually which is set aside for the Hospital's use. This year City contributions amount to the above and $318,703. toward operating expenses like research, out-patient, etc.

While the assumption of the capital debt retirement by the Hospital was a matter of policy and not law, no agreement has been reached on the Hospital's requests that the City assume the responsibility. With the advent of hospital insurance in 1959, non-municipal hospitals with unmanageable capital debts were considered the responsibility of the municipality. If the debt were retired or assumed by the City and municipalities' would accept their full out-patient responsibility, the hospital would not approach the City for any future operating expense or capital requirement beyond the present five year budget.

Of the 14 hospital trustees, 9 are citizens appointed by the City Council for 3 years, 3 are City representatives with the Mayor serving a 2 year term and a controller and alderman serving one year terms, and 2 are appointed from the hospital staff annually. However, all major capital expenditures for extension of services and new construction or anything that might formerly have been a debenture issue must be approved by the City. The Hospital's budget must be approved by the Ontario Hospital Services Commission and the City. This involves much administrative duplication and inconvenience due to time wasted. It was recommended that the Hospital should become an independent public hospital under the Act, with a separate Board of Trustees outside City control.


As things would turn out, the incremental and reluctant half-measures implemented by Queen’s Park beginning in 1959 would soon be combined and expanded somewhat into the Ontario Medical Services Insurance Plan (OMSIP) in 1966 and re-christened the Ontario Health Insurance Plan (OHIP) in 1972.