January 12, 2016 Hon. Charles Sousa Minister of Finance Frost Building South, 7 th Floor 7 Queen s Park Crescent Toronto ON M7A 1Y7 Dear Minister Sousa, We are writing to provide the Council of Academic Hospitals of Ontario s input to the 2016 Budget. The Council of Academic Hospitals of Ontario (CAHO) represents Ontario s 24 Research Hospitals that play a unique and vital role in the province s health care system. Collectively, we provide advanced patient care services, train the next generation of health care professionals, and conduct leading-edge research to discover tomorrow s care today. As connectors in the system, we create capacity and generate a healthier, wealthier, smarter Ontario. As Ed Clark has said: We have incredible hospitals that are at the forefront of health research. I say: open them up, link them more closely to the private sector, turn them into exporters. Imagine a world where A virus is used to cure cancer Surgery no longer means cutting through skin Genetic testing is used to ensure the best response to a medication This isn t just the world of imagination these breakthroughs are already underway, right here in Ontario, thanks to the availability of funding to Ontario researchers. But imagine how much better this brain belt could be if governments, researchers, industry, funders, universities, hospitals, patients, caregivers and other visionaries came together in an intentional way to invest in and support top health research talent, and big, bold ideas on how to treat our patients better and cure them faster. What would bring all of these groups together? A shared vision to build the best health research system in the world, finding and applying tomorrow s cures today, and at the same time contributing to the growth of Ontario s economy and its sustainability. Health care and health research in particular can indeed be managed as an asset on the Province s books, not a liability. In order to achieve fiscal balance by 2018, Ontario has made progress in controlling growth in program expenditure, partially through the thoughtful work of the Program Review, Renewal and Transformation. The challenge is to continue to stimulate investment, productivity and growth to increase revenues. Ontario s 24 Research Hospitals are part of the solution, contributing to a diversified economy. We are a part of Ontario s brain belt as engines of invention and discovery, making a profound difference to individuals, populations and the economy. Our members invest $1.4 billion in health research in Ontario and are home to 16,400 researchers and research staff. This investment generates $3.8 billion in
economic output and supports 41,000 total jobs across Ontario. Ontario s health research enterprise is a magnet for attracting investment. 14% of our research investment is funded by private industry, which is more than twice the OECD average for business investment in higher education R&D - collectively, our members form the R&D arm of Ontario s health care system. i 2
In planning for the 2016/17 budget, CAHO believes that investment in Ontario s health research enterprise is imperative to support and build Ontario s knowledge economy, while improving health care experiences and outcomes for Ontario s patients. This can be achieved by doing the following: Continue to drive discovery through continued investment in the Ontario Research Fund (ORF) Be strategic in approaching health research mandate the creation of a Health Research Strategy for Ontario Translate research discoveries into practice invest in implementing research evidence to transform care Fund hospitals to deliver on their mandate We recognize that: Ontario has made bold commitments to support the health research enterprise. We would like to formally thank you for moving forward on implementing the recommendations of the Ontario Health Innovation Council and appointing the first Ontario Chief Health Innovation Strategist (OCHIS). This demonstrates the government s commitment to collaboration and innovation across the health sector. CAHO shares this commitment and stands ready to partner. We would also like to acknowledge your continued support for health research through the ongoing funding of the Ontario Research Fund in the current funding environment, where research dollars are becoming more scarce, the ORF is the bright light for our researchers. We have been pleased to hear from Minister Hoskins and Minister Moridi that they understand the need for and support continued stable and predictable funding through ORF. Furthermore, Ontario matches the federal government s Canada Foundation for Innovation (CFI) dollars, and has been a leader amongst the provinces in always doing so this support has led to direct infrastructure gains for the province. Sustaining Ontario s Health Research Enterprise The return on investment in health research is real and measurable. Ontario s health research enterprise contributes to a diversified knowledge-based economy. However, to be competitive, we need to be more productive. To be more productive, we need to increase our capacity for innovation. This starts with stabilizing and increasing health R&D investment. To ensure sustainability, the full costs of research need to be funded. CAHO estimates that only 20% to 25% of scientists salaries and indirect costs (e.g., heat, light and power) are currently being recovered from external cost recovery programs. ii This means that our hospitals are increasingly reliant on their own internal hospital resources (e.g., income from investments, retail sales and parking) to fund research; however these sources of funding are unsustainable. Markets are volatile and foundations have a variety of priorities to support. Ontario s Research Hospitals are increasingly required to find ways to contribute more resources to fund health research within their institutions. In any business, this is not a sustainable model. 3
Leading international companies in health care and IT, for example, recognize the value of investing in R&D to drive innovation. Companies like Samsung, Intel, Novartis and Roche invest between 6% and 20% of annual revenues in R&D every year. iii We can learn from this and apply the lesson to a sustained commitment to health research. The opportunity exists for us to be strategically ambitious in our approach to investment. Together, we need to continue to drive discovery, be strategic in our approach to health research, and translate these discoveries into real value to ensure that our health research enterprise is sustainable and the knowledge-based economy is strengthened. Continue to drive discovery continue to invest in the Ontario Research Fund (ORF) The Ontario Research Fund (ORF) is Ontario s flagship R&D investment program for research infrastructure and research excellence and a key source of stability for the research enterprise in CAHO hospitals. It is a source of pride and stability in health research. While not explicitly mentioned in the 2015 Budget, we are pleased to have had a verbal confirmation that the ORF funding will continue at historic rates and request that funding at this level be sustained. In the uncertain and challenging health research funding environment particularly at the federal level and health charities ORF is the bright light for health researchers. It is a foundational program that proves the support of the Ontario government for a healthy research environment, providing investment for the most meritorious science, which then allows researchers to attract even more funding from donors, other jurisdictions and industry. For every dollar invested by the ORF in research projects, three dollars total is invested in Ontario. Funding of ORF creates a solid platform of support and investment for research in Ontario, creating the possibility to grow from there through other sources. Be strategic in approaching health research mandate the creation of a Health Research Strategy for Ontario Ontario has a strong history of success in health research. In alignment with Ed Clark s work regarding transitioning to a knowledge-based economy and optimizing Ontario s assets, we need to work together on a Health Research Strategy for the province, to make strategic investments that result in direct returns, getting the most out of our health research assets. Other jurisdictions which have created a Strategy find that there is greater synergy and collaboration, improved leveraging of dollars, attraction of investment and an overall common vision and plan to achieve greater health research results. We are asking that the government mandate the creation of a Health Research Strategy so that all health research stakeholders come together in an intentional way to invest in and support top health research talent. Translate research discoveries into practice Invest in implementing research evidence to transform care Research and discovery is just the start; to derive the most value from health research, we need to use what we have learned. The Adopting Research to Improve Care Program (ARTIC), developed by CAHO, is a valuable provincial asset that speeds up the implementation of research evidence in care settings. In partnership with Health Quality Ontario, CAHO is delivering the ARTIC Program across all sectors of the 4
Ontario health care system to drive progress on the Province s quality and transformation agendas. The ARTIC Program s model means we re able to implement the best care for our patients based on evidence, significantly and measurably faster. The literature demonstrates that translating evidence into routine health care delivery can take 17 years or more; the ARTIC Program with facilitated change management supports the implementation across multiple sites in just 2 years. It is a unique vehicle that can help the system achieve its transformation objectives quickly and widely across the province. We are actively planning the ongoing sustainability of the ARTIC Program, which was initially funded by the government, and are requesting $3M annually to appropriately use this provincial change management asset that has been created for the health care system. Building on the successes and learnings of the ARTIC Program over the past 5 years, we propose to leverage this cross-sectoral provincial evidence implementation pathway to continue to accelerate the adoption of research evidence into wide-spread clinical practice. By appropriately using the Program, we will achieve profound impact for a sizeable percentage of Ontario s residents. Fund hospitals to deliver on their mandate CAHO hospitals play a unique role in Ontario s healthcare system including system capacity creation. We are engines of invention and discovery, making a profound difference to individuals and populations. Our hospitals are highly efficient and relentless in their efforts to further improve their performance; however, in order for us to ensure that our unique mandate can be maintained and sustained, our hospitals need to be financially healthy. After 4 years of flat-lined growth and increasing costs (e.g., compensation, inflationary pressures for non-labour expenses such as energy, and drug and medical supplies), CAHO hospitals (like others) are challenged to keep meeting our mandate, even more so during a time of restructuring. The zero increase funding environment (and a decrease in real terms) is the greatest threat to the health research enterprise in the province. Hospitals need transitional funding for operating cost pressures if they are to maintain service levels in 2016/17, 2017/18 and beyond through the short-term instability that may be created by restructuring where the focus is on home and community care. We support the case being made in this regard by our colleagues at the Ontario Hospital Association and believe that an inflationary funding increase for hospitals in the 2016 Ontario Budget will help to ensure stability and that patients continue to receive care during this transition period. Conclusion It is clear: investment in health research contributes to the development of Ontario s brain belt and delivers a return on investment. We need to drive discovery while also being strategic in our health research investments, and translate discoveries into practice to create value both for our patients and for our economy. Our Healthier, Wealthier, Smarter campaign further illustrates the breadth and depth of health research and its impact in Ontario. For more stories about how health research contributes to the efficiency of our health care system, better outcomes for our patients and the creation of economic value, please visit www.healthierwealthiersmarter.ca. By following #onhws, you will also see the interest of Ontarians in health research and health research breakthroughs. With over 800 active participants in a conversation that is reaching a potential audience of over 10 million social media users, health research 5
is clearly of interest to the population, both inside and outside of the health care sector. In fact, patients are key drivers of this conversation, talking about the value of health research in their own lives. We appreciate the opportunity to provide input on behalf of Ontario s Research Hospitals into the 2016 Budget and welcome the opportunity to brief you at your earliest convenience. Sincerely, Karen Michell Executive Director i Figures are for the 2013-14 fiscal year and are gathered by CAHO from its 24 members as part of an annual exercise to determine the size, investments, and impacts of Ontario s health research enterprise. ii Analysis based on CAHO s annual exercise to determine the size, investments, and impacts of Ontario s health research enterprise. iii Casey, M. & Hackett, R., The 10 biggest R&D spenders worldwide, Fortune, 14 Nov 2014. 6