Strategic Responses to Fiscal Constraints: A Health Policy Analysis of Hospital-Based Ambulatory Physical Therapy Services in the Greater Toronto Area (GTA)

Abstract

Purpose: Ambulatory physical therapy (PT) services in Canada are required to be insured under the Canada Health Act, but only if delivered within hospitals. The present study analyzed strategic responses used by hospitals in the Greater Toronto Area (GTA) to deliver PT services in an environment of fiscal constraint. Methods: Key informant interviews (n = 47) were conducted with participants from all hospitals located within the GTA. Results: Two primary strategic responses were identified: (1) “load shedding” through the elimination or reduction of services, and (2) “privatization” through contracting out or creating internal for-profit subsidiary clinics. All hospitals reported reductions in service delivery between 1996 and 2003, and 15.0% (7/47 hospitals) fully eliminated ambulatory services. Although only one of 47 hospitals contracted out services, another 15.0% (7/47) reported that for-profit subsidiary clinics were created within the hospital in order to access other more profitable forms of quasi-public and private funding. Conclusions: Strategic restructuring of services, aimed primarily at cost containment, may have yielded short-term financial savings but has also created a ripple effect across the continuum of care. Moreover, the rise of for-profit subsidiary clinics operating within not-for-profit hospitals has emerged without much public debate and with little research to evaluate its impact.