Ontario makes changes to governance and critical incident reporting requirements for public hospitals

May 13, 2010 | Kathryn M. Frelick, Joshua Liswood

On May 3, 2010, the Minister of Health and Long-Term Care introduced Bill 46, the Excellent Care for All Act, 2010, which is currently being debated in the Ontario legislature.  The Ontario Government proposes that the hospital sector implement the legislative changes first, and once the results have been assessed, it will consider extending the requirements to other sectors within the health industry.

Among other things, the legislation includes requirements for the development of quality committees, annual quality improvement plans, executive compensation linked to achieving quality improvement goals, staff and client survey processes, patient relations processes, and the development of a patient declaration of values.

In its legislative background release, the Ontario Government also referred to regulatory amendments relating to the enhancement of critical incident reporting and board governance.  Ontario Regulation 156/10, which amends regulations under the Public Hospitals Act, was also filed on May 3, 2010.  Unlike more recent legislation, there is no public consultation process before regulations can be promulgated under the Public Hospitals Act.  The Minister of Health and Long Term Care may make regulations, subject to the approval of the Lieutenant Governor in Council.

1. Changes to Board Governance for Hospital Boards

As of January 1, 2011, subsection 2 (2) of Regulation 965, which mandates “ex officio” membership on the hospital board for certain medical staff positions (i.e. President and Vice President of the Medical Staff, and Chief of Staff/Chair of the Medical Advisory Committee) is revoked.  There will no longer be a requirement to appoint medical staff officers to the hospital board by virtue of their position.

This subsection is replaced with new language that specifies that where certain persons are members of the board, they may not be voting members.  This includes:

• any member of the medical staff, dental staff, extended class nursing staff or midwifery staff of the hospital
• any employee of the hospital

Implications

We believe that this change to the Regulation under the Public Hospitals Act has a number of implications for hospital boards to consider beyond the overall impact to local governance.

Principles of corporate law place a number of responsibilities upon directors, including a fiduciary duty to act in good faith and in the best interest of the corporation, as well as the obligation to meet an appropriate standard of care with respect to a director’s performance.  In addition, there are provincial statutes which impose a variety of duties directly upon individual directors.  Where common law or regulatory responsibilities have been breached, or have not been met, this may result in liability for the individual director.

One of the ways that an individual director can demonstrate the fulfillment of these duties is through the exercise of the right and obligation to vote.  Without a right to vote it can be argued that an individual simply cannot fulfil the duties of a director.

In these circumstances, we cannot advise the creation or maintenance of a directorship without a vote.  In considering the changes to be made to the organization’s by-laws we believe that the appropriate question will be whether to give the Chief of Staff, President and Vice-President of the Medical Staff a right of attendance at Board meetings or to eliminate them from reference in the Board composition.  It is of note that the most recent release of the Ontario Hospital Association Prototype By-Laws eliminated the position of Chief of Staff.

The Board remains ultimately responsible for ensuring that there are programs providing for necessary medical services to meet the needs of the community, and for the quality of care provided.  A significant further implication will be the need to establish an effective advisory link between the board and those matters relevant to the provision of needed, properly resourced, quality care by the health professionals within the hospital.  To date, this link has been institutionalized through the role of the Chief of Staff, along with the President and Vice-President, as entrenched voting members of the Board.

It appears from current governmental direction and as also reflected in the recent changes to the OHA prototype by-laws, that there is a move toward a reduction in the role of medical leadership and the medical advisory committee.  The medical leadership and the medical advisory committee have statutory responsibilities relating to the quality of care provided by professional staff.  Each hospital must consider how to entrench this relationship, beyond what is required by statute or regulation.  In our view, there will need to be greater consideration given to the position of Vice-President Medicine or Medical Director to support the senior management team and advise the board.

Similarly, organizations will need to determine the appropriate role for the President and Chief Executive Officer, as reflected in the organization’s administrative by-laws.  The Public Hospitals Act and other legislation impose a number of statutory obligations on the “administrator” of the hospital, including in relation to the development of appropriate “systems”.  To date, governance models have recognized the administrator as a full participant on the hospital board, with voting rights and other entitlements.

2. Critical Incident Reporting

As of July 1, 2010, subsection 2 (4) of Regulation 965 under the Public Hospitals Act which requires the board to ensure that the administrator establishes a system for ensuring the disclosure of every critical incident is amended.  Disclosure must now be made, as soon as is practicable, not only to the affected patient, but also to the Medical Advisory Committee and the administrator.

Further, a new section 5.1 requires the board to ensure that the administrator establishes a system for ensuring that following the disclosure of a critical incident, the incident is analyzed and a plan developed with systemic steps to avoid or reduce the risk of further similar critical incidents.

Implications

It is essential for hospitals and other health industry clients to develop policies to ensure that disclosure of critical incidents is done effectively and is linked to the facility’s risk, quality and patient safety programs.  Such policies allow the organization to provide support to health professionals and staff and ensure that there is appropriate communication within the organization.  While the regulation refers to “disclosure” of a critical incident to the Medical Advisory Committee and the administrator, disclosure has a specific meaning within the patient safety literature related to communication with the patient.  The intent of this regulatory amendment appears to be to ensure that hospitals have effective internal reporting and notification procedures.

There is already an existing obligation upon a hospital to disclose to a person the systemic steps, if any, that the hospital is taking or has taken in order to avoid or reduce the risk of further similar critical incidents.  The amendments create a positive obligation on the hospital to analyze the incident following disclosure and to ensure that a plan is developed.

Regulation 965 under the Public Hospitals Act recognizes that disclosure of systemic steps to the patient may be limited where an incident has been reviewed under the Quality of Care Information Protection Act, 2004 (QCIPA).  From a risk management perspective, we recommend that hospitals and other health industry clients ensure that their policies identify when a review ought to be undertaken in a protected fashion, for example, under QCIPA or solicitor and client privilege.  A review undertaken pursuant to solicitor and client privilege often provides greater flexibility to communicate information to the patient, to a Coroner or to use the information for other purposes.

 

Please contact our Health Industry Group in order to discuss the impact of the regulatory changes to your hospital’s current by-laws and policies or to discuss issues relating to governance and patient safety generally.

Disclaimer

This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

Miller Thomson LLP uses your contact information to send you information electronically on legal topics, seminars, and firm events that may be of interest to you. If you have any questions about our information practices or obligations under Canada's anti-spam laws, please contact us at privacy@millerthomson.com.

© 2020 Miller Thomson LLP. This publication may be reproduced and distributed in its entirety provided no alterations are made to the form or content. Any other form of reproduction or distribution requires the prior written consent of Miller Thomson LLP which may be requested by contacting newsletters@millerthomson.com.