Ontario Hospital Association responds to NDP campaign

SooToday.com received the following letter from Ontario Hospital Association President and Chief Executive Officer Tom Clossen to Ontario NDP Leader Andrea Horwath regarding NDP statements about compensation of hospital leaders.

Open letter to Ontario New Democratic Party leader Andrea Horwath regarding compensation at Ontario's hospitals

TORONTO - Dear Ms. Horwath:

On behalf of the Ontario Hospital Association (OHA), I am writing today to again bring to your attention certain facts related to compensation in hospitals and the broader public sector, and to express our very serious concerns about the rhetoric and approach being used by your campaign in relation to hospitals and their leaders.

Facts About The Potential Savings From The Proposed Cap On The Compensation Of Hospital Chief Executive Officers (CEO):

As you know, the Ontario New Democratic Party's (NDP) 2011 election campaign platform, "Plan For Affordable Change," states that a NDP government would cap the compensation of public sector CEOs at twice the Premier of Ontario's annual salary (approximately $418,000).

Both the campaign platform and its associated costing document state that such a cap would save $80 million over four years.

As was communicated to your campaign staff and shared with the public via a media statement issued by the OHA on September 22, 2011, according to the 2010 Public Sector Salary Disclosure, only 77 of the 207,000 people employed by Ontario's hospitals - including CEOs, senior management, physician employees, and other clinical staff - reported compensation levels (including benefits) above the NDP's proposed cap of $418,000.

This group represents less than four one-hundredths of one percent of the total number of hospital employees in Ontario.

As we also shared with your campaign staff, capping the compensation of hospital CEOs would result in savings to the hospital system of approximately $3.7 million per year; this represents approximately two one-hundredths of one percent of hospitals' total expenditures in 2010.

Capping the compensation of all hospital employees - including CEOs - who earned more than the proposed cap in 2010 would result in savings of approximately $4.7 million per year; this represents a total of less than three one-hundredths of one percent of hospitals' total expenditures in 2010.

Facts About The Potential Savings From The Proposed Cap On Public Sector Executive Compensation:

Because of our concern about the effect of the NDP's proposed public sector salary cap on various non-hospital, health-related organizations (specifically, Cancer Care Ontario, the Ontario Institute for Cancer Research, and the Ontario Agency for Health Protection and Promotion), we undertook a broader analysis of the 2010 Public Sector Salary Disclosure.

You may be interested to learn that the savings that would be garnered from your proposed cap on public sector executive compensation (all employees, excluding hospitals and municipalities) would total approximately $7.3 million per year.

When hospital sector compensation is included, the total rises to approximately $12 million - sixty percent of the total savings envisioned by the NDP campaign platform.

Continued Concern About Rhetoric Used By The NDP Campaign:

The OHA has, on previous occasions (specifically, September 21, 22 and 30, 2011), expressed our concerns to NDP campaign staff about various statements made by NDP candidates and certain tactics employed by your campaign.

I will bring three specific items to your attention today.

"Six-figure raises…"

The NDP election platform includes various references to "CEOs at our hospitals […] getting six-figure raises…" This notion has also been expressed by you and other NDP candidates during public events.

Unfortunately, it is a distortion of the facts.

As you know, the Bill 16, the Creating the Foundation for Jobs and Growth Act, 2010, froze the compensation structures of all non-unionized staff employed by public sector organizations.

As a result, hospital CEO compensation increases have since been frozen or minimal.

You may be interested to learn that, prior to Bill 16, senior managers at many Ontario hospitals had already voluntarily frozen their salaries.

With respect to the claim that hospital CEOs have received "six-figure" raises since Bill 16 became law, a review of the 2010 and 2011 Public Sector Salary Disclosures and other available materials suggests that, insofar as such increases occurred, they were the natural result of a CEO working a full year in 2010 after having assumed that role with the organization mid-year in 2009.

Put another way, it is no more fair to claim that these hospital CEOs received six figure raises in 2010 than it would be to claim that you yourself received a "five figure ($24,576) raise" between 2008 and 2009 without also acknowledging the timing or changes to your job circumstances.

Campaign Rhetoric And Advertisements

The OHA is very concerned about the tone of the rhetoric being used by you and your candidates regarding hospital leaders.

To read the rest of this open letter to Andrea Horwath, please click here.