Managing health reform through an economic downturn

A study of the Canadian experience of managing health reform in a time of austerity.


Published: 20/10/2011

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Nuffield Trust Director of Policy Dr Judith Smith on what the NHS could learn from the reform of Canada’s health services in the 1990s.

In the 1990s, following an economic recession, many provincial Governments in Canada cut their health budgets while also implementing structural reform. To learn from Canada’s experience, the Nuffield Trust and the Canadian Health Services Research Foundation (CHSRF) held a joint seminar, which heard first-hand accounts from senior Canadian politicians, academics and policy-makers, and explored how Canada undertook major reforms to health services in the midst of a severe economic downturn.

Managing health reform through an economic downturn: Canada's experience with deficit reduction, told through case studies of two provinces, by Nuffield Trust Senior Fellow Ruth Thorlby, is based on the presentations and discussions held at the seminar. It gives an account of the cost-saving measures that politicians and officials from Ontario and Saskatchewan implemented in response to Canada's falling GDP (national income) at the beginning of the 1990s.

The Canadian experience suggests that irrespective of how they choose to negotiate change, politicians need to be upfront with the electorate about both the need for reform and the likely future direction of travel, even if this means unpopular changes to hospital provision

In addition to staff cuts and wage restraint, a substantial number of hospitals were also merged, closed or converted to provide other health services. Ontario delegated this task to a restructuring commission, while ministers in Saskatchewan led an intensive process of consultation and dialogue with stakeholders and the public.

While both provinces took very different approaches to making savings, there was a common awareness that, regardless of the financial pressures, local health organisations were unlikely to undertake fundamental reform without support from central and provincial Government. The crisis did however promote a degree of innovation in health care delivery, demonstrating that financial pressure can create opportunities for positive change.

This research summary will be of interest to policy-makers, commissioners, academics and others with an interest in how to implement health reform effectively in the current economic climate.  The summary forms part of the Nuffield Trust research project: Managing the NHS through the financial squeeze: learning from international experience.

The Nuffield Trust is grateful to the Canadian Health Services Research Foundation (CHSRF) for sharing their knowledge, and for their assistance with organising the seminar and preparing this summary.


Canadian Foundation for Healthcare Improvement

Suggested citation

Thorlby R (2011) Managing health reform through an economic downturn. Research summary. Nuffield Trust and Canadian Health Services Research Foundation.