Hospital planning must consider societal costs, not just bricks and mortar ~ Hugh Holland


As the current discussion in Muskoka demonstrates, few things evoke emotional reactions more than hospital planning. Access to a convenient hospital has the potential to be a life or death factor for all of us, every day of our lives from the first day to the last day. But hospital planning is complicated and is fraught with (to borrow a phrase from Al Gore’s book) several inconvenient truths (ITs).

IT #1 – “The government” pays for health care. “The government” is us.

IT#2 – There are not enough dollars to meet the needs of Ontario’s 250 hospitals all at once. The Ministry of Health has the task of managing the queue of projects for new hospitals and upgrades. It is generally more productive to approve proposals from people who understand their need and have a reasonable plan to address it. That is why MAHC is looking ahead and working with the Ministry early.

IT #3 – The Ministry of Health follows a proven process for project management. The Ministry uses a five-stage process, but for simplicity I will describe it as a three-stage process. Stage 1 is the Concept Stage in which all stake-holders (including the public) explore, debate, and agree on the optimum concept. That is critical to avoid wasted time and money for changes in later stages. Stage 2 is the detailed development stage in which detailed plans, drawings and specifications are made, cost reduction strategies are explored, and the final plan is tendered for competitive quotes. Stage 3 is the actual construction. After a number of starts, MAHC is still in Stage 1. Three concepts are under consideration.

IT #4 – Every project is unique. The size and shape and spacing of population centers in the catchment areas of Muskoka hospitals are unique. Solutions that work in other areas may not work here.

IT #5 – Free land is not free. If one town offers land that could be sold to another party for revenue, it is a cost to the town (to us). It is not free and must be included in the cost equation.

IT #6 – In the concept phase, it is critical to consider societal costs and not just bricks and mortar. For example, MAHC is planning to follow the Ministry standard that now calls for 80 per cent private rooms in order to prevent the spread of today’s virulent infections, because prevention is cheaper than cure. Similarly, inconvenient access often results in people avoiding a visit until a condition becomes more severe and more costly to treat. Inconvenience and excessive travel time can result in disability or even death.

IT # 7 – The single-site model does not meet the needs of the entire population in the catchment area. The single-site model would build a brand new hospital. It could be located in Bracebridge, or Huntsville, or in the geographic center of the huge catchment area. Total cost would be about $350 million with some variations for land and services. On the surface, the single-site option appears to offer savings to the government (which is us), but the inherent inconvenience of a single-site hospital in Muskoka’s unique geography would be more costly to society when personal time and travel costs (and emissions) for patients, medical staff, paramedics, volunteers critical to hospital staffing, and visitors are considered. A return trip from Burk’s Falls to Bracebridge would take two hours. A return trip from Bala to Huntsville would take two hours. Both trips could take longer in winter. A single-site hospital in the geographic center would equally disadvantage all current residents and related businesses. Over time, that would also impact health outcomes as well as area growth patterns and infrastructure planning.

IT #8 – The “Centers of Focus” model would result in increased operating cost, eventual loss of core services, and difficulty attracting and retaining physicians who value the doctor-patient relationship. The “Centers of Focus” model would have a combination of new space and renovations at both sites with acute care at one site and ambulatory care at the other. Huntsville could be the acute care site and Bracebridge could be the ambulatory care site, or vice versa. MAHC estimates indicate costs would range from $374 to $408 million. This option has the same travel cost and risk concerns as the single-site option.

Respected local physicians say acute and ambulatory services are linked together and without on-site surgical services, there would be an eventual loss of all core services at the ambulatory site. Also, this model inherently leads to hospital doctors working separately from clinic doctors thereby diminishing the doctor-patient relationship. In her book Better Now, renowned professor Dr. Danielle Martin says a weak doctor-patient relationship results in costly over-testing and over-treatment.

IT #9 – The two-site model is consistent with Ministry specifications for small hospitals and is the only model that can meet the needs of all taxpayers in the entire catchment area. The two-site model would continue to provide acute care and specific specialities at both sites in a combination of new and renovated buildings. The MAHC estimate for this model is $475 million. Municipal leaders like the concept but are rightly concerned about the impact of the $114 million local share on municipal debt.

IT #10 – The current uncertainty about the future of our hospitals is a silent threat to local economic development. Many are looking to escape the big cities and the GTA needs relief from rapid growth. Businesses and retirees bring money and jobs. It is a well-known fact that the presence of a good convenient hospital is often a prime consideration for retaining and attracting businesses, talented employees, and retirees.

IT #11 – MAHC must be challenged to come up with a more economical version of the two acute-site model. There are reasons to believe that a modified and less costly two acute-site project could be done. Cost estimates in the public media may contain some different components, but a comparison with recent hospital projects in Canada, the USA and the UK indicates $1 to $2.5 million per bed vs $4 million per bed for the MAHC model. A lower cost per bed could reduce the cost of the preferred option from $475 to under $242 million, and reduce the local municipal share from $114 million to $58 million.

Hugh Holland is a retired engineering and manufacturing executive now living in Huntsville, Ontario.

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  1. Excellent analysis, Hugh! (Do you want to be on the hospital Board…pretty please? We might even hug you unless you have “personal space” issues.)

  2. Len Macdonald on

    All excellent points, Hugh. I hope you will give your cost per bed information to the committee. Its an appealing formula but would it work in Muskoka? Do other hospitals in Canada, the US and UK have the same Ministry of Health requirement for 80% single rooms vs. what our hospitals have now? That alone must add to the cost.

    And as anyone who has ever done a home renovation knows, often fixing up or adding to an old building can be more expensive than constructing a new one.

    • Len, you said: “…And as anyone who has ever done a home renovation knows, often fixing up or adding to an old building can be more expensive than constructing a new one…”

      Unlikely to be true of the present Huntsville hospital–it is only 35 years old. Presumably it was built to the standards of 1983 and there would be no extensive problems in a house from that era, if it was well-built. Yes–it is often cheaper to raze a house that is much older and was built in a sub-standard way with little maintenance done to it in the intervening years. But, there doesn’t appear to be those kinds of issues in the present hospital building. It will undoubtedly be used for some time to come.

      • Len Macdonald on

        From the 1930s to the 1990s there was widespread use of asbestos in home and institution construction, including the Huntsville hospital building, which was “built to the standards of 1983”. Asbestos is now officially banned in Canada, as of this year.

        Building and safety standards change all the time. What was appropriate in 1983 (asbestos) may no longer work or be legal today. Ask any contractor about a new build vs. a renovation.

    • Hugh Holland on

      Len, most US hospital new builds have 100% private rooms. The private room requirement only adds 5% to the floor-space of existing Muskoka Hospitals. It is not a big deal. The negative pressure requirement in private rooms will add a bit more cost. But overall, that does not explain the huge difference in total cost. As shown on the chart, Toronto’s new Humber hospital meets the 80% private room (with negative pressure) standard at a cost of $2.6 million per bed.

  3. Ray Richards on

    This is a very well presented analysis of what looks like accurate facts. This is exactly the kind of information that MAHC must already have and need to communicate to us in a clear concise manor.

    Thank you Hugh.

  4. “Hugh Holland is a retired engineering and manufacturing executive now living in Huntsville, Ontario.” has posted a very bias blog on his view and estimations etc etc of the different scenarios … and .. it is quite obvious which model he supports! … same old same old! The only decision that counts is when the government makes their decision… which I hope is very soon! One thing that should be considered is the use of the existing sites for each town that could solve other REAL problems that each town is facing .. ie homelessness, senior affordable housing, long term health care etc etc and if they played their cards right could negotiate ($$) with the province to solve these type of issues with the TWO VERY OLD sites.

    • Bob, your points have many problems. First, the government will not approve any plan that is not supported by the people, and their local governments, it’s that simple. The local share accounts for ~25% of the total project spend. If they don’t agree, it won’t happen.

      Second, our 2 sites are not “VERY OLD” as you claim. What standards are you using? Fact: they sit right around the average age of hospitals in Ontario, which is ~45 years. The government knows this very well, which is why they can’t afford to completely replace hospitals at this age.

      Third, hospitals are not well very well suited to turn into homeless or affordable housing shelters – cost would be prohibitive. And Long term care needs are required now, that is why Fairvern will be building a new expanded facility up beside the Huntsville hospital soon. Can’t wait for 15++ years. Combined, the 2 hospitals count 236,00 sq ft, total, way too big for long term care facilities. It would be very expensive to convert and fund long term, for a demand that will have already crested (around 2035, by current government projections) before they are vacated, renovated and ready to occupy for seniors.

      Just doesn’t make sense. Sorry

  5. Some good points that need to be addressed to make a good decision here.

    Some other things to remember.
    (1) It is not “government money” it is “our money” as we are the only source of funds a government has at the end of the chain. It may make some difference what level of government the funds actually come from, District, Local, Province or Federal but in the end they are all from taxpayers who work.
    Thus the wishes of these same taxpayers should carry significant weight with the Health Care board and their superiors.
    (2) You can’t solve homelessness with a soup kitchen. Shelters are a temporary support for these people. A better and more permanent solution is to improve the social conditions that cause the homelessness in the first place. Thus, ideas of maybe re purposing unused existing hospital sites for this need are not very realistic.
    (3) Our society is aging. I’d say “quickly” but that would not be right as everything ages at the exact same speed. What is changing however, is that the percentage of older people in society is growing with respect to younger people. Thus we need to accommodate this trend with, as noted by some others, cheaper places of reasonable quality and with good access to services for this growing segment. This segment will all ultimately end up in a hospital a few times and a care facility at the end so these facilities need to be expanded.
    Before the younger generation despairs they should remember that the costs for this are not all going to fall on them. The older segment does, in many cases, have considerable funds saved up from a lifetime of work that they can use too and this is exactly what government pensions are for.
    Regardless, this issue needs to be factored into the hospital studies in some way. It should be as these needs are all tied together and paid for by the same taxpayer and these needs of the older segment are just as important as any other health care issue.
    It costs far more to “make people well” than to “keep people well”.

    • Brian, I wish that I inhabited the parallel universe, in which you apparently reside. I have been retired for 23 years, and my retirement would have been far more comfortable; IF taxes were ALL “from taxpayers who work”. Put down the Kool-Aid, my friend.

  6. Great analysis Hugh.
    There is bound to be a need for local citizens to contribute as in the past. If the decision is to go with a one site hospital in Port Sydney would the present citizens still be inclined to contribute same or more? I would think not. Let us hope for two hospitals.
    Take care.

    • Len Macdonald on

      Many of the local citizens who have contributed in the past are cottagers who live on islands and small lakes. They are no where near a local hospital and yet it is assumed that they will pay more in property taxes and make donations. How do they benefit?

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