Changing in Comfort:

How to save millions of dollars for Douglas Hospital,

preserve hospital jobs, and please government:

the "OSBL" model of services to the mentally ill.

by James Farquhar MD psychiatrist

v3 Sept.19, 1999

This document is written about one hospital, the Douglas, but the concepts can be applied to all Quebec hospitals. The Douglas Hospital, in Verdun (Montreal area), has neither approved nor rejected these ideas.

Summary

Here is a simple way to satisfy government, by making gradual cuts in the official budget of Douglas Hospital, without losing any services or jobs of present employees.
The "OSBL" model, proposed here, makes this possible and even comfortable.
Hospital employees can keep all seniority, job guarantees, union membership, and other benefits while working in a new, more interesting setting.
In Quebec, an "OSBL" (organisme sans but lucratif) is a non-profit agency which can be created by a hospital (or in other ways). In this model, Douglas Hospital could help create new OSBL agencies to take responsibility for certain services which, up to now, are organized by the hospital. (Examples: a new PACT team, some or all rehabilitation services, possibly outpatient clinics.) The OSBL agencies would start doing this work, and would be linked to the hospital by service contracts.
The OSBL would get its own budget from the government. It would not need money from the hospital budget. This is what the Quebec government says it wants: to finance a lot of new "community-based services." This is why the government would want to inject new money into OSBL services, while it continues its plan to shrink hospital budgets. This is why we should like the OSBL model - it offers expanded government money, not a shrinking budget, for the services we want to give.
It is OK to create OSBL agencies using a mixture of workers "borrowed" from the hospital, and other workers hired by the OSBL directly. The agency would make contracts to give services previously provided by the hospital.
At the beginning, many of the OSBL's workers will be "borrowed" from the hospital. They remain hospital employees, with all their salaries, benefits, union rights, and particularly their lifetime guarantee of a salary. But employees hired directly by the OSBL agency from now on, to work side by side with hospital employees, would have different expectations for salaries and benefits. Young, energetic, bachelor-degree workers would be hired without nursing or social work diplomas. They would get on-the-job training about mental health, would be in a job category with slightly lower salary scales, and would not get a lifetime job guarantee.
This would save the hospital millions of dollars per year, since the new OSBL agency would get a new global budget directly from the Régie Régionale (Regional Health Board), to pay all employees. So, the Douglas Hospital would get paid back by the OSBL for all salaries and benefits for the "borrowed" hospital employees every year. This is a way for the Douglas to make gradual budget cuts without losing any employees, and without reducing services to the mentally ill.
This OSBL model could be applied to: a new PACT team, rehabilitation services, an "auberge" for short-term crisis housing for patients, day hospitals or day programs, even outpatient clinics. This is how services are organized in most of the United States.
Simply by using written agreements, or "service contracts", with the hospital, these OSBL agencies could use certain existing hospital services: some people call this the "infrastructure" of services to employees and to people giving mental health care. These services include Medical Records, Finance, Computer Services, Human Resources. For Medical Records, it is legal to share the medical record between the hospital and an OSBL, with the patient's documented permission. Thus "infrastructure" employees and managers would not lose their place in the new system.
Thus we can cut budgets but not lose anything, by a slow and comfortable change towards making a "Douglas Mental Health Network" (or we could choose another name). Quebec government policy statements show that the government wants this change to happen.
The first step will be to create a Committee or Work Group to study this idea in all its aspects, for about one year. We should start with one concrete example of transforming a hospital service into the OSBL model. We could focus on rehabilitation services, an "Auberge", or a new PACT team, or any service that might be easy to transform. This committee could gain the involvement of Régie Régionale and probably of mental health policy-makers of the Quebec government, in the course of a year.
After a year of study, we will have enough experience to decide if this model can be applied to other services too. The hospital will save money by doing this exercise. Whatever service is made into an OSBL, that service's budget will be cut away from the hospital budget for the following year. Instead, it will be financed directly by the Régie Régionale.
What do you think?

Details

The Quebec government gives a clear message:⁽¹⁾ for psychiatry and mental health services, hospital budgets must be reduced. The government tells us plainly that mental health services must be re-fashioned into a network of resources anchored in the community, where hospitals will play a smaller role than now.

This is not just a change of philosophy; I believe it is all about money. The government would like to have a whole range of very good services, where the average salary of all mental health workers, actually goes down a bit. People now working won't have a salary reduction; but the average will go down because the government wants to hire many new young workers at lower salary scales than we see now. This can be done simply by hiring very few new nurses and social workers (workers with professional diplomas), and hiring a lot of young people with bachelor's degrees in psychology or social science, who are not nurses or social workers. At the Douglas Hospital, these people are called human relations agents. Their work is excellent. In existing community mental health agencies, their starting salary is $29,000 to $30,000 and the upper limit is a bit lower than for nurses. This hiring strategy does not hurt existing staff; if anything, it makes their life easier, because we can hire more new workers for the same money. There will be slightly more staff than before, to share our heavy workloads. With new jobs for young people, and lighter work for existing staff, everybody wins.

This hiring strategy is very common in successful mental health systems in the United States. It requires setting up on-the-job training or courses about mental health for the new staff. In the U.S., these courses commonly take about 50 hours over a year.

So this hiring concept is a piece of the puzzle to help the Douglas Hospital services "move toward the community" with a lot of comfort.

The main solution is to create a number of small "non-profit organizations" (called OSBLs in French, for organismes sans but lucratif). In English, we could call them OSBLs too, or perhaps "new community agencies."

These new agencies could give a location where Douglas Hospital employees work side by side (under a special contract) with new, younger, and less expensive mental health workers hired directly by the agencies. Each agency would provide a specific service, for example a team of "intensive case management" for mildly difficult patients, or a new PACT team for heavy clients, or a rehabilitation service.

For the first few years, an OSBL agency would probably have a lot of Hospital employees working there, by contract. As the years go by, many of these would retire or leave for other reasons, and they would be replaced by younger workers hired by the agencies. About lifetime job security: it is great for people who already have it, but the people who will be hired by agencies do not really need it. For the last decade, job-market research indicates that young people can expect to switch jobs several times during their lives. As they gather experience, they can always expect an increasingly good salary. Lifetime job security is rare outside Quebec, and for a good reason - it is so expensive for governments, that it limits the number of people who can be hired to share our workload. It is time to consider dropping lifetime job security for certain people hired into the health care sector. It is time to discuss whether perhaps we should keep it only for people hired into existing arrangements between hospitals and unions.

Because OSBL agencies are not hospitals or CLSCs, they are not obliged by any law or agreement to give a lifetime job guarantee. They will be funded as "community mental health resources", by the Régies Régionales. Under official Quebec government policy, funding must be taken away from hospitals, and given to community resources, over the next 5 to 10 years.

Therefore this OSBL idea allows everyone to win. Hospitals can keep their present employees indefinitely, yet shrink their budgets - because "community-resource" funding will pay for these employees, through the OSBL agencies where the employees actually work. The Quebec government and the Régies Régionales will win because they are meeting their funding goals, and they allow for hiring hundreds of new mental health workers at a fair salary, without the costly (for government) lifetime job guarantee.

In writing this paper, I hope to stimulate a process at Douglas Hospital, to examine this OSBL concept, probably for about a year. A committee or work-group can focus on one concrete example to make a service independent of the hospital, yet tied to the hospital by contracts. After a year's discussion, we can make a report on what we have found out. With the report, other services at Douglas Hospital and elsewhere in Quebec, can become independent OSBLs, allowing for millions of dollars of savings for hospital budgets everywhere.

The committee's biggest challenges will include getting opinions and feedback from lawyers, unions, the Régies Régionales involved, and government officials.

The committee would focus on one chosen service to turn into an OSBL model. This could be a rehabilitation service, an "Auberge", a new PACT team, or another service. To test the OSBL idea, we need a service employing a dozen people or less, to keep the discussion simple. It might be smart to try to create a new service with some hospital staff and some newly-hired people, for example an Auberge or a new PACT team..

It is time to look at how to make a reality of the government's expressed wish to move away from hospitals and toward community resources. If we don't, hospitals will just keep falling into increasing deficits. And, if we don't, the government will feel pushed by its own policies into funding some other new community resources that make no promises or contracts, to take care of the patients being de-institutionalized.

Key concepts: "independent organization" and "contract"

These two concepts should make the OSBL idea very powerful and attractive to the government.

Independent organizations: Legally, an OSBL agency is independent of the hospital. It has its own board of directors. Of course, in setting up the agency, you can make rules about who will be on the board of directors. Some hospital officials could automatically be given positions on the board, and this move would ensure good communication between the OSBL and the hospital. Advice from lawyers and government financing people, will be needed to set up the board of directors properly, to ensure eligibility for the "community mental health resource" funding stream. Other members of the board may include people from existing community mental health agencies, and elected members which may include "consumers" ( people being treated by the mental health system). Nothing obliges an OSBL to have a board of directors that is totally elected, as we see in certain existing mental health agencies.

Since the OSBL is not a hospital or CLSC, it is not obliged to give a lifetime job guarantee to new employees. This fact will probably make the idea very attractive to government. There is no lifetime job guarantee for the hundreds of people working in "alternative" mental health agencies across Quebec. Therefore, someone like a secretary or a mental health worker without nursing or social work diploma, may be hired with no more expectations of job security than in an ordinary small company. This has good and bad aspects, but the bottom line is that the arrangement lets government hire a lot more mental health workers in the short term.

Also, an OSBL agency can use "service contracts" to let hospital workers, such as nurses, work in the OSBL workplace. This arrangement already works well in a few places, including Pointe St. Charles Community Clinic, associated with the Douglas Hospital but legally independent of the Douglas. (The service contracts at that clinic are not as extensive as the contracts I have in mind.)

Contract: Any two persons or organizations can make contracts or agreements. The "service contract" idea is a powerful tool for the OSBL. For example, an OSBL agency can make a contract to have five or ten hospital employees work at the OSBL workplace. A service contract can specify the categories of workers involved: for example, 2 nurses, one social worker, and seven "human relations agents".

Here are two examples chosen from the services I know best personally. The same principles could apply to other services.

If we create an OSBL agency to make a new PACT team, for example, the contract conditions might be as simple as these:

Example 1: A new PACT team (Assertive Community Treatment)

Here are the staffing aspects in a service contract between Douglas Hospital and an OSBL agency for a new PACT team:

The team's main manager will be the executive director of the OSBL agency. This person might not necessarily be a hospital employee in the future. The role and responsibility of the manager would be detailed in the service contract.
Douglas Hospital will supply (for example) two "human relations agents" for the PACT team -- possibly experienced people from an existing team. About six other "human relations agents" would be hired from outside the hospital. (There are a few hundred people already working in community mental health agencies who might want to work on the new PACT team.). These newly hired workers do not get lifetime job security.
The hospital will supply the services of two nurses for the team. If the nurses go on vacation or leave for any reason, they are always replaced by the hospital, according to rules of selection laid down for the team by a service contract.
The PACT team secretary will be hired directly from the community by the manager. This secretary will not get lifetime job security.
All PACT staff work in the same place, chosen by the OSBL agency. These persons function as a team, even if some of them are paid directly by the OSBL, while others get their paycheque from the hospital.
The hospital will ensure the presence of a psychiatrist, at least half-time (that is the norm in the U.S.) for the team. The psychiatrist is paid by the government, in the context of his or her relationship with the hospital. Therefore the psychiatrist takes part in the on-call list of the hospital, among other obligations to the hospital.

The service contract also includes certain contractual links which make the OSBL's work easy - as if it were part of the hospital. For example, the contract may say:

The OSBL agency (for example, a new PACT team), is allowed to see and photocopy hospital patient records, for patients followed by the team. Each patient on the team must sign a written authorization for this also, but that would not be a difficult step. (This contractual obligation costs almost nothing to the hospital.)
The OSBL agency may agree to supply the hospital's Medical Records department with copies of some, or all, progress notes for the patients. (Again, this requires written authorization by the patients.)
The OSBL benefits from Computer Services at the Douglas Hospital, for maintaining and repairing its computers. In return for this, there may be an annual payment by the OSBL.
The OSBL may wish to save money by using the Hospital's accounting services. The OSBL might have to make a small annual payment for this, to be negotiated.
The OSBL may negotiate to have a work-place on the Douglas Hospital grounds, for a nominal rent (for example, $1 per year), or for another rent to be negotiated, to cover costs of heating, electricity, and janitor service. It might be convenient for a new PACT team to start out with office space at the Douglas, since the hospital is centrally located.

The service contract also creates certain obligations for the OSBL towards the Hospital. For example, these might include:

The OSBL promises to keep, among its clients, a certain number of patients from the hospital. This might be as high as 80 or 90 per cent. This would give a guarantee to the hospital that it will get help for its goals of de-institutionalization. The number of patients, and their names, would be reviewed for a renewed agreement, in a meeting between the OSBL and the hospital, for example every six months.
The new PACT team (under OSBL management) is obliged to come to the Emergency Room within 24 hours, when a patient followed by PACT comes there for help.
A PACT team representative will be present at certain specified administrative meetings in the hospital, to ensure good coordination of its services with the hospital's needs.
Other obligations could be negotiated.

In summary, we see that independence of the OSBL agency makes some savings possible, especially in the context of hiring and labour relations. Contracts allow for clear, well-defined relations between the OSBL and the hospital, to meet the needs of both of these organizations, and, most importantly, to respond well to the needs of people with mental illness in our area.

The OSBL model allows us to ensure that new budget grants, to be accorded by the Régie Régionale, will truly permit the transfer of responsibility for care, from the hospital to the community resources.

Also, this model has fantastic flexibility. The new OSBL agencies can give a community-based working environment for existing hospital employees, without losing pay or benefits; and at the same time the OSBLs ensure that a large number of new mental health workers can be hired directly into community services. In both ways, the model fulfils the government's stated goals.

"Almost anything is possible if you use contracts." This guideline is widely used in the business world. It is time to apply it to the mental health network.

Therefore, the OSBL model is the key to the immediate survival of large psychiatric hospitals. We don't need to make a rapid, uncomfortable change. The OSBL model allows for a comfortable, slow transition towards a mental health network based in the community.

Example 2: An "Auberge"

Emergency rooms are overflowing. As the number of psychiatry beds decreases, the Douglas Hospital's Emergency Room often sees patients coming for help mostly because they are in a psycho-social crisis, without being very mentally ill at the moment. For example, they lose their place in a group home, or they are evicted from an apartment, or they feel overwhelmed by things happening in their family. Many of these people are too disorganized mentally to be acceptable at shelters like the Salvation Army. Often the patients insist on staying at the hospital, or in Emergency Room, so that they can feel safe. This need may last only for a few days or a few weeks. Often, a patient doesn't need to stay in hospital, but does need a safe, highly structured, place to stay while someone helps him with his crisis. (Right now, this "someone" is usually a person working in Douglas Hospital or its outpatient clinics.)

This need is too big to be filled alone by the excellent crisis centre, l'Autre Maison, a Douglas Hospital partner in Verdun. So, mentally ill people often end up staying in Emergency Room or in a Douglas ward, even though they are not very sick. But these are very expensive resources, since the staff consists mostly of nurses and other workers with professional diplomas, with relatively high salaries, for mental health. Instead, a new resource, which we can call the Auberge, could use a less costly mix of experienced hospital workers, and new young mental health employees without a nursing diploma.

At the Douglas, I am told there are plans to open an Auberge fairly soon. However, consider this way to get long-term funding and staff for an Auberge, using the OSBL model:

We could create an OSBL agency called "The Auberge for South-West" [of Montreal area], with its own board of directors. It would receive an annual budget from the Régie Régionale for the South-West sub-region, which contains the Douglas Hospital and its resources.
The Auberge itself would be a duplex or triplex, renovated, in the community, not far from the Douglas. It would have enough space for 10 or 15 patients.
The director (person in charge) would act as a manager, and would be chosen from among the nurses or nursing assistants of the Douglas.
There would be about 10 staff positions to fill in addition. The OSBL model could ensure the presence of a nurse or nursing assistant at all times, by means of a service contract with the Douglas. These persons have the experience and judgment to cope with emergency situations which may arise as a result of mild psychosis, or because of the personality problems of the patients.
A service contract would provide (for example) five full-time positions for nurses or nursing assistants from the Douglas. These staff would receive their paycheques from the Douglas, and would retain all their seniority, union rights and status, job security, and benefits with the Douglas. They are still Douglas employees ! However, the daily place of work for these persons would be in the Auberge, a community resource, and they would only go to the Douglas campus occasionally (the same as for Lasalle and Verdun clinic employees).
The five remaining job openings would be filled when the OSBL agency directly hires people without a professional diploma. These staff do not come from the Douglas. This workplace may provide many young people with a first job, which they may wish to keep for many years; or they may stay 5 years and then move on to something else. These employees will learn about mental health by their experience on the job, by formal courses or classes in their first year of work, and by learning from the experienced Douglas staff working with them. (In my opinion, these courses could be organized at the level of the Douglas Hospital for new mental health workers in the whole South-West sub-region. That would give savings for the whole system.)
So this new Auberge agency would serve dozens of Douglas patients per year. However, its budget does not depend on the Hospital budget. Rather, the budget depends on funding for community resources - a funding stream which has been promised by the Quebec government and by the Régie Régionale.
Savings for the hospital: Douglas Hospital can reduce its budget by an amount it would have to pay for salaries and benefits to the five or six Douglas employees who will now work at the Auberge. These persons are still Douglas employees, but their salaries and benefits are paid back to the hospital by the OSBL (Auberge), each year. This is a saving of about (6 x $50,000 =) $300,000 per year for the Douglas.
Savings of $300,000 plus a new service to reduce use of beds in the emergency room and in hospital. That's a good deal !

"Institute Status": a reward for using the OSBL model

The Quebec government says it will reward at least one large psychiatric hospital, with the title "University Institute". To qualify, the hospital has to show leadership in being partners with community mental health resources.

"As its mission, a University Institute [in mental health] offers services, manages a research centre or research infrastructure, and takes part in training of professional workers in the mental health field. In terms of services, a University Institute must be solidly based in the community and well connected with the other partners in the public and community networks."⁽²⁾

Probably, the OSBL model will allow for savings even if the services are still geographically located, at first, on the hospital grounds. As long as a service is managed as an OSBL agency, it may occupy space rented from a hospital, as a first step towards re-locating the service in the community.

The first step - get experience creating just one OSBL agency

The best way to explore this idea, will be to try it out for one service at Douglas Hospital. We can choose any service. For discussion here, I will think about creating a new PACT team, since that is the kind of team I know best personally.

We would have to discuss how to apply the model, and the discussion would probably take at least 12 months, before taking action. This would be a very valuable process for the hospital, as a way of finding out "how do you do it?" - how do you save money by putting services in a different frame of management?

Here are some themes, among many, which would probably be discussed:

Board of Directors. Who would be on the Board? How many members should there be? Do we have to start out by making an "interim board of directors" to organize the legal framework of the OSBL? Or can we proceed directly to select, or elect, a board?
Manager (or chief of service). What about the person in charge of the program, who could be called the Manager or Chief of Service? In my view, this should not be a doctor, but should be an experienced and mature person such as a nurse, human relations agent, social worker, or mental health worker. For the first OSBL project we try, should the Manager be the same person as the Chief of Service? Or will the work of discussing the new model be too much for that person? Who, on the existing team, should be involved intensively in setting up an OSBL frame of management?
Rôle of the Régie Régionale. Will the Régie Régionale support this OSBL model, which seems likely to resolve so many funding problems? This model could make the Régie's job a lot easier, since they have to carry out government policy, to reduce funding for hospitals and increase funding for community mental health resources. Could we find a Régie Régionale official who would be interested in coming to some of the committee's meetings, or perhaps even being part of the committee? If the Régie likes the OSBL model, how would it like to finance this kind of model? (For example, it could ask hospitals to fund OSBL projects jointly, or it could be willing to finance the entire budget of the OSBL - with savings from the hospital's reduced budgets.)
Legal aspects. We need a lawyer's input for many of the questions to be raised in a year's discussion of the OSBL model. For example, are the "service contracts" easy or difficult to create? Do these contracts need a lot of negotiation or just a little? Once we work out contracts for Douglas Hospital and the first OSBL (a new PACT team or something else), can we use similar contracts to set up other OSBLs easily, as if with a "cookbook"? Where is this model already in place?
Union aspects. We need to consult all the unions which might be involved. It seems to me that the OSBL idea does not hurt any rights of individuals who are union members. How can we use the OSBL model, while respecting the collective agreements already in place? In what ways is the OSBL model attractive to unions? (For example, it offers a way to let hospitals continue to employ everyone already employed, with no discomfort for anyone. At the same time, the model allows for savings desired by the government, within hospital budgets.)
Other issues. You can probably think of some good questions yourself. Please let me know. We need everyone's ideas.

I can be reached at (514) 761-6131 extension 22288 if you have a short comment.
My E-mail is farjam@douglas.mcgill.ca .
My regular mail address is Dr. James Farquhar, Douglas Hospital, 6875 Boul.Lasalle,

Verdun Qc H4H 1R3

1. Please see its major policy statement on mental health services: Plan d'action pour la transformation des services de santé mentale (Quebec Ministry of Health and Social Services, December 1998). The French text is available on the web-site www3.sympatico.ca/actquebec/homepage.htm .

2. Plan d'Action, Quebec government policy paper already cited, December 1998, page 35