Sunday, February 28, 2010

The five-point health care fix.

Somewhat refreshing to see an article that makes sensible recommendations for health care reform without starting with the premise that what we need to do is privatize as much as possible and offload costs from the government to the individual health care consumer. While rising health costs are certainly a problem there is no need to slash coverage. Certainly the US system is very much more expensive than ours and less equitable with poorer overall results. Ours may not be the best system in the world but for the ordinary citizen it is superior to the US and ranked much higher by the WHO. I am always amazed when US politicians claim that the US system is the best health care system in the world. Certainly it is a very good system if you have lots of money for high quality health insurance but otherwise it is not that great at all and it costs the US taxpayer much more than most advanced capitalist countries pay for equal or better quality care.

The five-point health fix
It’s not impossible to save taxpayers money without sacrificing high-quality care for Canadians

André Picard
From Saturday's Globe and Mail

With an increasing array of new drugs, technologies and specialization, and Canada's seemingly insatiable appetite for services, the cost of delivering health care has increased relentlessly. From 1975 to 2009, it rose from $12.2-billion to $183.1-billion.

In that period, the only time year-over-year spending dipped was from 1993 to 1996, when the provinces, saddled with massive deficits, took Draconian measures and public expenditures fell 8 per cent. But the tactics used – laying off nurses, shutting hospitals, imposing across-the-board cuts on programs and decentralizing administration – resulted in longer wait times for patients and were deeply unpopular.

Because of the backlash, governments reversed course and, over the next four years, spent like there was no tomorrow – 18 per cent from 1996 to 2000.

Today, with recessionary pressures and health accounting for an ever-larger part of public spending, there is a new push to control costs. So how can governments do the seemingly impossible: rein in spending while ensuring universal, high-quality care? Here are some strategies worth trying.

Predictable, stable funding

The pattern in Canada has been to impose dramatic cuts and then make huge reinvestments, creating administrative whiplash and inconsistency in service delivery. Health-care providers need to live within their means but, to do so, they need to know their budgets. Under the 10-year Canada Health Transfer, funding from Ottawa to the provinces and territories has been clear and predictable (though some would say inadequate). Provinces need to provide the same clarity to regions, hospitals and other providers. While it does not serve the public good to be indifferent to costs, when there are cuts they should be targeted and surgical, not reactionary and willy-nilly.

Human-resource planning

The single biggest expense is labour – personnel accounts for about 80 per cent of total costs. The generous contracts signed with physicians and nurses in recent years and the large influx of practitioners (5,000 new physicians in the past five years, for example) have created built-in inflation that will make it difficult to keep costs down. At some point, Canadians will have to ask: “What's the right price to pay for labour?” The answer is not necessarily to cut salaries – doing so would set off a war with powerful unions and professional associations – but to ensure we get value for money with a rational division of labour. In Canada's health system, we have a lot of high-wage employees doing relatively mundane tasks.

Better co-ordination of care

We don't tend to use people's skills efficiently. There is a lot of territorialism, a good part of it driven by funding methods that encourage volume rather than reward quality. We invest massively in health professionals but spend relatively little on support services. From the patient perspective, the care is disjointed and there is a lack of continuity. We need more interdisciplinary delivery of care – or teamwork to use a more simple term. Patients also have to be more active participants in their care, not just passive recipients.

Sort out drug funding

The fastest-growing expense in the system is the cost of prescription drugs. But which ones are covered when and where varies wildly, depending on a person's province, age, income and the place where he or she is treated. There is a strong argument to be made that creating a national (not federal) pharmacare plan – or at the very least, a catastrophic drug plan – would ultimately save money, as well as make the system more fair. In the meantime, provinces need to do a better job of ensuring drugs are prescribed appropriately, and of negotiating better prices with pharmaceutical companies (particularly generics). Canada has a National Pharmaceuticals Strategy, one that looks good on paper, but it has not been fully implemented.

Focus on quality and safety

There is a lot of rhetoric about cutting waste and bureaucracy but the reality is that the health system is pretty lean. That said, record-keeping is poor, transitions within the system (say, from a family doctor to a specialist, or from critical care to home care) are often pained, and we are slow to implement the latest evidence-based care. The result is a system where efficiency, quality and safety are not what they should be – and, just as important, where there can be marked variations from one institution or one region to the next. Over the long term, improving quality and safety is where the true savings will be found. But doing so requires significant investments, in electronic health records, in data collection and in monitoring mechanisms.


Despite popular mythology to this effect, health-care spending in Canada is not out of control: After adjusting for inflation and population growth, spending increased 2.5 per cent last year.

Still, the political environment, post-recession, is such that Canadians are more conscious of the need to control costs, and doing so is wise to ensure sustainability.

But the prescription for what ails our health system is not simply throwing more money into it or, conversely, slashing and burning.

Rather, we need wise investment in strategic reforms to ensure that the system is organized in a manner that ensure the most appropriate care is delivered at the right time, in the right place and to the right patients.

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