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Time to change how we pay for health care, together

Jan 17, 2017 |

The time is ripe for provinces to work together to reform Canada’s health care payment systems, a new report has said.

In a commentary published today, School of Population and Public Health (SPPH) associate professor Jason Sutherland and Centre for Health Services and Policy (CHSPR) research associate Erik Hellsten describe Canadian provincial health care payment systems as “antiquated”, “hodgepodge”, and “fragmented”, delivered in silos that see the country repeatedly perform poorly against OECD peers when it comes to healthcare performance.

Jason Sutherland

SPPH associate professor Jason Sutherland

With a new federal government, the time is ripe for provinces to begin piloting integrated payment systems, the authors argue, such as ‘bundled’ payment models, where single payments are made across groups of providers, and population-based models, where single payments are made to groups of providers for a given population of patients.

Dr Sutherland said the cost of not implementing reforms was becoming unsustainable.

“We are wasting and misspending hundreds of millions of dollars that could be redirected into effective care that people need.”
SPPH associate professor Jason Sutherland

Published by non-profit research institute C.D. Howe, Integrated Funding: Connecting the Silos for the Healthcare We Need points to provincial global budget systems, or fixed amounts per year given to hospitals, and fee-for-service models, as legacy systems inadequately able to serve current Canadian health needs, despite receiving $58.5 billion and the majority of $33.4 billion respectively from provinces each year.

The authors say these systems are ‘siloed’ – for example, specialists are paid separately from the hospital for which they work, and hospital budgets are decided upon historical factors.
“This constellation of different payment models and incentives spread across care settings results in no provider holding financial accountability for a patient’s care or outcomes outside its specific setting.”

The authors look at integrated payment systems trialled in other countries, including the USA, Germany, and the Netherlands, which had mixed results. These examples showed there was no silver bullet but that doing nothing was not the answer, Dr Sutherland said.

The authors suggest action on several fronts, including that provinces trial systems, with a focus on rigorous evaluation, and that the federal government establish a national centre of excellence to support provinces in areas such as gathering and disseminating evidence and successful models.

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