Saturday, November 05, 2011

Healthcare Reform in Canada

From the link:

The story has become too familiar: health-care spending is skyrocketing and governments are struggling to find money to pay the bills. With current trends, health care would account for 80 per cent of Ontario’s budget in 2030.

These “straight line of death” projections lead quickly to the conclusion that we either need new revenues (i.e. taxes) or we must reduce the number of services paid for by governments (i.e. privatize).

But neither of these is necessary. Years of investment to reduce wait times, improve the quality of care and introduce technological innovations have created a platform for transformative change that can produce real cost savings — all under the umbrella of our public system.

Governments need to manage change in the health-care system differently in order to reap these savings.
First, we need to look for disruptive innovations in the delivery of care. What’s happening in health care is similar to the transformations in other high-tech industries: roles evolve quickly, traditional service models change rapidly and regulations need urgent reform. We are now seeing brain surgery done on an outpatient basis in Toronto.

Second, costs per unit in health care are declining as they do in other high-tech industries in a fashion analogous to Moore’s Law. Yes, that’s right, health-care costs are going down in many areas. In many cases, these dollars are not being returned to governments. We must recover the financial benefits of these productivity gains.

Third, policy-makers should continue their ongoing focus on improving access and quality as costs decline. Health care is different from traditional industries and more like high-tech industries. When access and quality improve, the cost often drops.

Finally, high-tech industries like health care require flexible operational environments. Regulatory barriers need systematic review and removal to encourage further innovation.

These four approaches applied to health system transformation in five areas will produce short-term savings and build a health-care system that responds to continuous change in a sustainable way:
 • Modernize the organization of hospitals by disrupting existing models. Services in today’s general hospital could be provided more efficiently elsewhere: academic centres focused on excellent diagnostic work-ups; specialty clinics providing routine procedures efficiently and accessibly, and networks of care that monitor patient well-being for chronic conditions — an organized system with public funding and in partnership with traditional hospitals.
 • Use virtualization to develop new roles for providers and patients. Virtualization allows health professionals to use the telephone, email and more breakthrough technology for patient interaction. Virtualization will also mean that health-care access will no longer be contingent on geography and region; this is critical in rural and northern regions. Like the ATM for banking, health virtualization fundamentally transforms how care is organized and delivered.
 • Exploit digitization. After years of capital investment in health information technology, operational costs have begun to fall in areas like diagnostic imaging. Government must recover these savings and reinvest them. The next decade of IT modernization needs reformed provincial agencies that respond quickly to technological change and provide more IT funding directly to care providers. We urgently need to support grassroots innovation in health care, such as smart phones and tablets to enable doctors to communicate and deliver treatment more quickly.
 • Change some governance structures. Ontario does not need a major round of restructuring, for example, by reinventing LHINs from scratch. Policy-makers should strengthen regional bodies, specialty care networks, and support mergers and acquisitions that build scale.
 • Reform the way health services are purchased. The health-care pricing system is fundamentally broken. Global budgeting for hospitals and inflation in fee-for-service payments for doctors need to be urgently reformed in most provinces. The current system has allowed the benefits of productivity gains to accrue largely to providers, when more of the benefits should be returned to funders through lower prices.
These reforms do not rely on new revenues or any form of privatization to create a fiscally sustainable system.

They could all take place within the Canada Health Act and are consistent with its principles.
Discussions of new revenues or privatization distract policy-makers from tackling the main task of transforming health systems. Canadian governments should treat health care as the high-tech industry it is and accept that rapid change is a good thing for patients. These reforms will improve services for patients and strengthen Canada’s world-class health system.

Will Falk is executive fellow in residence at the Mowat Centre at the University of Toronto. He is lead author of a new report, Fiscal Sustainability and the Transformation of Canada's Healthcare System.

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