Home and Community Care Digest

Home and Community Care Digest December 2005 : 0-0

Lessons learned using an economic framework for resource allocation decisions in the Calgary Health Region


Programme budgeting and marginal analysis (PBMA) is a priority-setting framework that helps decision makers compare the alternative uses of health care dollars using economic principles. As an increasingly utilized economic tool used to make resource allocation decisions in health care, PBMA was implemented in the Calgary Regional Health Authority as part of a research project designed to improve the region's annual priority setting and budgeting process. Decision makers identified several themes that were of importance during the PBMA process, including comparison of disparate patient groups, programmes considered to be political "givens," evidence of effectiveness of health interventions, innovation, and public participation. Overall, PBMA was found to improve the transparency and fairness of the priority setting process.
Background: The Calgary Health Region (CHR) in Alberta participated in a research project with the objective of implementing programme budgeting and marginal analysis (PBMA) as part of their annual priority setting and budget development process. The CHR is responsible for a budget of approximately $1.5 billion, which represents all health care dollars in the region except for physician salaries. PBMA is a priority-setting framework that helps decision makers compare the alternative uses of health care dollars using economic principles. PBMA requires decision makers to evaluate the following five questions: "1) What resources are available in total?; 2) In what ways are these resources currently spent?; 3) What are the main candidates for more resources and what would be their level of effectiveness?; 4) Are there any areas of care which could be provided to the same level of effectiveness but with fewer resources, so releasing those resources to fund candidates from (3); and 5) Are there areas of care which, despite being effective, should receive fewer resources because a proposal from (3) is more effective (per dollar spent)?" (Reference: Health Services Management Research 2003; 16: 96 - 105).

The purpose of this paper was to identify the priority setting issues that arose during the implementation of PBMA that are of importance to the decision makers who participated in the project.

Methods: The implementation of PBMA was discussed in a focus group involving the 8 individuals on the CHA's internal priority-setting committee and in 8 individual interviews with other senior managers. The transcripts of the interviews were thematically analysed.

Findings: Five general themes emerged during the focus group. First, decision makers found the comparisons of disparate patient groups during PBMA to be challenging. Although some researchers have proposed to develop a quantitative tool to aide this process, the participants believed that such a tool would obscure the social value and ethical issues laden in this process. They preferred to use a more pragmatic framework to guide decisions. Second, participants felt that any programmes considered to be political "givens" should be explicitly identified at the outset to reduce tension during the process. Third, participants felt that more emphasis should be placed on the ability of certain populations to benefit from health interventions. They were concerned about the variation in level of evidence available to judge the effectiveness of various programmes and were willing to accept evidence that does not meet the standards of "evidence-based medicine". Fourth, participants felt that innovation and the potential value of emerging treatments were not adequately accounted for in the PBMA framework. Finally, participants felt that the public should play a role in developing the criteria used to guide priority-setting decisions, but that they should not participate in the actual decisions themselves.

Conclusions: The researchers conclude that while PBMA is not a "magic bullet" for health authorities, it can be used to improve the transparency and fairness of the priority setting process. Decision makers faced with allocating health care dollars across competing programmes in regions across Canada, such as Ontario's new local health integration networks (LHINs), can potentially learn from the experiences of the managers in the Calgary Health Region.

Reference: Patten S, Mitton C, Donaldson C. "From the trenches: views from decision-makers on health services priority setting." Health Services Management Research, 2005; 18(2): 100 - 108.


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