Insights May 2011

How Do We Compare? Lifting Our Game on Healthcare Performance

Colleen M. Flood

The latest report on health care from the Conference Board underscores concerns that Canada punches below its weight in terms of value-for-money in health care.  Of the seventeen countries reviewed Canada recorded the fourth highest level of spending on health care, but ranked just 10th overall in the population health indicators of life expectancy and infant mortality.  More money does not buy better health but more of what is frequently described as “flat of the curve” medicine.

This kind of comparative report provides a snapshot of one part of the elephant but can be a bit misleading.  Canada’s performance is neither as good nor as bad as the Conference Board concludes depending on what you count as important in terms of performance measures and how deep you want to dig on any particular measure.   The link between spending and population health outcomes is far from a linear one; indeed access to health care itself is estimated to affect just 20% of health status.  Moreover, overall rankings hide a great deal in terms of variability in performance on specific indicators (e.g. survival after a cardiac event or in the wake of a GI hemorrhage).  And many Canadians would consider process outcomes – e.g. how long they have to wait for care – as important as indicators like overall life expectancy.

Nonetheless, the Conference Board’s overall conclusion that Canada doesn’t perform well is a salutary one as we approach federal-provincial negotiations over the health care transfer, with the promise of a 6% escalator already on the table.  It is important that Canadians demand evidence for the efficacy of more and more spending on health care.  What do Canadians really gain and what do we give up in spending more on health care? And how could we get better value for our health care spending?  

Looking at how other countries perform relative to ours on a value-for-money basis drives me to three main conclusions.

First, as the Conference Board makes clear, although we face many challenges, Canada does perform much better, overall, than the US.  It’s obvious that there are no magic market fixes in terms of a greater reliance on private insurance and financing, and we should stick with and expand universal publicly funded health care.  Its important to hang on to the fact that the “public” part of our health care system is where we seem to have the best cost control and it’s the “private” part that has seen unsustainable increases.  Having said that, it is important to note that other countries have universal plans that are not necessarily solely financed through taxation but through, for example, social health insurance.  Different (universal) modalities of paying for health care are worth close analysis as a potential means to expand our universal program and to reap the gains from better integration of prescription drugs, home care, dentistry, etc.

Second, we should not assume that when we spend more, we should get more-- be it health care outcomes or tangible goods and services like diagnostic tests, physician visits, etc.  It may be that we are just paying more – a higher price -- for the same stuff.  The Conference Board notes the two outliers in their study are the US and Japan. The US spends the most and finishes last in terms of performance; Japan spends the least and finishes first.  One important difference as the Board notes is that the US prices are approximately 25% higher than the average; Japan’s prices are 25% lower.  An important question for Canada is how we can pay less and receive better (more effective) health goods and services.  Blaming it all on proximity to the US gives us a reason justifying high prices but no solutions on how to manage this problem.  Provincial health insurance plans, following international examples from Australia and New Zealand, should do more to negotiate prices with drug companies – paying more for break-through innovations and much less for those me-too drugs.  And we must continually work at designing payment systems for doctors and caregivers that reward them for delivering evidence-based, safe and effective care and dissuade them from providing anything other.

In order to make some inroads on prices, a couple of things need to happen. As a starter, decision-making in health care needs to be at arm’s length from politics.  Politicians tend to cower when doctors and other caregivers, who have the ear of voters, accuse them of penny-pinching at the expense of patients. To the extent that it’s possible, these resource allocation decisions need to be made by folks who are not constantly worried about re-election.  And it is critical that clinicians and caregivers themselves are part of this, and be accountable not just for services provided to a specific patient but also for some of the overall consequences of resource allocation.  In addition, Canadians need to understand that more health care is not always better, and is frequently harmful—both to the patient and the sustainability of the system as a whole.  As a society we need to get more savvy and be prepared to say no to high-priced ‘innovations’ that provide very little benefit; this will give us some bargaining power with suppliers, turn us from price-takers to price-makers, and incentivize real innovation. 

Third, as we have long known, we need to re-gear the system from treating acute episodic incidences to treating patients and their needs as a whole.  In particular, we need a system that much better serve those with complex chronic diseases, because those folks are the ones most likely to fall into the large cracks in our present system – resulting in suffering, poorer health outcomes and increased cost.  The key to achieving this is a robust primary health care system. Countries that do punch above their weight in terms of performance and/or have seen improvements in recent years have made large strategic investments to kick-start primary care reform.  Strong primary care is linked to better health outcomes, improved equity, reduced wait times and an improved patient experience.  Presently, Canada lags behind peer countries on many primary health care measures, including wait times, access to after-hours care, the delivery of chronic care, the employment of electronic health medical records, and the provision of team-based care.  Canadian provinces are making attempts in this regard, each pursuing different models for reform, which suggests that there is uncertainty as to the best way forward.  Canada can learn from path-breaking jurisdictions on this front, but the first step is acknowledging we’ve fallen behind and get down to the hard work of reform.  Instead of doing this, our tendency is to fall into old and sterile debates about public vs. private, which take us no-where and somehow seem to justify doing nothing on other reform frontiers.

The Conference Board calls for us to grapple with the complexity of health care issues with specific options and costing, learning from best practices and building consensus. Amen to that.  There are no romantic, sweep-you-off-your-feet solutions from other places, but hard, thoughtful work is required to lift our game in healthcare performance, making it both sustainable and capable of continuous improvement into the future.

About the Author(s)

Canada Research Chair in Health Law and Policy, Faculty of Law, University of Toronto.


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