Linda Miller and Dave Wattling

Canada’s healthcare system is stuck – almost paralysed by a series of well-intentioned but misguided beliefs and policies that short-change Canadians and leave both taxpayers and patients wondering about the system and its sustainability.  The debate about the future has become both over-politicized and at the same time focused on bureaucratic processes rather than financial and healthcare outcomes.  At a high level, the Canada Health Act and its five principles are both a target and a talisman for vested interest groups pushing agendas that are inconsistent with good public policy.  At a more micro level, strict new procurement rules are stifling innovation and resulting in a series of unintended consequences.  There is a more sensible path forward and we will explore some of its key elements here.

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At its essence, our healthcare system is about finance and delivery:  how we pay for healthcare as a society; and, how we delivery it effectively and efficiently.  The Canada Health Act is about the public financing of “medically necessary” services and as Canadians we value medicare highly.  The raising of funding and its administration is done with commendable efficiency in Canada, certainly compared to our American neighbours.  The delivery side is where we are increasingly falling down and putting the system at risk as a result.

Consider Roles Carefully
Getting healthcare delivery right requires careful thought about roles.  Policy-making is rightly the province of government.  We expect our law-makers and public servants to make and foster good public policy and to be held accountable for doing so.  In contrast, government is not always good at implementation and the private sector could play a greater role.  However, good implementation also requires good oversight – to ensure that public objectives are met and that value-for-money is achieved for taxpayers.

The experience of Infrastructure Ontario (IO) is instructive.  IO is a special purpose agency of the Ontario government that provides procurement support and project oversight for major government infrastructure initiatives.  One of the government’s policy objectives is to progressively renew its healthcare infrastructure, of which the most expensive element is public hospitals.  A series of cost-overruns on large hospital projects led to a decision to centralize oversight of procurement and construction with a specialized agency – Infrastructure Ontario.  Delivery of these major projects was left to private sector consortiums, with the attendant assumption of delivery and operational risk.  Some other provinces, including British Columbia, have similar models that have also been quite effective.  However, no model provides a panacea, and all require effective leadership and insulation from political interference.  (The process used for the recently awarded federal ship-building contracts is also instructive in this regard.)

There are clear opportunities to extend the IO or similar models to other fields.  Effective implementation of technology projects is another area where governments fail on a regular basis.  Unfortunately, some of the current remedies are making the situation worse.  When procurements go bad, the natural tendency is to tighten the rules.  What has resulted across the country is highly rigorous and controlled request for proposal (RFP) processes that focus on delivering rigidly defined “solutions” to often ill-defined business problems.  This may be fine for simple procurements, where the requirements are relatively straightforward and the solutions readily identifiable in the marketplace.  It does not work well where the business problem is complex and the solutions multi-faceted and not “off the shelf”.

Focus on Business Problems

Good procurement principles are essential to ensure both public confidence and business community support.  Fairness and transparency are critical.  However, complex procurements need to focus more on the business problem, rather than trying to identify a particular “solution” in advance. The key here is to contract for the outcome (result), not the process, or a pre-specified type of product (i.e., the specified solution).  This allows private-sector respondents to offer creative solutions that would not be allowed to surface in a more traditional process.  One option, recently explored at a CHIEF (Canadian Healthcare Informatics Executive Forum) meeting, consisting of chief information officers from government, large scale delivery organizations and industry leaders, general consensus was reached that a preferred approach would be to issue a public call for “expressions of interest” from vendors and their partners to tackle a complex business issue and to offer their suggested solutions.  This would result in an assessment of capabilities and a short-list of potential vendors.  Short-listed vendors would then be paid for a short period (say three weeks) to work along-side the client and its business experts to better understand the business problems and the potential solutions.  Submission of proposals would follow and a procurement decision would be made.  This process would be transparent and fair and would result in a solution much better aligned to the government customer’s needs. The forum participants agreed to track the results of this discussion to see if in six months any of the participating organizations have been able to implement a revised procurement model of this type.

Sharing Risks and Rewards

The private sector is prepared to take on more risk for project success, provided vendors have some degree of autonomy as to how they address the elements of risk. This will require careful consideration by both government and its private sector partner of the available regulatory, policy, financial and other levers that government can tailor; along with the private sector’s role in bringing a strong product with excellent usability, high availability and adaptability so that it meets the needs of users on an on-going basis. The sometimes vexing issue of clinical adoption is an interesting example.  In a traditional technology procurement the vendor’s job is done when the system is tested and installed, leaving the client to contend with getting its business users to actually use the system.  Functionality often is underused and frustration results.  Attracting customers to purchase and use products is at the core of what private businesses do – if they don’t do it successfully then they are out of business!  This is not typically a core skill set for government and history suggests that, with rare exceptions, where government takes on implementation and adoption responsibilities they often do it poorly.

Public-private partnerships should start modestly and grow as trust builds.  Governments are wary of providing “blank cheques” but need to provide the incentives and flexibility that allow innovative models to be successful.  Paying for success requires innovative compensation models that recognize the achievement of adoption targets, but also recognize economies of scale and that share these rewards fairly between government and its delivery partners.  Teranet, the highly successful model that led to the full automation of Ontario’s land registration system, took 20 years to achieve its goals.  Strong governance mechanisms helped to ensure its success and to resolve complex and often unforeseeable issues as the project unfolded.

Careful thought about both roles and processes ultimately will deliver much better healthcare for Canadians.  Canadians expect this of both our governments and our healthcare providers and we disappoint them at our peril.

Linda Miller is the Executive Director of Canada’s Health Informatics Executive Forum (CHIEF) and a former Deputy Minister of Health and Wellness for the Province of Alberta.  Dave Wattling is Vice-President, Transformation Services with TELUS Health Solutions.  Correspondence to:  dave.wattling@telus.com. November, 2011