The Fiscal Sustainabilityof Ontario’s Health Care HLTH 405 / Canadian Health Policy Winter 2012 School of Kinesiology and Health Studies Course Instructor: Alex Mayer, MPA
Announcement• Volunteer note-taker needed o Please apply online at http://www.queensu.ca/hcds/ds/ o Karmic Rewards available: • You may begin to look and feel happier • You may become wealthier • You will definitely receive a reference letter upon request
Announcement• RE: Last week’s quiz o Moodle grades have been changed as follows • If an answer was not received for any particular question, I left it out and pro-rated your score. o In the future: • You are solely responsible for ensuring that your answer is properly transmitted (there is a light on your iClicker that should turn green).
In the News• ‚High cost of prescription drugs is leading some patients to skip doses‛ – Jan 17th, 2012 (CBC)• ‚While McGuinty Stalls, Drummond’s Legend Grows‛ – Jan 24th, 2012 (Globe and Mail)• ‚Delisting just the start of big change‛ – Jan 27th, 2012 (TheSpec.com)
Test Question…If a provincial election were held tomorrow, whowould you vote for? A) Hudak’s Conservative Party B) McGuinty’s Liberal Party C) Horwath’s New Democratic Party D) I don’t vote for parties… I vote for ideas (independent). E) Voting is like so boring.
Topics for today’s lecture:Fiscal Sustainability• How much does Ontario spend on health care?• Components of health spending• Key drivers of spending growth• What action has been taken so far… And where work remains to be done.• Don Drummond’s recommendations
Topics for today’s lecture:Interprofessional Collaboration• What it means• What problems does team-based care aim to solve?• Potential Benefits / Challenges• What action has been taken so far… And where work remains to be done.
The Fiscal Sustainabilityof Ontario’s Health Care
The Fiscal Sustainabilityof Ontario’s Health Care• Drastic cuts in the Ontario health budget in the early 90s o Quality of care was negatively impacted o Professional shortages (particularly MDs and nurses) were exacerbated• Opportunists and proponents of for-profit health care took advantage o Cast doubt on the public system’s ability to provide quality care o Brought into question the fiscal sustainability of public health care o Fuelled a debate over the future of health care in Canada
The Fiscal Sustainabilityof Ontario’s Health Care• Around the year 2000, Prime Minister Jean Chrétien taps Roy Romanow to head up a commission to survey the values and wishes of Canadians with regards to the future of the health care system.• In 2002, the Romanow Report concludes that Canadians deeply cherish their publicly-financed health care system and, furthermore, that the health care system is ‚as sustainable as we want it to be‛.
The Fiscal Sustainabilityof Ontario’s Health Care• Reassured Canadians anxious about the encroachment of for-profit health providers• Sent a strong message in support of public financing and provision of care on basis of medical need and not one’s ability to pay• Failed to adequately define the fiscal sustainability problem• Did not educate Canadians about the seriousness of the long-term cost containment challenge
So what is the ‘FiscalSustainability Problem’?Every year, Ontarians pay taxes on incomeearned…
What is the Fiscal Sustainability Problem?… on goods and services purchased (13% HST)…
What is the Fiscal Sustainability Problem?on properties we own, businesses we operate, etc.
What is the Fiscal Sustainability Problem?• All other things being equal, this government tax revenue rises or falls in tandem with the province’s economic activity (GDP). Year Real GDP Tax Revenue growth 2011 $71.3B 2010 +2.95% $64.9B 2009 -3.26% $68.9B 2008 -0.64%
What is the Fiscal Sustainability Problem?So the ‘fiscal sustainability problem’ is simply this: Y/Y% growth HC spending > Y/Y% growth revenueOr similarly… Y/Y% growth HC spending > Y/Y% growth GDP
Share of Ontario’sTotal Program Spending 2010 Health, 46% Education & Other, 54%
Share of Ontario’sTotal Program Spending 2020 Education & Other, 40% Health, 60%
Share of Ontario’sTotal Program Spending Education & 2030 Other, 20% Health, 80%
Follow the moneyBig revelation #1:• About 1/3 of the health care budget goes to hospitals. o Until recently, these were sent by the MoH to hospitals as global funding envelopes ($$$) o In 2011, ‘Excellent Care for All’ kicks in
Global FundingHospital is paid based on historical budget trends, withsmall year-to-year adjustments based on input costs.Pros• Provides budgetary predictabilityCons• Disincentives for discharging patients to post-acute care and increasing volume (i.e. exchanging relatively less expensive patients for relatively more expensive patients)• No incentive to improve quality or efficiency
Excellent Care for All Act (2011) • Introduces activity-based hospital funding in Ontario as of April 2011. • Reimbursement rate based on types, volumes and quality of care provided. • CEO pay is tied to performance (meeting concrete targets). • If all goes well, model will become funding model for CCACs, long-term care homes, CHCs, as well.
Activity-Based FundingPros• Rewards volume, quality and efficiency, which will incentivize greater specialization (i.e. centres of excellence) and high throughput (i.e. more efficient discharge; no more stranded ALC patients).• CEO incentives are aligned with hospital’s performance.Cons• Rural hospitals risk may be penalized if performance standards (e.g. ‘quality premiums’) are set too high or if some component of basic global funding is not retained to offset operating costs.
Follow the moneyBig revelation #2:• More than ½ of health care dollars are spent paying people for services (e.g. medical, admin, clerical). o Big ticket items: Physicians, nurses, CEOs
Physician Remuneration• Payment models come in many different shapes and sizes: o Fee-For-Service o Blended Models: FHT MDs can choose from Blended Capitation (FHN or FHO) or Blended Salary• Average payments to physicians have moved from $200,000 to $400,000 over 1992 - 2009.
Physician Remuneration• MDs are being gradually weaned off of Fee-for-Service based models through $$$ inducements from other payment models (FHGs in 2003, FHOs/FHTs in 2006).
Blended Capitation Model• Base funding of about $125 (avg.) per patient added to a physician’s roster (accounts for 60% of income) o teen male = $60; 90-year old female = $440 o $60 extra if patient has diabetes or serious mental illness, $125 extra if patient has experienced heart failure• Shadow billing provides small FFS component (only 10-15% of normal OHIP fee for the procedure)• Population health bonuses and incentives: o E.g. If 50% patients get colorectal cancer screening, $2200 bonus If 70% patients get colorectal cancer screening, $4400 bonus
FHTs and Blended Capitation PaymentsPros• Incentivizes cost-effective primary care (i.e. prevention)• Does NOT incentivize volume (desirable for quality care)• MDs lose out on bonuses if low acuity patients seek ER care; this incentivizes 24/7 access to primary care (e.g. extended hours, THAS)Cons• Rewards beneficial activity but not health outcomes!! (yet!)• FFS MD practices still alive and kicking despite their obvious drawbacks (BC payment model not imposed across the board)
Health Human Resources• If you were to design the system from the ground-up, with MDs costing $250k to $500k, NPs costing $100k, practical nurses costing $50k, how would you organize different health professionals to provide accessible, cost- effective primary care?
Follow the moneyBig revelation #3:• Drug expenditures account for 10% of public health care costs and 33% of privately-borne health care costs.
Pharmaceutical Drugs• Ontario had some of the highest per capita drug costs of any jurisdiction in the world until recently.• Due to: 1. Generous Ontario Drug Benefit program e.g. No matter if a 68-year old made $45,000/yr. or $45M/ yr., she would still have access to basically ‚free‛pharmaceutical drugs (small annual deductible of $100). 2. Overutilization of new, expensive brand-name drugs 90-95% of new drugs provide no clinical benefit over generics. 3. Relatively high prices for generic drugs Highest of any jurisdiction in the world, until recently.
Pharmaceutical Drugs• Defeats cost-effective provision of health care in a few ways: o Age criterion does not align provision of benefits with financial need o High cost of pharmaceuticals facing non-ODB patient leads to high rates of clinical non-adherence; patients show up sicker downstream
Pharmaceutical Drugs• In 2010, new regulations were introduced into the Ontario Drug Benefit Act. o Prices for generics bought under the plan would be capped at 25% of the cost of their brand-name equivalent, down from 50%. o Similar price reductions for drugs purchased out-of-pocket or through private insurance to be phased in over 3 years.Result:• Whereas ODB program cost growth used to go up by 9.4% per year, it only went up by 5% in 2010.
Class ExerciseDon Drummond’s 10 Prescriptions for Sustainable Health Care
Recommendation #1Take bold action to promote healthier lifestyles. o Government should set bold targets around obesity, diabetes, smoking, and invest more $ in health promotion initiatives. o Ontario should diminish health disparities by predominantly targeting its initiatives towards disadvantaged or low-income groups. o Targeting physical activity and junk food in schools. o Engage larger employers about the benefits of workplace wellness programs to productivity and insurance costs.
Recommendation #2Expand the use of information technology in thesystem. o Use this as a tool to collect data and reward performance across the system. o Mandate the use of a single province-wide IT system in new Family Health Teams, allowing FHTs to communicate effectively with other providers and expand their gate-keeper role for hospital and community services.
Recommendation #3Establish a Commission on Quality and Value forHealth Care. o Establish a quasi-independent body to assess the value-for-money of new health care procedures and review existing ones (including drug treatments) and make binding decisions on provincial coverage. o Would amalgamate the activities of the Ontario Health Quality Council (OHQC), the Committee to Evaluate Drugs (CED) and the Institute for Clinical Evaluative Sciences (ICES).
Recommendation #4Change the way physicians are paid. o Step up provincial efforts to move the 2/3 of physicians still receiving fee-for-service payments to the newer blended capitation payment model. o Target financial incentives on process rather than outcomes, to avoid ‚cream-skimming‛.
Recommendation #5Develop a new hospital financing model. o Move towards a diagnosis-related group-based payment system (i.e. ‚activity-based funding‛). o Have a review body assess and set appropriate prices for different diagnoses.
Recommendation #6Reallocate functions among health care providers. o Reallocate some functions from physicians to non- physician health professionals (e.g. Nurse-Practitioners) to improve access and increase patient satisfaction. o Expand roles of technologists for specific procedures (e.g. routine cataract surgery). o Expand the supply of non-physician health professionals, by easing restrictions on foreign credential recognition and increasing support programs for immigrant professionals.
Recommendation #7Scale back Ontario Drug Benefit for higher-incomeseniors. o Increase the rate of financial contribution (i.e. co- payments) of high income seniors for drug coverage on a sliding scale, while maintaining generous coverage for low-income seniors and seniors with high drug costs.
Recommendation #8Increase bulk purchases of drugs to lower costs. o Centralize hospital drug purchasing in Ontario to drive down the price of generic pharmaceutical products. o Approach other Canadian provinces to form a central buying agency responsible for bulk drug purchasing on the behalf of the provinces.
Recommendation #9Establish pre-funding of drug coverage. o Establish a CPP-style contribution system to prefund one’s lifetime drug costs, in order to fairly distribute the burden among different generations and to free up the fastest growing portion of most provincial health budgets.
Recommendation #10Incorporate a health-care benefit tax into theincome-tax structure. o Establish a link between cost and usage to discourage over-utilization of health care goods and services. o Address ability-to-pay concerns at low administrative cost, by taxing benefits at 40% the cost of care received, up to a maximum of 3% of income over $10,000. People earning below $10,000 would pay nothing.
Recap • How much does Ontario spend on health care? • Components of health spending • Key drivers of spending growth • What action has been taken so far… And where work remains to be done. • Don Drummond’s recommendationsFill-In-The-Blank…• What is the %growth in Ontario’s HC spending for 2011?• What does this say about our odds of having a fiscally sustainable health care system under McGuinty?
An Important Question• If you were to design the primary care system from the ground-up, with MDs costing $300k, NPs and PAs costing $100k, practical nurses costing $50k, how would you organize different health professionals to provide accessible, cost-effective primary care?
InterprofessionalCollaboration in Health CareWhat is the problem?• Health care is provider-centric rather than patient- centered• Poor use of available resources• Emerging evidence of high rates of medical error in acute care settings (e.g. hospitals)
So how does interprofessionalcollaboration address these challenges?Video Presentation: ‚Teams Work, Patients Win‛ by the Health Council of Canada http://www.youtube.com/watch?v=YipFWjZp2Jc&feature=related
InterprofessionalCollaboration in Health CareBenefits• Increases access to primary health care• Improves outcomes for chronic disease patients• Less tension/conflict among caregivers• More cost-effective use of clinical resources• Better workload and work environment
What are some of the policy challenges of shifting to IPC?• •• •• •• •
InterprofessionalCollaboration in Health CareIn Ontario, Family Health Teams mayinclude any of the following professions: • Family physician • Physiotherapist • Registered Nurse • Occupational Therapist • Psychologist • Chiropractor • Dietitian • And more! • Pharmacist
InterprofessionalCollaboration in Health Care• Additionally, two new regulated professions have appeared in recent years: o Nurse Practitioners (NPs) o Physician Assistants (PAs)• Policy goal: To let lower-cost health providers do the routine tasks of MDs, freeing up physicians to engage in more cognitive work and thereby addressing the ‚doctor shortage‛.
InterprofessionalCollaboration in Health Care• Nurse Practitioner (NP) o An advanced practice nurse who has completed a nurse practitioner program (Master’s or PhD degree) o Typically specialize either in Primary Care, Adult Care or Pediatric Care o Has acquired expert knowledge base, critical decision- making skills, and clinical competencies for expanded practice
InterprofessionalCollaboration in Health Care• Nurse Practitioners (NPs): Scope of Practice o Can perform annual physicals and counseling services o Health promotion (e.g. smoking cessation) o Can order tests, perform screenings and administer immunizations o Treat acute illnesses (e.g. injuries, infections) o Monitor stable chronic illnesses (e.g. diabetes care) o Can refer patients to health and social services (e.g. dietitians, psychologists, specialists, addictions programs, housing supports)• In July 2012, will be able to admit patients to hospitals through amendments to the Regulated Health Professions Statute Law Amendment
InterprofessionalCollaboration in Health Care• Other potential uses for NPs being discussed: o Perform on-the-spot lab tests for patients o Use specific types of energy (e.g. defibrillation) o Order diagnostic tests, specifically MRI & CT scans o Offer psychotherapy as a controlled act (i.e. with appropriate credentials)
InterprofessionalCollaboration in Health Care• Nurse Practitioner-led clinics o Performing quite well: • High patient satisfaction • Oftentimes better patient compliance with clinical guidelines • Improved coordination of care o NP-led clinics are currently the norm in Northern under-serviced areas, but NPs are increasingly common in all mainstream care settings (CCACs, FHTs, CHCs, hospitals, LTC homes, etc.).
InterprofessionalCollaboration in Health Care• Physician Assistant (PA) o A health care professional with a Master’s level or PhD degree who is licensed to practice medicine under the supervision of a physician. o A PA’s scope of practice can be as expansive as that of an MD, but is typically negotiated based on several factors including a clinic’s caseload as well the MD’s expertise and preferences.
InterprofessionalCollaboration in Health Care• Physician Assistant (PA) o Currently being deployed in different settings as part of provincial pilot projects • Family Health Teams • Emergency Rooms • Interprofessional teams in Hospitals (e.g. surgery) • Interprofessional teams in CHCs • MD practices, working for MDs on chronic disease management and in LTC settings o Provincial review will take place in the next 2 years to assess the proper role for PAs based on provider feedback.
InterprofessionalCollaboration in Health Care• Between the introduction of Family Health Teams, blended salary models, IPE programs, eHealth technologies, NPs and PAs…Lots of positive changes to the quality ofprimary care over the past 5 years!• Better yet, the stage is set for further improvements.
InterprofessionalCollaboration in Health Care• The hard work now is to: o Increase eHealth adoption and use it more strategically in team-based care settings o Increase the % of MDs being paid under BC payment model o Evaluate the health outcomes of team-based care vs. traditional medical practices o Boost supply of non-physician health professionals o Better use and coordination of health teams in providing outpatient and home care