Breaking the Silos: Funding for the Healthcare We Need

Jason Sutherland and Erik Hellsten
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Jason Sutherland: University of British columbia
Erik Hellsten: University of Toronto

C.D. Howe Institute Commentary, 2017, issue 463

Abstract: Once held in high esteem worldwide, Canadian healthcare has taken a drubbing in recent international comparisons, posting repeated poor showings against similarly high-spending OECD peers. The erosion in the worldwide status of Canadian healthcare has been attributed to the failure of the provinces to adapt their aging health systems to the changing face of healthcare demand. Since the late 1950s, the provinces have only tinkered at the margins of the Canadian healthcare delivery silos – a system that is arbitrarily divided among hospitals, specialists, and the provision of prescription drugs, primary care, and home and community care. This Commentary provides an overview of current payment models for provincial health services, focusing especially on areas where there is misalignment among the methods. Then, turning our attention beyond Canada, we examine a diverse range of international integrated payment reforms – defined here as models that distribute single payments or funding envelopes across groups of once disparately remunerated providers in order to foster shared financial incentives. A series of emerging policy reforms in the United States, the Netherlands, England, and Germany has attracted attention from international policymakers for going beyond the silos of traditional payment reforms in healthcare to introduce new financial flows that bridge sectors and settings. New models such as bundled payments and accountable-care organizations disburse single payments across groups of provider entities, offering shared financial incentives to improve coordination, efficiency, and effectiveness across a patient’s entire journey. Although still in their infancy, early evaluations have found compelling evidence of the potential for some of these models to reduce healthcare costs while maintaining or improving the quality of care. With a still relatively new federal government and the recent success of the pan-Canadian Pharmaceutical Alliance in providing a potential template for cross-provincial collaboration, the time appears ripe for collaboration on integrated payment reforms and greater sharing of experiences and expertise. Federal players such as Health Canada and the Canadian Institute for Health Information can have a strong role in facilitating this Canada-wide collaboration, with funding to facilitate transition, analytic tools that generate insights across the continuum, and information brokering among provinces.

Keywords: Health; Policy (search for similar items in EconPapers)
JEL-codes: I1 (search for similar items in EconPapers)
Date: 2017
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