Are Canada’s Premiers serious about innovation in public health care?

By Cy Frank

Real innovation means changing how we compensate and incent the people who have the biggest impact on quality and cost of care: health care professionals

A version of this commentary appeared in the Calgary Herald and the Hill Times

The task of reforming public health care has been left in the hands of Canada’s premiers after the federal government dropped a 10-year non-negotiable funding plan in their laps and beat a quick retreat into the tall grasses.

Ottawa’s over-to-you strategy comes complete with no strings attached to how they spend the $40 billion a year they receive in federal health transfers. The premiers are free to innovate, and they intend to do so, having formed a Health Care Innovation Working Group coming out of January’s Council of the Federation meeting.

If Canada’s premiers are serious about innovation, they could begin with transforming the conventional compensation models that are lacking any incentives related to patient outcomes or health system efficiency.

Start with physicians and specialists who are paid on a fee-for-service basis. They receive the same fee regardless of complexity and time involved. A patient who needs a blood pressure check or prescription renewal — a 10-minute visit to the family physician — generates the same revenue as one who has a serious disease and consumes an hour of physician time. In the operating room, an orthopaedic surgeon performing a hip replacement is paid the same fee regardless of complexity and whether surgery takes 60 minutes or 160 minutes. The anaesthesiologist is similarly compensated.

These health care professionals are, in fact, responsible for the hospital, drug and other treatment decisions that drive nearly three-quarters of the total costs of health care, which have reached nearly $200 billion a year in Canada. Yet they are incented only to increase volumes. More patients, more revenue.  As further evidence of the disconnect, surgeons and anaesthesiologists work as a team in the OR with nurses, who are paid an hourly rate over an assigned period. Numbers of patients are not as relevant to them.

This problem is becoming more pronounced as health care practice shifts increasingly to a team model. This shift has been driven primarily by the rise in chronic diseases, which have replaced infectious diseases as the major health care challenge in Canada and other developed countries. Chronic diseases, such as osteoarthritis and diabetes, require multifaceted, multidisciplinary services that are delivered most effectively in a team setting.

In Alberta, for example, most patients who need a hip or knee replaced are managed through a central intake clinic where they are assigned a team whose members include the surgeon, an internal medicine specialist, a nurse, a physiotherapist and a case manager. Other professionals, such as dieticians and occupational therapists, are drawn into the team as needed.

An innovative next step would be strengthening the alignment between team members by assigning a case rate to each of the patients they treat, adjusted for the complexity of the case.

A further innovation would involve adding incentives tied to team performance against provincial benchmarks in critical areas such as access, patient outcomes (adjusted for the severity of patient condition), and efficient use of public resources. Benchmarks could include wait time for surgery, time from surgery to walking, days in hospital, time in the OR, and patient satisfaction to name a few.

Alberta has already experimented successfully with incentives tied to provincial benchmarks for hip and knee replacements. These benchmarks are part of a standardized care path that has been rolled out across the province over the past few years.

In the experiment, hip and knee replacement teams across Alberta set out to reduce patient stay in hospital to a four-day benchmark while also striving for other performance improvements. The result: a measured annualized savings of almost 11,000 hospital bed-days, which translates to more than $9 million in found efficiency.

The teams’ incentive: the savings in resources were pumped back into hip and knee replacement services where the teams could see the impact of their success first-hand, rather than disappearing back into the system as a whole.

The downstream benefit is impressive: saving 11,000 hospital bed-days opens up capacity to perform an extra 2,750 hip and knee replacements. More surgeries mean shorter wait lists and wait times without incurring incremental costs.

While non-monetary, the incentive was nevertheless highly rewarding to the teams, proving that financial compensation is not necessarily the motivating factor in doing better, especially in health care where the thinking is focused on patient services.

This ‘experiment’ has become a permanent program in Alberta involving at least one team at every hospital in the province where hip and knee replacement surgery is performed.

Public health care in Canada will be bankrupt without innovative change. A good place to start is with how we compensate and incent the people who have the most impact on costs and quality of care.  Depending on their funding model,  the new multidisciplinary Family Care Clinics just announced in the Alberta throne speech may be a step in that direction. The grassroots approach used in Alberta together with using evidence to guide decisions — not ever bigger dosages of money — is the key to sustainability.

As B.C. Premier Christy Clark, who hosted the premiers’ meeting, said: “There are some big issues in health care that we have to address and I think it’s going to take some political courage to do that.” Compensation tied to multidisciplinary teams of health care professionals is one area that will take political courage. But in the face of rising need, spiralling costs and diminishing taxpayer capacity to pay, injecting innovation into the system, even if painful, is the most compassionate and responsible action Canadians can take.

Cy Frank is an expert advisor with EvidenceNetwork.ca, and an orthopaedic surgeon practicing in Calgary.  He is also the Executive Director of Alberta Bone and Joint Health Institute, professor of surgery in the Division of Orthopaedics, University of Calgary, and the McCaig Professor of Joint Injury and Arthritis Research.

February 2012

This Commentary is from Commentaries, Waiting for Care.

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