Eight ways Ontario’s health care could be cheaper and better

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We are not getting value for money for all our health-care spending. The status quo is not acceptable. Reform is overdue.

These are oft-heard refrains in political, public policy and business circles.

The latest to chime in on the issue is the Institute for Competitiveness & Prosperity, an independent think tank (funded by the Ontario government) that focuses on monitoring the province's competitiveness, productivity and economic progress.

In a new report entitled "Building better health care: Policy opportunities for Ontario", the institute makes the point that health spending in the province (and Canada more generally) is well above the average of OECD countries, but the province/country lags on virtually every performance measure, including population health outcomes, quality of care and thoroughness of coverage.

In other words, not only is our beloved medicare system not very efficient or cost-effective, it's not especially equitable either.

"Ontario could be getting considerably more bang for its buck in health care, and new priorities are needed to make our health-care system work smarter," is how Roger Martin, chair of the Institute for Competitiveness & Prosperity, summed up the situation.

What's refreshing with the new report is that it actually offers up some solutions, or what the ICP calls "a portfolio of policy options" to start righting the listing ship.

There are eight principal recommendations (and while they are aimed at Ontario they pretty well apply to every province and territory):

• Strengthen primary care. “A strong primary care health system is the backbone of a high-performing health care system.” Keeping people healthy and managing their health conditions is far more efficient than only providing reactive sickness care. But Canada has a hospital-centered system, and the shift to primary care has been slow, confused, and costly. Ontario alone has seven different primary care models, and there is little goal-setting, performance measurement or accountability for outcomes, so it’s hard to say which – if any – approach is working best.
• Engage physicians to be leaders and change the payment model: Physicians are essential to drive innovation and reform, but they have little opportunity to make system improvements. At the same time, more has to be done to control spending on physician services (which are a main driver of increased spending), by finding “a reasonable balance between entitlements and responsibilities.” Mr. Martin drew a lot of wrath recently for saying we are not getting value for princely sums paid to doctors, but the report itself is more subtle.
• Accelerate the deployment of IT in health care. While progress has been made on electronic health records, Ontario/Canada is “startlingly behind” when it comes to technical efficiency and using IT to improve health delivery. The message here is: Forget the past scandals and forge ahead.
• Implement a pharmacare program: A major reorientation of pharmaceutical policy is needed to tackle issues of cost control and inequity in access to drugs, and there is one clear solution: “A publicly administered, universal pharmacare program would increase the ability to control drug spending and ensure better access to medications.”
• Scale up the policy focus on end-of-life care: Developing a system-wide end-of-life care strategy that addresses issues of quality standards, patient preferences, access and cost, and clinical efficiency should be a high priority for policy-makers because it’s top of mind with the public.
• Introduce a savings plan for pre-funding drugs: Canadians ‘pre-fund’ their retirement benefits through payments to the Canada Pension Plan. The ICP argues that they should do the same with health benefits, and the starting point should be pre-funding of future prescription drug costs. This is important because, while there are many calls for pharmacare, there is little discussion of how to pay for it.
• Build the case for co-payment: Many countries with universal, publicly-funded health care require co-payments, an additional cash payment when you see a doctor or are treated in hospital. Such an approach could “bring benefits in terms of both cost efficiency and equity.”
• Abolish the tax subsidy for employer provided health benefits: Health insurance benefits that many employees receive are exempt from personal income tax. The subsidy disproportionately benefits employed and higher-income individuals, and it’s inefficient because it undermines publicly funded health care.

Not everyone will agree with these priorities. They reflect a particular worldview, that of a business-oriented think tank.

But the recommendations are an important contribution to a long-overdue debate, not the final word.

Business, which is one of the biggest beneficiaries of medicare (because health insurance costs are transferred largely to the state) tends to be a silent player in this debate, or leaves the talking to the hard-core free-marketers who tout a simplistic "let's privatize" solution to controlling health costs.

This report, however, explicitly acknowledges that investing in publicly funded health care makes economic sense; it even makes a powerful business case for expanding medicare by creating a pharmacare program, recognizing that equity matters as much as efficiency.

Close to half of all public spending in this country goes to health care. (In Ontario it's 42 cents on the dollar.) Governments need to have the institutional capacity to control and manage spending, to respond to demographic changes, technological advances, economic realities and changing public demands.

They also have an obligation to get value for money on behalf of citizens.

To do so, clearly articulated goals and priorities are required, be it those recommended by the Institute for Competitiveness and Productivity or otherwise.

But, above all, political and policy leaders need the desire to do act, to no longer accept that Canada be a middling performer in the health care field.

As the ICP report notes: "Public policy courage is necessary to break new ground."

André Picard is The Globe's public health columnist. Follow him on Twitter: @picardonhealth