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Aging Canadians jump from one health-care silo to another, from hospital to the community and back again, with nobody accountable for their safe journey.Getty Images/iStockphoto

Jason Sutherland is an associate professor in the Centre for Health Services and Policy Research in the UBC Faculty of Medicine, School of Population and Public Health. He co-wrote a paper with Erik Hellsten, titled "Integrated Funding: Connecting the Silos for the Healthcare We Need," which was published by the C.D. Howe Institute.

Since December, Canadians have been treated to the spectacle of provincial and territorial health ministers squabbling with their federal counterparts for more health-care dollars. As they argue over cash, they overlook a lesson from Canadian health-care history: Asking how much without also asking how those dollars will be spent is a recipe for more of the same.

The last time health ministers haggled with the feds, in 2004, they received a record $41-billion over 10 years. This so-called "fix for a generation" achieved little of the sort. Across the country, emergency departments are still as congested as ever and unhealthy numbers of hospital beds remain filled by seniors who should be receiving care elsewhere. Even waiting times for elective surgeries – one of the few success stories of the 2004 agreement – are creeping back up in a number of provinces.

What went wrong? Most of the flood of new federal money in the 2004 accord flowed straight into the pockets of health-care organizations and providers in the same way the money had flowed for decades – and continues to flow today. Hospitals are largely paid based on how much they spent last year. Long-term care homes are paid for each bed filled. Physicians are paid for the number of services they provide. Crucially, all these entities are paid public dollars through separate envelopes despite treating the same patients.

As aging Canadians with multiple chronic diseases bounce from one health-care silo to another, from hospital to the community and back again, nobody holds accountability for their safe journey across these settings.

Why should Canadians care about how we pay for health care? Because this jigsaw payment approach leads to breakdowns in communication and co-ordination between providers, resulting in avoidable medical errors and wasteful health-care spending.

There are ways forward. The international trend has been away from silos and toward creating shared financial incentives for co-ordinated, efficient and effective care.

In the United States, groups of previously independent hospitals, physicians and nursing facilities now receive a single, combined payment for each hip or knee replacement they perform. This "bundled payment" approach creates a shared financial incentive for these providers to work together efficiently and avoid costly complications and unnecessary duplicate tests.

In Germany, new regional health-care management companies are being formed to co-ordinate between hospitals and physicians, taking full responsibility for the costs and health outcomes of their populations.

While some of the U.S. reforms spawned under Obamacare face an uncertain future under President Donald Trump, the genie is now out of the bottle. Private health insurers are adopting similar models and many European countries are following suit.

The evidence for these new integrated payment models is promising: Studies have shown these reforms reduce costs while maintaining or improving quality of care. Despite the potential of these innovations, Canadian policy makers have made no significant attempts to date to bridge their own health-care payment silos.

Ontario is a modest exception. Cancer Care Ontario pays regions for patients to receive renal care at home, when it is safe to do so without jeopardizing quality, a method to move away from volume-based health funding. The province has also launched pilot programs where hospitals work jointly with community providers to reduce hospital re-admissions and avoid unnecessary admissions to long-term care.

As health ministers exert public pressure on Ottawa to loosen the purse strings, they should learn from these innovations – and their own experiences after the 2004 accord – and take steps to change how they direct their health-care spending, rather than simply seeking more money to spend.

It's high time to break down Canada's health-care silos.

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