Week 2A: Healthcare Systems, Basic Health Economics, & Budgeting Concept

What a is health system?

A collection of people, institutions and resources with established policies, to improve the health of the population they serve

Responding to people’s legitimate expectations and protecting them against the cost of ill-health whose primary intent is to improve health

What is the primary purpose of a health system?

Promote, restore, and/or maintain health

What does a good health system deliver?

Quality services to all people, when and where they need them

What does a good health system require?

-Robust financing mechanism

-Well-trained and adequately paid workforce

-Reliable information to base decisions and policies

-Well-maintained facilities and logistics to deliver quality medicines and technologies (Infrastructure)

List the functions of health care systems

1. Financing: How healthcare is paid for

2. Funding: How provinces and territories health plans pay the provider for their care

3. Delivery: Method of providing healthcare to the pubic

What kind of health care system does Canada have?

A decentralized, universal, publicly funded health system called Canadian Medicare

Roles and responsibilities for health services are shared between __________, __________, and __________ government

Provincial, territorial, federal

What do public and private refer to?

The delivery and financing of healthcare

Public =

All levels of government (E.g. Canada Health Act)

Private =

Owned and operated by private organizations or individuals in which individuals and their families pay for their own services

List the types of private health care

-Corporate for-profit business

-For profit small business

-Not for profit organizations (hospitals and home care/community agencies)

What does private insurance cover?

Services excluded from public reimbursement, such as:

-Vision

-Dental care

-Prescription drugs

-Rehabilitation services

-Home care

List the 5 pillars of the Canadian Health Care System

-Public Administration

-Comprehensiveness

-Universality

-Portability

-Accessibility

Explain the pillar of: Public Administration

All Administration of provincial health insurance must be carried out by a public authority on a non-profit basis

Explain the pillar of: Comprehensiveness

All necessary health services (Includes hospitals, physicians, surgical dentists) must be insured

Explain the pillar of: Universality

All insured residents are entitled to the same level of healthcare

Explain the pillar of: Portability

A residents that moves to a different province or territory is still entitled to coverage from their home province

Explain the pillar of: Accessibility

All insured persons have reasonable access to healthcare facilities

What are the roles and responsibilities of the federal government?

-Contribute funding support to provinces and territories through the Canada Health Transfer Fund

-Supports care delivery of health services to specific groups (E.g. refugee, inmates, First nation/Inuit, Canadian armed forces, etc)

-Sets and administers national standards for the health care system through the CHA

What are the roles and responsibilities of the provincial/territorial governments?

-Administer their own health insurance plan

-Finance and organize health services within their jurisdiction

-Decide how much money to spend on health services, where to deliver these services, where to locate hospitals, and how many doctors are needed

How do provinces and territories pay their physicians?

Fee-for-service, where physicians are paid separately for each service they provide

How do provinces and territories fund hospitals and public health?

Global budgets

What are global budgets?

A lump-sum payment given to hospital based on the number and type of cases treated

How do provinces and territories fund communities (home care and nursing homes)?

Fee-for-service basis or by fees per day

How are services for Indigenous peoples funded?

-Federal, provincial, and territorial governments

-Third-party organizations

How are health programs and services for on-reserve Indigenous peoples funded and delivered?

Through the First Nations Inuit Health Branch (FNIHB) of Indigenous Services Canada (ISC)

True or False: There are significant gaps in access to health care services for Indigenous communities and Indigenous peoples living on reserves?

True

1 multiple choice option

Do the delivery methods of health services operate separately or collectively?

Separately (E.g. Hospitals have their own boards of directors, physicians work independently)

1 multiple choice option

True or False: Most hospitals are not-for-profit?

True, (Any surplus revenue is reinvested back into the hospital, not distributed to owners or shareholders)

1 multiple choice option

What does the basic framework of health care services include?

-Primary health care services

-Secondary health services (hospitals, LTC, community health)

-Additional health services (prescription drugs, vision, dental, counselling, PT/OT) --> may be part of primary/secondary services, but they are typically not included in public insurance and are paid through private insurance

List the types of service classifications

-Public health services/prevention services

-Community care services (E.g. Rehab, mental health, specialized, Ambulatory, emerg, etc.)

Accountability is _________ and is defined _________ by policymakers, managers, researchers, and providers

Complex, Differently

What does accountability emphasize?

Keeping agreements and performing tasks in a respectful manner

What does a accountability not do?

Accountability is NOT about blaming, rather about learning and continuous improvement

What is a culture of accountability important for?

Improved quality of care and value for money spent on healthcare

What year were key reforms in primary health care, pharmaceuticals management, health information, communications technology, health equipment, and infrastructure agreed upon?

2000

What year was the Accord on Health Care Renewal agreed on?

2003

What is the Romanow Report

A comprehensive review of Canada's healthcare system, led by Roy Romanow, former Premier of Saskatchewan

With 11 key recommendations

What was the purpose of the Romanow Report?

To examine the state of healthcare in Canada and make recommendations to strengthen and modernize the publicly funded healthcare system

List the 11 key recommendations of the Romanow Report

-Sustaining service, needs and resources, new governance

-Sustaining Medicare

-More comprehensive use of information management and technology

-Investing in health care providers

-Primary health care and prevention

-Improving access and ensuring quality

-Rural and remote communities

-Home care services

-Prescription drug

-Aboriginal health

-Globalization

What is the full name of the Romanow Report?

Building on Values: The Future of Health Care in Canada

What are the three premises of health care economics?

1. Scarcity

2. Choice

3. Preference

Define Scarcity

Resources exist in finite quantities, and consumption demand is greater than existing resources

Define Choice

Decisions are made about which resources to produce and consume among options

Define Preference

Individual, societal values, and preferences influence the decisions that are made

What is the delivery and financing of health care highly influenced by?

The government, public, and private organizations because they define and control payment for health care services

What are the key elements of health economics?

-Price and Cost

-Supply and Demand

-Cost effectiveness

-Efficiency

-Value

Define cost (For the provider)

The total expenses/amout a healthcare provider incurs to deliver health services to patients

(E.g. procedures, therapies, and medications)

Is the actual cost of a service/product typically higher or lower than the price the consumer paid?

Lower (the amount it costs a provider to deliver a service is usually less than what they charge or get paid for that service)

1 multiple choice option

Define price (fee, rate, Tariff)

The financial amount the purchaser (health insurer) or individual pays to a provider to deliver a service/product

Define Supply

The total amount of a good or service that is available for use (the availability of healthcare resources)

When is supply high?

When the selling price of an item rises, production (supply) usually increases because manufacturers are more likely to make a profit and are incentivized to produce more

Define Demand

The desire and ability of consumers to purchase a good or service at a given price

When is demand high?

When the price of an item is reduced, the demand for it increases

When is demand low?

When the price of an item increases, demand decreases

Define cost-effectiveness analysis

Estimates the cost of different interventions and compares their outcomes based on the same measure

Example of cost-effectiveness analysis

Two medicines might do the same job in treating an illness and give similar results, but cost-effectiveness analysis helps us figure out which one costs less, and still gives good results

So, the goal is to pick the product (medicine) that saves money without sacrificing quality of treatment

Define Efficiency

Getting the best possible results with the least amount of waste of resources or effort

What are the two basic points of efficiency?

-Economics

-Avoiding waste, or using healthcare resources to get the best value for the money

What is economics about?

Resource allocation and efficiency in resource use

Define value (in terms of healthcare)

Measured by the health outcomes achieved, not the volume of services delivered

What is a central challenge of health care value?

Shifting focus from volume to value

Why do we need a budget and why would a nurse Manager need to understand it?

-Transparency

-Accountability

-Sustainability

Define transparency (In term of budgets)

A budget must align with the strategic directions and goals of the organization

What is the fourth organizational goal of AHS?

Improve financial health and value for money

Define accountability (In term of budgets)

Every manager must understand what’s included in their budget so they can be accountable

Define sustainability (In term of budgets)

Plan for times of financial constraint, find ways to be more effective and efficient, and plan for the long term

Define a budget

A financial plan for income (Revenue) and expenditures (amount of money spent) in a one year period

How long are budgets generally developed for?

12-month period or yearly cycle

The fiscal year is determined by the _____________

Organization

How often are budgets monitored?

Typically monthly

Why are budgets are monitored monthly?

For variance (inconsistency) to determine if were spending under or over our budget and why

What do budgets help do?

-Define services (costs)

-Serve as benchmarks

-Foster collaboration between departments

Budgets require _________ thinking

Forward (planning)

Define Accounting

An activity managers engage in to record and report financial transactions and data

List the types of budgets

-Operational budgets

-Capital budgets

-Construction budgets

What are operational budgets?

Financial tools outlining anticipated revenue and expenses over a specified period

What are capital budgets?

Account for the purchase of major new or replacement equipment (E.g. CT scan, Smart infusion pumps)

What are Construction budgets

Developed when renovation or new structures are planned

What fundamental information is gathered to prepare a budget?

-Demographics: Client characteristics and health care needs

-Regulatory Influences: Monitor healthcare providers and organizations to ensure they meet standards. Their recommendations can affect operating budgets

-Strategic Plans: Map out the direction for the organization over

several years

In budget preparation what are department scopes of service and goals?

Hospital systems are frequently divided into subsections or units, commonly called cost centres.

Each cost centre defines its own scope of service

Why do organizations look at past budget information?

To establish:

-A baseline for a department or unit

-Patterns of a department’s growth or decline over time

Define Revenue

The amount of money a business or organization earns from selling its goods/services before subtracting any costs or expenses

Define Expenses

The costs a business/organization pays to operate and provide its services

What are expenditures?

The resources/money used by an organization, business, or government to deliver/buy goods, services, or assets

_______ are a major cost in healthcare

Supplies (E.g. Food, Drugs, Cleaning materials, One-use products, etc.)

How a nurse manager manages the team will have a direct impact on _________

The budget

What factors can impact how a budget is managed?

-Recruitment of new staff and retention of existing staff

-Staff turnover and increased orientation costs

-Increased absenteeism of team member can increase overtime costs

-Unfilled positions will lead to increased overtime of regular staff which can increase absenteeism