Health Systems and Basic Economics

Week 4

health system

people, institutions and resources, arranged together in accordance with establish policies, to improve the health of the population they serve

Primary purpose: to promote, restore, and/or maintain health

a ‘good health system’

delivers quality service to all people, when and where they need them

• robust financing mechanism

• a well-trained and adequately paid workforce

• reliable information on which to base decisions and policies

• infrastructure: well-maintained facilities and logistics to deliver quality medicines and technologies

Functions of Health Care Systems

1. Financing: How is health care paid for?

2. Funding: the way provinces and territories’ health plans pay the provider for care

3. Delivery: the method used to provide health care to the public

Canadian Health System

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

• roles and responsibilities shared between provincial, territorial and federal governments

• Funded and administered by the country’s 13 provinces and territories

• each has own insurance plan, and each receives cash assistance from the federal government on a per-capita basis. Benefits and delivery approaches vary.

Canada Health Act

Canadians have reasonable access to medically necessary hospital, physician and diagnostic services without paying out of pocket.

Private Health Insurance

Covers services excluded from public reimbursement, such as vision and dental care, prescription drugs, rehabilitation services and home care

Roles and Responsibilities of the Federal Government

Contributes funding support to provinces and territories through the Canada Health Transfer

Support care delivery for health services to specific groups: e.g. Members of the Canadian Forces, First Nations/Inuit, living on reserves, inmates in federal institutions, refugee clamants

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

Funding

Main form for physicians is fee-for-service, where they are paid separately for each service they provide

Hospitals and public health are funded with global budgets (lump-sum payment)

Community services are funded on a fee-for-services basis or by fees per day

Health Care Funding for Indigenous Communities

Services for Indigenous peoples are provided through FPT governments and third-party organizations

Health programs and services for on-reserve Indigenous peoples are funded and delivered through the First Nations Inuit Health Branch (FNIHB) of Indigenous Services Canada (ISC)

Basic framework of Services

• Primary health care services

• Secondary “ “ “ (hospitals, LTC, community health)

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

Service Classifications

• public health services/prevention services

• home and community care services

• hospital care services, continuing care and rehab

Romanow Report

11 key recommendations:

1. sustaining service, needs and resources, new governance

2. sustaining Medicare

3. more comprehensive use of information management and technology

4. investing in health care providers

5. primary health care and prevention

6. improving access and ensuring quality

7. rural and remote communities

8. home care services

9. prescription drug

10. Aboriginal health

11. globalization

Kirby Report

explored ways to expand publicly funded health services and privatization

scarcity

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

choice

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

preference

individual and societal values and preferences influence the decisions that are made

cost

(For the provider), the total amount incurred in providing a service, including procedures, therapies, and medications. The actual cost is typically lower than the price paid

price

(also fee, rate, Tariff) Financial amount that a purchaser (i.e. health insurer) or individual pays to a provider to deliver a service

Direct Costs

• health professionals (fees)

• hospital costs

• medication costs

• supplies and equipment

• cost of treating side effects and complications

Indirect Costs

• lost productivity (patient and caregiver)

• caregiver/family burden (physical and emotional)

• lost time at unpaid work (caregiver)

• cost to the employer to hire and retain a replacement worker

• childcare costs

• transportation

cost effectiveness

The resources used to provide care services are scarce. Decisions about the services to be provided and who will receive these services usually have resources and cost implications

→ about whether you are achieving the best outcomes for what you are paying

cost efficiency

• focuses on using the least amount of resources to achieve a goal

• avoiding waste (including waste of equipment, supplies, and people) or using healthcare resources to get the best value for the money

• focus on input verses value

value in healthcare

measured by the health outcomes achieved, not the volume of services delivered, and shifting focus from volume to value is a central challenge.

Budgeting: Transparency

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

Budgeting: Accountability

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

Budgeting: Sustainability

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

budgets

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

• monitored monthly for variance - differences between the project and actual costs

operating budgets

account for income and expenses associated with day-to-day activity within a department or organization (e.g. equipment, supplies, staffing, and other indirect costs such as maintenance costs)

capital budgets

account for the purchase of major capital items such as physical plant (infrastructure, buildings, etc) and equipment (e.g., C scan; smart infusion pumps) that provide long-term value over several years

budget preparation

• demographics

• regulatory influences

• strategic plans

• department scope of service & goals

• history

budget development

• revenue — income generated through a variety of means

• expenses — determined by identifying the costs associated with the delivery of service; resources used by an organization to deliver services that may include labour, supplies, equipment, space, utilities, and miscellaneous items

practices to decrease HR costs

• efficient recruitment

• managing people; employee engagement:

• ensure the right skill mix (RNs, LPNs, HCAs) to care for our patient

• assess workload

• absentees & work-life balance

• manage disruptive behaviour

practices to decrease drug costs

medication reconciliation on admission

drug utilization and stewardship

antimicrobial stewardship

practices to decrease supply costs

• consider cost of dressing and the frequency of changing the dressings, choosing the most appropriate product

• consider what supplies are brought into patient rooms — many are discarded at discharge. treatments might change and result in the waste of products

• be cognizant of wastage in case of emergencies

• take only what you need from the stock room