Tag Archives: “good idea”

Paying for healthcare and real choice

TGV at Avignon, France
For faster healthcare, you need new tracks

The UK is again in the midst of a crisis of purpose as it seeks to understand how to balance the monopoly (under) supply of health care that characterises the NHS, and enabling individuals to purchase (mainly) medicines that are deemed too expensive.  Apart from the argument made in an earlier posting that the NHS cannot get off the hook of paying for high cost healthcare, rationalising the current mix of co-payments can only be good.  The effect of enabling top-ups (as if that is really what they are, of course), or more accurately co-payments, would actually harness a variety of features that currently elude UK health policy makers.

Enabling wider use of copayments (also apart from the literature which would say they increase social injustice and are an example of a policy zombie), would turn the UK NHS into the French health system — and given the evidence from France, that might not actually be a bad thing.

Such a change would have the effect of clarifying the current dispensing fees for medicines, bundling them with the cost of medicines deemed by NICE to be excessively costly, and enabling payment by individuals through suitably prepared supplementary health insurance — which reversing the senseless actions of the Labour government in 1997 could be made tax deductible.  It would also enable a simplification of the current gap between NHS and private dentistry (by blending entitlements) and enable easier utilisation of the wider healthcare infrastructure of public and private (sorry, not very politically correct here, independent) provision.  Further bundling with individual social care budgets would open the way toward consumer-led purchasing of healthcare, something of considerable interest to people with long-term conditions who no doubt dislike others telling them how to lead their lives.

All this would provide the needed disruptive influence to drive provider reform and improve quality and system responsiveness much faster than would otherwise be the case if the PCTs, ICOs and whatever next crops up, were to try to achieve the same goals through institutional planning processes (not an easy thing to do with complex adaptive systems that in effect ignore the impact of patients in the system).

No need to create a market, no need to fuss about social justice, individuals would be given responsibility for their care and that is a just thing to do. The NHS in its current form  effectively insulates individuals from the consequences of their own poor health and lifestyle choices which only exacerbates injustice to the extent that it undermines individual autonomy.

Rather than co-payments having the economic effect that various folk have written about, policy makers would have instead a mechanism by which public health goals could be pursued, through a partnership between the state/NHS and the individual, rather than a partnership between the state/NHS and PCTs/itself, with the patient as an interested, but disenfranchised bystander.

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Strategic Healthcare Purchasing: UK/Ontario

The Classic Guide to Strategy album cover
Play on!

The most advanced development of the purchasing function is with the English NHS. Other countries, such as the Netherlands are leaders in using competition to improve purchaser performance.

The priority for the English NHS has been to ensure the effectiveness of purchasing (or commissioning as it is called), as poor purchasing is seen as the weak link for ensuring good service delivery. For Ontario, this means that LHINs will need to be robust organisations with the necessary capabilities to undertake the necessary work to deliver integrated health services.

Strategic commission involves the following for LHINs:

  • Planning healthcare

  • Determining local health priorities within the provincial health strategy

  • Assessing and identifying local needs based on patterns of service that respond to the population’s needs

  • Establishing local capacity plans that extend into the future (and achieve the integration objectives)

  • Purchasing healthcare

  • Deciding which services are provided by which providers, taking into account current balance of service delivery (and risks in areas of strategic low priority) and future capacity requirements

  • Developing the right SAA arrangements that achieve integration (taking account of service utilisation, risk, quality)

  • Appropriately overseeing the resulting arrangements within a collaborative governance arrangement

  • Monitoring and performance managing healthcare services

  • Are the agreed services being provided to the volume that has been identified for the population’s needs?

  • Assessing provider clinical performance using quality assurance through external auditing and accrediting bodies that a service meets external standards, and SAA-specific quality standards that the LHIN may seek.

  • Is a high-quality, integrated patient experience being provided?

Effective purchasing focuses on delivering health outcomes to national targets, with the ability to establish novel provider arrangements as they see fit, and which provide at least equivalent clinical benefit (that ensures that changes are not just for change sake but are value-adding). This addresses an element of strategic purchasing about how to encourage novel forms of provision, and move beyond legacy providers.

Various challenges for strategic purchasing by LHINs include:

  • The ability of a LHIN to measure health needs and inequalities and model appropriate service provision, in the present and for the future.

  • The ability of a LHIN to collaborate with other LHINs and multiple providers particularly around specialist service areas.

  • The ability to achieve integration strategies with non-LHIN-funded providers.

  • Determining the appropriateness of cross-LHIN-boundary patient flows that may not be compatible with LHIN-based integration strategies.

  • How can LHINs achieve integration solutions that reduce inappropriate use of secondary care, by

  • shifting resources toward primary care,

  • enabling service redesign by providers

  • working with non-secondary-care/community providers.

This presents a developmental challenge for LHINs for a number of reasons:

  • There is a very small number of people on LHIN boards who have direct experience of the purchasing function, and who have not developed their perspective on health system performance from other than a provider experience. This means that considerable efforts will be needed to ensure that LHIN board members learn the appropriate strategic approaches to service redesign, transformation and integration from a non-provider perspective.

  • Proposal: a board-level development plan is needed to ensure that LHIN board members are able to embrace the appropriate health system reform models compatible with a purchasing function.

  • Differences between LHINs and providers are real in terms of them having different roles within the Ontario system; explicit recognition of this is necessary.

  • Proposal: individual chairs and chief executives of LHINs may find it useful to engage in a learning-set development process with chief executives and chairs of providers to explore their different roles.

  • LHINs need to engage with like-minded organisations with purchasing experience

  • Proposal: a series of workshops for LHINs with people with direct and practical experience of the problems and challenges of purchasing.


Commissioning in the NHS: challenges and opportunities, NERA Economic Consulting, London, June 2005.

NHS Alliance, The Future Shape of Primary Care and General Practice – who will be the providers of the future, and how will they be organised? November 2004). Dr Mike Tremblay led the development of this paper for the NHS Alliance.

Mike Tremblay, Tremblay Consulting

Role Description
Short term demand forecasting

Use of actuarial techniques to forecast demand, even in short term

Modelling techniques

Long term demand forecasting and capacity planning Strategic perspective on future activity levels taking account of epidemiological models and service design assumptions
Market management Taking account of longer-term capacity requirements, relationship between purchasing decisions affecting one provider may impact on others
Financial, risk management Risk pooling of high-cost low demand care where population is small or insuring against unavoidable overspending in high priority (necessary) areas of service delivery
Procurement Contract negotiation, based on agreed activity from planning process with providers
Supply chain management Pro-active approach to ensuring the best pattern of service delivery, rather than functioning as a ‘flow-through’ funding body
Patient relationship management Ensuring the administrative control of the patient’s journey through the healthcare system, to achieve service integration from the patient’s perspective
Contract management Reviewing service quality and service provision; payment
Information Standardised and timely information to monitor financial performance of the local system
Benchmarking Using comparative information on providers to permit service improvement through peer-learning

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A federal approach to cross-border healthcare in the European Union

The map shows the results of a Eurobarometer p...
One Europe, divided by borders

With the release of the European Commission’s communication on cross-border health services [Communication from the Commission, follow-up to the high level reflection process on patient mobility and healthcare developments in the European Union, COM(2004) 301 final, 20 April 2004] and the proposed services directive which will implement the various rulings of the European Court of Justice on cross-border health care [Proposal for a Directive of the European Parliament and of the Council on Services in the Internal Market, COM(2004) 2 final, 13 January 2004], momentum will now build to really understand the potential for a European health system.  While a wholly integrated “European Health Service” seems unlikely, the status quo is also not sustainable.  So what is to be done?  One approach is to learn from countries with federal health systems, where responsibilities are split between the national/federal government and lower levels of jurisdiction, and how they accommodate the different objectives of service delivery at one level, and integration of systems at another.

Canada offers a particularly interesting example since its highly decentralised health system is composed of the autonomous health systems of the provinces, with a federal Canada Health Act [Canada Health Act, 1984] to enshrine particular national standards.  Such an approach offers a way forward for the EU since it recognises that there are legitimate issues that overarch the responsibilities of member states, yet accords to the member states their own sphere of autonomy.

The Canada Health Act sets out specific standards which form the cornerstone of the health system’s national design:

  1. public administration: the administration of the health care insurance plan of a province or territory must be carried out on a non-profit basis by a public authority;
  2. comprehensiveness: all medically necessary services provided by hospitals and doctors must be insured;
  3. universality: all insured persons in the province or territory must be entitled to public health insurance coverage on uniform terms and conditions;
  4. portability: coverage for insured services must be maintained when an insured person moves or travels within Canada or travels outside the country; and
  5. accessibility: reasonable access by insured persons to medically necessary hospital and physician services must be unimpeded by financial or other barriers.

The important step that the EU must take is to move beyond the development of a purely bureaucratic approach to cross-border health care (by simply making existing regulations more complex [Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community]) and embrace a few good principles.  I would propose the following as a starting point, to create a simple basis (no mean feat in European affairs!) for member states, the Council of Ministers and the Commission to establish the basis for an agreed approach:

  1. portability: insured individuals may seek health services throughout the EU in a uniform manner;
  2. accessibility: reasonable access is assured to insured individuals to medically necessary health care with fair administration of cross-border entitlements;
  3. comprehensiveness: all medically necessary care that meets international standards is covered;
  4. accountability: consistency of services and adherence to standards across the EU is provided by public bodies.

It would be a good founding agenda for the new ”High Level Group on Health Services and Medical Care” to explore whether principles such as these might provide a cornerstone for cross-border health services in Europe.

Learning from federal health systems will reveal the potential scope for a European agenda, driven by shared values and principles.  It is important and timely for health care professionals, policy makers and everyone concerned with health to understand the implications of greater Europeanisation of health care as it will drive much of the logic around quality, standards and accreditation to the EU level.  But this will also require greater scrutiny that can only come from a single, EU-level tier.  That is why key design principles, such as the ones suggested, are needed.

Having a set of guiding principles will help to ensure that future European health care developments are sensible, productive, transparent and benefit us all, while respecting national and European interests.

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Counterfeit medicines are a global threat to human health

The mortar and pestle is an international symb...
A tainted symbol of trust

How can I be sure the medicine I take is genuine?  In some countries, there is an almost even chance that it is counterfeit; not just a cheap substitute, but a real fake,  ineffective,  probably harmful, and maybe fatal.  Some counterfeit medicines were found in Hamilton, Ontario, earlier this year and the pharmacist has now been charged by the RCMP.

Counterfeit medicines are a global problem, with trade estimated to exceed US $36 billion a year.  The World Health Organization estimates 8-10% of all drugs supplied globally are counterfeit.  The European Union estimates counterfeit drugs cost their health systems €1.5 billion annually.

Counterfeits are a clear and present danger to human health.  Africa is threatened by counterfeit AIDS drugs, while in Haiti, Nigeria, and Bangladesh almost 500 mainly children were killed from fake paracetamol syrup.  Perhaps 192,000 people were killed in 2001 in China from counterfeit medicines.  Counterfeits circulate in the European Union, with two recent cases in the UK alone.  And Canada.

Fake medicines are hazardous, with documented toxicity, instability and ineffectiveness but few people are experts in pill authentication (even pharmacists get fooled).  Counterfeit drugs are easier to make — in portable cement mixers – and fake than money.  But there is little patients can do but rely on assurances by others that drugs are genuine.  That may not be good enough.

Our health and medicines regulators believe there isn’t a problem because there are few cases.  But recent research in Europe counters this regulatory denial with evidence that regulators have little hard evidence on the scale of counterfeiting.  Problems with medicines are rarely associated with the drug being fake.

Counterfeit medicines don’t just show up in the local pharmacy, they are infiltrated into the supply and distribution of legitimate medicines by rogue, criminal organizations and individuals, who specifically target the weaknesses in this system.  But counterfeiting is seen as a patent issue not the criminal act it is.

Once a medicine has been factory sealed by the pharmaceutical manufacturer, there is no assurance that it will reach the patient unopened; a pharmacist and doctor can open it.  However, there are companies with the licensed authority to repackage factory-sealed medicines with new labels in new languages.  Unscrupulous distributors can conceal the illegal substitution of counterfeits within our apparently highly regulated system.  Canada, a net importer of medicines, is vulnerable from this as it imports medicines from countries that are known sources of counterfeit medicines.

While US/Canada medicines trade has focused on internet pharmacies, the real problem the internet is also a counterfeit drug delivery system and a real problem by the US, which views Canada’s system as easily compromised by counterfeiters.

Therefore, we need to ensure that any tampering with a product’s factory packaging is clearly evident to others.  Using ‘drug provenance’ would show who has handled, opened or repackaged a product; another way is to use advanced ‘track-and-trace’ technologies such as radio-frequency tags (RFIDs) to track shipments of medicines and determine if they have been tampered with.  However, there are stricter controls in place to deal with the movement of cattle than medicines.

Nevertheless, things are slowly improving, with the US FDA promoting the use of RFIDs by 2007, and efforts to improve data collection on counterfeiting.  But there is little public awareness of this global threat, as regulators focus on the operation of pharmacies rather than the origin and safety of the medicines themselves.  Legal sanctions are often weak, or inappropriate, considering the grave health risk counterfeit medicines represent.

The way forward will require ‘counterfeit proofing’ the supply and distribution of medicines.  The criminal law needs rethinking to link human health and counterfeit medicines.  Good data is needed to inform our actions and understanding to ensure appropriate regulation.  Finally, the problem must be viewed as a global one and Canada could show international leadership in proposing solutions in an area were there is common cause amongst regulators, health professionals, pharmaceutical companies, and healthcare organizations.

The health system works on the basis of trust, and patients must trust that the pills in that little bottle are what they are supposed to be.  But while the vast majority of drugs are perfectly legitimate, a more comprehensive solution to the problem of counterfeits is needed.

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More on Courts and Health Reform

European Court of Justice
Health Reformers?

The Canadian Supreme Court ruling on private health insurance has alerted us that individual rights do matter and now they matter in health care, more than people had thought. Perhaps the greater impact of this ruling may be the emergence of legal or rights-based challenges to health policy, something the European Court of Justice has shown global leadership on.

Traditionally, health care decisions revolve around money, how much who gets and how; Canadian health politics is littered with the wrangles between the federal government and the provinces, and where has it got us?  Years of polemic perhaps about fiscal priorities, but perhaps little mileage on how to ensure Canadians get the health service they are paying for.  Other countries have been rudely awakened from this complacent slumber and found themselves faced with a steep challenge; in the UK, government spending on their National Health Service is being virtually doubled, to bring average UK spending in line with average spending in the other European countries.  Indeed, it used to be a hallmark of the venerable NHS that is was parsimonious in delivering health care, but the social costs in waiting times and waiting lists became politically unacceptable when compared with the rest of Europe.  Canadians of course compare Medicare to that the US system, and thank heaven that we don’t do that here!  But reality is of course much different, and we are learning daily now that there are things our mother never told us about Canadian Medicare, and finally perhaps the public is asking, “so, remind me again, what is we have been paying for all along?”

How do we know if we are getting a decent health system for our money?  The answer is not easy, but there are some clues.  Unfortunately, waiting lists and waiting times are indicators of resource shortages, not necessarily whether the health system is working well.  It’s a bit like heading into Home Depot to buy some paint, they may have lots of paint, great variety in the catalogues, but you need to line up to discuss the colour with one person, line up to get the cans from someone else, and third person to mix them for you, and you still haven’t paid for the paint!  Canadian health care is fascinated with hospitals, the most expensive, inefficient and labour intensive institutions known to modern society.  Not noted for being particularly safe, people get sick there while they’re recuperating from being sick.

One way to make sense of how well as health system works is to look at how well it treats new entrants, i.e. babies.  Infant mortality is a measure of the deaths of newborns, up to 1 year of age, and measured as a death rate per 1000 live births, so a number of 5 means 5 infants died in year for every 1000 babies born alive (i.e. not still births). High death rates pick up on problems associated with access to health care facilities, medicines, as well as maternal knowledge of child-rearing, diet and hygiene.  Low rates suggest the opposite.

In 1996, Newfoundland had a rate of 6.6, compared to the Canadian average of 5.8.  Nova Scotia had a rate of 4.9, while Nunavik Region in Quebec had a rate of 22.9.  In Ontario, Quinte area, rated by some as one of the best places in Ontario to live, had a rate of 6.8, Northwestern Ontario at 8.6 with the lowest being Halton/Brant at 3.9.  As we head west, Manitoba sits at 7.3, Saskatchewan, the birth place of socialized medicine at 8.7, Alberta, the new driver of health system reform at 6.1 and BC at 5.3.  Nunavuk is 17.9 and the Yukon 8.7.  Quite a spread.  To put it into a different perspective, the infant mortality rate in 2003 in Austria is 4, Finland 3, Romania and Argentina 17 and Colombia at 21.

So, once we survive that first year, how long will we live?  In Canada it is about 78.3 years of disability free life (1996 data).  But the best place to live if you’re a woman is BC with 81.8 years, and the worst place is Nunavut for men at 69.8.  Does the health system have any impact on how long we live?  Probably not, as most people’s encounters with the health system are around accidents and child birth, and the regrettable tenure we endure in our final days when the system’s heroic efforts to keep us alive gradually fail.  Most health system expenditure is incurred within the last 6 months of life, we just know when those last 6 months are.

Does money matter?  Well, you’d think it did, but there isn’t really any accepted correlation with how much a country spends on health care and the results it gets for its spending.  Canada spends a lot of money percapita (per person).  Newfoundland is the biggest spender, at $2151 per person along with BC at $2157, and PEI the smallest at $1718 and Quebec at $1760.  This money is being used to buy the same sorts of things in all these provinces, with varying degrees of success in meeting public expectations and service standards.  But it is how we organize those resources, well or badly, that determines whether we get good value for our spending.  The case may be building that the problems with Medicare are problems with design, the choices we’re made on how to organize it.  The main problem in my view being this fascination with hospitals and the bottlenecks created through them in accessing diagnostic tests for example.  Most countries trying to reform their health system, believing it will improve the statistics mentioned above, are trying to reduce expenditure and use of hospitals, and move resources into the community where the focus is on greater real-time engagement with people to help them maintain their health, rather than respond with a ‘sickness service’.

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Health Reform and the Courts

Quebec City
Quebec City, Quebec: is this where a revolution in Canadian healthcare began?

The ‘perfect storm’ as the Canadian Medical Association (CMA) so wisely observed, gathers strength, most recently with the endorsement of private health insurance. Health system leadership and politicians have let the system fail on their watch; we face disrepair, and the risk of catastrophic failure.Canada’s relatively unique position, with a front window view of the US health system, has dulled our creative thinking and we have fallen into a false complacency, deaf to the cacophony of reform happening in other parts of the world.  Perhaps, they were paralyzed by the fear of creating a US-style health system.  But times change.

There are two lessons from the Supreme Court’s ruling on Chaoulli v Quebec.  The first is the failure of expert testimony to the Court to provide any evidence from any other health system in the world (!) that private health insurance should be avoided at all costs.  World renowned expertise failed to provide the evidence that health systems with private health insurance were to be avoided: just tell that to the Dutch, the French, the Germans, just about anyone else for that matter.  But perhaps not the Norwegians, who have a 100% publicly funded health system, and the longest waiting lists in Europe, so long in fact that they have a so-called ‘patient bridge’ programme to fly patients to Germany for treatment.

The second is that government policy can be tested against the Charter.  To paraphrase Richard Titmus, the sociologist and political theorist, a health system is a poor one when it fails to meet the needs of all.  The collectivist rhetoric that has characterized much health debate in Canada, and is a broad theme running through the Romanov work for example, conceals an important shift in contemporary values which has not been fully grasped in Canada.  Perhaps until now, that is.

Other countries have had to come to grips with changing public thinking and are making the movement, albeit slowly, and not always happily, to a new interpretation of the social contract: namely, that governments have no pre-emptive right to deprive individuals of their constitutional rights just to achieve collective social objectives, such as Medicare, and, perhaps more subtly, governments have no right to create monopoly suppliers of public services that manifestly fail to meet the needs of the public.  So services that are underfunded, underbuilt, but publicly funded or delivered are no longer defensible simply because they are public!  Therefore, governments have a new problem, concealed within this Supreme Court decision, that of learning how to provide services that the public will value and use.  It is no longer sufficient to argue that the proper role of the state is to provide public services, if they cannot do it well.

I’d like to think that this new world would be liberating for governments, but perhaps they like to meddle and tinker rather than provide strong leadership and direction, and importantly social purpose to public service institutions, like health care for example.  As was said it seems so long ago, by Osborne and Gaebler in their book Reinventing Government, governments should steer and not row. Put more elegantly by Mario Cuomo, former governor of New York: “it is not government’s obligation to provide services, but to see that they’re provided”.

The debate over private health insurance must not conceal the real problem, that the public purse is financing at federal and provincial levels, health systems in the various provinces that are manifestly failing to deliver value for money, or indeed a service Canadians will value and use.

Where can we look for some ideas?  Often a source of inspiration in welfare state reform, the United Kingdom has embarked on changes that will virtually reinvent the public service ethos there.  Under the banner of ‘consumer choice’, they are reinventing their National Health Service by giving consumers choices in how, when and from whom they receive public services, largely putting to rest the many tired arguments about whether patients cannot exercise informed choice in health care.  One consequence of this is greater private and voluntary sector involvement in service provision. In health care, the shift is virtually seismic, with the dismantling of the NHS as a ‘provider driven service’, characterized by services dictated by what the hospitals and other care providers can or want to do when and how they want to do.  The new ‘patient-led” NHS is focused on buying (what the British call ‘commissioning’) those services, responsible for doing what Cuomo says: ensuring that the health services that are provided are timely, convenient, and to high standards.  We in Canada have a lot to learn from this, as we try to avoid consumer demand, or protect acute care hospitals from the primary care revolution.

Governments can only tax with the will of the people, and when taxes produce substandard levels of service, inconvenience and delay, the public is right to call the government of the day to account.  Increases in taxes cannot be justified unless there is demonstrable improvement in service, and increased value for money. The UK is exploring this new territory, and rethinking in particular how its health service will work.  Funnily enough, much of the impetus for this also came from rulings of the European Court of Justice.  What they have learned, though, is that the government has no moral right to be a monopoly supplier of public services.  Choice is the hallmark of public sector reform there, and offers Canada lessons for its own restructuring.

Will an emphasis on private health insurance be the solution?  To adopt the position that private health insurance is the solution to a failing public system is to abandon the principles that are the logic of an effective system of health care. But countries which have wide-spread use of private insurance, such as Netherlands, Germany or France, also have integrated principles of private insurance into their national health system.  Interestingly enough, these countries also show the value in putting money into the hands of patients and consumers to reinforce the value of their health care decision-making  The private insurance market in the UK is an opt-out from the national system, not a complement to it, and as the reform of the NHS has quickened, the private health market has shrunk.  Other countries have had more success with mixed insurance models and do not appear to have fallen apart or suffered from widespread social inequality, indeed, the WHO rankings would suggest the opposite, with Canada ranked well down after France, Spain, and Italy.

The best direction for new thinking, therefore, is to look for reforming ideas which endorse greater consumer choice, greater consumer purchasing power whether through private insurance or through commissioning reform.  But purchasing choices require greater flexibility in how health services are delivered and this debate is, as Senator Rigby as observed, full of mythology.In the end we need a fully integrated public/private health system.

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