B.C.’s New Twist in Delivering Health Care

Worth A Look, Healthcare & Welfare, Frontier Centre

There isn’t a provincial health minister in the country not spellbound by the fight Dalton McGuinty has on his hands with pharmacists.

If the Ontario Premier gets away with his attempt to lower the costs of generic drugs, then they might try it. That’s how it works in the often cowardly world of politics. Much of it is about weighing the political costs of any policy, regardless of the greater good it may serve.

B.C. Health Minister Kevin Falcon admits to being one of those monitoring the drug costs battle. It’s likely to affect negotiations under way with pharmacists in his province. Mr. Falcon, meantime, is gearing up for a fight of his own – one his provincial counterparts will undoubtedly be keenly keeping tabs on, too.

The B.C. government recently announced a new funding model for health care. Instead of giving hospitals a set amount of money each year – known as block funding – they will get financed per procedure. In theory, this should force hospitals to look for efficiencies and drive up productivity. Why? Because the amount of money they receive will depend entirely on how many patients they move through the system.

It’s a model already used in many European countries, whose health-care programs are routinely rated higher than ours. Britain was the most recent European Union country to convert to this operating system. Waiting lists have plummeted as a result. Today, 90 per cent of patients there are receiving treatment in under three months.

B.C.’s public-sector health-care unions are already coming out against the plan, saying it opens the door to uncertainty and dislocation. Or maybe it’s the potential for more scrutiny they don’t like. Words like productivity and efficiency have been known to scare public-sector unions, too.

The B.C. New Democratic Party opposes Mr. Falcon’s plan as well. Big surprise. It seems to oppose any changes to the health-care system. The party says health-care costs actually went up in Britain when the country changed over to a patient-focused funding approach. That’s true.

But the NDP doesn’t say why: The new approach drove up productivity, which meant that more patients on waiting lists were being treated. So it cost the national health service more money upfront while those waiting lists were shrinking. And the same thing is going to happen in B.C., which is why the government announced an additional $250-million in funding for the next two years to cover the costs of the burgeoning number of patients the system will be handling.

But after a few years, the efficiencies hospitals find become the norm and costs will level out.

Is this a panacea for all that ails the health-care system? Not at all. But new efficiencies will drive costs down somewhat. Beyond that, the new model challenges existing orthodoxies around health-care funding. And it represents something of a bold step, which there have been precious few of by our politicians when it comes to taking on the monster that is health-care spending.

The best hope any provincial government has when it comes to these costs is simply slowing the rate of growth, which is about 6 per cent a year nationally. Health ministers want to bend the arc of that spending curve downward a little – that is, as long as it doesn’t imperil them at the ballot box.

Which is why so many of them are only too happy to let others venture into that battle zone first.

So much about health care doesn’t make sense when you think about it. Taxpayers get exercised when it’s revealed a politician has spent $40 on a bottle of champagne at some dinner yet they demand little accountability around the billions of dollars spent each year on health care. Politicians, meantime, are discovering the obdurate realities of providing a service for which demand is virtually unappeasable.

Patient-focused funding may not drive massive savings in health-care costs, but could have a significant impact on the Canadian economy if it plays a role in reducing wait lists. Patients who are in line for everything from heart surgeries to knee replacements cost the economy billions of dollars each year. That is reason enough to give this new approach a try.

There will certainly be lots of politicians waiting to see how it works out.