There are plenty of ways to improve the health-care system, but we need the political will

January 17th, 2011
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My Open Range column from the January 2010 issue of Alberta Venture magazine:

Why Can’t We Get It Right?

Is there anyone left in Alberta who doesn’t have a health-care horror story? As someone with aging parents, I regularly hear about what has befallen them or their friends. For people of an age when every month is precious, the punishing delays – for certain specialists there are now semi-secret, unofficial extra waiting lists before you’re even placed on the official waiting list – are only the beginning. The icy indifference and petty humiliations from people who chose to be in a “caring” profession are worse. Perhaps worst is the gnawing suspicion of better treatments out there, while here we’re only getting the second- or third-rate version. Do we now gather up our meagre savings, totter onto a plane and seek help at an advanced but expensive U.S. clinic? Will we survive the trip?

For 20-plus years we’ve had political paralysis in the face of steadily worsening conditions. Confronted with inefficiency and too much bureaucracy, the government adds administrative layers and processes. Seeing already vast funds being misallocated, it shovels more money into the sinkhole. The Ed Stelmach government’s centralization of the entire hospital system is unforgivable. Decades of disaster in the U.K.’s National Health Service made it obvious this is the worst approach. But it’s typical for a premier who seems to think more like a bureaucrat than a citizen-legislator.

The one strong argument for centralization is that it can override the public-sector unions’ traditional divide-and-conquer bullying of local boards. Once one board was terrorized by a strike or threat, the rest would cave. But for centralization to work, you need centralized bureaucrats who care more about the taxpayers’ interests and public finances than getting along with the people they see across the negotiating table. Someone who demands $600,000 per year as an administrator doesn’t inspire confidence in that regard,not to mention the entire superboard disintegrating, as we witnessed in late November.

Restoring control to local hospital boards is only the first step. They’d indeed be vulnerable to threats and co-option by labour groups. To be driven by the needs of patients, they need motives tougher than altruism and caring – although those traits are urgently needed. They need a major economic incentive. One of the most powerful could be implemented without touching Canada’s single-payer [government-funded] model. It’s used in numerous jurisdictions. It’s known as funding following the patient.

Right now, hospitals and their workforces are funded by the government in huge annual budgets. Hospital system administrators apportion these according to the many competing needs and demands they face. The process is disconnected from how many patients are treated and procedures performed – let alone how good the outcomes are. In fact, the more actual care a hospital provides, the higher its costs and the more out-of-whack its budget. Every patient, every procedure, every occupied bed worsens the financial picture. The patient is the hospital’s financial enemy. The fewer patients who walk through the door, the more solvent a hospital’s finances become.

We need to turn that on its head. Hospitals should be funded based on how many patients they see and how many treatments they perform. Do less work, get less money. The more people they treat, the more money they get. This would instantly upend the hospital administrator’s financial viewpoint. Patients would become a source of profit. They wouldn’t be the enemy; they’d represent fiscal salvation. Hospitals would be eager to usher them in the door. Administrators could turn their attention to the actual sources of costs – inflated wages and salaries for support staff, needlessly expensive supplies, over-designed hospital expansions. This approach is known to work better, because many European countries use it already.

People might well fear that the only thing worse than our current system is some herky-jerky stumble towards an eventually better system through trial-and-error, with thousands inconvenienced and dozens needlessly dying during the long transition. They don’t want to be the guinea pigs in a world laboratory for crazy schemes. Leaving aside the human cost, such an approach to health-care reform would be political poison.

There’s no need for that. There are dozens of successful health-care reforms to draw from. Even Sweden, go figure, has privatized hospitals and many hospital services, to reportedly very good effect. In the U.S., there’s stiff resistance on multiple fronts to the Obamacare legislation. Several states have implemented health savings accounts, with great success, and publish information online on the costs and quality of health services provided by different operators. There’s even serious talk of transforming Medicare [which pays for the health care of retirees] into an individually operated plan providing set amounts of funds for a person to pay for their own health insurance.

We’ll probably never move Alberta as far as my favourite health-care model, Switzerland. The Swiss purchase their own insurance, taxes are very low and health care providers mount billboards begging people to come and use their services. Switzerland’s payment system makes the patient a source of profit sought by competing government and private providers, rather than a burden to be kept at arm’s length through waiting times, nasty indifference, horror stories and other informal rationing. Switzerland offers more doctors, more hospital beds and vastly more modern health-care technology per capita than Canada. By contrast, ours is a system where even the idea of contracting out support services like laundry, cleaning, food service and building maintenance is considered blasphemous. It can’t go on. We need to shake and rattle the system, or denial of treatment will become our way of life.

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By George Koch