Time to fix medicare’s innovation problem
The recent passing of renowned health economist Uwe Reinhardt has sparked widespread reflection on his many insightful observations about health policy. German born, Reinhardt spent his academic career at Princeton, but his world view was strongly influenced by Canadian experience.
Reinhardt did his undergraduate degree at the University of Saskatchewan in the 1960s during the tumultuous years when Tommy Douglas and his CCF government introduced universal medical insurance.
Fifty years later, at a health policy conference in Saskatchewan, Reinhardt challenged Canadians to be more innovative. He spoke plainly: “You have been gifted with one of the best models in the world, and you have sat on your hands. I fear the rest of the world is passing you by.”
International comparisons would suggest Reinhardt was right. For example, the Commonwealth Fund has consistently placed Canada near the bottom of the pile when it comes to health system performance. And once we look outside the United States, many other countries also provide universal health coverage, but with wider scope, fewer waits, and at a similar or lower cost. What gives?
The basic problem is that the way we finance and deliver health care in our country hasn’t changed all that much. Yes, we adopt new technologies and make piecemeal improvements in the system. However, waiting times for many services remain excessive. Patients in some regions are struggling to find a family doctor. And with systems that are weakly integrated and coordinated, the patient journey can feel lonely and fragmented.
Some of this is because the federal-provincial framework for medicare hasn’t moved beyond covering hospitals and doctors. For drugs and many important services, we have a national patchwork with gaping holes. Extending coverage is harder without integrated financing.
For example, insuring physiotherapy services provided in clinics or at home might save costs by reducing return visits to doctors or days in hospital. There’s just no way to make that math work, or take other innovative steps, when each part of the system has a separate budget.
The way doctors are paid is another case in point. Provinces vary a bit in this respect, but across Canada a big share of physician payment is driven strictly by the volume of services we provide. That has some logic to it, but does little to reward better quality or higher value care. Efforts to promote valuebased purchasing have barely begun and will be limited so long as medical budgets are in a separate silo negotiated between doctors’ associations and provincial governments.
So, can paying for health care differently drive innovation and lead to better outcomes? Yes! — is the resounding answer from the Center for Medicare and Medicaid Innovation (CMMI) in the United States.
CMMI is a national hub that focuses on integrating payments around the patient while also scaling up successful experiments in care delivery. CMMI is the source of ideas like bundling all payments to hospitals and professionals alike when financing complex services that bridge hospitals and homes, like hip replacements.
A key strength of CMMI is its laser focus on evaluating every innovation. If something works, CMMI makes that payment option widely available. If it doesn’t, the model is tweaked and re-evaluated.
We believe Canada needs to adopt a CMMI approach to engage health care leaders, front-line providers and patients in redesigning Medicare. In 2015, a federal advisory panel recommended just that, urging Ottawa to reorganize some of its agencies and focus on supporting and scaling innovation in collaboration with the provinces.
The case for that change has become even more urgent today. Sure, some provinces have been experimenting, but frankly, Reinhardt’s criticism still holds true right across Canada. We’re laggards when it comes to innovation, and the architecture of our system needs to evolve rapidly.
Meanwhile, under the Trump administration, a whole host of CMMI projects have already been cancelled and it is not certain what the fate of the centre will be.
In typical Canadian fashion we can console ourselves that the U.S. is now even less likely to leapfrog us in health care. Or we can finally get moving with a fundamental rethink of how we organize and finance our own medicare system.
The hard reality — reinforced by multiple performance indicators and countless stories from frustrated patients and professionals — is that we just can’t keep delivering health care as we always have. Not now, and not when, as Reinhardt said, the rest of the world is passing us by.