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Dr. Irfan Dhalla

Learning from Payment Reforms to Improve Quality

It has long been recognized that how we pay for health care in Canada has resulted in a system that does not appropriately incentivize high-quality care along many of its six domains of quality.

For several years now, the Center for Medicare and Medicaid Innovation in the United States has been testing payment models designed to improve the quality of health care. These models try to better link compensation mechanisms with quality of care.

Ontario has also changed the way we pay for health care over the last decade.

As part of Ontario's ongoing effort to support innovation in health care, perhaps it is time to consider how we can develop a centre like the Center for Medicare and Medicaid Innovation so that we too can systematically learn from funding changes to help improve care for our patients.

Many of the changes introduced in Ontario over the last few years have been primarily designed to improve efficiency and equity. For example, a substantial portion of each hospital’s funding in Ontario is now driven by patient volume and complexity, and is not simply a function of how much the hospital received the year prior.

While paying more for higher volume and greater complexity makes intuitive sense, many experts now also advocate a complementary approach – often referred to as integrated payment, or bundled funding – to allow more flexibility, more room for locally-driven innovation, and ultimately higher value care.

With integrated payments, a group of health care providers receive a single payment to cover all the care needs associated with a procedure, for instance a hip replacement, or a chronic condition such as diabetes. The “bundle” might, for example, cover the costs of surgery, of the inpatient stay, of nursing care and personal care provided at home after discharge, as well as the costs associated with a readmission to hospital, in the event that happens.

The terms “integrated funding model” and “bundled care” are sometimes used synonymously to describe the provincial Ministry's initiatives to implement innovative approaches to integrate funding over a patient's episode of care. In Ontario, six teams have received support to implement integrated funding models, and early results are encouraging.

Several recent reports support the argument that we should learn more from funding reform, including a report in 2015 from the Health Canada Advisory Panel on Healthcare Innovation chaired by Dr. David Naylor, a report from the C.D. Howe Institute published earlier this year by Jason Sutherland and Erik Hellsten (a Health Quality Ontario employee), and a discussion document from the Canadian Medical Association.

Given Ontario’s strengths in health services and policy research, and the comparatively rich data that exists in this province, it would not be difficult to develop an initiative in Ontario similar to the Center for Medicare and Medicaid Innovation. Such a centre would allow us to learn as much as possible from payment reforms, and help ensure we are providing the best possible care to our patients.

Healthy Quality Ontario and other organizations routinely and rigorously evaluate new drugs and devices to make sure they are effective before offering them to patients, but paradoxically, major payment reforms rarely get the same rigorous testing before being rolled out.

Maybe it is time that was changed.

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