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The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

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Break Down Payment Silos for Better Healthcare

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“Only the United States prevents us from occupying last place."

January 17, 2017 – Canada needs to break down payment silos for more effective healthcare, according to a new report from the C.D. Howe Institute. In “Integrated Funding: Connecting the Silos for the Healthcare We Need,” authors Jason M. Sutherland and Erik Hellsten provide an overview of provincial silo-based payment models and draw lessons for Canada from international integrated payment reforms.

“Once held in high esteem worldwide, Canadian healthcare scores poorly against similarly high-spending OECD peers in recent international comparisons,” remarked Sutherland. “Only the United States prevents us from occupying last place,” added Hellsten.

The erosion of Canadian healthcare has been attributed to the failure of the provinces to adapt their aging health systems to the changing face of healthcare demand. Healthcare delivery silos are arbitrarily divided among hospitals, specialists, and the provision of prescription drugs, primary care, and home and community care.

The authors examine international integrated payment models that distribute single payments or funding envelopes across groups of providers to foster shared financial incentives.

They note emerging policy reforms in the United States, the Netherlands, England, and Germany go beyond the traditional payment silos in healthcare to introduce new financial flows that bridge sectors and settings. New models such as bundled payments and accountable care organizations disburse single payments across groups of provider entities, offering shared financial incentives to improve coordination, efficiency, and effectiveness across a patient’s entire journey.

Although still in their infancy, early evaluations have found compelling evidence of the potential for some of these models to reduce healthcare costs while maintaining or improving the quality of care.

The authors recommend the federal government and the provinces consider taking action on several key fronts as part of a broader Canadian payment reform strategy:

  1. Articulate a clear national vision and end goal for integrated payment models;
  2. Establish a national centre of excellence in payment and delivery models, with provincial spokes;
  3. Engage physician groups at the national and provincial levels;
  4. Build analytic capacity at the national, provincial, and regional levels; and
  5. Design and implement demonstration projects with an eye toward evaluation and either scaling up or winding down.

Click here for the full report

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

For more information contact: Jason M. Sutherland, Associate Professor, Centre for Health Services and Policy Research (CHSPR), UBC Faculty of Medicine, School of Population and Public Health, and Scholar Michael Smith Foundation for Health Research; or Colin Busby, Associate Director, Research, C.D. Howe Institute: 416-865-1904 or email: kmurphy@cdhowe.org

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© 2014 C.D. Howe Institute. All Rights Reserved.

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© 2014 C.D. Howe Institute. All Rights Reserved.