Alberta’s Third-Way Health Framework: An Independent Look
By Gregory D. Morrow
This week, Alberta announced a new health policy framework that, in part, experiments with more private-sector involvement in the delivery of health services. Predictably, many (mostly on the right) who have long extolled the benefits of private healthcare have applauded Alberta’s plan, while those who oppose any involvement of private-sector in healthcare (mostly on the left) have condemned the plan. Between the rhetoric of both ideological positions, it is hard for level-headed Canadians to get a real sense of whether Alberta’s plan is workable or not. So, in what follows, I attempt to analyze Alberta’s health plan from an independent perspective. I will assess the Alberta framework according to its 10 points (Note: the Alberta plan is only a policy framework, so full details are often lacking):
1) Putting Patients at the Center
I can’t imagine anyone arguing against this policy objective. As such, it is largely symbolic. It reminds health professionals to treat people with respect, but also asks patients to take responsibility for their health. This is a feel-good statement with few tangible policy implications.
Assessment: Good, but largely symbolic
2) Promoting Flexibility in Scope of Practice of Health Professionals
This policy objective means giving nurses, pharmacists and other non-physicians more authority to make decisions about your health, freeing physicians to deal with more complex cases. The goal is to make healthcare more “team-oriented”. Collaboration is good — and can be facilitated by instantly-retrievable electronic medical records — but it cannot come at the expense of someone (a primary-care physician) taking responsibility for a patient.
Assessment: Good, so long as primary care physician remains responsible for patient
3) Implementing New Compensation Models
This policy objective moves physicians’ fee-for-service compensation to alternative structures that provide incentives for quality. I agree that the fee-for-service system typically rewards volume, not quality. However, the policy brief does not detail alternative models, noting only the possibility of bundling services. It is not clear what the policy implication here will be until more details of the alternatives are laid out.
Assessment: Potentially good, but no way to know since alternatives not laid out.
4) Strengthening Inter-regional Collaboration
This means better communication and collaboration between the regional health authorities. This one should go without saying; obviously, different sub-units of the healthcare system should collaborate. No-brainer here (but easier said than done).
Assessment: Good, but self-evident.
5) Reshaping the Role of Hospitals
This means using hospitals less for primary care and more for emergency care. The problem here is that urban hospitals are overburdened, and rural ones are often under-utilized. The goal is for regional health authorities to shift services to community-based facilities, or to rural hospitals (in the case of rehab or post-acute care). This could be a good thing, but only if those secondary facilities have the personnel and equipment to deal with the additional load — the brief does not acknowledge that community or rural facilities may not be able to take additional capacity without more resources. More gravely, however, it fails to recognize the central cause of overcrowded hospitals: the lack of primary care physicians!
Assessment: Good, but only if additional primary care physicians are trained.
6) Establishing Parameters for Publicly Funded Health Services
This is a policy meant to limit what the public system pays for. Alberta wants to pay for only “essential” services. Non-essential services — discretionary, experimental or unproven procedures or drugs — would need to be covered by private insurance. This is at the crux of the matter. Yet, it received the least attention in the policy brief. The cursory treatment of this objective is unacceptable. If the health framework is to mean anything, this policy objective needs much more detail to be useful. As it stands, it is code for de-listing public services without a comprehensive plan for those who cannot afford to pay for them privately.
Assessment: unacceptable. This is a central question, but there is no way to know since the question of what is and is not covered is avoided.
7) Creating Long-Term Sustainability and Flexible Funding Options
Much like 6), this policy objective is meant to shift payment for services to non-government sources. The brief mentions the problem of the rich buying access to better services, with the poor being treated differently, but it does not effectively address this central question. Possible alternatives include co-payments, long-term savings accounts, and various private insurance options. However, it is important to examine what, precisely, those alternatives look like. Unfortunately, there are two negatives to creating a private insurance market: 1) Canada, let alone Alberta, is too small to have enough competition to make it work and 2) if private insurance is tied to employment — the most effective way to make private insurance affordable — then patients don’t have choice without changing jobs. The use of co-payments could be useful, if only to ensure that people think twice about going to the hospital (but it needs to be low enough not to be barrier). Long-term savings accounts are also helpful to save for healthcare that might be needed later in life. This could just as easily be a change in RRSP rules to allow people to use them for medical services not covered by Medicare. Overall, this policy objective needs further explanation.
Assessment: Co-payments and long-term savings (or using RRSP funds) is probably wise in the long-term, but creating a private market with the assumption that competition will increase quality has proven neither realistic in the Canadian context nor effective in the U.S. context. With no details provided, it is not possible to evaluate alternative funding schemes.
8) Expanding System Capacity
This is another policy meant to increase private-sector healthcare, both for- and non-profit. No details are provided here. Only a vague suggestion of increasing personnel by collaboration between teaching institutions and healthcare facilities is mentioned. This should be done regardless of expanding capacity. The absence of a commitment on the public sector’s part to train more doctors, nurses, technicians and other health professionals is a glaring omission here. Also missing is a commitment to work with the professional associations to recognize the credentials of foreign-trained medical personnel, and to establish intensive touch-up courses to ensure they have the same level of training as domestic-trained professionals. It is also unclear how additional technology (MRIs, for example) will be financed in order to increase capacity.
Assessment: Unacceptable. No details are provided on private-sector involvement, and obvious means of expanding capacity are not mentioned.
9) Paying for Choice and Access while Protecting the Public System
This policy objective essentially allows the rich to buy quicker access to non-essential services or to pay for a higher quality of care. Ostensibly, the additional revenues will be used to fund essential services and to act as an incentive to build additional capacity. This policy allows physicians to double-dip — to operate both within and outside of the public system. There are long-debated reasons to avoid double-dipping, the most obvious is that a doctor’s patients who pay privately (i.e. pay more), will have preferential treatment. This policy is framed under the rhetoric of ‘consumer choice’. If you have money, you have choice. If you can’t pay for a service, it is not really a choice.
Assessment: Unacceptable as outlined. There may well be a role for elite medical services but for these not to negatively impact the public system, they would have to be priced so as to be used only by a tiny fraction of people (i.e. the very wealthy) — that is, they need to cost the same as similar services offered in the U.S. And this can only be effective if doctors do not double-dip, otherwise they will give preferential treatment to the rich. For this policy to genuinely improve the public system, the proceeds must be channeled back into the regular system.
10) Deriving Economic Benefits from Health Services and Research
This isn’t really a policy so much as touting Alberta’s success in attracting top people. It basically says that improving health and research is good for Alberta’s economy. It’s not clear why this is part of the framework other than as a feel-good conclusion. The only implication is the desire to market Alberta’s achievements.
Assessment: irrelevant since there are no policy implications.
Overall: there are surprisingly few innovations here. There are several commitments that are worthwhile — expanding the role of nurses, pharmacists and other health professionals (so long as physician accountability is maintained); shifting non-emergency care to secondary facilities instead of hospitals (only possible if they have the people and equipment to receive them, and there are more primary care physicians); possibly introducing small co-payments, or allowing RRSPs for uncovered medical services. There are some policies that are self-evident, like greater cooperation between regional health authorities, and making the system patient-centered. However, on the key questions, the brief is curiously silent. Exactly how would an expanded private health sector work? What services would and would not be covered by the public system? How would elite services help the public delivery of health services? And on other key items, the brief is dead-wrong: allowing doctors to double-dip in elite and regular health services, a blind faith that a private insurance market will be competitive or be patient-centered, or be affordable without being tied to employment (which would limit choice, not expand it). Moreover, other obvious reforms are absent: training more doctors, nurses, and technicians, expanding the capacity for diagnostic equipment within the public system, getting foreign-trained health professionals into the workforce. Overall, this policy framework is disappointing. It picks up the low-hanging fruit, misses obvious reforms and avoids the tough questions. For this to be a solution to health reform, it must provide details. It is in the details we will discover whether the reforms are workable or not.