2009 General Meeting ● Assemblée générale 2009 Ottawa, Ontario ● Ottawa (Ontario) 2009 General Meeting ● Assemblée générale 2009 Ottawa, Ontario ● Ottawa (Ontario) Canadian Institute of Actuaries Canadian Institute of Actuaries L’Institut canadien des actuaires L’Institut canadien des actuaires Session/séance :PD-9 Value for Money in Canada Healthcare Speaker(s)/conférencier(s) : Robert Grignon fcia,fsa,mba

Sustainability - The issue of financial sustainability of our Canadian healthcare system is narrowly defined as meaning: how we can continue operating our public system without changes in existing coverage and without relative increases in taxes. - Our public system can, for the large part, be defined as a universal medical and institutional care coverage General Meeting Assemblée générale General Meeting Assemblée générale 2009

VALUE FOR MONEY -Current waste linked to incentives -Medical and institutional care expenses increase at an annual rate that is 2-3% higher than inflation and increases in tax revenues. -Control can be achieved because we can work on incentives and some cost drivers

COST DRIVERS 1.Demographics 2.New technology 3.Application of new technology

Strategy for long term sustainability Step 1: Refocus current system on primary care, doctor-patient relationship, and right care at the right place at the right time. Step 2: Control future cost increases that are now unsustainable long term

STEP 1: REFOCUS 1.Each Canadian should be registered with a primary care provider; 2.Primary care providers must work as teams; 3. Promote long-term relationship between primary care provider and patient; 4. Promote achievement of results (quality vs quantity of care)

Step 1: a.Medical acts done under medical supervision b.Keep patients away from institutional care c.Promote the profession of primary care physician d.Promote continuity of care and emphasize care of chronic diseases e.Because of Canadian geography/demographics, multiple (3-4) delivery models are necessary f.Increase significantly the relative attractiveness ($$) of primary care g.Introduce significant (20%+) financial reward for performance

Step 2: Control cost increases 1.Very little one can do against demographics except being aware of its real impact 2.New technology: more emphasis on the additional financial cost vs additional result rather than on whether or not technology works 3.Application of technology: tug-of-war of incentives

KEY ELEMENTS TO SUCCESS 1.Primary care physicians must become overall financial winners 2.Compensation of primary care physician moving away from a fee-for-service to a capitation + performance based system 3.Flexibility in delivery of care 4.Recognition that not all can have the same level of accessibility to care; need for multiple model of care delivery.

ACTUARIAL INPUT 1.Design alternative primary care models (urban, rural, remote) 2.Design provincial wide primary care compensation systems based on demographics of population and attainment of stated quality objectives 3.Evaluate the shift in funding allocation between the different sectors of the healthcare systems 4.Evaluate the long term impact of new compensation schemes on long term growth of public healthcare system

ACTUARIAL INPUT 5. Work with Primary Care Group (PCG) to maximize external funding and to allocate equitably revenues among providers 6. Continuous performance assessment of the incentives put in place.