1. Health Care System Financing: Canada versus Best Practise Presentation at the Conférence de Montréal June 11 2014 Peter Jarrett OECD Economics Department peter.jarrett@oecd.org

2. Medicare Drugs, dentistry and community therapies not covered No patient co-payments/deductibles, i.e. no price signals Private financing generally prohibited In general Lack of cost-saving incentives Gaps in information Decentralised to provinces and below Spends most on prevention and public health Some consequences Strong, UK-style equity in Medicare (narrow but deep coverage) US-style inequity in non-Medicare (high out-of-pocket and private insurance costs) No possibility of physician “dual practice” (unlike UK) Medicare services effectively firewalled from private competition (unusual) Long and locationally variable wait times Some features of the Cdn health care system

3. Canada suffers from long wait times Waiting time of four months or more for elective surgery

4. Main pressure points are in non-Medicare Percentage of GDP

5. There is no one most efficient health system

6. HospitalPublicPrivate (not- for-profit) Private (for profit) AUS DRG Procedure service payment CANGlobal budget DNK Global budgetn.a.DRG FIN DRG ISL Global budgetn.a. IRL Global budget ITA Global budgetDRG NZL Global budgetn.a. NOR Global budget DRG PRT Global budget Procedure service payment ESP Line item remunerationGlobal budget SWE Global budget GBR DRGProcedure service paymentRetrospective Hospital funding: mostly global budgets

7. Promote cost containment 1.Eliminate zero patient cost sharing for core services by allowing co ‑ payments and deductibles. Clarify the CHA to facilitate provincial experimentation with private entry of hospital services and mixed public/private physician contracts. Contracting out occurs in some cases, but extra billing and user charges still not allowed. 2.Replace historical ‑ based cost budgeting of RHAs by one based on a formula, and devolve integrated budgets for hospital, physician and pharmaceutical services to RHAs. Ontario has decided to move in this direction as BC has already done. 3.Introduce an element of capitation or salary for doctor payment with fees regulated by RHAs. The latest figures show that alternative payments to fee for service are 28.7% of the total. 4.Move to activity ‑ based (e.g. DRG) budgets for hospital funding, contracting with private and public hospitals on an equal footing. Ontario is phasing in Health System Funding Reform: hospitals will get only 30% of their income from global budgets and 70% on volumes and quality. BC and Québec also have an element of activity-based funding. 5.Allow competition to drive generic drug prices to internationally comparable levels. Heath care reform recommendations 7

8. Promote access 6.As finances permit, include essential pharmaceuticals in a revised public core package. 7.Remove tax exemptions for employer-provided private health insurance (PHI) benefits. Regulate PHI to prevent cream ‑ skimming and adverse selection. Promote quality 8.Accelerate ICT applications in health care, starting small ‑ scale if necessary. 55% of Canadians had an electronic health record by end-2013. 9.Encourage provinces to provide better health ‑ system analysis and performance data. 10.Charge a pan ‑ Canadian, independent agency with monitoring and analysis of health ‑ care quality. Health care reform recommendations (cont.)