1. Overview of workshop and
basic principles
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2. Spending on health care in
Canada
$170 B in total health care spending in 2008
on average about $5170 per person
Canada ranked in top 5 of OECD countries
30% after inflation increase since 1993
Greatest increases in drugs
$37 billion in spent in 1984
translates to 10.7% of GDP and in many provinces
over 40% of provincial expenditure
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3. What are we getting for
this spending?
90% of people who used the system in 2007 rated
the overall quality of the care they received as good
or better
88% of Canadians rate their personal health as good
or very good
2008 OECD health database
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4. Yet, there are issues
Allocation of health care funds according to defined
populations is a global phenomenon
Basic notion within health authorities is that of a
limited funding envelope
Not enough resources to meet all needs
Also, 72% of Canadians believe our system requires
either fundamental change or a complete overhaul
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5. In summary
Some issues with our healthcare system:
widespread perception amongst decision
makers that there are not enough resources
and amongst the public that major changes
are needed
Those two issues relate directly to resource
allocation and priority setting i.e. there are
issues with resource allocation and priority
setting
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6. The goal in resource
allocation
Decision-makers need to determine:
what health care services to provide
for whom to provide services
how to provide services
where services should be provided
… in order to meet local and/ or system level
objectives including access, health gain…
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7. How is that typically done?
Resource allocation based on:
Historical patterns with incremental adjustment
Politics and the ‘squeaky wheel’
Needs assessment
Core services
economic evaluation (limited)
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8. Historical allocation
Funding based on last year’s budget with some
adjustments
No mechanism for maximizing benefit
Continual growth in regional budgets
Process for funding new proposals unclear
Safe, can take less time
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9. Politics and the ‘squeaky wheel’
Typically guides the ‘adjustments’ associated
with the historical approach
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10. Needs assessment (1)
Define need and measure the met and unmet needs of a given population
Common approach for setting priorities
Useful in highlighting gap but not for priority setting
‘Need’ itself is value laden and will change as resource availability
changes
If unmet need, then allocate resource that way
May not be enough resources… opportunity cost
Costs and benefits often not considered in tandem
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11. Needs assessment (2)
Epidemiological needs assessment with
diseases ranked based on prevalence
Effectiveness of interventions not considered
Implies that services must be provided to meet all
needs but fails to recognize scarcity
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12. Core Services
Define a set of core services and only publicly fund
those services on the list
New Zealand & Netherlands but problems in practice: what is
‘medically necessary’?
Items ‘out’ may provide more benefit per dollar spent for
some patients then other ‘in’ items
As those that are ‘out’ are out, cannot shift resources from the ‘in’
items to the ‘out’ items… maximizing benefit overall unlikely due to
margin being ignored
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13. Economic evaluation (1)
Comparison of two or more interventions or services
on the basis of costs and benefits
Cost-effectiveness, cost-utility, cost-benefit
Opportunity cost: benefit gained from one service
more or less than benefit from alternative uses of
resources
Benefit: life years gained, QALYs, common currency
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14. Economic Evaluation (2)
Important tool but rarely provides the answer
Other criteria in decision-making
Time and cost of studies… feasibility issue
Incremental cost-effectiveness ratio (ICER)
Low cost per unit of benefit ‘cost effective’
Incremental resources required, budget impacted elsewhere, opportunity costs
ignored
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15. QALY league tables
Ranking procedures based on marginal cost per
QALY gained (Oregon model)
To produce more QALYs, items higher on list done
in lieu of lower items
Assumptions underlying ratios not considered
Is QALY maximization really the end goal?
List based approach: opportunity cost and the margin
again ignored
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16. How do decision makers feel
about these methods?
Surveys in various countries have reported feelings of
unease around priority setting
United Kingdom (late 1990s)
Australia (2003)
Canada (late 1990s, 2004, 2005)
• Often ad hoc and inconsistent approaches
• Concerns about fairness and stakeholder impact
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17. What is Required?
A pragmatic decision-making approach that….
– Aligns resources strategically with system goals and community
needs
– Leads to publicly defensible decisions based on available evidence
and community values
– Facilitates stakeholder engagement around improving benefit with
limited resources
– Supports the public accountability of health care decision-makers
How do we move in this direction?
This is what this workshop is about
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18. Workshop overview- key
areas covered
Key principles underpinning a pragmatic approach to resource
allocation decision-making
How to address values in the context of priority setting
Methods for priority setting- specifically Program Budgeting and
Marginal Analysis (PBMA)
Economic evaluation
Success factors
Case studies
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19. Learning objectives
Knowledge on commonly used approaches to priority
setting by health care decision makers both within
Canada and elsewhere
Practical steps for resource allocation priority setting,
including generating and applying decision making
criteria, based on the implementation of PBMA
Understanding how economic evaluation can be used
alongside of other types of evidence to inform real
world health care priority setting
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20. Learning objectives (2)
Knowledge of individual and organizational success
factors related to improving priority setting and
resource allocation practices
Basics of designing a process for resource allocation
priority setting in a health organization
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