So far in this series on Paradigm Freeze, I’ve presented the various areas that the writers of selected for study. I’ve also focused on regionalization, as it became clear that the processes and consequences considered in the book were restricted to the boundaries of the current healthcare system and were especially focused primarily on acute care. The book appears to argue that it is hard to reform that system, but does not consider expanding or even significantly changing what the system contains.
The same appears to be true in their discussion of needs-based funding. For a long time, the funding for health care was historical: every year the budget for each health care organization was revised based on the previous year’s funding. The problem was that this funding model provided no basis for change or development, nor was it related to the changing needs of the population. The model of needs-based funding presented in Paradigm Freeze derives from an article called “The Financial Management of Acute Care in Canada” by McKillop, I., Pink, G.H., and Johnson, L.M. This article is concerned only with how hospitals are funded. Here is the main table that sets out the various types of “needs-based funding.” Note: Global funding is what we usually mean by historical funding.
Method // Description
1. Population-based: Uses demographic or other characteristics of the population (such as age, gender, socio-economic status, etc.) to determine the relative propensity of different population groups to seek health services.
2. Facility-based: Uses characteristics of the organization providing care (such as size of the organization, type of the organization, geographic isolation, occupancy rate) to estimate the cost to sustain a specified profile of cases and/or service volumes in the future.
3. Case Mix-based: Uses a profile of cases and/or service volumes previously provided (such as a number of knee replacements, number of dialysis procedures) to estimate the cost to sustain a specified profile of cases and/or service volumes in the future.
4. Global: Applies a factor to a previous spending figure (or to a forecasted cost) to derive a predicted spending level for an upcoming period.
5. Line-by-line: Applies factors on an individual basis to previous cost experiences (or to forecasted costs) to derive a proposed funding level for each line item (such as housekeeping, inpatient nursing, etc.) for an upcoming period.
6. Policy-based: Directs spending to address specific policy initiatives of the Department or Ministry of Health. These policy initiatives affect the operation of multiple organizations within the jurisdiction.
7. Project-based: Flows funds to a single health service organization in response to evaluating a proposal from that organization for one-time funding, often for a major expenditure.
8. Minister discretion: The Minister of Health decides on the specific dollar amounts to flow to health service organizations.
This is pretty comprehensive if we are looking only at what hospitals need. But it is not so good if you consider the health care system on a larger scale and the needs of people with non-acute long term conditions. It is especially not effective if we want to consider what such people need to stay out of hospital. During the study period of this book, we already knew that we had an aging population that could benefit from many health-related interventions apart from acute care and that it was generally a good idea to keep people out of the hospital. Therefore it seems really odd that Paradigm Freeze considers the health care system to be made up of hospitals and doctors and little else.
The result of this rather myopic view is that the study considers only provincial policies. It does not discuss the policy struggle between the health promotion community and population health researchers at the federal level. There is little doubt that this battle has important consequences for needs-based funding for health care in the broader healthcare system.
Health promoters were the offspring of the Lalonde Report, perhaps the most widely known policy document to emerge from Canada. In the 1970s and 1980s, they were a dominant force in Health Canada that instituted programs like ParticipACTION to encourage personal fitness, pressed successfully for anti-smoking campaigns, lobbied for and instituted seat belt legislation, reinstituted the Canada Food Guide which had been dormant since 1961, and initiated community development programs. Their loss of influence and funding meant that these and similar efforts slowed down and often stopped completely. ParticipACTION, for example, was disbanded in 2001 and only re-emerged in 2007 in response to the growing concern about inactivity and obesity.
Population health researchers derived their view from inequalities in health research in the UK. They argued that health promotion was an ineffective way of improving the health of the population – that it was important to consider the underlying causes of “why some people were healthy and others not” – that is to say, the underlying social and economic forces. The efforts of health promotion were considered to be ineffective in dealing with such disparities and some even argued that because they were largely focused on a middle class population, they actually increased inequalities in health. The population health group made up of health economists, demographers and health services researchers gained ascendency. Their mantra of reducing inequalities in health kept the focus on determinants of health over which individuals and communities had little or no control. Over the next decade it emerged that their control over the research agenda had very little influence on reducing inequalities in health through policy development. In fact, during their period of influence, inequalities have actually increased. Little wonder that current policy thinkers who emerged from that period should think that health policy has little impact on the system.
McKillop, Ian, Lina M. Johnson, and George H. Pink. The Financial Management of Acute Care in Canada: A Review of Funding, Performance Monitoring and Reporting Practices. Ottawa, Ont: Canadian Institute for Health Information, 2001. Print.