Sunday, January 4, 2015

British Columbia - Health System Reform


Document Purpose:

To offer comment on Heath System reconfiguration.

Comment on Process

You've made a request to the public for suggestions on ensuring the quality and sustainability of the BC health care system. The bullet points in your bulletin or the points offered in your “letter” as points of contemplation tend to direct response to the tactical level, to solicit, to some degree, suggestions for operational improvement. While for people in the system seeking operational improvement is important, in governance, and for the system as it now is, the challenges are really strategic in nature.

The system requires restructuring, we need to, with an open mind, take the knowledge we’ve gained through the development of this iteration of health care delivery and apply it to the design of a new system. The design perspective and the design process will take us to many of the same places we are now and find us new solution; design process achieves this by liberating us from present modalities of action that limit solution. People seeking solution in the health care space have their heads in a box, the costs of thinking outside that box are dear due to the virulence of the interests that have built it. The people protecting interests are good people, good people in a bad environment, the environment we made for them.

Commitment to Universal Access – Facilitation of Open Discourse

People prefer health over illness and when illness comes it is rarely by choice. Fulsome healthcare is a responsibility for people to garner of their own accord and by their own capacities and in the absence of capacity, the state has a role. The quality of healthcare should be of symmetric in provisioning, regardless of socioeconomic circumstance; quality as per health outcome, as opposed, to the nature of the provision of service. Universally accessible healthcare is a moral obligation of society and any chosen action that impairs the delivery of universal healthcare is an immoral act.       

With an overriding commitment to universal access to healthcare as the premise for discourse, perhaps people can begin to broach the subject absent the political polarisation that has plagued the debate to date. As resources for the provision healthcare garner greater and greater portions of the public purse, as dictated by ever expanding health technologies, demographic realities and the expanding definition of illness, we are going to require enthusiasm AND open minds to meet the challenge. Thus far the debate around healthcare has been hijacked by ideologues touting one political philosophy or another.

The Political Reality

The Canadian public wants healthcare that responds to the needs of all people, delivered on a timely basis.  Tommy Douglas never wanted and nor would any other reasonable person want, people in waiting lines because of some manufactured cultural imperative. The question should be - how do we ensure that Canadians have universal access to excellent and timely healthcare?

The challenge is that Canadians have, at the hands of leadership, chosen to make the present health system a key component to our national identity. The present health system is unsustainable; the reality of the health system being a key component of our national identity and the system’s inability to exist as it does has created a pernicious polarised circumstance where a near religiosity is driving the discourse around the issue.

The monolithic nature of the system has massed operational interests to a point of influence that rational operational modalities are impossible to introduce. The collective influence of all the service providers intimidates government and hence confounds restructuring. This reality has the tacticians holding nearly complete sway over system design and functionality. The institutional inertia that has emerged from this circumstance is precluding the government from managing the system, the system is managing itself and, in an increasing measure, the government.  

Discourse from government has to be directed at the larger body politic; the message must be made clear, concise and delivered at sufficient volume to cut through the constant din that arises at the mere prospect of change.  

State action is only progressive when it is responding to people’s needs and state action is regressive when it is precluding access to healthcare. It is the case with many people holding rigidly to the status quo, that they are failing to trust the good human intent they so ardently seeking to enforce. There needs to be a much larger effort on behalf of government to accurately inform the discourse around this issue so as to facilitate rational debate.  

The reality in Canada however is, there is an almost irrational adherence to centrally controlled healthcare, even when it is to the public’s detriment; so the solution posited to the public must see to this concern, that is to say, the public demands attention to single payer and universal health care.   

The Case for Private Involvement

Most leadership presently exercised in the Canadian health system is reacting to a system that has failed to adopt appropriate strategies. When one observes the delivery of any other service provided in the context of market forces, from food to houses, one witnesses a larger gradation of service providers, heightened absorptive capacity and service provision that responds to demand. We need to liberate ourselves from an irrational perspective that places us in an ideological straightjacket; the overarching goal is the universal provision of health care to Canadians. Our present system, in some cases, is creating a circumstance of universally inaccessible healthcare. We can do better. As Canadians we need to challenge ourselves to give contemplation to the benefits that a market environment provides. We owe so much abundance to what the market system provides in all other aspects of life, it is truly shameful to obstruct access to that same abundance in the case of healthcare

To suggest private enterprise is absent a role in the delivery of healthcare, in the context of the Canada health act, is limiting as a perspective and inaccurate as a reflection of the present health system. Presently, some 30 – 40% of healthcare in British Columbia is privately delivered. There are many compelling reasons to accept the utilization of markets in the delivery of health services, we need only look to other countries successes to guide us; France, Sweden, Japan, to name a few, have benefited from private delivery of service. There is an irrational adherence to “government only” health services in Canada that stifles the debate around our best way forward and confines the breath of solution applied to the healthcare challenge.

Critical, is the realisation that universal access to quality healthcare can occur society wide absent the government delivering the services. We have a commitment in society for universal access to food, this hardly compels the government to start farming – it only compels government to support the underprivileged to purchase food. Enthusiasm for universal access to healthcare must be actuated under the appropriate selection of the modality for universality, in the case of other essentials, such as food, the poor are provided the resources to purchase what they require in the market place - allowing the market to discipline production under the rigors of supply and demand. Presently we control the whole medical system to ensure the same services for all, and end up with many having none.  I am certain, absent distortions caused by regulatory constrains such as in the United States where the medical insurance lobby has far too much influence, that the open provision of medical services would ultimately provide the best outcome.

As a rule of thumb, large centrally planned organizations, such as England’s National Health Service become too bulky to manage. As time progresses, the nature of organization has these entities become more administratively intensive, the professionals’ and or service provider interests over take user interests and there is an inherent inclination of all providers to isolate themselves from accountability. In the absence of market discipline these forces continue to attack both the quality and quantity of care and overall productivity falls. England’s National Health Service experienced this very reality and in response they privatised their hospitals by converting each hospital to a society and adopting a fee for service model of payment for hospital services. This model dismantled global budgeting, allowed the single payer and universal access principles to be respected and still provides incentive to deliver services at a lesser cost. This has also set up a dynamic of inter-hospital competition, as each organization seeks to attract people (people now represent income as opposed to expense). While this program is only partially successful, the entrepreneurialization of medical services has provided improvements.

In Canada we had the Romano Report. Mr. Romano sought to propagate the existing system absent a major overarching strategic change and requested $15 Billion to fix healthcare for a generation. The System has taken that $15 Billion, chewed it up and left waiting lists in its wake. This reality should be evidence enough to make the point, that putting more money into large organizations which are absent a rationalising influence toward outcome, just means the organization uses more money. The present way healthcare is managed in Canada will ensure that the more we pay, the more will be spent and the deficiencies will continue to exist.

The United States system is much maligned by many in the debate around healthcare, as there is an absence of universal provision of healthcare. The key element to advancement of medical services is that ability for a system to be well enough resourced to have sufficient absorptive capacity to utilize new technology. Additionally, innovation is critical as a means to advance medical technology. When one examines other goods and services in society, such as a refrigerator, one witness the following: the people with large resources purchase the frig first and then as the technology gains profile and is proving useful, gradually the frig is purchased by the less wealthy as production volume reduces cost, until finally the marvels of mass production makes it possible for all people to have one - this is called the product cycle. In the context of utilitarian ethics, which is the foundation of universal medical services, if a given technology is undeliverable to all, nobody gets it. This reality stifles the introduction of technologies and retards innovation. In the United States, the bottom socioeconomic groups have very poor medical treatment, but the top 25% of US society has the best in the world. This seems unfair on the surface, but the top 25% of medical treatment in the US is responsible for the mass of the innovation in medical services worldwide. Technologies are being used in this stratum and as they become more widely used they filter through the system until they become ubiquitous. If that supper resourced stratum were absent, the whole of humanity would suffer. This is in no way a theory – it is a fact – a fact that unassessed leaves us all wanting.

Innovation is best initiated through small nimble organisations. In British Columbia, the introduction of a new piece of equipment is difficult, given the monolithic nature of our system, in other countries where service provision is fragmented in to small service providers, the ability to try a new piece of equipment is easier to facilitate – absorptive capacity grows where small nimble actors are looking for an edge or are just inherently innovative. Advancement in any field is most often a product of heuristics, as our system is now structured, heuristically motivated change is virtually non-existent.    

The United States system overall is costly, because there is provision for people to choose medical services and pay for them, standing in contrast to Canada where service is provided but has limited choice. The US system is less than ideal, and I would concede less ideal overall than the Canadian system – for the same reasons – both systems have fallen prey to distorting policy, which retards the effective deployment of best practices. In the United States industry actors have lobbied government for policy that protects incumbent healthcare providers and retards the natural functioning of the market. The United States also has monopolistic professional organisations that effect influence over policy in a manner that is beneficial to them but harms the system overall. The Canadian system requires a lower portion of GDP because the government is rationing services, while in the United States, people are purchasing what they want. There are a number of detrimental occurrences emerging from the US system, but there are valuable lessons to be learned there.        

Restructuring – Under a Single Payer (The ICBC Solution)

The whole issue of capacity is a product of resources flowing to the system, when markets are at play rationing to control costs is absent, as services expand as people’s enthusiasm to pay increases. One of the largest constraints to our system presently is resources flowing to healthcare are retarded by our present mode of financing (single payer) the system. The single payer system seems almost inextricably linked philosophically to universality; this is especially true in the Canadian context. The solution to capacity is critical, I am unsure under a single payer system how we can to address it, except to extract ever greater funding from the citizenry. The only solution to capacity in the present system is better productivity; this can be readily addressed by a single payer system by introducing market forces under a single administrative umbrella – as exemplified by the National Health Service in the United Kingdom and the privatisation of hospitals.  

A medical system uninhibited by monopolistic policies would most certainly serve the public interest better in the long run. However, there is a political realty that dictates that whether another system is better at providing health services or not, the Canadian public are strongly committed to a single payer system. In view of this political reality one needs to contemplate the delivery of medical services in the context of a single government entity. Once this has been conceded, in the light of political expediency rather than the unfettered pursuit of the best solution, one must turn their thinking to ways to introduce market forces in a single payer system. Introduction of market forces into a monolithic system is done by the provisioning of the individual with the resources and then letting the service providers respond to that person with the resources, with services. This is a flow of funds issue, and by provisioning the service user with resources and options, service providers become responsive to the people they are serving. In this way demand is responded to more vigorously with the same resources, as providers seek to increase revenue with their existing asset base.     

In BC we have a single provider of car insurance (ICBC). Everyone gets their insurance from one provider, yet the provision of car repair services is still provided through a vibrant market. I believe this model transfers well to the provision of healthcare in Canada, providing all the ingredients to meet the public requirements efficiently and the political imperative presently projected by the majority of Canadians. Each Canadian would purchase insurance from a single medical insurer and be allowed to seek treatment where they prefer. The forced participation in an insurance program is a breach of the personal choice; however, this breach is then mitigated to some degree by the provision of choice with respect to treatment providers.   

The “ICBC” model would allow for a broader array of services to emerge. The present model is unresponsive to demand and is slow to absorb new technology and hence productivity is retarded. Healthcare services would fracture in the way other services fracture when they evolve under the influence of a rigorous market. One needs only observe other complex services in society to witness the sophistication that addresses the management processes in all industry, to have confidence that medical services, while unique, can be well addressed by the creative application of market mechanisms. All the challenges related to centres of excellence and capacity, are attended to by a dynamic where knowledge is applied most closely to the challenge at hand. Centrally planned systems simply lack the capacity for the spontaneous emergence of phenotypes and the natural clustering of services that is achieved through the unfettered process of human association. The dynamics that emerge from the provision of services in the context of technologies, if brought to bear on the challenge of healthcare, will determine where and the nature of services provided.

The ICBC” model addresses the migration of services and human resources by only having a single insurer. The issue of the absence of competition for the single insurer could be addressed by an exterior bench marking process to other jurisdictions throughout the world. In many ways the “ICBC” model exists now, the only change would be that if private entities saw an opportunity of offer services, they would be allowed to.

A group of doctors may decide to open a small hospital to service an area presently poorly served by the existing hospital network. It is impossible to predict how the ingenuity of human response to the challenge of healthcare provision may end up looking, and that is point really, because free human response to any challenge is unpredictable and when viewed in retrospect, free human response has generally always fostered improvement. Our present system leaves much of that responsive ingenuity in a latent state.

With more service providers working to attract people to services, more and better services will emerge. In this environment productivity is greatly increased and services improved and so rather than rationing the supply of services, overall systemic capacity is increased. We know this to be true, because it is repeatedly demonstrated in the economy at large, where market forces work in the favour of the consumer and society as a whole. This assertion is substantiated by a cursory review of other services in society, there are more gas stations than we need, and gas comes to us in the volumes we need, when we need it and where we need. Redundancy is very important in essential services to ensure when a large scale catastrophic event transpires there is sufficient system capacity to cope – presently our system is over taxed in the absence of any negative events, with day to day demand rendering a circumstance of “hallway medicine”. The private sector provides an abundance of competing services, in this context the pure unit cost of relative assets reduces and more of the same assets are introduced to the market. Instead of one MRI at the town hospital, there would be several clinics dispersed conveniently around the town, like Starbucks and 7 elevens. This dynamic provides more and better services, we know this to be true because, everywhere you look you see it happening – there’s several car dealers as opposed to one – an equally complex set of products and services as medical services.

In order to effectively discuss the transformation of a system as complex as the medical system, one needs to contemplate obstructions to change. The primary obstruction to change at play now are the people who have worked to from the present systems structure – as is often the case. Doctors, Nurses and other personal have established themselves in the system and view change as a threat. Medical professionals in US, France, Japan, Sweden and other countries do equally as well or better than Canadian personnel: so allowing market forces to come into play really offers opportunity. Opportunity, as professionals can extract extra revenue by investing in assets related to the provision of medical services. By allowing medical professionals greater access to more and varied revenue streams related to their respective endeavours, they are better able to be competitive in the application of their skills, thus providing opportunity for reduced immediate operation costs.

The market works elsewhere, we need to have an open mind in the provision of medical services and products.

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