PPHC 05: Health – What is sustainability / How much do we spend on the Canadian Health Care System? Flashcards
What is the connection between scarcity, choice, and opportunity cost?
- scarcity: resources are limited (time, money) – not enough of everything to satisfy everyone’s wants and needs
- choice: because resources are scarce, we have to choose how we use them, which means selecting one thing instead of another
- opportunity cost: value of the next best alternative that is foregone (given up) when making a choice
Describe the connection between scarcity, choice, and opportunity cost in the BC government.
- scarcity: have $79.6 billion to spend
- choice: have to choose between health, education, social services, etc.
- opportunity cost: choosing to spend $35 billion (41%) on health
What is the Consolidated Revenue Fund (CRF)?
province’s main operating account (ie. BC’s chequing account)
- account where taxes and other revenue are deposited, and from which money is withdrawn to pay for public services
What are the sources of BC’s income?
- taxation
- federal government – Canada Health Transfer, Canada Social Transfer
- fees and licenses
- natural resource revenue
- miscellaneous – MSP
- crown corporations – BC Hydro, BC Liquor, BC Lotteries, ICBC
- investment income
How does the federal government allocate money to provinces?
money allocation via Canada Health Transfer is per capita
What is per capita allocation?
distributing resources on a per-person basis within a population (total budget/population)
- does not consider need or performance
- is not random
What is gross domestic product (GDP)?
total market value of all finished goods and services produced by a country (ie. within its borders)
- measure of country’s economic health based on total expenditure on what an economy produces (goods and services)
What is the GDP equation (expenditure approach)?
C + G + I + NX
- C: consumption
- G: government purchases
- I: investment
- N: net exports (NX)
GDP Equation
Consumption (C)
what people buy (household spending)
- non-durables – things that do not last long (ie. food, gas)
- durables – things that do last long (ie. cars, appliances)
- services – getting things done (ie. haircuts, accountancy)
GDP Equation
Government Purchases (G)
anything from desks and staplers in Ottawa to fighter jets
GDP Equation
Investment (I)
business spending on capital (assets)
- things that will make money over time
- new machinery and technology, new factories
GDP Equation
Net Exports (NX)
value of things we sell to other countries (exports) minus what we buy from other countries (imports)
Describe Dhalla’s view on health spending.
GDP is increasing
- spending on health as a proportion of GDP is increasing over time – cannot continue to do this
- BUT because health care is a small proportion of GDP (around 10%), this might not be a problem
- growth has been largely in line with GDP, other than some times of crisis
Describe Berwick’s view on health spending.
sustainable position – growth in health spending equals growth in GDP
- can carry on doing what we are doing – same or even increasing quality and quantity of care, amount spent in actual dollars can increase because our ability to pay is increasing at same rate
- wedge model: wedge driving us away from sustainability
- even if what we are doing is not sustainable, we can still maintain (and improve) what we are doing and current growth by removing waste (opportunity cost) from the system, not quality
Berwick’s View
What are the 3 types of waste from proving the wrong health care, or health care in the wrong way?
- failures of care delivery – poor execution/lack of widespread adoption of best care processes
- failures of care coordination – fragmented, disjointed care
- overtreatment – care that cannot help (ie. contrary to best evidence, patient preference)
Berwick’s View
What are the 3 types of waste from administration/management of health care?
- administrative complexity – inefficient or misguided rules
- pricing failures – prices do not reflect those expected in well-functioning markets (ie. actual costs of production plus fair profit)
- fraud and abuse – fraud/scams and resulting inspection/regulation
How might we better improve health care? (3)
- effective disease prevention and health promotion – reduce demand for health care services (from sick care to health care)
- efficient and effective health and health care systems – integrated, organized, effective, and efficient health care aligned with system and patient goals (eliminate waste)
- appropriate use of innovative technologies and innovation in health care delivery – health technology assessment and economic evaluation
How much money does BC receive?
$35 billion
How is money in BC (Ministry of Health) allocated?
- regional services – $26.5 billion (6 health authorities, each responsible for acute care, home and community care, mental health and addiction, population health and wellness, corporate costs of running health care)
- medical services plan (MSP) fee payments – $7.6 billion
- pharmacare – $1.8 billion
- health benefit operations – $52 million
What is population needs based funding (PNBF)?
allocation of health funds to health authorities based on estimated need, according to. . .
- population demographics (age, gender, socioeconomic status, etc.)
- utilization (which varies by demographics and other factors)
- interregional flows (disconnect of area of residence and HA for treatment)
- regional cost differences (remoteness, cost of providing large, specialist services)
- segmentation of population needs (ie. end of life care, cancer, maternity, frail in long term care – better prediction of health care use)
Describe the allocation of resources to health authorities within BC.
based on needs rather than counts of residents – those needing more support get it, and overall community health outcomes should be better
- ie. low-income individuals may have higher health care needs due to poorer diet, housing, working conditions
- ie. older residents might require more medical attention than younger populations as health declines with age
