Financial Incentives Could Improve Patient Health

  • Canada’s health care system spends billions each year treating preventable diseases and conditions – diabetes, heart disease, strokes, heart attacks, etc.
  • Financial incentives for patients could improve their health, reduce strain on system

CALGARY, AB: SecondStreet.org released today a new policy brief that examines the strain on Canada’s health care system that comes from unhealthy lifestyle choices – diet, a lack of exercise, etc. – and how financial incentives could help improve patient health and reduce strain on the system.

“Canada spends billions each year treating health problems which come as a result of lifestyle decisions such as dietary choices and a lack of exercise,” said SecondStreet.org President Colin Craig. “Private companies and academic studies have shown that financial incentives can lead to improvements in patient health. If patients live healthier lives, then that could reduce strain on the system.”

For instance, studies have suggested that Canada spends upwards of $18 billion annually treating diabetes, $26 billion treating diet-related diseases, $11 billion on obesity and $14 billion treating high blood pressure. Lifestyle decisions often contribute to these pressures on the health system.

Some examples of financial incentive programs that led to healthier outcomes include:

  • Safeway – The U.S. company saved on health costs by rewarding staff with upwards of $1,560 per family if they had a healthy weight, good blood pressure, didn’t smoke, etc.;
  • Sweden – Since 2001, Swedish health officials have been regularly prescribing exercise to patients. Sweden also allows exercise fees/memberships as a tax-free benefit; 
  • Manulife – The life insurance company allows users to track their fitness activities using smart watches and offers rewards and discounts off their premiums if they meet certain thresholds. Results showed significant improvements; and 
  • Philadelphia Veterans Affairs Medical Center – Two monetary incentives were tested separately against a control group. The tests found that those who were offered an incentive were most likely to meet their weight loss target. 

Provincial governments could try implementing pilot projects that use incentivizes to improve patient health. One option would be to provide financial incentives for weight loss and maintaining a healthy weight as it could encourage both exercise and healthy eating – two activities that can help ward off serious disease.

“Provinces should be encouraged to pilot initiatives,” said SecondStreet.org President Colin Craig. “If a model emerged that was effective and simple to administer, then it could be scaled or duplicated in other jurisdictions.” 

To view Policy Brief: Incentives Could Improve Patient Healthclick here

Share on Facebook
Share on Twitter

You can help us continue to research and tell stories about this issue by making a donation or sharing this content with your friends. Be sure to sign up for our updates too!

Prevention – reduce demand in the first place

If Canadians lived healthier lives, we could reduce demand for emergency services, orthopaedic surgeries, primary care and more. 

For instance, if you visit the Canadian Cancer Society’s website, you’ll read that “about four in ten” cancer cases are preventable. The Heart and Stroke Foundation notes that “almost 80 percent of premature heart disease and stroke can be prevented through healthy behaviours.” A similar number of Diabetes cases are also preventable. 

Many joint replacements and visits to ERs and walk-in clinics could also be avoided through healthy living. 

To be sure, not all health problems can be avoided through healthy living – everyday the system treats Canadians with genetic conditions, helps those injured in unavoidable accidents and more.  

But there is an opportunity to reduce pressure on the health care system through Canadians shifting to healthier lifestyles – better diets, more exercise, etc. 

To learn more, watch our Health Reform Now documentary (scroll up) or see this column. 

Partner with non-profits and for-profit clinics

European countries will partner with anyone who can help patients. 

It doesn’t matter if it’s a non-profit, a government entity or a private clinic. What matters is that patients receive quality treatment, in a timely manner and for a competitive price.  

In Canada, governments often delivery services using government-run hospitals instead of seeing if non-profit or private clinics could deliver the services more effectively. 

When governments have partnered with non-profit and private clinics, the results have often been quite good – Saskatchewan, Ontario and British Columbia are just a few examples of where partnerships have worked well. 

Canada should pursue more of these partnerships to reduce wait times and increase the volume of services provided to patients.  

To learn more, watch our Health Reform Now documentary (scroll up) or see the links above. 

Make cross border care more accessible

In Canada, citizens pay high taxes each year and we’re promised universal health care services in return. The problem is, wait times are often extremely long in our health system – sometimes patients have to wait years to see a specialist or receive surgery. 

If patients don’t want to wait long periods, they often have to reach into their own pocket and pay for treatment outside the province or country. 

Throughout the European Union, we also find universal health care systems. But a key difference is that EU patients have the right to go to other EU countries, pay for surgery and then be reimbursed by their home government. Reimbursements cover up to what the patient’s home government would have spent to provide the treatment locally. 

If Canada copied this approach, a patient waiting a year to get their hip operation could instead receive treatment next week in one of thousands of surgical clinics throughout the developed world. 

Governments benefit too as the patient is now back on their feet and avoiding complications that sometimes come with long wait times – meaning the government doesn’t have to treat those complications on top of the initial health problem. 

To learn more, watch our Health Reform Now documentary (scroll up) or this shorter video. 

Legalize access to non-government providers

Canada is the only country in the world that puts up barriers, or outright bans patients from paying for health services locally. 

For instance, a patient in Toronto cannot pay for a hip operation at a private clinic in Toronto. Their only option is to wait for the government to eventually provide treatment or leave the province and pay elsewhere. 

Countries with better-performing universal health care systems do not have such bans. They allow patients a choice – use the public system or pay privately for treatment. Sweden, France, Australia and more – they all allow choice. 

Why? One reason is that allowing choice means some patients will decide to pay privately. This takes pressure off the public system. For instance, in Sweden, 87% of patients use the public system, but 13% purchase private health insurance. 

Ultimately, more choice improves access for patients. 

To learn more, watch our Health Reform Now documentary (scroll up) or watch this short clip on this topic. 

Shift to funding services for patients, not bureaucracies

In Canada, most hospitals receive a cheque from the government each year and are then asked to do their best to help patients. This approach is known as “block funding”. 

Under this model, a patient walking in the door represents a drain on the hospital’s budget. Over the course of a year, hospital administrators have to make sure the budget stretches out so services are rationed. This is why you might have to wait until next year or the year after for a hip operation, knee operation, etc. 

In better-performing universal health systems, they take the opposite approach – hospitals receive money from the government each time they help a patient. If a hospital completes a knee operation, it might receive, say, $10,000. If it completes a knee operation on another patient, it receives another $10,000. 

This model incentivizes hospitals to help more patients – to help more patients with knee operations, cataract surgery, etc. This approach also incentivizes hospitals to spend money on expenses that help patients (e.g. more doctors, nurses, equipment, etc.) rather than using the money on expenses that don’t help patients (e.g. more admin staff). 

To learn more about this policy option, please watch our Health Reform Now documentary (scroll up) or see this post by MEI.