TRUE NORTH COLUMN – Incentives for patients could ease health care crisis

Canada’s health care system is in crisis. While much of the discussion around this is rightfully centered on how governments can improve the services provided, policymakers would be wise to also think about how to ease the demand that patients impose on the system. 

Simply put, if Canadians lived healthier lives, the health care system could focus more of its resources on treating those with unavoidable health conditions. 

Many of the lifestyle decisions that Canadians make – what they eat, how frequently they exercise, and so on – can lead to diseases and adverse health conditions if poor choices are made. This in turn increases demand for health services. Consider that the Public Health Agency of Canada has indicated that if individuals eliminated risk factors such as unhealthy eating and physical inactivity, 80% of premature heart disease and type 2 diabetes cases, and 40% of cancers could be prevented. 

Similarly, the Chronic Disease Prevention Alliance of Canada (CDPAC) estimated that in 2015, the cost of treating diet-related diseases in Canada was approximately $26 billion. For perspective, last year, provincial governments in Canada spent $218 billion on health care. Billions more could be saved if Canadians exercised more frequently.

So how can governments encourage healthy living, without micromanaging people’s lives? In a normal insurance model, those who pose higher risks pay higher premiums and have a financial deterrent to making unhealthy choices. This is why drivers who have had many speeding tickets typically pay more for car insurance.

In Canada, it’s probably fair to say that no political party would introduce higher premiums in health care based on risk. However, the opposite of higher premiums could be an option – incentives. New SecondStreet.org research shows that financial incentives have been effective in improving patient health in several studies and private sector models. 

In the U.S. for example, grocery store chain Safeway improved employee health by implementing a rewards program based on financial incentives. For performing well on health indicator tests (eg. blood pressure, body weight, cholesterol etc.) employees received discounts on their insurance premiums. According to the former CEO of Safeway, Steven Burd, an employee could save up to $1,560 annually on health insurance for their family.

Burd indicated that the incentives were a success; the company’s obesity rates were 30% below the national average and its spending on health insurance stayed constant over the course of the program, when ‘most American companies’ saw their health care costs increase by 38%. 

In Canada, Manulife Financial Corporation implemented a program called Vitality that offers rewards and benefits, including discounts of up to 15% on insurance, for making healthy choices and recording it using their app. The program has yielded positive results according to Manulife: “nearly one in three members with elevated blood pressure improved their readings to normal levels within one year.”

Safeway and Manulife are just a few of the examples highlighted in the report by SecondStreet.org, where successful incentive programs have improved the health of its users. Based on these findings, provincial governments should be encouraged to try small pilot projects that use incentives to promote healthy living. Such programs should be voluntary, simple and avoid micromanaging patients’ lives.

And if a province comes up with an effective incentive-based model, it could be scaled on a wider basis. 

Ultimately, a healthier population could help ease the burden on our nation’s health care system – something our system could definitely do with right now.

Victoria Sampson is a research intern with SecondStreet.org.

This column was originally published in True North on September 3, 2023.

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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.