Accelerating Healthcare Improvement in Canada: A Review of Policy Options to Sustain, Improve and Transform Healthcare

Sandra Milicic, Gillian Mulvale, Stephen Petersen


  • In Canada and around the world, health expenditures have been rising at a faster rate than GDP growth. The rate of growth in health care spending has raised concerns in policy discourse about the financial sustainability of Canada’s publicly-financed healthcare systems and other public healthcare spending.
  • The Canadian Health Services Research Foundation (CHSRF) – now known as the Canadian Foundation for Healthcare Improvement (CFHI) – embarked on an initative commissioned by Health Canada referred to as Healthcare FiT (Financing, innovation and Transformation) in 2011 to synthesize evidence on cost drivers, options to improve efficiency, extend financing and to examine health system transformation in Canada. The information contained in this report is meant to provide a preliminary overview and analysis of options that can be further explored and advanced to support improvement initiatives that aim to change the ways in which healthcare in Canada is organized, financed, managed and delivered.
  • The analysis of the Healthcare FiT inititative suggests that there are many unique policy options available at different levels of decision-making. This report focuses on four areas of health system design covered by the analysis: physician remuneration, hospital funding, pharmaceutical pricing and reimbursement, and options to extend financing where gaps exist in public insurance coverage.
  • Physician remuneration has been increasing quickly (CIHI, 2011), without strong evidence to suggest that the increase has resulted in improvements of health outcomes or access (Brasset-Latulippe et al, 2011b; CIHI, 2011). The traditional fee-for-service method of payment for physicians may be improved by implementing alternative payment methods, such as blended systems.
  • Hospital spending is one of the highest public health sector expenditure categories in Canada (Constant et al., 2011; CIHI, 2011). Hospitals predominantly use global budgets, which provide little incentive to improve access, quality or efficiency since they are based on historical levels. Alternatives such as blending global budgets with activity based funding can optimize the respective strengths of each type of funding and create incentives for timely and equitable access, appropriate volume of care, and efficient care (Sutherland, 2011).
  • Pricing strategies for pharmaceutical drugs vary across Canada and can lead to higher prices overall, inequitable pricing, and reduced and inequitable access for certain individuals. Altering pricing mechanisms can help to address this price discrimination among provinces and may also increase access to new drugs, lead to more equitable distribution and better access for patients (Grootendorst and Hollis, 2011).
  • Public insurance covers ‘medically necessary’ hospital and physician services, but a lack of public insurance coverage for other services may create barriers and inequities in access to care. A carefully designed social insurance approach could encourage earlier treatment and significant equity gains if implemented to finance a universal system of prescription drugs, with potential applicability for other services as well.