Financing a First Nations and Inuit Integrated Health System - A Discussion

Scope of the Paper

The scope of integrated funding described in this paper includes health funds from Health Canada and provinces, and health-related funding from the Department of Indian Affairs and Northern Development (DIAND). Issues and options for further investigation and consultation have been identified. In the development of this discussion paper, some fundamental principles of integrated indigenous health systems were assumed. An integrated system should:

• build on the experiences and progress to date in improving the First Nations and Inuit health system, including the current Health Transfer initiative;
• be aligned with the desires and need for First Nations and Inuit to control, in a meaningful sense, the administration, planning, delivery of their health system, both now and in the future;
• be sufficiently flexible to allow unique expressions of a health system, which may incorporate both indigenous and western perspectives;
• embrace existing knowledge on determinants of health and its contribution to the design of a health system;
• allow an accountability to First Nations and Inuit communities and funders;
• be compatible with self-determination and self-government goals of First Nations and Inuit;
• be adaptable to meet the health financing requirements of all First Nations and Inuit communities, which may vary according to community size, geographic location, and health status;
• be founded on the principles of equity in access to health resources; and
• lay out a long term vision of a health financing system, which may be implemented at the pace desired by communities.

Although the central theme in this paper is financing reform, it should be seen as a tool which will facilitate a broader reform of the health system directed to integrating health services to achieve increased efficiencies, effectiveness, and improved First Nations and Inuit health. Accordingly, this paper will present an overview of future directions in health service reform which would complement a new financing approach.

This financing approach is illustrated using 1997/98 expenditures to First Nations in Ontario. An analysis is presented which looks at all health and health-related expenditures to First Nations and Inuit, both in the province overall, and for two First Nations health authority models: a single community and a tribal council.

A three year trend analysis on the non-insured health benefits (NIHB) program is presented. This program, which now accounts for 52% of the federal government's financial contribution to health services of First Nations and Inuit, is very sensitive to changes in financing in diverse sectors of the health system. This is due to its mandate as a program of last resort for medically necessary services. The NIHB program, as part of an overall Health Canada capped budget, is encroaching on the balance of resources directed community health services in this budget, as it has proven difficult to control these NIHB health costs in a meaningful way (Note 3: NIHB program increases have also been ascribed to population growth, effect of Bill C-31 re-instatements and registration, increasing cost of technology, and a higher utilization of health services.). The analysis looked specifically for evidence of cost-shifting between different health funders which has impacted on the NIHB budget. Potential solutions to this cost shifting are discussed in the context of First Nations and Inuit health system reform.

Finally, it is not the intent of this paper to advance the concept that the current services delivered by Medical Services Branch (MSB) financing are fundamentally wrong. Indeed, as Health Transfer has shown, community health plans often look remarkably similar to services provided in the pre-transfer environment. The poor health status of First Nations and Inuit (which will not be documented here) result from a complex interaction of social conditions, economic circumstances, in some cases diet, the consequences of the Indian Act in defining a reserve system, jurisdictional service issues, lifestyle choices, the residential school legacy, the relocation experience of some communities, and the overall breakdown of Aboriginal culture and community cohesion. The financing vehicle for First Nations and Inuit services, however, must keep pace with the need for an Aboriginal controlled, holistic approach to community, family and individual healing. As well, the segmentation of funding among federal and provincial government departments limits opportunities for cost efficiencies, an issue which is absolutely essential in First Nations and Inuit communities which are feeling the impacts of a federal funding cap and provincial downsizing.

First Nations and Inuit communities are essentially powerless to affect change in the largest expenditure area, the NIHB program; to proactively address the consequences of reduced hospital services in the provincial sector; or to redesign the physician-focused primary care system to meet unique Aboriginal circumstances and culture. Given the great health needs of Aboriginal people and their continued poor performance in health indicators, reductions in the demand side of the financing equation are not expected in the short term. Cost containment must be found in the supply side, and can be facilitated by an integrated method of health financing.