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

The Provincial Environment

The focus of this paper is First Nations and Inuit health systems, but as these systems are influenced and dependent on provincial systems outside of the community borders, a brief review of recent changes to the provincial health systems is essential in order to understand the factors which have been considered in the reforms envisioned here.

Great strides have been made over the years in developing cures and treatments for many of the illnesses which affect populations, but biomedical advances have proven to be limited without equal attention to two other areas integral to improving the health of a nation -- population health, which addresses the broad determinants of health including lifestyle and socio-economic conditions, and the management, organization and delivery of health services, which have an impact on accessibility to health services, efficiency of resource utilization and the effectiveness of services provided. It is the latter variable, that concerning the management, organization and delivery of health services which is most directly linked to health financing. This relationship is evident in the provincial health systems, which now are the throes of changing their delivery systems to more effectively and efficiently manage limited resources. Canadian health system reform was sparked by the escalating provincial health costs in the 1980s, at a time when the federal government was restraining the increases to health transfers to the provinces, then more recently, actually reducing these transfer payments. Provinces have responded to the decrease in federal contributions in two fundamental ways.

• The first was to reorganize the care delivery system, both for fiscal reasons and to improve the quality of care provided. The goal of this reorganization was to integrate health services and provide a continuum of care from primary through tertiary to community-based services. In real terms, the mechanism of this reform centered on reducing services in the area which demanded 41.7% of total resource expenditures in Canada in 1993 - the hospital sector (Note 4: Canadian Healthcare Association. 1995. Health Facts: Made in Canada. CHA Press:Ottawa.). Hospitals, primarily those in acute care, are being or have been closed, 4 merged, or reduced in numbers of inpatient beds. A new paradigm on health care is being developed, one that has utilized new technologies and procedures to reduce inpatient stay, which has re-evaluated the roles of different health professionals in the system, but which has also relied to an increasing extent on community based services and informal caregivers to provide care previously assumed by hospitals.
  
• The second provincial response was to fundamentally realign the organization and management of the health system to bring it closer to home, to devolve resource allocation to the community level, and to place accountability and decision-making in the community. This has been seen through regionalization initiatives in nine of the ten provinces (all except Ontario). Regional or district health councils have resource envelopes from which they fund services according to health needs of the region, and have the freedom to adjust the spectrum of services within the mandate of the Canada Health Act and provincial health priorities. The scope of services varies from province to province; for example Prince Edward Island includes health, social and correctional services in its regional envelope, whereas another province's envelope may contain mainly health institution resources.

With First Nations and Inuit, despite the advances made by Health Transfer in consolidating funds, the resourcing of health services is fragmented into separate agreements and programs, and both federal and provincial governments have responsibility for funding of health services. The federal component of health services to First Nations is funded through the Medical Services Branch (MSB) of Health Canada, although the Department of Indian Affairs and Northern Development (DIAND) funds health-related social services such as Child and Family Services and Adult Services. MSB has been moving to integration of health funding with the Health Transfer program, but even for those communities which have undergone health transfer, nationally administered programs including the non-insured health benefits (NIHB) Program have remained outside of the transfer funding envelope.

Provincial involvement in First Nations and Inuit health is primarily through provision of physician and hospital services, as required under the Canada Health Act. A few provinces, such as Ontario, provide additional Aboriginal or First Nations/Inuit health programs. In the provinces where regional health authorities have assumed responsibility for resource allocation of health services, these authorities are charged with the provision of health services to First Nation and Inuit persons residing within their jurisdiction. If a regional authority's resource envelope includes hospital budgets, the calculation of resources to these institutions includes those persons living in First Nations or Inuit communities. To date, physician services have not been included in regional funding envelopes, however a number of provinces are now investigating alternate payment systems for delivery of physician resources, such as capitation using rostered or enrolled populations. Therefore the situation may arise where regional health authorities will also be administering primary care physician budgets, which will include resources targeted to delivery of physician services to the First Nations or Inuit population in the region.

Presently, federal and provincial cost containment and reduction strategies for health care affecting First Nations and Iniut occur in isolation from each other. For these communities, the implications of these strategies are often more profound than for the general population, as services are obtained from both jurisdictions, and reductions in one jurisdiction may place added stress on the services provided by the other. This issue will be discussed more thoroughly in a subsequent section of this paper.