Financing a First Nations and Inuit Integrated Health System
- A Discussion
First Nations and Inuit Integrated Health Funding
Why is it needed?
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Limitations to Achieving Efficiencies with the Present System
Transferred programs represent a minor component
of Ontario Region's total resources. In Ontario among the two transferred
community examples which are included in this paper, these programs
represent about 37% of the MSB budget on average, as the non-insured
health benefits (NIHB) program and some other centrally administered
programs are not included. If provincial expenditures are included,
then the proportion of transferred programs drop to 26% of the
total Medical Services Branch (MSB) and Ontario resources spent
on health services to these two communities (data from Figure 9).
All health systems today are preoccupied with controlling costs.
It is difficult, if not impossible, to control costs when different
governments and organizations each possess a portion of the total
resource pool. Efficiencies, therefore must be found in segmented
portions of the health system to limited avail. Broader reform
is not possible, such as labour adjustment strategies, which might
replace a portion of the physician budgets with nurse practitioners,
due to resource being handled at the provincial level (physician
budgets) and provinces' reluctance to enter into areas deemed federal
jurisdiction (community nursing). This statement is a generality,
as some exceptions exist. The provincial government has provided
funding for nurse practitioners in the northern health authority
of Weeneebayko. This situation is somewhat unique as it involves
a health system redesign around a previously MSB-operated hospital,
now under First Nations administration.
There are limitations imposed to health service
reform even within jurisdictions. The NIHB Program operates on
a regional and national level. Due to its immense scope ($507.7
million nationally in 1997/98), it functions as an insurance pool
where risk (related to illness and utilization of a population)
is greatly lowered due to its size. Also because of its size, regions
are able to negotiate preferred rates for dental care and pharmaceutical
and other medical supply purchases. However, somewhat ironically
due to its scope and size, management of health provider practices
in the NIHB program is difficult, leaving the program open to another
type of risk, that of provider mismanagement and self interest.
It is difficult to monitor individual health professional practices
in such a large system, and the usual recourse is to conduct random
audits. Dental services is the classic area where cost escalations
have not been controllable and examples of inappropriate practice
by dentists not uncommon. Recently, the establishment of pre-determination,
where dental care plans must be preapproved by the funders, has
appeared to reverse the trend to rising costs. However, it is too
soon to conclude that predetermination will control dental costs
in the long term. A previous strategy of frequency based benefit
reimbursement only had a short term effect in reducing costs, and
has been attributed to providers resorting to lower frequency but
higher cost care (such as root canals rather than routine fillings)
to maintain former income levels.
Abuse by clients is second area of concern with
the NIHB Program which is hard to control with its large, impersonal
structure. The Auditor General has identified risks in this area
as clients accessing excessive levels of benefits, and clients
abusing or misusing prescription drugs.(Note 12: Ibid.)
Another limitation of the regional administration
of NIHBs is an inability to institute other types of funding processes
which might be more cost-effective or appropriate for a population,
such as a local-based arrangement for salaried or contract providers
rather than the fee for service (FFS) reimbursement. This has been
done in one Ontario community, where the NIHB program has been
devolved to local control, and has generated substantial savings
in dental services. These savings have been redirected into other
areas of their integrated health and social service system.
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Resources Currently Provider Driven
The current system, which operates largely on
an arms-length reimbursement of services provided directly through
patient-professional interactions (certainly this is true for the
NIHB Program, and provincial hospital and physician services),
has limited ability to monitor performance or adjust the system
to meet community needs. There are no financial incentives for
quality of services delivered. Direct contracting with professionals
and/or organizations will provide an opportunity for performance
measures to be included in the contracts. In addition, a closer-to-home
relationship between providers and health organizations means that
contractual relationships can respond to population needs in a
way that respects provider concerns and requirements.
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Current Government Directions
The financing arrangement being advanced by this
document is in alignment with federal policy direction. The inherent
right policy which was announced by the federal government in January,
1998 in its policy statement Gathering Strength, promises
a new fiscal relationship which provides more stable and predictable
financing. This relationship will allow First Nations governments
to exercise increased autonomy and greater self-reliance through
the creation of expanded transfer arrangements, First Nations fiscal
authority, and in a full blown self-government environment, resource-revenue
sharing and incentives for enhancing First Nations own-source revenue
capacity.(Note 13: Government of Canada. 1998. Gathering Strength:
Canada's Aboriginal Action Plan.Minister of Public Works and Government
Services Canada: Ottawa.)
Through negotiation with Aboriginal, provincial
and territorial governments, the federal government is committed
to developing multi-year arrangements which will establish clear
funding formulas, and which will provide more stable and predictable
flow of revenue to facilitate program and financial planning.(Note
14: Ibid.)
The federal government has identified the consolidation
of funding arrangements from different government departments as
one avenue to improve financing of First Nations and Inuit, for
example between Health Canada and the Department of Indian Affairs
and Northern Development (DIAND). The goal of this initiative,
labeled the Canada First Nations Funding Agreement, is to primarily
achieve economies in administration, not present innovative new
ways of financing. (Note 15: Interview with Abu Nazier, Director,
Health Funding Arrangements, Medical ServicesBranch. September
24, 1998, Ottawa.)
The spirit of the federal Gathering Strength initiative
does include, however, the promise of a future financial relationship,
which goes beyond innovative administrative devolution. The federal
government, with some provincial involvement, is developing mechanisms
for financial government-to-government transfer systems for First
Nations governments. Fair, stable, and equitable are the words
used to describe the goals of these projected transfers.(Note 16:
Government of Canada. 1998. Gathering Strength,.)
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Opportunity for Greater Accountability
Accountability derives from control. Governments
speak in accountability terms with respect to First Nations programs
and services, using the words "budgeting, internal controls,
reporting and auditing standards." (Note 17: Ibid,.) The financing
model in this paper is premised on greater control by First Nations
and Inuit to develop a health system in the context of the holistic
health needs of the community. Once a clear relationship is made
between the ability to work towards meeting needs in a system that
accommodates change and innovative reform (which requires meaningful
control in the system), and the product -- community designed programs
and services, the foundation for a grass roots accountability will
have been forged. The accountability is two fold, to both government
(funders) and the community membership, with the more onerous accountability
directed to the latter. In an integrated health funding approach,
the organizers of the health system will not have the limitations
of stove-pipe financing, and community needs will be more easily
met as resources can follow need (rather than the present situation,
where need is slotted into existing programs.) Full responsibility
rests with the community health system to ensure that community
consultation occurs and the results are reflected in the health
design, to demonstrate improved health outcomes, to manage resources
in a cost-efficient and effective manner, to evaluate community
satisfaction and continuously improve the system, to use evidence
in its decisions on health program design and implementation, and
finally to report to the community periodically on the system's
progress against defined criteria and outcomes.
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