Driving Reform with Fiscal Reality Checks: the case in health care


Funding models differ across the world, but health care is expensive everywhere. Canadians have a universal taxpayer funded health insurance sector which spends over $200.5 billion a year, an average of $5,800 per Canadian. This expenditure now consumes over 40% of every provincial budget and 11.6% of GDP. These costs are in the upper third of the international range. The US has a mixed model of healthcare insurance coverage with the introduction of the Affordable Care Act, but the bulk of US health care is still primarily privately funded. In 2013 the US spent $2.9 trillion on health care, or about $9255 per person and 17.4% of GDP. The US system is an outlier in international comparisons with both much higher costs, much lower coverage across the population and rather poorer measured outcomes by OECD assessments.

In all countries the health care cost curve is positive and accelerating. Globally this cost acceleration is attributed to growing populations, increasing proportions of older population segments and increasing technological capacity (proteomics, molecular medicine, synthetic biology, computational biology and nanotechnology) to provide ever more effective health care interventions including home diagnostics, personal genomics, gene therapy and personalized medicine.

The cost curve is a concern to all governments regardless of the fiscal model used to support health care. Economic trends that shaped global markets over the past decade have stalled leaving all economies uncertain of future revenues. So the focus turns to cost containment, cost spreading and return-on-investment (ROI) determinations. Health care is a big budget item in all economies, and deserving of ROI scrutiny for a number of reasons.

Countries have a fairly accurate, if unshared, picture of costs and services delivered by health care sectors, but very little information about the appropriateness, quality, benefits or outcomes of those services individually or collectively. Funders, administrators and providers cannot accurately characterize the value received for the substantial personal and societal investment in health care. This lack of know-ability breeds doubt that individuals and societies are receiving commensurate value for the money paid. Central to innovation and solution is proactive, transparent, publically available real-time data mining on all health care encounters start-to-end: all services; all results; all costs.

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