Eric Nauenberg, Ph.D.*Eric Nauenberg, Ph.D.*Peter Coyte, Ph.D.*Peter Coyte, Ph.D.*

**Department of Health Policy, Management and EvaluationDepartment of Health Policy, Management and Evaluation

University of TorontoUniversity of Toronto

IRPP ConferenceIRPP Conference Careful Consideration: Decision-Making in the Health Care SystemCareful Consideration: Decision-Making in the Health Care System

November 30November 30thth, 2004, 2004

Funded by the Canadian Health Services Research Foundation and the Ontario Ministry Funded by the Canadian Health Services Research Foundation and the Ontario Ministry of Health and Long-Term Care as Regional Co-sponsors: RC-0861-06of Health and Long-Term Care as Regional Co-sponsors: RC-0861-06

Development of a Taxonomy for Health Development of a Taxonomy for Health Care Decision-Making in CanadaCare Decision-Making in Canada

DisclaimerDisclaimer

The content herein reflects the The content herein reflects the observations and opinions of the observations and opinions of the authors and in no way reflect the official authors and in no way reflect the official positions of the Ontario Ministry of positions of the Ontario Ministry of Health and Long Term Care (MOHLTC), Health and Long Term Care (MOHLTC), the CHSRF, nor any other decision-the CHSRF, nor any other decision-making body.making body.

Disclaimer #2Disclaimer #2

““The content herein The content herein maymay [sic] shed [sic] shed some light on why the foot is connected some light on why the foot is connected to the head when it comes to decision-to the head when it comes to decision-making, but the explanation is likely to making, but the explanation is likely to be incomplete.”be incomplete.”

Source: Nauenberg E., The Health Economist’s Source: Nauenberg E., The Health Economist’s Approach to Anatomy. Forthcoming, 2010.Approach to Anatomy. Forthcoming, 2010.

PurposePurpose

• To develop a taxonomy to better understand To develop a taxonomy to better understand health care decision-makinghealth care decision-making

– Caveat: This taxonomy does Caveat: This taxonomy does notnot explain how decisions explain how decisions are made but rather helps explain the are made but rather helps explain the contextcontext in which in which decisions are madedecisions are made

• To help distinguish between advisory-making and To help distinguish between advisory-making and decision-makingdecision-making

OutlineOutline

• Conceptual FrameworkConceptual Framework

• Simple Model of Health Care Exclusion: What’s in Simple Model of Health Care Exclusion: What’s in and what’s out of the Medicare basket?and what’s out of the Medicare basket?

• Jurisdictional Levels & Processes Used in Jurisdictional Levels & Processes Used in Canadian Health Care Decision-MakingCanadian Health Care Decision-Making

• ConclusionConclusion

Conceptual FrameworkConceptual Framework

• Deconstruct health care decision-makingDeconstruct health care decision-making

• Define health care decision-making as Define health care decision-making as opposed to health care advisory-makingopposed to health care advisory-making

Health Care Exclusion:Health Care Exclusion:What’s In and What’s Out of Medicare?What’s In and What’s Out of Medicare?

• Consider a society with competing interests.Consider a society with competing interests.

• Each group differs in their capacity to engage in Each group differs in their capacity to engage in and benefit from exclusionary actions.and benefit from exclusionary actions.

• As long as the aggregate net benefit from As long as the aggregate net benefit from exclusionary actions is sufficient, institutions will exclusionary actions is sufficient, institutions will develop to support such actions (or efforts).develop to support such actions (or efforts).

Health Care Exclusion:Health Care Exclusion:What’s In and What’s Out of Medicare?What’s In and What’s Out of Medicare?

• Institutions that support exclusionary efforts Institutions that support exclusionary efforts are more likely to develop if:are more likely to develop if:

– Those that benefit and the magnitude of their Those that benefit and the magnitude of their payoffs are large; payoffs are large;

– Those that suffer adverse effects or the size of Those that suffer adverse effects or the size of such effects are small; orsuch effects are small; or

– Where the costs of engaging in exclusionary Where the costs of engaging in exclusionary efforts are small.efforts are small.

Health Care Decision-MakingHealth Care Decision-Making

Health care decision-making is a context-Health care decision-making is a context-specific process involving a range of specific process involving a range of stakeholders and a broad array of stakeholders and a broad array of “evidence” that is designed to yield “evidence” that is designed to yield resource allocations that may resource allocations that may differentially advance the interests of differentially advance the interests of participants to health care transactions.participants to health care transactions.

Health Care Advisory-MakingHealth Care Advisory-Making

Within the public civil service and “arms Within the public civil service and “arms length” advisory committees, advice on length” advisory committees, advice on how to proceed with a decision is often how to proceed with a decision is often developed and provided. This must not developed and provided. This must not be confused with “decision-making” be confused with “decision-making” which often involves different factors.which often involves different factors.

HT evidence based policy analysis andOntario based data analysis[16 weeks]

HT evidence based policy analysis andOntario based data analysis[16 weeks]

Pre-assessmentfor OHTAC prioritisation

Pre-assessmentfor OHTAC prioritisation

Recommend•Implement•Not implement•Re-visit•Field evaluation•Registry study

Recommend•Implement•Not implement•Re-visit•Field evaluation•Registry study

Application to OHTAC through MAS for review

Application to OHTAC through MAS for review

MOHLTC response and policy decision within 60 days.

Appeals process

MOHLTC response and policy decision within 60 days.

Appeals process

Advisory Example: OHTAC Process for Reviewing Health Technologies

MAS

OHTAC

MOHLTCApplication

with Sponsorship

Systematic Review - Effectiveness•Search databases•Selection criteria•Analysis•Consult experts, industry

Systematic Review - Effectiveness•Search databases•Selection criteria•Analysis•Consult experts, industry

Prioritisation:

•Description

•Priority score

•OHTAC

Prioritisation

Prioritisation:

•Description

•Priority score

•OHTAC

Prioritisation

Economic Analysis

•Budget impact•CEA•Cost avoidanceExpert Review of HTPA

Economic Analysis

•Budget impact•CEA•Cost avoidanceExpert Review of HTPA

OHTAC: Critical Review

•Recommend to DM•Disseminate on Website

OHTAC: Critical Review

•Recommend to DM•Disseminate on Website

MAS HTPA Unit

MAS HTPA

Policy Options & Ontario Specific Analysis•Ethical, legal, regulatory, systems implications•Options

Policy Options & Ontario Specific Analysis•Ethical, legal, regulatory, systems implications•Options

Medical Advisory Secretariat HTPA Process

-

–Published systematic review available Synthesis

Review

Two Major Components to Two Major Components to Decision-MakingDecision-Making

• Jurisdictional Level of Decision-Making from Jurisdictional Level of Decision-Making from National to Individual Decision-Making; andNational to Individual Decision-Making; and

• Process of Decision Making from Centralized to Process of Decision Making from Centralized to Devolved Decision-Making.Devolved Decision-Making.

Nested Optimization Problems Characterized Nested Optimization Problems Characterized by a Cascade ofby a Cascade of ConstraintsConstraints

• Optimization decisions are subject to an array of Optimization decisions are subject to an array of constraints on the choice set or course of action. constraints on the choice set or course of action.

• Each level of decision-making authority may Each level of decision-making authority may impose constraints on each subsequent level. impose constraints on each subsequent level.

• These restrictions on decision-making narrow the These restrictions on decision-making narrow the range of possibilities afforded to stakeholders.range of possibilities afforded to stakeholders.

Jurisdictional Levels of Decision-MakingJurisdictional Levels of Decision-Making

• FederalFederal

• ProvincialProvincial

• Regional (Regional Health Authorities)Regional (Regional Health Authorities)

• Transfer Agencies (i.e. hospitals, home health care Transfer Agencies (i.e. hospitals, home health care agencies, etc.)agencies, etc.)

• MunicipalitiesMunicipalities

• Individual Care ProvidersIndividual Care Providers

• Individual Care RecipientsIndividual Care Recipients

CentralizedCentralized DevolvedDevolved

MacroMacro

MesoMeso

MicroMicro

Level of Decision-MakingLevel of Decision-Making

Components of the Components of the Decision-Making ProcessDecision-Making Process

Three Broad Sets of Health CareThree Broad Sets of Health CareDecision-Making ProcessesDecision-Making Processes

• ““Closed-door/Top-down”Closed-door/Top-down” decision-making: where decisions decision-making: where decisions are taken by the governing body with control – constitutionally are taken by the governing body with control – constitutionally ordained or otherwise – over a particular decision ordained or otherwise – over a particular decision withoutwithout publicly transparent consultationspublicly transparent consultations with stakeholders. with stakeholders.

• ““Bilateral” Bilateral” decision-making: where decisions are jointly decision-making: where decisions are jointly determined by both the governing body determined by both the governing body andand stakeholders/other levels of government with some form of stakeholders/other levels of government with some form of publicly visible process that may be combative or amenable publicly visible process that may be combative or amenable to consensus-building.to consensus-building.

• ““Hands-off/Bottom-up”Hands-off/Bottom-up” decision-making: where the decision-making: where the governing body over a particular decision devolves authority governing body over a particular decision devolves authority to the stakeholders to make decisions by which they agree to to the stakeholders to make decisions by which they agree to abide.abide.

Taxonomy for Health Care Decision-MakingTaxonomy for Health Care Decision-Making

Care RecipientCare Recipient

Care ProviderCare Provider

Transfer AgencyTransfer Agency

MunicipalMunicipal

RegionalRegional

ProvincialProvincial

FederalFederal

Hands-off/ Hands-off/ Bottom-upBottom-up

BilateralBilateralClosed-door/Closed-door/Top-downTop-down

Decision-makingDecision-making processprocess

Level ofLevel ofDecision-makingDecision-making

CentralizedCentralized DevolvedDevolved

MesoMeso

MicroMicro

MacroMacro

Federal RoleFederal Role

• Promotion of health, setting and enforcing standards, and Promotion of health, setting and enforcing standards, and managing measures designed to increase accountability.managing measures designed to increase accountability.

• Direct provision of insurance/services to population Direct provision of insurance/services to population segments.segments.

• Approval of safe and efficacious drugs - Food and Drug Act.Approval of safe and efficacious drugs - Food and Drug Act.

• Drug price regulation - Patented Medicines Prices Review Drug price regulation - Patented Medicines Prices Review Board. Board.

• Leadership in health technology assessments with product Leadership in health technology assessments with product listing recommends to the Provinces - Canadian listing recommends to the Provinces - Canadian Coordinating Office of Health Technology Assessment Coordinating Office of Health Technology Assessment (CCOHTA), (CCOHTA), Common Drug Review (CCR), and Common Drug Review (CCR), and the the Canadian Expert Drug Advisory Committee (CEDAC).Canadian Expert Drug Advisory Committee (CEDAC).

Provincial RoleProvincial Role

• Provinces effectively define: services that will be publicly-Provinces effectively define: services that will be publicly-funded, and hence, “medically necessary”; set fee schedules for funded, and hence, “medically necessary”; set fee schedules for provider reimbursement; and set global budgets for health care provider reimbursement; and set global budgets for health care institutions.institutions.

• Provinces directly fund some hospital-based services, known in Provinces directly fund some hospital-based services, known in Ontario as “Priority Programs”, that lie outside of hospital global Ontario as “Priority Programs”, that lie outside of hospital global budget budget ----– Cochlear implants (Bilateral decision-making)Cochlear implants (Bilateral decision-making)– MRIs (Bilateral decision-making)MRIs (Bilateral decision-making)– PET scanners (Hands-off/Bottom-up decision-making) PET scanners (Hands-off/Bottom-up decision-making) – Genetic Testing (Absence decision-making rules for public Genetic Testing (Absence decision-making rules for public

funding, thereby raising concerns about access to care)funding, thereby raising concerns about access to care)

Provincial Role: Prescription DrugsProvincial Role: Prescription Drugs

• The advent of a common drug review process at the federal The advent of a common drug review process at the federal level has relegated provincial committees to advice on “how level has relegated provincial committees to advice on “how to list” (i.e. general use, limited use, etc.) rather than “what to list” (i.e. general use, limited use, etc.) rather than “what to list”. (Closed-door/Top-down decision-making)to list”. (Closed-door/Top-down decision-making)

– Recent advice from CEDAC to not fund the first-in-therapeutic class Recent advice from CEDAC to not fund the first-in-therapeutic class treatments--Replagal and Fabrazym--for Fabry Disease will be test treatments--Replagal and Fabrazym--for Fabry Disease will be test of cohesiveness of provinces in responding to a “thumbs down” of cohesiveness of provinces in responding to a “thumbs down” advisory from this process.advisory from this process.

• Beta Interferon – available in Ontario under a Section 8 Beta Interferon – available in Ontario under a Section 8 process, where a prescriber makes a case-by-case process, where a prescriber makes a case-by-case application to the Drug Quality and Therapeutics Committee application to the Drug Quality and Therapeutics Committee (DQTC) for approval compared to Quebec where the drug (DQTC) for approval compared to Quebec where the drug is fully funded.is fully funded.

Provincial Role: Physician/Hospital ServicesProvincial Role: Physician/Hospital Services

• Negotiated settlements between physicians and provinces (Bilateral Negotiated settlements between physicians and provinces (Bilateral decision-making)decision-making)

– Future of this process is now being tested in Ontario due to the events of the past Future of this process is now being tested in Ontario due to the events of the past week.week.

• Quebec’s Bill 114 is an example of a closed-door/top-down decision Quebec’s Bill 114 is an example of a closed-door/top-down decision making process where control occurs through back-to-work legislation.making process where control occurs through back-to-work legislation.

• Most provinces have adopted a hands-off/bottom-up decision-making Most provinces have adopted a hands-off/bottom-up decision-making process regarding requests for out-of-province/out-of-country process regarding requests for out-of-province/out-of-country

treatmenttreatment

Provincial Role: Home Care ServicesProvincial Role: Home Care Services

• Devolution of responsibility to regional health authorities Devolution of responsibility to regional health authorities or Community Care Access Centres (CCACs) in Ontario.or Community Care Access Centres (CCACs) in Ontario.

• Since 1997, CCACs divested themselves of direct Since 1997, CCACs divested themselves of direct service providers and allocated service contracts on the service providers and allocated service contracts on the basis of a competitive bidding process. basis of a competitive bidding process. (Hands-off/bottom-up decision-making)(Hands-off/bottom-up decision-making)

• Community Care Access Corporations Act of 2001 Community Care Access Corporations Act of 2001 returned some control to the province, advanced CCAC returned some control to the province, advanced CCAC accountability, and maintained a hands-off/bottom-up accountability, and maintained a hands-off/bottom-up relationship with direct service providers.relationship with direct service providers.

Regional Decision-Makers Regional Decision-Makers (Regional Health Authorities)(Regional Health Authorities)

• The following RHA processes are normally characterized The following RHA processes are normally characterized as “hands-off/bottom-up” decision-making:as “hands-off/bottom-up” decision-making:

– Internal allocation by transfer agencies of financial resources to Internal allocation by transfer agencies of financial resources to meet volume/deliver expectations; meet volume/deliver expectations;

– Fundraising activities for internal use by institutions; Fundraising activities for internal use by institutions; – Monitoring of quality measures against regional standards; Monitoring of quality measures against regional standards; – Staffing patterns and allocation to meet needs. Staffing patterns and allocation to meet needs.

• Many opportunities for local sabotage of regional priorities Many opportunities for local sabotage of regional priorities and initiatives by swaying public opinion.and initiatives by swaying public opinion.

• Contracting-out to private-for-profit clinics.Contracting-out to private-for-profit clinics.

Hospitals and Other Transfer AgenciesHospitals and Other Transfer Agencies

Through their global budgets, along with additional Through their global budgets, along with additional funding through fundraising or charitable contributions, funding through fundraising or charitable contributions, hospitals must decide on the adoption of new hospitals must decide on the adoption of new technologies through their respective pharmacy and technologies through their respective pharmacy and therapeutics committee. (Closed-door/top-down therapeutics committee. (Closed-door/top-down decision-making)decision-making)

Individual Care Providers & Care RecipientsIndividual Care Providers & Care Recipients

• Health care decision-making processes are shifting Health care decision-making processes are shifting towards more “bilateral” processes and away from towards more “bilateral” processes and away from more “closed-door/top-down” processes as patients more “closed-door/top-down” processes as patients become more informed through various media.become more informed through various media.

• Different views on the merits of this development Different views on the merits of this development exist, particularly if the capacity to benefit from exist, particularly if the capacity to benefit from shared decision-making is unevenly distributed in shared decision-making is unevenly distributed in society.society.

Conclusion (I)Conclusion (I)

• We offer a taxonomy for health care decision-making that We offer a taxonomy for health care decision-making that highlights the constraints under which decisions are made.highlights the constraints under which decisions are made.

• In 2003, national health expenditures were estimated to be In 2003, national health expenditures were estimated to be $121.4 B; $3,839 per capita; & 10% of GDP (CIHI, 2003)$121.4 B; $3,839 per capita; & 10% of GDP (CIHI, 2003)

– growth in expenditures is well in excess of growth of overall economygrowth in expenditures is well in excess of growth of overall economy

– Increase health service accountability & more centralized decision-Increase health service accountability & more centralized decision-making are responses to insatiable appetite for health care services.making are responses to insatiable appetite for health care services.

• The limited role for cost-effectiveness analysis under the The limited role for cost-effectiveness analysis under the Canada Health Act which emphasizes medical necessityCanada Health Act which emphasizes medical necessity

– Is it time to change to standard of “reasonable and necessary”?Is it time to change to standard of “reasonable and necessary”?

• Pressure from private markets and the relationships between Pressure from private markets and the relationships between public and private marketspublic and private markets

Conclusion (II)Conclusion (II)

• Pressure from higher government levels limits Pressure from higher government levels limits decision-making on the government (or other decision-making on the government (or other decision-maker) below. decision-maker) below.

• Changing relationship between physicians and Changing relationship between physicians and patients.patients.

• The futureThe future: role of LHINs in--and impact upon--: role of LHINs in--and impact upon--decision-making:decision-making:

– Maybe different than RHAs given differences in governance Maybe different than RHAs given differences in governance structuresstructures