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ISSUES

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  1. Alberta Health Services’ Step-Wise Approach to Improving Allocative Efficiency in Health CareDr. Stephen Duckett, President and CEO, Alberta Health ServicesPresented to the Institute of Health EconomicsMay 25, 2009

  2. ISSUES • Allocative efficiency involves consideration of technical efficiency. • The latter is a boring and neglected aspect of health economics – but not health policy. • There is considerable work to do on technical efficiency in Alberta. • Allocative efficiency also involves a focus on improving effectiveness.

  3. ALLOCATIVE EFFICIENCY • A focus on what (health) outcomes you gain for the inputs you provide (OUTCOME / INPUT). • Aim that last unit of input yields better outcomes than investing that input elsewhere (or at least as good). • But Outcome/Input = f (input/output,output/output) Technical Effectiveness Efficiency • As technical efficiency improves (cost per patient treated goes down) so does allocative efficiency.

  4. Cost per Weighted ED Visit, 2007-08

  5. Cost per Weighted Case vs. Number of Weighted Cases, Alberta EDs, 2007-08

  6. Cost per Weighted Case vs. Mean Complexity, Alberta EDs, 2007-08

  7. Improving Technical Efficiency Activity based funding • Addresses “overfunding”, fairness • Reduces likelihood of service reductions as budget strategy • Applies to acute and continuing care • Needs to be accompanied by focus on quality Feasibility assessment • Consistency of financial allocation practices • Recording and coding of activity • Audit systems • CMG+, RUGS III

  8. Policy Levers • Financial incentives/markets/quasi-markets • Legal structure, hierarchies, organizational incentives • Culture

  9. Improving Effectiveness • Guidance • ‘Alberta Service Models’ • Care Paths • Enhancing patient choice • Measurement of outcomes • Providing feedback • Clinical Measures • Patient reported outcome measures • Technology Assessment

  10. Summary Addressing allocative efficiency requires • Addressing technical efficiency • Activity based funding • Improving effectiveness • Alberta Service Models • Care Paths • Ensuring dynamic efficiency • Technology assessment Stephen.Duckett@albertahealthservices.ca

  11. Making Difficult Decisions IHE Innovation Forum II