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
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.
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.
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
Policy Levers • Financial incentives/markets/quasi-markets • Legal structure, hierarchies, organizational incentives • Culture
Improving Effectiveness • Guidance • ‘Alberta Service Models’ • Care Paths • Enhancing patient choice • Measurement of outcomes • Providing feedback • Clinical Measures • Patient reported outcome measures • Technology Assessment
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
Making Difficult Decisions IHE Innovation Forum II