Shifting resources: disinvestment and re-investment

Craig Mitton, PhDCentre for Clinical Epidemiology and Evaluation, Vancouver Coastal Health Research Institute

School of Population and Public Health, University of British Columbia

craig.mitton@ubc.ca

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Resource scarcity

• Allocation of health care funds according to defined populations is a global phenomenon

• Basic notion within health authorities is that of a limited funding envelope– Not enough resources to meet all needs

• Surveys have reported uncertainty amongst decision makers on how best to set priorities and allocate resources

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Aspects of Formalization

2012 Canadian survey, n=91

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Resource Allocation Framework

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1. Determine aim & scopeof decision making.

4. Develop decision criteriawith stakeholder input.

3. Clarify existing resource mix.

5. Identify & rank funding options.

7. Provide formal decision review process.

8. Evaluate & improve.

6. Communicate decisionsand rationale. 2. Identify priority setting

committee.

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Key Concepts

• Shifting or re-allocating resources based on comparison against pre-defined criteria

• Incentives to encourage participation• Clinicians and managers working together• Ethical conditions built in• Tool that supports decision making• Link to Health Technology Assessment agencies

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Managing evidence

• Education on process and expectations on using evidentiary base

• Single standard business case template• Targets on investments and disinvestments• Process guidelines and formal, explicit submission

process

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Criteria

• Operationalize organizational objectives• Clearly defined at the outset• Mutually exclusive• Weight to reflect relative importance• MCDA as method for benefit measurement

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Expected Outcomes

• Primary benefits of explicit approach– Achieving real resource shifts consistent with

strategic decision making objectives– Bending the cost curve and investing in areas

where marginal gains are greatest– Clinical engagement and opportunity for public

involvement– Greater transparency and accountability

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Main challenge with the process

• Difficult decisions have to be made• Historical and political allocation the norm• Substantial literature on implementation and evaluation of

formal approaches

• Canadian ‘success’: over 30 organizations with disinvestment ranging from $200K to $45M– Examples include investment which acts as an incentive– Still more likely to have more investment options– Disinvestment continues to be a challenge– Stand alone tool for disinvestment needed for decision makers

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Categories of ‘disinvestment’• Reduce costs – i.e., efficiency gains (LEAN or similar thinking), or reduction in costs of inputs

(e.g., outsourcing). From the perspective of patients/clients, nothing has changed – that is, there is no change of the quality or quantity of service provided, but the service is being provided at less cost.

• Integration, consolidation or standardization of non-clinical services. From the perspective of patients/clients, nothing has changed.

• Generate or increase revenue - increases in fees (or new fees). This is the only change patients/clients see – that is, the service is the same but it will cost more for the patient/ client.

• Integration, consolidation or standardization of clinical services. Patients/clients may see a change in the way services are delivered but the service per se remains unchanged (i.e. they will still get the same service but there may be only one location delivering a service instead of multiple locations).

• Re-engineering or redesign - changes to the way services are provided, i.e. some steps of a service are removed or restricted and this may impact the quality of care, but not necessarily.

• Reduce volume or amount of service provided - waiting time will increase or some will forgo service. This involves identification of services that are less effective or appropriate. It is not to say that they are not effective, just that these services may be providing lower value relative to other options.

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“The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all

those who want it. The first lesson of politics is to disregard the first lesson of economics.”

- Thomas Sowell