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The Challenges in Public Funding of Health Care Technologies

Published on
May 6, 2019

With the passing of Health Innovation Week (April 1-5) last month and the recent changes to health care delivery in Ontario, it is useful to discuss the current state of health care technology adoption and the potential impact of changes to the health care environment in Ontario.

New and emerging medical technologies and health innovation have the potential to improve the quality of care patients receive and the way they receive it. A healthy, health innovation ecosystem enables discoveries and development, attracts investment and benefits from high adoption rates.

While there is no shortage of research and development in Ontario, investment and adoption are lagging. Ontario and the rest of the country lag in the adoption of new health care technologies into the publicly funded system.

Health Innovation Evaluation and Adoption in Ontario

In Canada, Canadian Agency for Drugs and Technologies in Health (CADTH) an independent, not-for-profit organization, created by the federal, provincial and territorial governments, provides health technology assessments. In Ontario, we also benefit from health technology assessments from the Ontario Health Technology Advisory Committee (OHTAC). Until recently, OHTAC fulfilled one of Health Quality Ontario’s (HQO) legislated functions, to make evidence-based assessments and recommendations to the Minister of Health and Long-Term Care on which health care services and medical devices should be publicly funded.

According to the Auditor General Annual Report (2018), these OHTAC health technology and services assessments are costly-- an average of $380,000 each in 2017/18. If your technology is fortunate to be selected for review, it can take anywhere from 37 to 93 weeks to complete.

A negative recommendation on the health technology can have a devastating effect on the prospect for public funding, but a positive recommendation is no guarantee of funding either. While both CADTH and OHTAC provide evidence-based assessments on the cost effectiveness of health technologies, their recommendations are not binding on governments or health care providers.

When recommendations to fund land on the desk of the Minister of Health, he or she needs to consider the immense fiscal constraints and many competing demands on the government, as a whole. With our siloed system, in most cases, funding one of these recommendations is considered to be a net new expense, regardless of potential offsets in other areas of the system.

All of this makes adoption of health technologies in the province very challenging. OHTAC completed 12 assessments in the fiscal year 2017/18. Of the 12 assessments, five recommended against and seven recommended in favour of public funding, with only four of the seven implemented (OHTAC website). The Ministry is still deciding on whether to implement the other three, underscoring how there is no requirement to adopt recommended medical device or health care service.

The recent changes announced in Ontario’s health care system provide some opportunities and challenges.  

Opportunities and Challenges Going Forward

It turns out OHTAC will no longer have a clear legislated mandate when it, as part of Health Quality Ontario, amalgamates into the new Ontario Health agency (along with at least 20 other health agencies). With the passing of Bill 74, The People’s Health Care Act, 2019, OHTAC’s legislated function, on a date decided by cabinet, will be replaced by the more vague objective “to provide advice, recommendations and information to the Minister and other participants in the Ontario health care system in respect of issues related to health care that the Minister may specify”. In other words, new evaluations will be Minister directed making it harder for innovators and vendors to initiate new evaluations directly. It remains to be seen whether OHTAC will even continue to function in the manner it has in past.

Adding to the complexity of the issue is that OHTAC, a recommender of funding, will be housed within an Agency that makes funding decisions. Both will have different health priorities for quality and cost-effectiveness. The answer to this question will depend on the degree of decision-making power the Ministry will retain as it relates to individual technologies.  

The Auditor General Annual Report (2018), also suggested that greater collaboration with CADTH has the potential to reduce duplicated efforts and costs. Six provinces/territories rely only on the funding recommendations of CADTH.

It remains unclear whether the OHTAC and CADTH organizations working in tandem or individually can assess technologies in a manner that keeps pace with technological changes, especially those related to genetics.

Recent Progress

Dr. Rueben Devlin and the Premier have repeatedly talked about using technology and innovation to drive efficiencies in the health care sector. The new Ontario Health Teams will hopefully spur innovation within the field of health care delivery, with the emphasis on ‘Digital First’ and the incentive that teams that achieve savings can reinvest them in care for their patients.

In addition, Treasury Board Parliamentary Assistant, Stan Cho’s speech at the recent MEDEC conference reiterated the Ontario government’s commitment to value-based-procurement in their supply-chain modernization through centralized procurements. The transformed system will be co-ordinated under the oversight of the Ontario Health agency. Value-based procurement will allow the system to consider innovative technology and devices that in themselves may be a more expensive option but will lead to downstream cost savings to the health system. These options may have not been considered in the past because of siloed spending and thinking. We look forward to additional details about how this will work in practice.

Conclusion

This government appears to recognize the importance of health innovation in advancing health care. There are many pieces up in the air related to health innovation at the moment and it remains to be seen how all these pieces will play out.

Abid Malik
Senior Associate
Abid brings a unique combination of over 20 years of political, government, private sector, health care policy, digital health and technology experience.
Naomi Shuman
Policy and Research Lead
Naomi holds a Master of Public Policy from the University of Toronto and a Master of Biomedicine, Bioscience and Society from the London School of Economics. Her research and analysis products have been used to inform government strategy and the decision-making process.
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