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The Creeping Digitization of Health Care in Ontario

Published on
November 17, 2017

As we mark Digital Health Week in Canada (November 13-19, 2017), it is useful to take stock of the gains that have taken place, and the challenges still to be overcome in Ontario.

The health care system in Ontario is gaining some momentum on the adoption of digital solutions, but it remains challenged by a funding model that creates barriers to investment that need to be fixed.

The Promise of Digital Health
Digital health care records, office and system automation tools, enhanced communication between providers themselves and with patients, provider applications, patient facing apps, connected devices, artificial intelligence driven medical software are all part of the universe of digital tools now available in the marketplace or in the pipeline in the start-up community. Together, they can improve patient outcomes, increase the efficiency in the delivery of care, enable self-care at home, predict patient risk allowing for preventative measures, and ensure patients receive the right care at the right place, at the right time. These technologies are improving everyday at a faster pace than ever before.

How is Ontario progressing?
There is progress in Ontario. Paper records are being replaced by digital records. More and more clinicians (over 114,000 according to eHealth Ontario) are gaining access to Electronic Health Record portals. With a few clicks, a clinician can access a patient’s lab results, hospital reports, diagnostic images and to a certain extent, a patient’s drug history.

80 per cent of Ontario’s family physicians are using Electronic Medical Record software that automates their office and maintains records digitally. They can access lab results, hospital reports and digital images from the community. Many are connecting with specialists through telemedicine video conferencing, consulting with them virtually through eConsult and will soon refer patients electronically though a new system known as System Coordinated Access.

Local hospitals are beginning to install state of the art hospitals information systems. All pharmacies and most home care and LTC providers have also digitized their operations and patient records (how else do you get those fancy labels on pill bottles?) Canada Health Infoway, a non-profit entity funded by the Federal Government has begun the work of implementing a pan-Canadian e-Prescribing system.

Slowly, certain patients have access to a myriad of portals, ebooking tools, and telehomecare solutions.

The Ontario Auditor General and Ed Clarke, the former TD Bank CEO hired to report on the state of Digital Health in Ontario, would attest to the progress and the work yet to do. Many community providers are still not connected and do not contribute to, nor have access to, the EHR, leaving islands of information stranded. But it is just a matter of time before they are all included.

In Ontario, much of the progress can be attributed to direct government investment including through eHealth Ontario, Ontario Telemedicine Network and Canada Health Infoway. In Ontario however, the days of multi-billion mega technology projects appear to be a thing of the past.

Progress can also be attributed to individual providers, where their scale was large enough to free up enough resources to make investments upfront.  Hospitals and larger health provider chains were able to invest if the return on investment (ROI) was sufficient enough to justify it. Would it directly reduce the number of bedside care hours to the patient? Would the digitized workflow enable reductions in administrative personnel, or increases in patient flow? By ROI, they meant direct ROI, where the investment resulted in reduced costs elsewhere. Unfortunately, in too many cases, the value to the patient was absent from the equation.


Barriers to progress
For developers of digital health and device technologies, from large corporations to start-ups who have invested time and resources to develop tools that enhance the quality of care to the patient, these are frustrating times. These developers know the value of their products to the patient, but the value to the system is a different thing. They know how fast the pace of technology is moving, and they are the ones who can deliver what is possible, yet the system when it comes to adoption seems stuck in first gear.

Direct government funding opportunities are few and far between. Where there are investments, it is usually presented as a pilot or demonstration project with hopes of expansion.

Further digital health investments by health providers who can afford it are harder to justify from an ROI perspective. Most health care providers including hospitals are operating on razor thin margins and are not able to make investments at all.

Under the current system, no one is really incentivized to invest in tools that improve patient outcomes, although the notion of paying for outcomes is entering the funding discourse. Most services are paid on a fee for service basis, which is eaten up by overhead and health professional compensation. Rarely is there enough of a cushion to reinvest part of the fee towards innovative technology solutions that enhance patient care. Far too often in Ontario’s fee for service world, there are perverse incentives to avoid investing, in self-care solutions for example, since it could mean reduced visits. Most primary care physicians and specialists are compensated as this way. Home care providers are paid mostly on a per hour or per visit basis.

Hospitals have historically been funded with a global budget, or a defined budget that rose steadily over time with few strings attached. Ironically, the model allowed far more flexibility to divert dollars to technology – they could simply reduce care in other areas such as surgeries. Wait times would go up, but no one was penalized. As the wait times issue became political, funding reform was introduced to transition hospitals to a more fee-per-procedure route, which later became known as Quality Based Payments (QBP). Like fee for service, the QBP price is often too low to make room for the implementation of health technology solutions.  QBP’s can’t be used twice on the same patient for the same procedure, so perhaps there is an incentive to do it right the first time with the help of digital health, but it’s a very low bar. The politicians got lower wait times, but where were the investments in technology to improve the quality of patient care? 

Part of the problem is the lack of connection to the patient’s home and the reduced flexibility in payments. Once the patient left the hospital, they were someone else’s problem.  The recent introduction of bundled payments are helping to solve that deficiency because the QBP is supplemented with post-surgical care dollars, which can be used for community care. In a bundled payment model, the hospital has a larger pool of dollars to work with and could conceivably divert part of the funds towards digital health tools or a better medical device. There is also a greater emphasis on tracking outcomes, but penalties are still not part of the mix.

There are potential solutions to the lack of funding:

To deal with scarce dollars available for upfront investments, providers could potentially subscribe to cloud based services. The technology provider could make the upfront investments which could be recouped over time.  It’s feasible, however it doesn’t address the additional human resource costs required by the provider to operationalize the solution. For a tele-homecare solution for example, you still need a health professional to monitor patients on the other end.

You could have risk sharing agreements, where digital health solution providers make the investment and receive part of their funds by achieving certain metrics. These arrangements might work when you are trying reduce costs, (splitting cost savings for example), but the provider is still not incented to adopt technologies that improve the quality of care or improve patient experience.  Also, one can only imagine lawyers on both sides quarreling on whether cost savings have actually been achieved.

Governments could fund projects on a case by case basis. This would be nice, however the process to get from inception to province wide roll out is long. By the time the pilots have been evaluated, procurement processes, however innovative, have been completed it could be years and newer technologies could make the project already obsolete.

There needs to be a better way.

A better way forward
If a senior citizen is found to have an illness that can be cured with a drug that is funded by the province through its “formulary”, the physician could prescribe it and the patient is cured. The drug could cost a few dollars, or it could cost thousands, but from the prescriber’s perspective, the cost of the drug is a secondary concern because it does not come out of their budget. Meanwhile, if a diabetic patient can benefit from a digital health technology, the physician cannot offer it without paying for it themselves or charging the patient directly. Drug companies have their products funded when they are listed on a provincial formulary through a structured process.  For Digital Health, there is no similar process.

Ontario needs to create a formulary for digital health technologies. Digital Health apps and devices need to be made available centrally and funded through a dedicated technology adoption fund and listed on a digital health formulary. Where there is a formulary there is a path to innovation. Evaluation committees need to weigh the evidence and add any standards they wish, but when a solution is given a green light, a clinician should be able to adopt it as a tool and offer it to patients without thinking about the cost. Providers would be reimbursed for the per-unit cost of the product along with the additional human resource costs required to operationalize. (like a pharmacist dispensing fee). Let the province negotiate the best deals, including “try before you buy.”

The notion of app formularies have been around for a while. The OTN Hub, at the Ontario Telemedicine Network comes close. However, this would encompass all digital health technologies, including devices, the internet of things, provider and patient tools and AI tools with costs fully reimbursed.

Providers may need to change their practice, but they shouldn’t have to choose between providing high value care through technology and balancing their own budget. The digital health formulary should learn from the lessons of drug formularies (where the budget in Ontario now exceeds $4 billion) and track outcomes closely. If a product does not meet expectations, it will be all transparent.

Where there is a formulary, there is a funding target. Where there is a funding target, there is innovation. This is the way forward.

Sussex Strategy Group has expertise and significant experience working with clients in health care. If your organization requires strategic advice, government relations, strategic communications or advocacy support in this or other areas please do not hesitate to contact us for more information.

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Abid Malik
Senior Associate
Abid brings a unique combination of over 20 years of political, government, private sector, policy, eHealth and technology experience.
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