A new direction: Canadian lessons from international experiences with strategic resource reallocations

Health expenditures represent an ever-growing part of GDP, rising from 3% of world GPD in 1948 to 7.9% in 1997. This continuous increase in spending worldwide has prompted many countries to implement various cost containment strategies (e.g., service substitution, health premiums, desinsuring of healthcare services, referral of patients to other sectors or agencies). While these rationing mechanisms have had some impact, health expenditures are still increasing at rates exceeding the overall economic growth in many OECD countries. One consequence has been an increased interest in strategic purchasing: identifying the best interventions available and the best payment mechanisms. The purpose of the study is to (a) compare selected international experiences of fund reallocations by public and private funding agencies and the struggle to reconfigure state market relations when conditions change; (b) assess the extent to which resource reallocations meet tests of allocative efficiency, fair financing, stewardship, and citizen engagement; (c) test the transferability and acceptability of best practices in resources reallocations to Canada, (d) develop a decision making procedure in which normative judgements inherent to resource re/allocation decisions can be explicitly discussed, and (e) develop policy recommendations for Canadian decision-makers engaged in reforming the health system.