Can We Get Better for Less: Value for Money in Canadian Health Care

Abstract

Over the past decade, Canadian health care expenditures have grown at a rate significantly higher than that of the growth in the economy and the growth in combined federal-provincial tax revenues. However, allocating an increasing amount of resources to health care does not necessarily lead to better health care, and despite significant investment, Canadians do not seem to receive sufficient value from the health care system. This paper aims to analyze the prospective rationale for emphasizing the concept of value-for-money in the largest segment of the Canadian health care system – hospitals. The results of the analysis show that a lack of activity-based or patient-based funding historically may have limited hospitals’ ability to assess their own effectiveness and efficiency. A focus on outcome measures alone may not be sufficient to assess and evaluate management for the stewardship of resources allocated to them. Outcome measures may not reflect how much value-for-money results from health care spending, while introducing incentives for improving quality of health care is not sufficient to improve efficiency of health care delivery.health care, hospitals, value-for-money measurement