Rising Physician and Drug Costs Through an Equity Lens

The latest Canadian Institute for Health Information report on health care expenditures highlighted that hospitals, drugs and doctors are the largest components of overall spending.  Spending has been increasing fastest in physician services and drugs. Some media discussion has correctly highlighted how the incentives built into fee-for-service payment – to see as many patients as quickly as possible — and drug manufacturing and prescription patterns have huge quality implications.  At the same time, these funding patterns have equally critical adverse effects on equity.

Payment by procedure is also a disincentive to treat patients with more complex needs. Those disadvantaged populations facing the most pervasive health disparities also tend to have more complex needs — think of poor immigrant seniors or people in poor housing with multiple chronic health conditions.  There are funding and practice models that mitigate quality problems to some degree, such as the more multi-disciplinary and integrated family health team (FHT). However, we still need to ensure that they are located in areas where need and disparities are greatest.  Early research indicates that FHTs have been mostly benefiting more advantaged populations.  We already have solutions: physician salary-based models such as in Community Health Centres avoid these adverse incentives, and have the added equity benefit of being located in exactly those communities that need equitable access to primary care the most.

Controlling rising drug costs is certainly critical.  But the equity problem is that so many people do not have employee or other benefit plans and have to pay for prescription drugs privately.  Those who cannot afford the often very high cost simply go without.  Drug policy reform must not just control costs through more effective procurement, but ensure all have access to the medicine they need regardless of ability to pay.