fair shares for the zone: allocating health-care ...

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tion, that of Sioux Lookout Zone, within the context of the total provincial population. We argue that a fair share of provincial health resources for any population ...
j O H N EYLES Department of Geography, McMaster Universily, Hamilton, Ontario, Canada

L8S 4K1

STEPHEN BIRCH Centre for Health Economicsand Policy Analysis and Department of Clinical Epidemiology and Biostatistics, McMaster University, Hamilton, Ontario, Canada L8S 4K1

SHELLEY C H A M B E R S Department of Clinical Epidemiology and Biostatistics, McMaster University, Hamilton, Ontario, Canada L8S 4K1

FAIR SHARES FOR THE ZONE: ALLOCATING HEALTH-CARE RESOURCES FOR THE NATIVE POPULATIONS OF THE SIOUX LOOKOUT ZONE, NORTHERN ONTARIO

The purpose of this paper is to explore issues of healthcare resource allocation for a Canadian native population, that of Sioux Lookout Zone, within the context of the total provincial population. We argue that a fair share of provincial health resources for any population must be based on a population needs approach. The paper begins by establishingamethod tomeasurea fair shareof healthcare resources. It goes on to establish why a fair share is important in the light of native health conditions in general and with respect to this specific population. The fair share is then calculated and illustrated with reference to particular health-care programs. Finally, there is discussionof the methodological and policy issues that arise from this research.

approche fond& sur les besoins d'une population pour attribuer sa juste part des ressources provinciales en sante i toute population donn&. L'article commence par etablir une methode de mesure de la distribution equitable des ressources en soins de sante. I I continue en montrant les raisons pour lesquelles une distribution equitable est importante la lumi6re des conditions de sante des autochtones en general et en ce qui concerne cette population en particulier. La repartition 6quitable est alors calculee et illustr& en se r6f6rant i des programmes de soins de sante specifiques. Enfin, les probkmes de methodologie et de politique que cette recherche souleve sont ensuite discutes.

Le but de cet article est d'explorer les possibilites d'allocation de ressources en soins de sante i une population autochtone canadienne, telle que celle de Sioux Lookout Zone, en prenant en consideration la population totale de la province. Nous argumentons en faveur d'une

Increasing attention is being paid in Canada to native issues. On the one hand, there is increasing recognition of the relative disadvantages and lack of opportunities facing native populations as compared to their nonnative counterparts. For example, relative to non-native

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The Canadian Geographer / Le Gbographe canadien 38, no 2 (1994) 134-50 0 / 1994 Canadian Association of Geographers / L'Association canadiennedes ghgraphes

Allocating Health-Care Resources for the Native Populations of the SLZ 135

populations, natives tend to have lower incomes, higher rates of unemployment, and poorer housing and are at greater risk of dependency on government transfer payments. On the other hand, considerable concerns have been expressed and documented about the quality, quantity, and appropriateness of services provided to native populations in response to these needs. In particular, major concerns have been expressed about how existing mechanisms for allocating resources for social programs fail to reflect the needs of native populations both in absolute terms and in relation to the needs of the nonnative populations. In this paper we report on a study to establish a share of current provincial resources allocated to health-care services in Ontariofor the native populations resident on reserves in the Sioux Lookout Zone (SLZ) in Northern Ontario (the Nishnawbe-Aski Nation -also referred to as the ‘study population’). The importance of health and health care in ensuring high levels of quality of life has been established in both the social indicators literature (see, for example, Eyles 1990) and in government documents at both the federal and provincial levels (e.g., Epp 1986; Ontario 1991). While health-care resources are increasinglyseen as only one factor contributing to health status (Evans and Stoddart 1990), there i s no question in this debate that such resources are unimportant or that they should remain inequitably distributed. In fact, the distribution of health-care resources to native populations in Canada is quite complex. As citizens, they are entitled to the services provided to all residents and underwritten by the provincial government. The federal government is involved in funding a proportion of the costs of these services through block funding under the Established Programs Financing Act. Further, the federal government provides considerable direct funding for health-care services on native reserves. These funds are not intended to substitute or replace services provided under provincial programs, Indeed, much of the federal funding is provided for services which are not eligible for provincial funding (i.e., non-insured services). In this paper, we shall therefore concentrate on the provincially funded services. The main purpose of the paper is to consider how a needs-based allocation can be derived and, using the approach, to show what the fair (i.e., needs-based) share of provincial health-care resources of SLZ is. This may therefore be seen first and foremost as an applied study in medical geography, and the paper is structured in the following way. The next section provides the rationale for following a needs-based approach. We then develop a method for arriving at a needs-based share. We go on to The Canadian Geographer / Le Ghgraphe canadien 38, no 2 (1 994)

address the question why a fair share of resources is required, describing the health conditions of native Canadians in general and those ofsLz in particular. The method is then applied to health-care programs to determine the fair share for SLZ. The paper ends with a discussion of methodological and policy issues. The Rationale for a Needs-based Approach

The core of the needs-based approach consists of estimating the relative need for health care in the study population by comparing levels of health-care needs in this population with levels of health-care needs in the rest of the provincial population. It should be emphasized that we use population-based measures of need rather than the more commonly used and moreeasily derived utilization rates. Basing resource allocation on the relative health-care needs of a population represents a major change from the existing approaches to the allocation of health-care resources in Ontario (Eyles and Birch 1993). Currently allocations are determined largely by past resource allocations and the distributions of health-care facilities and providers of health care. In particular, hospitals are funded on the basis of global budgets which are determined, by and large, by previous years‘ expenditures. In settingthese budgets, no particular consideration is given to characteristics of the population being served, asdistinctfrom patientcharacteristics, so that any existing inequalities in health-care distribution are perpetuated. Physicians are funded largely by fee-for-service. Even where a population-basedapproach currently exists such as the funding of Health Service Organizations by capitation payments, the capitation rate relates directly to levels of utilization in the fee-for-service sector. As such, resource allocation is determined by the number and type of services provided, which are related in part to the number and type of physicians. But the distribution of physicians may or may not correspond to the distribution of population needs for health care. A population-needs-based approach to health-care resource allocation is adopted for conceptual reasons. From this perspective, health-care provision in Canada and Ontario, enshrined in the Canada Health Act (1984) (see Health and Welfare Canada 1990) and in the health goals and vision of health in Ontario (Ontario 1987; 19891, is based on the philosophy of providing healthcare services in accordance with health-care needs. If health-care resource allocation i s to be consistent with this philosophy, it must reflect the health-careneedsofthe population. Yet most approaches to health-care resource appear to be inconsistent with this philosophy, being

136 John Eyles, Stephen Birch, and Shelley Chambers .

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based largely on existing utilization of services, which may or may not reflect variations in population health risks and health-care needs. Indeed, the current usebased approach simply perpetuates any existing inequalities in levels of provision among population groups. Under a needs-based approach, resource allocation is based directly on the relative needs of the populations being served. This approach also breaks any direct links with current and past utilization and encompasses aspects of both efficiency and equity in the resulting population distribution (although not necessarily the use) of health-care resources. Efficiency in this context is concerned with maximizing the health status improvements produced from a given amount of health-care resources. Under the needs-based approach, populations with great health-care needs, and hence greater potential for health improvements, are allocated greater levels of resources. Equity, on the other hand, introduces notions of fairness into the allocation of health-care resources. The needsbased approach provides equal resources for populations with equal needs (or what i s often referred to as horizontal equity) but unequal resources for populations with unequal needs (vertical equity). In essence, therefore, the method involves calculating separate allocations for each health-care program which, when aggregated, produce a global (i.e., all-program) allocation. Accordingly, adjustments can easily be made to the calculated allocations to exclude particular programs if required, or to include other programsthat are not currently covered by the allocations. It is important to emphasize that the methodology is concerned only with resource allocation among populations. Monitoring the appropriateness or efficiency of the use of resources within populations is a separate question which, like used-based systems of resource allocation, requires additional policy mechanisms (e.g., performance appraisal systems).

Developinga Needs-based Approach The simplest form of population-based allocation would be to allocate health-care resources on an equal percapita basis. But the needs for health care are not equal, for all individuals and adjustments to an equal per-capita resource allocation are required if the resulting allocations are to be consistent with the stated objectives of the health-care system. The framework used here is to make adjustments to equal per-capita allocations to allow for two types of influence on relative needs for care and hence the resource requirementsfor the study population: influences of demography and influences of health risks ____ --

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The < anadtan Geographer / Le Geographe canadten 38 no 2 ( 1 994)

and relative levels of need for health care, over and above those indicated by demography. To make these adjustments, the calculations consist of two stages.’ First, allowance is made for age and gender differences in healthcare needs. The calculated per-capita allocation is adjusted to reflect the particular age / gender distribution of the study population. For each service program, current provincial mean allocations by age and gender (where available) are applied to the study population. This generates a study population age and gender-adjustedallocation which is then expressed as a percentage of the total provincial program allocation. This percentage share is then applied to the planned total program expenditure to produce an age- and gender-adjusted dollar share of the program budget and can be expressed in average percapita terms bydividingthisdollarfigure bythesizeofthe study population. For services where eligibility is not universal (e.g., Ontario Drug Benefit Plan - a program of funding prescribed drugs for seniors in ambulatory care), the adjustment is based on the number of individuals in the population eligible for the program, as opposed to the total study population. Secondly, allowance is made for variations in health risks and the need for health care not explained by age and gender alone (e.g., the risks to health and needs for care may differ between females aged 25 to 45 in SLZ and females aged 25 to 45 in, say, Metro Toronto). For each service program, an index of the population’s relative need for care is applied to the age- and gender-adjusted resource requirements. This ‘needed’ level of services is then expressed as a percentage of the total program, and total population and per-capita dollar allocations are calculated following the approach in the first stage. The standardized mortality ratio (SMR) for the study population i s used as a proxy for need for health care in the allocation formula for several programs. The SMR is the ratio of the number of deaths observed in the study population to the number of deaths expected if this population had experienced the same age- and gender-specific rates of mortality as the standard population (in this case, the province). In previous approaches to needs-based allocations for Ontario, deaths in age groups 65 and above were excluded from the calculations of the SMR, in order to enhance the role of the SMR as a measure of premature mortality (Eylesetal. 19911. In particular‘all-age’smsare biasedtowards deaths i n older age groups because theSMR is weighted in line with an age group’s share of total expected deaths. But differences in age-specific death rates in younger groups are more likely to reflect relative needs for health care than differences in death rates in the

Allocating Health-Care Resources for the Native Populations of the SLZ 137

older age groups (Mays and Bevan 1987). Chronic conditions in the elderly give rise to high demands for services but do not generally result in deaths, so the mortality experience of the elderly is likely to reflect the accumulated hazards of a lifetime rather than current circumstances. The upper age limit to be used is subjective, and other researchers have argued that expanding the age group on which SMR are calculated to 0-74 provides a more appropriate measure of premature mortality (Townsend et al. 1988). Consequently, in this study, SMRS based on deaths in age groups 0-74 are used as a proxy for health-care need, but the sensitivity of the resulting allocations to the use of SMRS based on alternative age groupings will be discussed in our final section. The reasons for choosing the SMR as an indicator of population need are both conceptual and practical. From a conceptual point of view, population-based mortality measures are independent of health-care utilization rates and hence avoid introducing any existing inequalities in the availability or use of services into future allocations. Furthermore, previous research in the U.K. has shown thesMR to be a valid indicator of health-care needs (Bennett and Holland 1977) and there is some indication that the relationship between SMRS and health-care needs analysed at the small-area population level may be linear (Brennan and Clare 1980). From a practical point of view, the accuracy of mortality records is not generally problematic, particularly for the nonelderly (although this may not always be the case for native populations on reserves - see below). The data are collected continuously for the whole population and reported frequently. SMRS have been found to correlate closely with various indicators of social deprivation and socioeconomic status which are not generally recorded as comprehensively or frequently as mortality (Forster 1979; Townsend et al. 1988). Finally, SMRS can be calculated using existing administrative data sets for precise geographically defined populations. It is not suggested thatsMRs are a perfect indicator of the relative need for health care. Indeed, such a measure is particularly inappropriate as a proxy for relative need for some services (e.g., mental illness programs, obstetric care) and other population-based indicators were therefore chosen. For some other programs ( e g , health promotion and protection), no satisfactory indicator of relative need was found, and so the allocations of these programs are based on demographic adjustments alone. Although more research is required to evaluate the validity of the SMR and other indicators of relative need as proxies for the relative need for health-care in Canadian The Canadian Geographer/ Le Cbographe canadien 38, no 2 (1994)

populations in general and native populations in particular, for the purposes of the presentstudy, and the potential application of the proposed formula on a continuing basis, thesMR appears to be the best available indicator of relative need for most programs. If this, then, is a method of allocating health-care resource shares to populations, why is it relevant to utilize such an approach for SLZ?To address the question, we review native health conditions in general and in the zone in particular.

Whya Fair Share Is Important: Native Health Conditions In many respects the issue of native health inequalities is summarized by Young (1984, 257): With cultural backgrounds widely divergent from those of the dominant Euro-Canadian society, Indians have continued to suffer from the effects of considerable political, social and economic underdevelopment. In terms of health status indicators, numerous studies and official statistics consistently demonstrate a wide gap between Indian and non-Indian Canadians.

More specifically, in 1961 life expectancy for native infants was about 10 years less than that of the general population, although for natives surviving to middle age, additional life expectancy was only slightly below the national average (Ministry of Indian and Northern Affairs 1980). By 1971, although life expectancieshad increased in both groups, the gap between natives and the general population remained. Similar findings are observed for the 1980s. Between 1980 and 1985, life expectancy at birth among native populations increased from 62.6 to 65.9 years, some 9 years below the Canadian average (Assembly of First Nations 1988). It should be noted that nativesage 80 and over had greater additional life expectancy than the general population. The overall mortality rate in 1985 for native populations was 1.04 per 1000 compared with 0.72 per 1000 for all Canadians. The useof standardized mortality ratios (SMRS) provides a more precise figure for comparison gender because itallowsfortheeffectsofdifferentageand distributions of the populations being compared. In a study of the registered Indian population of Saskatchewan, an SMR of 1.9 was observed (Brady 1984; Hay 1988), indicating that there were 90 percent more deaths occurring in the native population during the period studied than would be expected based on the age- and gender-specific death rates observed in the province as a whole. In a national study of mortalityon Canadian native reserves from 1977 to 1982, it was found that age-specific

138 John Eyles, Stephen Birch, and Shelley Chambers __ .________

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Table 1 Indian Reserve Areas and Canada, 1977-1982 (Age-Specific Mortality Rates p e r 100,000) Males

Females

Age

Reserves

Canada

Ratio

Reserves Canada

Ratio

1-9

118.4 218.1 438.7 51 7.1 716.4 1131.4 1507.3 5883.6

49.8 92.5 158.0 163.9 391 . I 1054.4 2544.7 7943.9

2.38' 2.36' 2.78' 3.16*

91.3 85.1 184.2 276.2 424.8 854.4 1578.8 4228.8

2.46' 2.29' 3.53' 3.28. 1.97. 1.60" 1.27* 0.78'

10-19 20-29 30-39 40-49 50-59 60-69 70'

1.83* 1.07 0.99 0.75'

37.2 37.1 52.1 84.2 215.7 535.3 1245.7 5449.2

* p < 0.01 IOVRC~

Mao el al. 1986. 264

all-cause mortality rates were two to three times higher for natives up to the age of 50 (see Table 1). Analysing the same data by cause of death,sMRs for ages 1 to 69 indicated elevated risks among both genders for all major forms of accident and violence (SMR male 3.7, female 3.2). Frideres (1988) noted that ratesofsuicideand self-inflicted injuries among native groups are three times and homicide rates twice the rates for the population as a whole. The SMR was also greater than 3.0 for alcoholism among male residents of native reserves and for alcoholism, diabetes, cirrhosis, pneumonia, and infectious and parasitic diseases among female residents of native reserves. Mortality rates for all cancer sites combined, however, were lower than the corresponding Canadian rates for both genders. Similar mortality experiences have been noted in specific native communities. For example, Jarvis and Boldt (1982) and Hislop et al. (1987) found higher rates of accidents and violence in Alberta and British Columbia, respectively, while Young and Frank (1982) noted the lower rates of cancer mortality in the Sioux Lookout Zone. Indeed Young (1987) shows that in the Sioux Lookout Zone population, neoplasms and diseases of the circulatory system are between two and three times less likely to occur than in the Canadian population as a whole, but injuries and poisonings are about four times more likely, and diseases of the respiratory system twice as likely to occur in the Zone population (see Table 2). In terms of overall risks of death, the all-cause SMR for nativepopulationswasfoundtobe 1.65formen (p