CATEGORY: EQUITY

Sub-categories/nodes Additional dimensions Principle 8. The amount of funding a PHU

receives should be sensitive to the presence of high-risk vulnerable populations in a PHU’s designated service area

1. Servicing priority populations

2. Balancing incentives and resource requirements for health equity issues across PHUs

3. Ontario Marginalization Index Principle 9. Under-funded PHUs should be

brought up to the level of the top PHUs, rather than bringing the top funded PHUs down

1. Current variations in budget sizes across PHUs 2. Shifting towards a more equitable distribution of resources across PHUs

Principle 10. Funding decisions should be based on measures of health outcomes and disparities in health outcomes across jurisdictions

1. Linking funding to health outcomes

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The challenge of balancing resource needs for health equity issues with incentivizing better performance at a health unit level also emerged as an important sub-theme in informant dialogue around this particular principle. Some public health professionals felt that if PHUs were simply granted additional resources to address equity issues within their jurisdictions, it could disincentive long-term efforts or investments in identifying the underlying causes of health inequalities within their designated service areas:

My main concern with funding based on equity is that you create a disincentive to address inequity. So if a PHU gets extra money because it caters to a population that is significantly disadvantaged compared to the general population, that health unit has no incentive to actually change that inequality, because they get paid for it… Requests [for additional funds to service vulnerable populations] must be absolutely evidence based. [Health units] should go out into their communities, and figure out what the inequities are, and what the barriers to access might be, and put together a proposal to address a specific barrier in a specific

population, rather than simply ask for extra money because their population as a whole is disadvantaged. (Participant 3)

Several informants emphasized that the provision of additional funds to service high-risk vulnerable sub-groups should be supported via a transparent, evidence-informed review of how funds that are granted to PHUs to service high risk vulnerable communities are being utilized to address health disparities. The Ontario Marginalization Index (ON-Marg) was brought up by a number of interviewees as a possible tool to consider in examining health inequalities to inform funding decisions. Developed by the Center for Research on Inner City Health (CRICH), ON-Marg is an index based on census and geographic data designed to identify and address various aspects of marginalization in both rural and urban Ontario (CRICH, 2006). This tool is specifically intended to be used in conducting needs assessment and health service planning, with respect to health

inequalities and focuses on four specific dimensions of marginalization; residential instability, material deprivation, ethnic concentration and dependency (CRICH, 2006). In fact the ON-Marg tool was discussed by multiple informants as one of the potential components of alternate funding

approaches under review by the FRWG. Across interviews, there was strong support for a systematic inclusion of health equity considerations into resource assessments and the distribution of funds across health units. Balancing the provision of additional resources with incentives to encourage PHUs to address the underlying causes of health disparities in their respective jurisdictions was suggested as another important feature to consider in the implementation of this particular principle.

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4.5.2.2 Principle 9: Under-funded PHUs should be brought up to the level of the top PHUs, rather than bringing the top funded PHUs down

Another aspect of integrating equity lenses into public health funding suggested by

informants was oriented around moving towards a more equitable distribution of resources across the 36 health units. There is a great deal of variation in per capita budget allocations across PHUs with the highest board of health expenditure estimated at $193.6 million (Toronto Public Health), and the lowest estimated at $5.7 million (Timiskaming Health Unit) (MOHLTC, 2009). This prominent variability in board of health expenditures across the 36 health units may be linked back to historical allocations based on municipal support for public health, rather than more empirically driven

approaches towards the distribution of resources across PHUs. Political influences and the advocacy/lobbying power associated with different boards of health and historical variations in municipal buy-in were discussed as key factors that may have contributed to current variations in budgets sizes across health units. Some informants suggested that health units with stronger ties to policymakers and the provincial government tended to have a more prominent voice in advocating for and receiving additional funds:

Invariably what happens with provincially-centered [PHUs]… is that as you get closer to the center, the bigger mass has the bigger voice, the bigger whine - and invariably the large central health units are resourced well, while the other health units continually end up getting the short end of the stick because there's less advocacy power. (Participant 12)

Many public health professionals suggested that any changes to the status quo should be preceded by a critical review of PHU budgets would help to identify both under-funded and over- funded health units, and establish a baseline understanding of where the greatest resource needs lie, and what levels of resources are required to address those immediate gaps:

The place to start is to look at the historical gap and do an analysis to determine which boards of health are underfunded and need to be brought up to a standard; and then once you've leveled everyone up, then definitely population or needs-based funding makes sense. (Participant 8)

Another aspect of incorporating equity lenses into allocation mechanisms was discussed in light of transitioning to alternate funding approaches. Shifting to a different funding framework could cause drastic reductions in PHU budget sizes. For instance, over-funded health units may face serious budget cuts whereas underfunded PHUs could receive prominent increases. A ‘red-circling approach’ was suggested by many interviewees as a critical component to consider in broader efforts around equalizing PHU budget sizes. Under a red-circling strategy those PHUs who may be receiving more resources than empirically warranted would be allowed to retain their current allocation, i.e., existing budgets would be frozen at a ‘holding level’ (Treasury Board of Canada Secretariat, 2013), and any

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new/additional funds would be directed towards underfunded PHUs to ensure over time an equalization of resource distribution across jurisdictions. Over time a gradual introduction of equalizing measures was emphasized by several interviewees, who suggested that a long-term lens should be applied to any transition towards equalization to ensure that PHUs are not decimated by drastic funding cuts:

Also critically important is going to be, over what timeframe are you going to implement it? And, are you going to red-circle these health units? For instance, if you've got a health unit that, you determine with your new formula, was getting too much money, all of a sudden to cut them back 25% if that's what a new funding model shows that it should be, is going to be devastating for that health unit. And, what the alternative might be is that you leave them where they are but they don't get any increases for the next whatever number of years, until the have-nots, the ones that were below average, the money goes to them to get them up to where they need to get to. (Participant 10)

An objective funding formula that most people can either agree with or live with would have to be applied over a long period of time to be able to avoid complete chaos. I mean, could you imagine a health unit saying: “As of this year you’re going to get a 40% drop”… So that, you’re going to have to start firing people, and move out of buildings - it’s going to be a disaster. And those that are getting a 40% increase… They wouldn’t even know what to do with it, this is more money then they can even imagine… I think a transition from the subjective formula that we supposedly have now into whatever objective formula is decided upon… will have to be a very gradual transition. (Participant 6)

I think what you would have to do [if there was a shift towards equalizing health unit budgets], is you have to have a lot of notice. If you're going to implement a funding formula and there's going to be winners and losers, first of all, it has to be very transparent so people understand that what the decisions are based on. Two, you have to give boards of health lots of notice because 90% of your funds are labor costs and we want to be able to transition to a new funding formula without penalizing people so that you had a two or three year window, you could plan for a gradual decrease. So if you had to decrease your staffing, you could do that through retirements, for example, so you don't have to lay people off. I think you would want to minimize the harm being done to individuals as you transition over, and so this has to be done very gradually and with lots of notice. (Participant 8)

Informants suggested red-circling existing budgets would be essential to ensure that any significant changes in allocation practices do not decimate health units to the extent that PHUs have to make drastic cuts to staff or compromise programmatic capacities to fit within revised allocations. Some interviewees suggested that PHUs that are selected to receive additional resources should be provided with systematic guidance and support (from the provincial government, PHO or other PHUs) on how to best utilize new funds to maximize investment potential for improvements in population health. Many public health professionals felt this was an important guiding principle to consider in distributing resources across PHUs. An empirically supported review of existing budgets (and related disparities between jurisdictions) and a systematic but gradual approach toward

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equalization were the main points stressed by informants in their feedback around the practical application of this particular principle.

4.5.2.3 Principle 10: Funding decisions should be based on measures of health outcomes and disparities in health outcomes across jurisdictions

Several public health professionals in their discussion around the integration of health equity lenses in allocation decisions mentioned the idea of health outcomes as determinants of health inequalities and demonstrated resource need at a PHU level. Health outcomes were discussed as empirically driven indicators of health disparities and associated resource needs. Life expectancy and standardized mortality ratios (SMR) were proposed as potential outcome measures to consider in developing comparisons of health status across jurisdictions to guide the distribution of resources across PHUs. Several informants suggested that health outcomes and resulting disparities across jurisdictions indicate where the greatest resource needs lie, and proposed that they should be used to guide resource distribution and drive improvements in health disparities:

Health outcomes are not a proxy measure. They show actual disparity in health across the province. Life expectancy is an example of a health outcome measure that varies across the province… and serves as evidence for the need to increase funding to level up health units with lower health outcomes… How would cutting the budget [of those PHUs who are underperforming on health outcome measures] and giving more money to somebody who already has excellent health outcomes make any sense? If Peel Region has the lowest amount of funding, but they still actually have the healthiest population, then they don’t need more money… (Participant 13)

Aligning the means to identify and address gaps in health outcomes with incentives to

improve performance was another significant theme that emerged across interviews. Some informants felt that the provision of resources to PHUs simply on the basis of disparities in health outcomes across jurisdictions may create a climate of negative incentives for better performing PHUs, and could discourage health units from striving towards improvements in health outcomes and eliminating the underlying causes of health disparities within their respective jurisdictions:

If you have a population for example that has high rates of cardiovascular disease, should that health unit be getting more money? Because it's like a double-edged sword. You're rewarding poor health, and yet they have a need to address that issue. But it's disincentive to make it better, because you get more money if it isn't. So, should health units be penalized for doing well? (Participant 10)

Overall, many informants felt that health units with poorer health outcomes should not simply

be granted additional resources without a rigorous examination of the causes of poor health outcomes in a given jurisdiction/community, and the establishment of a clear plan to address the underlying causes of health disparities in their respective jurisdictions. Interviewees indicated that shifting

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towards funding based on health outcomes requires a careful review of the extenuating circumstances and social conditions that influence gaps in health outcomes within and across PHU jurisdictions. Many public health professionals stressed that PHUs should be asked to provide a clear justification for any additional resource needs that they request to deliver specific plans or programs to improve health outcomes (and their underlying determinants). Establishing consensus around a core set of health outcomes as indicators of a PHU’s resource needs, and the difficulty associated with balancing the provision of additional funds with demonstrable efforts to address the underlying determinants of health outcomes were discussed as potential challenges with the adoption of this particular principle. 4.5.3 Transparency-accountability-based principles

The fourth category ‘Transparency and Accountability’ included principles related to the integration of transparency in the procedures that inform budget development, and the adoption of greater accountability in linking performance indicators to resource needs at a PHU level. Two of the 12 principles proposed by public health professionals were linked to this particular category. Table 11 provides an overview of the two principles along with additional dimensions discussed by informants in terms of the design and implementation of each principle.

Table 11: List of transparency and accountability-based principles

4.5.3.1 Principle 11: Funding for PHUs should be determined via a process that is sufficiently transparent

In terms of the current funding arrangement, informants felt that the processes and variables that guide the distribution of resources across health units remain unclear. Many of the public health professionals that were interviewed expressed a strong interest in seeing a shift towards more transparency in the distribution of funds across health units. Several interviewees suggested the adoption of a formula-based approach (with specific justifiable criterion) to calculate or justify

CATEGORY: TRANSPARENCY AND ACCOUNTABILITY