Case study 3: Canada’s Primary Health Care Transition Fund

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Part of A Transformation Fund to sustain the future of the NHS

The CAD800 million (£360 million) Primary Health Care Transition (PHCT) Fund was in place from 2000 to 2006 and provided transitional costs to support the transformation of Canada’s primary health care system. Most of this funding was allocated to the provinces, but a proportion was retained centrally to be distributed for specific projects and initiatives.


Canada’s health care system is publicly funded, and mostly free at the point of use, based on a regionally administered public insurance programme that funds mainly private provision. Canada is made up of ten provinces and three territories. The provinces receive federal funding for health care and have to agree federal mandates (such as universal access to essential care) but each has jurisdiction over health care. This means that provinces are able to determine what is considered essential care, as well as how it is delivered, leading to variation between provinces.

The development of primary care in Canada is an ongoing process driven by a number of policy initiatives and financial incentives, as well as by the political environment and demand for change. The fund was put in place by politicians in response to growing political and public concern about access and quality of primary care, given that its performance and infrastructure was lagging behind those of its international peers. There was also growing dissatisfaction among family physicians with their working conditions and ability to provide high quality of care. During the same period, economic downturn led the government to focus on efficiency, and provinces were integrating health services (including community, acute and residential) within their regions.

The PHCT Fund was one of a number of initiatives implemented to strengthen and develop primary and community care. This included a CAD16 billion Health Reform Fund targeted at home care, drug coverage and primary care, and a national target for 50 per cent of Canadians to have 24/7 access to multidisciplinary primary care teams by 2011. There have also been initiatives to develop electronic health records and a human resources (HR) strategy.

Intended benefits

All initiatives funded by the PHCT Fund had to be linked to one of five aims:

  1. To increase the proportion of the population with access to primary health care organisations that are accountable for the planned provision of comprehensive services to a defined population
  2. To increase emphasis on health promotion, disease and injury prevention, and chronic disease management
  3. To expand 24/7 access to essential services
  4. To establish multidisciplinary teams, so that the most appropriate care is provided by the most appropriate provider
  5. To facilitate co-ordination with other health services (such as specialists and hospitals).

Process and management

Provinces were required to submit a proposal to a national working group (which included provincial representatives), which assessed whether it met the objectives and eligibility criteria. If it did, a Contributions Agreement was signed, with a yearly budget that outlined how and when the money would be spent. It is not clear to what extent provinces were held to account for these agreements, and the PHCT Fund has been criticised for not holding provinces to account.

Provincial governments took different approaches to distributing their allocations. Some developed their own proposals process, accepting applications and giving out grants. In some provinces these were focused on certain areas, such as developing electronic health records or developing teams. Some provinces also took a directed funding approach and invested in research.

Medical associations were engaged in the PHCT Fund from the outset, which meant that transformation was, in many cases, physician-led. For example, in Ontario, the College of Family Physicians received funding for a workshop to develop the research agenda for the fund and to hold stakeholder meetings with organisational leaders.

Ontario’s programme of administration

Ontario split its provincial envelope (CAD213 million) into operational grant funding and capital grant funding. The capital grant funding was to support one-off capital costs associated with the integration of primary health care practitioners into interdisciplinary primary care models. These were generally awarded to practices and were used to fund projects such as:

  • increasing capacity by equipping a new treatment room or setting up a new nurse practitioner clinic
  • upgrading practice telephone or computer systems such as patient database management systems or electronic health records
  • renovation or construction of office space – for example, to enable a nurse practitioner to be available on-site.

The operational grant funding (CAD75 million) focused on developing interdisciplinary primary health care. Funded projects included academic research to develop or evaluate programmes, demonstrations or pilots of projects (particularly for mental health and rehabilitation), developing multidisciplinary teams and integration, training and education, and investment in IT systems.

Funding arrangements

The fund comprised CAD800 million and was aimed specifically at transitional costs. It was split into five envelopes. The provincial envelope accounted for 75 per cent of the fund (CAD600 million) and was used to support provinces to reform their primary health care systems. This was allocated on a per capita basis, and smaller provinces received an additional CAD4 million each to ensure sufficient funding for initiatives on significant and sustainable scale.

The remainder of the fund (CAD200 million) was split into four envelopes to support cross-province initiatives, pan-Canadian initiatives and specific envelopes for minority groups (one for aboriginal health care and one for language minorities). These national and minorities envelopes were available for federal, provincial/territorial governments, health organisations and not-for-profit organisations to apply for. Initiatives for any of the five funding envelopes had to support at least one of the five key national objectives.

The fund was used to cover costs of (for example): pilots and demonstrations; workshops and knowledge sharing events; project management staff; IT systems; retro fitting (such as equipping a new treatment room); research and evaluation. A set of eligibility criteria aimed to focus the money on the transitional costs and ensure that money was not spent on things that would require ongoing investment. For example, funding new buildings was not allowed, nor was funding additional clinical personnel, unless it was to backfill a secondment to a project management role.


Many provinces were already taking steps to improve primary care and it is difficult to determine what can be attributed directly to the PHCT Fund, because the literature often focuses on primary care reform in Canada more generally. However, there are some ways in which the Fund is considered to have had more of an impact than others.

As one of our interviewees highlighted, first and foremost, the Fund focused the attention of policy-makers, system managers and researchers on primary care. It brought together academics and policy makers from different fields, such as health and the social sciences, and established some long-lasting connections and partnerships. The Fund provided an opportunity to bring about change in primary care, following a period of austerity.

Second, involving clinicians in the Fund and transformation proposals from the outset enabled quicker implementation and aided buy-in. The need to involve patients as part of the decision making process was also noted.

Third, building collaborations and relationships enabled continued sharing of knowledge and provided support for cultural change, leadership and knowledge sharing. The importance of evaluation was highlighted throughout, with part of the Fund earmarked for knowledge sharing and evaluation. The national evaluation synthesis of the PHCT Fund highlighted the importance of sustained effort to support knowledge transfer and dissemination to ensure that best practice is adopted.

Finally, the Fund led to a rise in collaborative and multidisciplinary primary care providers, such as Family Medicine Groups in Quebec. It enabled investment in primary care IT systems. In 2013, the Health Council’s annual report found that the use of electronic medical records had more than doubled since 2006 (one of the aims of the PHCT Fund), and electronic prescribing had increased from 11 per cent in 2006 to 43 per cent in 2012. An evaluation of primary health care reform highlighted positive developments in Canada’s primary care as ‘an increase in collaborative practices, openness to change and quality improvement, more patients being registered, changes in remuneration to more blended forms of payments and improvements in chronic disease management’. However, it found little evidence of positive change in accessibility, in the use of emergency services or in access for vulnerable populations.

Overall, some provinces may have taken better advantage of the opportunities brought about by the Fund than others, leading to uneven progress.


Time and resources

The PHCT Fund has been criticised for funding a large number of short-term initiatives without strategic planning or oversight. In many cases it took a while before funds were actually being spent, leading to tight timescales in which to complete projects and some poor investments being made. In Ontario, for example, guidelines for applicants were published in May 2003, with application deadlines a few months later; all projects had to be completed by 2006.

Engagement, accountability and evaluation

At a national level, having a set allocation per province led to complacency, with some provinces assuming they would receive funds regardless of the quality of their proposals. There was a requirement for provinces to produce update reports, but it was not clear what happened to these or how they were used. Matched funding was suggested as a means of ensuring engagement and accountability. At a provincial level, governments lacked the capacity to monitor initiatives or check on delivery. Difficulty in developing indicators to monitor impact was highlighted as a challenge; ensuring that initiatives were outcomes-focused, with improvements in patient care as the ultimate goal, was seen as key.


Although the Fund was aimed specifically at transitional costs, many stakeholders raised concerns about sustaining changes after the Fund had closed.

More on the case for a Transformation Fund for the NHS