Changing how we fund hospitals to put the patient first could help eliminate health-care wait times, policy experts say
Unlike global budgeting, activity-based funding for hospitals allocates funds according to the actual services provided. Bacchus Barua argues that this model could reduce wait times and would create a competitive and dynamic environment where funding follows the actual patients who need it.
As staff we used to know budget time was coming when all the depts were using up funds by another round of unnecessary repairing / repainting. The use it or lose it funding model seems so antiquated & ridiculous. If a department/hospital overall comes in under budget they should be rewarded and model what they were doing right.
20th November 2023 at 8:20 am
RJKWells
A line used by many government agencies is “March Madness” – the “antiquated & ridiculous” practice of blowing what remains in the cupboard as the fiscal year comes to an end. Those who operate in this manner fail to understand there is a limit to what we can give.
Rewarding departments that come under budget recognizes excellent stewardship of tax dollars. Putting fences around those budgets in Q4 is another way ensuring responsibility and holding all managers to account.
20th November 2023 at 10:05 am
Gordon Divitt
I worked for the Canadian Coast Guard in the 1970s and can attest to the antics necessary some years to spend every last penny in the budget in time. The ice breakers in particular were problematic as some years they would need significant repairs after being in the Arctic and some years very little. Of course the concept of establishing a contingency reserve offended the bureaucrats in Ottawa.
20th November 2023 at 12:11 pm
Dennis Egan
I have been involved in running hospitals for decades. The global funding system is and will always be a disaster when hospitals have a fixed budget and must meet unlimited and unconstrained demand. The annual budget adjustments never ever covered the actual cost increases and there was no recognition of population growth or aging (except with the odd new or expanded facility and when the Harris Government recognized the growth in the GTA905 area in Ontario for a couple of years). I was involved in the early and ongoing development of cost per case information that started in the mid 1980s. The objective at the time was the fairer funding of hospitals — i.e., splitting up the pie — but it just “baked in” the much higher costs of the teaching hospitals. The resulting cost per case was mostly used as punishment — i.e., the high cost per case hospitals — and seldom as an incentive by rewarding low cost per case hospitals. The only reasonable solution goinmg forward is to return to the roots of Medicare which was an insurance system for doctors and hospitals. Health Commissions need to be reestablished at arms length from the politicians and negotiate rates with specialists and hospitals, develop a primary care system, disease management programs, and introduce insurance concepts like premiums,. co pays and deductibles, etc. The hospitals and their specialists should the be free to provide additional self pay “private” servces to others subjetc to meeting their public system responsibilities (that is how it works elsewhereon the planet). The notion of paying private for profit operators in health care is ideological drivel —- i.e., the public should not be paying for profits and for equipment and facilites when they do not even fund them for the public sector — e.g., I have installed two MRIs at a cost of about S5 M each which was 100 percent donated money. I would also point out that every major and well known hospital on the planet is a “not for profit” —- e.g., Mayo and Cleveland Clinic — and for good reason. Finally, it is time to recognize that the health care professionals in this country are among the highest paid on the planet (in some cases multiples of other countries) and that comparisons to Europein countries in particular need to recognize this FACT and adjust for it — e.g., a radiologist in Canada can make 6 times or more the amount as one in a Europeon country.
20th November 2023 at 7:59 am
Brenna Rutt
Thank you for taking the time to write this. Every Canadian needs to be more informed so we can sift through and ignore the quick inflammatory comments regarding health care solutions.
20th November 2023 at 11:08 am
The Hub Staff
Thank you Dennis for participating in Hub Forum.
20th November 2023 at 12:13 pm
Barry Imhoff
Instead of giving hospitals and health boards a lump sum budget, why don’t we pay them for the individual treatments they complete? That would give them great incentive to increase the number of procedures in order to increase their income rather than calling for higher budgets where money disappears into an administrative black hole.
20th November 2023 at 7:28 am
RJKWells
“Activity-based” funding, another way of saying let the dollars follow the patient, rather than going directly into the system.
Defenders of the status quo consistently object to the former, yet do not provide any credible argument or alternative, other than to say ‘just give us more money.’ Meanwhile, patients in actual need continue to queue up under the latter, until it finally gets around to admitting the next person in line.
20th November 2023 at 9:49 am
A. Chezzi
Two concerns after reading the article, living in Northern Ontario where there is only one hospital for a very large area, how does this model fit our need? In a time where funding for mental health is sorrily in need, this model is criticized for a gap in services. Will this model allow for specific hospitals to treat drug addiction or will it fund centers for treatment? Does this model propose to allow for different approaches to drug addiction or will it favor a model such as Alberta forced treatment as opposed to safe drug centers?
Funding for health care is a complex issue and it needs to be studied carefully but there should be no option for privatized health care. That would be a step backwards for Canadians.
20th November 2023 at 8:51 am
David Krieger
The free market of neoliberalism suggested falsely that competition will give us all a better life, especially when we were in competition with each other as we are inheritly selfish. So 40 years of government is the problem uttered by Ronald Reagan!
Totally Bee Sss.
What we got was increased inequality especially in the USA & UK and now Canada. And the rich getting richer at the expense of the bottom 90%. Inequality kills democracy, period! And we see where the USA is with democracy, where Alberta is going, and where Poilievre will want to take us. And now you are telling me competition between hospitals will improve service! Well here’s hoping, but not optimistic!
20th November 2023 at 10:13 pm
Paul
Part of the problem is patients seeking medical attention for frivolous things like colds. I think every visit should cost the patient $50 per visit or maybe $100. People would be more circumspect when using the health care system. I also think complicated procedures like surgery should have a good user fee also.
20th November 2023 at 9:18 pm
Kim Morton
I’m OK with the single payer model, even though that is not what we really have now, as industrial and sports injuries are treated outside the system now. For that matter, doctors are independent contractors that are paid a fee for service and must run their offices from that fee. What I do object to is the payer and provider of services being one and the same. There are many services that can be done outside hospitals for far less money than the bloated bureaucracy we now have.
Next complaint: complaint I have about our current system is not all required services are covered. I am required by the government to have annual medicals for my professional driver’s license, but have to pay this out of my pocket.
Next complaint: Naturopaths are not covered by medical. I must pay upfront and collect back from my benefit’s provider for this important service. In more enlightened European countries Naturopaths have hospital privileges, as do midwives.
20th November 2023 at 3:25 pm
D.Crooks
The ideal budgeting would be a mix of the two where procedure driven care such as hips, knees, eyes etc would be tracked and longer ten care for cardiac/cardiovascular, respiratory, kidney etc. should be assessed differently across medical services. Cancer care folded in to hospital budgets has impaired patient care especially in relation to biological drugs and treatment modalities. Mental health also requires a great deal of work as a specialty practice. Community based health care should be included as well where those services if funded adequately, would keep people out of hospitals and promote wellness vs illness focus. The latter focus is self defeating. Further hospital budgets cover salaries for nurses physios, respiratory techs and others but stifle the scope of practice for these groups. This is a waste of talent and care. Clearly budget planners have much work to do.
Comments (13)
As staff we used to know budget time was coming when all the depts were using up funds by another round of unnecessary repairing / repainting. The use it or lose it funding model seems so antiquated & ridiculous. If a department/hospital overall comes in under budget they should be rewarded and model what they were doing right.
A line used by many government agencies is “March Madness” – the “antiquated & ridiculous” practice of blowing what remains in the cupboard as the fiscal year comes to an end. Those who operate in this manner fail to understand there is a limit to what we can give.
Rewarding departments that come under budget recognizes excellent stewardship of tax dollars. Putting fences around those budgets in Q4 is another way ensuring responsibility and holding all managers to account.
I worked for the Canadian Coast Guard in the 1970s and can attest to the antics necessary some years to spend every last penny in the budget in time. The ice breakers in particular were problematic as some years they would need significant repairs after being in the Arctic and some years very little. Of course the concept of establishing a contingency reserve offended the bureaucrats in Ottawa.
I have been involved in running hospitals for decades. The global funding system is and will always be a disaster when hospitals have a fixed budget and must meet unlimited and unconstrained demand. The annual budget adjustments never ever covered the actual cost increases and there was no recognition of population growth or aging (except with the odd new or expanded facility and when the Harris Government recognized the growth in the GTA905 area in Ontario for a couple of years). I was involved in the early and ongoing development of cost per case information that started in the mid 1980s. The objective at the time was the fairer funding of hospitals — i.e., splitting up the pie — but it just “baked in” the much higher costs of the teaching hospitals. The resulting cost per case was mostly used as punishment — i.e., the high cost per case hospitals — and seldom as an incentive by rewarding low cost per case hospitals. The only reasonable solution goinmg forward is to return to the roots of Medicare which was an insurance system for doctors and hospitals. Health Commissions need to be reestablished at arms length from the politicians and negotiate rates with specialists and hospitals, develop a primary care system, disease management programs, and introduce insurance concepts like premiums,. co pays and deductibles, etc. The hospitals and their specialists should the be free to provide additional self pay “private” servces to others subjetc to meeting their public system responsibilities (that is how it works elsewhereon the planet). The notion of paying private for profit operators in health care is ideological drivel —- i.e., the public should not be paying for profits and for equipment and facilites when they do not even fund them for the public sector — e.g., I have installed two MRIs at a cost of about S5 M each which was 100 percent donated money. I would also point out that every major and well known hospital on the planet is a “not for profit” —- e.g., Mayo and Cleveland Clinic — and for good reason. Finally, it is time to recognize that the health care professionals in this country are among the highest paid on the planet (in some cases multiples of other countries) and that comparisons to Europein countries in particular need to recognize this FACT and adjust for it — e.g., a radiologist in Canada can make 6 times or more the amount as one in a Europeon country.
Thank you for taking the time to write this. Every Canadian needs to be more informed so we can sift through and ignore the quick inflammatory comments regarding health care solutions.
Thank you Dennis for participating in Hub Forum.
Instead of giving hospitals and health boards a lump sum budget, why don’t we pay them for the individual treatments they complete? That would give them great incentive to increase the number of procedures in order to increase their income rather than calling for higher budgets where money disappears into an administrative black hole.
“Activity-based” funding, another way of saying let the dollars follow the patient, rather than going directly into the system.
Defenders of the status quo consistently object to the former, yet do not provide any credible argument or alternative, other than to say ‘just give us more money.’ Meanwhile, patients in actual need continue to queue up under the latter, until it finally gets around to admitting the next person in line.
Two concerns after reading the article, living in Northern Ontario where there is only one hospital for a very large area, how does this model fit our need? In a time where funding for mental health is sorrily in need, this model is criticized for a gap in services. Will this model allow for specific hospitals to treat drug addiction or will it fund centers for treatment? Does this model propose to allow for different approaches to drug addiction or will it favor a model such as Alberta forced treatment as opposed to safe drug centers?
Funding for health care is a complex issue and it needs to be studied carefully but there should be no option for privatized health care. That would be a step backwards for Canadians.
The free market of neoliberalism suggested falsely that competition will give us all a better life, especially when we were in competition with each other as we are inheritly selfish. So 40 years of government is the problem uttered by Ronald Reagan!
Totally Bee Sss.
What we got was increased inequality especially in the USA & UK and now Canada. And the rich getting richer at the expense of the bottom 90%. Inequality kills democracy, period! And we see where the USA is with democracy, where Alberta is going, and where Poilievre will want to take us. And now you are telling me competition between hospitals will improve service! Well here’s hoping, but not optimistic!
Part of the problem is patients seeking medical attention for frivolous things like colds. I think every visit should cost the patient $50 per visit or maybe $100. People would be more circumspect when using the health care system. I also think complicated procedures like surgery should have a good user fee also.
I’m OK with the single payer model, even though that is not what we really have now, as industrial and sports injuries are treated outside the system now. For that matter, doctors are independent contractors that are paid a fee for service and must run their offices from that fee. What I do object to is the payer and provider of services being one and the same. There are many services that can be done outside hospitals for far less money than the bloated bureaucracy we now have.
Next complaint: complaint I have about our current system is not all required services are covered. I am required by the government to have annual medicals for my professional driver’s license, but have to pay this out of my pocket.
Next complaint: Naturopaths are not covered by medical. I must pay upfront and collect back from my benefit’s provider for this important service. In more enlightened European countries Naturopaths have hospital privileges, as do midwives.
The ideal budgeting would be a mix of the two where procedure driven care such as hips, knees, eyes etc would be tracked and longer ten care for cardiac/cardiovascular, respiratory, kidney etc. should be assessed differently across medical services. Cancer care folded in to hospital budgets has impaired patient care especially in relation to biological drugs and treatment modalities. Mental health also requires a great deal of work as a specialty practice. Community based health care should be included as well where those services if funded adequately, would keep people out of hospitals and promote wellness vs illness focus. The latter focus is self defeating. Further hospital budgets cover salaries for nurses physios, respiratory techs and others but stifle the scope of practice for these groups. This is a waste of talent and care. Clearly budget planners have much work to do.