Ontario begins to phase out global funding for hospitals — moving to US system?

Concurrent to its Act to tie health care executive salaries to performance, the province also quietly announced it was beginning the process of replacing global budgets with a patient-based payment scheme.

While few details are available, the communiqué suggests the new system will be built upon the wait times strategy funding, which will allocate procedures based on a number of factors, including the ability to perform the service under a cost threshold.

The Ministry says it will first move larger hospitals to the new funding model beginning April 1st of next year.  

However, details have yet to be worked out. The Ministry promises to consult with hospitals, LHINs and other “relevant partners” in the detailed design of the payment system. Among issues the Minsitry says need to be resolved: how to recognize hospitals with unique roles, such as academic health sciences centres as well as those serving small and rural communities.

The Minister’s office had told OPSEU weeks ago that rural hospitals would be exempt from the competition model, although the new communiqué is more ambiguous, suggesting the model may be instead adjusted to take into account their specific needs.

It is not clear how the move to more patient-based funding will be balanced by the government’s other promise – to bring in a funding formula that would address inequities in the current system. With the move to more patient-based funding, it would appear that funding formula may have already been abandoned.

With more hospital funding being directed from Queen’s Park, it raises questions around the autonomy of hospital boards and LHINs to determine local service.

It also means hospitals may be more subject to fluctuations in their funding base, raising difficulties in long term planning. This could impact on the recruitment and retention of health care staff.

The statement suggests Canada would be joining countries like the United States, England and Western Europe by moving to such a system, claiming, among other things, that it will improve access and cost efficiency. Wait a minute, the United States?

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