Alberta should fund hospitals based on treatments performed to ease chronic wait times, urges MEI
April 25 2024 - 9:04AM
Adopting activity-based funding for hospitals in Alberta could
shorten wait times and improve productivity, according to a
Montreal Economic Institute study.
“Our current hospital funding model incentivizes treating the
fewest patients possible, as each new patient represents an
additional cost,” explains Krystle Wittevrongel, Senior Public
Policy Analyst and Alberta Project Lead at the MEI. “It's
imperative that we transition to activity-based funding immediately
in order to start bringing wait times down, as so many other
jurisdictions have done.”
Wait times from referral by a general practitioner to treatment
by a specialist in Alberta are among the highest in Canada: 33.3
weeks, compared to 29.4 weeks in Quebec and 20.3 weeks in
Ontario.
Currently, Alberta’s hospitals are financed under a system
called “global budgeting.” This involves allocating a pre-set
amount of funding to pay for a specific number of services based on
previous years’ budgets.
Quebec is transitioning to a model known as “activity-based
funding.” Under this system, hospitals receive a fixed payment for
each treatment delivered.
In Quebec, after adopting activity-based funding, the cost of an
MRI fell by four per cent and the number of MRIs performed
increased by 22 per cent. In the radiology and oncology sector,
productivity increased by 26 per cent while procedure costs
decreased by seven per cent.
Similarly, in the colonoscopy and digestive endoscopy sector,
productivity increased by 14 per cent and the case backlog shrank
by 31 per cent.
This isn’t unique to Quebec, as Australia experienced a 16 per
cent drop in wait times within the first year after activity-based
funding was implemented, according to the study.
“We can’t keep doing the same thing while expecting different
results,” said Wittevrongel. “If we want a truly patient-centric
healthcare system, let’s transition to something that we know
works: activity-based funding.”
The MEI study is available here:
https://www.iedm.org/wp-content/uploads/2024/04/note052024_en.pdf
The MEI is an independent public policy think tank with offices
in Montreal and Calgary. Through its publications, media
appearances, and advisory services to policy-makers, the MEI
stimulates public policy debate and reforms based on sound
economics and entrepreneurship.
Interview requestsRenaud BrossardVice
President, CommunicationsCell: 514
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