New funding model for Ontario hospitals?

In the Globe and Mail this morning, there was an article on how the Ontario government is considering changing the way that Ontario hospitals receive funding. Essentially, the new model would allocate funds based on the mix of patients and the quality of service for each individual hospital. I am all for making the hospital system more efficient as long as it will also improve patient care. That should always be the focus of any initiative taking place in the hospital sector.

Efficiency and the public sector have never gone hand in hand over the years. Governments and organizations have made Herculian efforts to make themselves more efficient, but as health costs go up and the population gets older, this becomes an even larger challenge. It is for this reason that I support the proposed changes being discussed by the Ontario government. By basing the funding on the needs of each individual organization, it may help to reduce the competition amongst hospitals because each hopsital will be treated individually based on its patient base. Seemingly, this would mean that hospitals in communities with older patients will receive different funding than those in communities with young families.

Additional funding is also being proposed for those hospitals that perform efficiently. This provides incentive for hospitals to control their expenses and manage their organization. I just hope that this does not lead hospitals to make short-sighted decisions in order to keep costs down.

In order for this new funding proposal to work, three things need to happen:

- there needs to be a comprehensive way of measuring efficiency so that it is not focusing on volume or cost savings, it must focus on quality of patient care and maintaining (or improving upon) that quality while being more productive.

- there needs to be a way to ensure that the funding model does not focus too much on reactive care versus preventative care. Hospitals that are working on innovations that will prevent disease and sickness in old age should not have their funding reduced in order to pay for patient care for older residents. The model must strike a balance.

- there needs to be a better way for hospitals to collaborate in a more organized way. There are best practices that can be shared amongst hospitals that will allow the entire system to become more efficient.

Of course there are going to be imperfections in this new funding model, but those can be worked out within the details. The key is that the government is having the conversation about how to raise the level of efficiency of the hospital system as well as recognizing that not all hospitals provide the same services or serve the same patient bases. This could be the first step on the path to better and faster health care for patients across Canada.

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