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Friday, 10 August, 2007

BC offers hospitals cash incentive to fast track patients

A new hospital funding plan in British Columbia will pay the Vancouver regional health authority extra money for treating patients faster, .

This is a major departure from the traditional block funding methods used across most of Canada.

The $16.4 million BC plan is just a pilot project for the time being to determine if the strategy works.

Starting in October, the B.C. government will pay an extra $100 for every patient requiring hospitalization who is admitted to a bed within 10 hours. There will be an extra $60 for patients who are treated and discharged within two to four hours, depending on the urgency of their needs. Hospitals can use the extra money to expand services, staff and space. In effect, the cash incentive turns the current payment system on its head.
This system, sometimes called patient-focused funding, or PFF for short, is strongly supported by both Dr Brian Day, the new president of the Canadian Medical Association, and Michael Kirby, the former Liberal Senator whose 2002 report on the healthcare system sparked national debate.

"The only way to get people to change their behaviour is by offering them an incentive to change," Mr Kirby told the Globe. "You have to do it with carrots, not sticks."

I wrote about in February of this year. But not everybody thinks PFF is going to help:
"You have to make sure the incentives you have in place don't get in the way of what you need done," said Raisa Deber, PhD, a University of Toronto health policy expert. "It would be disastrous to move entirely to a service-based funding schedule. That would incentivize overuse instead of appropriate use."
Dr Day explained in a response to my article :
It's no coincidence that the report of Senator Michael Kirby, a PhD in mathematics who applied simple logic and basic internal marketing principles, came out solidly in support of patient-based funding (PFF). In late October of 2006, the updated OECD report also came out solidly in support of it. Of course there must be safeguards in place, and it's not a panacea. Smaller rural hospitals can actually outperform large institutions, although the opposite has been claimed. We're very lucky to have the British experiment to learn from.
One potential caveat, however, may be a paucity of accurate performance measures in Canadian hospitals' reporting, according to a .
[University of Melbourne research fellow Julia Witt] argues it may not always be true that a hospital where patients spend less time is a good hospital.

"Shorter lengths of stay could be the result of insufficient funds or space to keep patients for a more optimal length," she writes.

"If there is pressure on freeing up beds, patients may be released earlier in order to make beds available."

Sometimes, she writes, such "clinical efficiency measurements" assess if a hospital is saving money, but tell little about the quality of patient care.

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  1. The British doctors, in a letter to the Canadian doctors, have urged them to avoid things like PFF.

    Thanks to CUPE for this ...

    British doctors urge cooperation

    A group of British doctors have urged their Canadian counterparts to heed their cautionary tale on the perils of privatization.

    See: Letter from the National Health Service Consultants Association

    See CUPE media release: British to Canadian Doctors: Collaboration not market competition is the remedy for health care

    Dr. Jacky Davis and Dr. Peter Fisher, executive officers with Britain’s National Health Service Consultants Association have written a letter to CMA President Brian Day and meeting delegates about how various forms of private involvement have harmed Britain's National Health System.

    Proposals to endorse some of these failed practices are on the CMA meeting agenda in Vancouver next week.

    Some of the lessons from the UK:

    Activity-based funding, (called "payment by results" in the UK) where funding is provided based on volume and type of service provided, has lead to increased hospital admissions and administrative costs.

    Use of the private sector to deliver public health care has lead to higher costs for inferior care.

    The so-called “patient choice” agenda has lead to a competition where public facilities must compete at a disadvantage against private ones.

    Onerous debt repayments from Public-private partnerships used to construct new hospitals have put hospitals under serious financial pressure.

    The British Medical Association recently voted to oppose payment-by-results and has passed a unanimous resolution favouring collaboration over competition.

    For more information visit the CUPE website:

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