Hospital funding reforms require transparency and collaboration: study

Changing the way hospitals are funded may be one way to improve health care system sustainability.

Some Canadian hospitals are moving towards “patient based” hospital funding to replace annual global budgets. Linking funding to quality of patient care in a bid to improve care and achieve better patient outcomes may encourage smarter use of limited resources.

But a recent study by Karen Palmer, an SFU health sciences adjunct professor, finds that achieving major changes in complex health care systems can be fraught with challenges. 

Palmer and her colleagues at the Women's College Hospital's Institute for Health System Solutions and Virtual Care (WIHV) in Toronto evaluated the implementation of Quality-Based Procedures (QBPs), a new “patient-based” funding mechanism to replace existing global hospital budgets in Ontario. Whereas global budgets provide hospitals with fixed funding per year, QBPs pay them a set price to cover each episode of care for patients with particular diagnoses or for specific procedures.

QBPs were launched with evidence-based care guidelines, aimed at helping clinicians provide the best care for the set price.

The study revealed that health system leaders in Ontario didn't have a shared understanding of the goals for reforming hospital funding, and are still uncertain about those goals four years after implementation. A prolonged implementation period, key staff turnover, and inconsistent messaging resulted in the policy drifting over time, which exacerbated implementation of the reforms.

“Ongoing differences in understanding the QBP goals and funding mechanism have made implementation challenging, and have created difficulties in measuring success,” says Palmer.

As a result, she suggests that Canadian hospitals could improve the implementation of funding and quality reforms through processes that are more transparent, collaborative, and intentional.