Mailbag: A New Funding Model for Healthcare

Apr 19, 2010 | Government News

Brian A. Kelly, co-founder of Kelwin Management Consulting, wrote:

Brian Kelly

Brian Kelly

The global funding that Dr. Gerrard speaks about is being tried in BC.

Two recent articles describe BC’s introduction of what Dr. Jon Gerrard has been proposing.

One article titled, “B.C. pioneers new formula for funding hospitals” is by Rod Mickleburgh, Vancouver of The Globe and Mail (Monday, Apr. 12, 2010) (available here)

The second article titled, “B.C.’s new twist in detivering heatth care” by Gary Mason of the The Globe and Mail describes the political challenges governments face when introducting changes to our health care system. The article is in the Thursday, April 15, 2010 issue of The Globe and Mail (see here).

Rather than continuing “global annual block funding” to hospitals and regional health authorities (RHA’s), where a sum is allocated to each institution for each year (e.g. Where the provincial government says, “Here’s $x00 million, please do good things with it”.); the government would change the system to say, “We will give you $x for each specific service delivery to a patient”, just as is currently done with visits to doctors in their offices.

As the second article notes, “It’s a model already used in many European countries, whose health-care programs are routinely rated higher than ours.”

A number of changes would occur in hospitals because of this, with major potential improvements coming from seeing patients as a source of revenues, as opposed to the current situation where management sees patients as a cost to their global annual budget allocation. Thus, if too many patients seek services, it could lead to budget deficits relative to the set money (block funding) they get from government.

This is not a radical change. Government would still pay for health care. The existing service providers woud still provide it. But, significant change could occur that would lead to a number of benefits, especially reduced waiting times – which is one of the greatest weaknesses of our current health care system,

Many other financial and operational management changes would likely occur, over a period of time, that could lead to significant benefits to society.

This is a change that appears to be desirable for our provincial government to introduce.

This reply originally appeared in relation to a post entitled “Leader of the Liberal Party of Manitoba Addresses MCC”. Click here to access that post.    

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