Activity-based funding of hospitals: Weve waited long enough Yanick - PowerPoint PPT Presentation

Activity-based funding of hospitals: We’ve waited long enough Yanick ck L Labri brie, , M.Sc. c. Econo Ec nomist, Mo Mont ntreal Ec Econo nomic I Inst nstitut ute Reform Id m Ideas fo for Que uebec's H Health C h Care Sys System Rit itz C z Carlt lton H Hot otel, el, M Mon ontreal September 19 19, 2012 12

Plan of the presentation  Global budgets: at the root of the chronic problem of waiting lists in Quebec  Activity-based funding: a model with better incentives  The experiences of Scandinavia and England with ABF  Some challenges

Global budgets: a funding model that needs to be re-examined  Currently, nearly all Quebec hospitals receive their funding in the form of global budgets, based on amounts spent in the past  Global funding offers no incentives for hospital managers to innovate in order to reduce expenses and improve access  Patients are a source of additional expenses with this model, so there is no gain to make in trying to reduce wait times  The chronic problem of waiting lists is thus rooted in part in hospitals’ global funding model

Accessibility and wait times Patients who must wait more than 5 days to see a doctor (%), 2010 70% 65% 60% 50% 40% 32% 30% 20% 16% 15% 15% 9% 10% 5% 2% 0% Source: Results from the International Surveys of the Commonwealth Fund, 2010

Accessibility and wait times Number of days before seeing a specialist, 2010 90 83 80 68 70 57 60 50 44 40 34 27 30 20 14 13 10 0 Source: Results from the International Surveys of the Commonwealth Fund, 2010

Accessibility and wait times Patients who must wait 4 months or more for elective surgery (%), 2010 30% 25% 25% 22% 21% 21% 20% 15% 10% 7% 7% 5% 5% 0% 0% Source: Results from the International surveys of the Commonwealth Fund, 2010

Making money follow hospital patients  Most OECD countries adopted activity-based funding of hospitals during the last two decades  These reforms gave hospitals better incentives: good performance is now rewarded with increased funding  Reimbursement based on average cost (of treatment) put pressure on management to improve cost efficiency  Reimbursement based on activity also contributed to improve access to care and reduce waiting lists  ABF promotes competition and creates patient-centered care

Making money follow hospital patients  The experience of Norway (1997):  The reform entailed an increase in the annual growth rate of activity  Public expenditures remained relatively stable or even decreased in real terms  Resulted in a significant reduction in wait times  From 2002 to 2006, hospital admissions jumped by 24% while average wait time for elective surgeries fell by 30%

Average waiting times (in days) for somatic treatment in Norway, 1998-2010

Making money follow hospital patients  The experience of England (2003):  Average length of stay fell rapidly after the implementation of the reform  Better use of resources by hospitals led to more patients being treated with no reduction in quality of care  The median wait time for elective surgery decreased by more than 60% between 2002-2010, partly because of ABF  Reduction in wait times for cataract surgeries and hip and knee replacements has been greater for patients from less well-off areas

Evolution of waiting times for elective surgery in England, 1992-2010

Towards an activity-based funding reform  Some challenges…  Up-coding  Cream skimming  Discharging patient too early