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

Activity-based funding of hospitals: We’ve waited long enough

Reform Id m Ideas fo for Que uebec's H Health C h Care Sys System Rit itz C z Carlt lton H Hot

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September 19 19, 2012 12

Yanick ck L Labri brie, , M.Sc. c.

Ec Econo nomist, Mo Mont ntreal Ec Econo nomic I Inst nstitut ute

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

Source: Results from the International Surveys of the Commonwealth Fund, 2010

Patients who must wait more than 5 days to see a doctor (%), 2010

65% 32% 16% 15% 15% 9% 5% 2%

0% 10% 20% 30% 40% 50% 60% 70%

Accessibility and wait times

Source: Results from the International Surveys of the Commonwealth Fund, 2010

Number of days before seeing a specialist, 2010

83 68 57 44 34 27 14 13

10 20 30 40 50 60 70 80 90

Accessibility and wait times

Source: Results from the International surveys of the Commonwealth Fund, 2010

25% 22% 21% 21% 7% 7% 5% 0% 0% 5% 10% 15% 20% 25% 30%

Patients who must wait 4 months or more for elective surgery (%), 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