The global budgeting system used for funding hospitals in B.C. is being called into question following a public forum in Campbell River. The Campbell River hospital is shown in a July 2018 file photo.

Hospital funding system called into question at North Island forum

Changes could increase volume of patients treated, says UBC prof

Reports that health care is in crisis is renewing questions about the system for funding hospitals in B.C.

During a public forum in Campbell River last week, Union Bay resident Liza Schmalcel described overcrowded conditions and poor treatment faced by her 83-year-old mother at the Comox Valley hospital, as reported by the Mirror.

Schmalcel argued that hospitals should receive revenue based on the spaces provided to patients, with no money being provided for care in hallways as an incentive to prevent overcrowding.

“It would be better for Island Health, and the public, if hospitals billed according to rooms, making distinctions according to medical overflow rooms, private rooms and shared rooms, and not be allowed to bill for unconventional spaces,” said Schmalcel, who began researching hospital capacity and funding issues after seeing the problems faced by her mother.

Asked about its funding system, Island Health said it doesn’t receive any extra funding when hospitals are overcapacity.

“Funding for our hospitals is population based, not care space based,” said Island Health spokesperson Cheryl Bloxham in an email.

Schmalcel isn’t the only one raising questions about how hospitals are funded.

READ MORE: ‘It breaks our hearts and spirits’: Health care advocates in Campbell River decry overcrowded hospitals

UBC professor Jason Sutherland, who specializes in health care funding, says that alternative models include so-called activity-based systems used in several European countries.

In B.C. and other provinces, ministries of health provide a fixed amount of funds annually to acute care hospitals, a system known as global budgeting.

According to a 2011 report by Sutherland, hospitals account for upwards of 28 per cent of health care expenses, the largest part of health-related spending. Health care accounts for about 11 per cent of Canadian gross domestic product.

“They’re given an annual budget, and they work within that to provide the service that they feel the community needs,” said Sutherland in an interview on Monday. “So the incentive is for the chief executive officer and for the board to make sure their budget doesn’t exceed that target.”

READ MORE: South Island measles exposures confirmed at Royal Jubilee Hospital in Victoria

But research suggests that global budgeting has mostly been ineffective in slowing the growth of spending, according to a 2016 paper co-authored by Sutherland in the journal Health Policy. And the spending caps tend to result in restrictions on hospital services.

In contrast, England, Australia and several European countries use a system called activity-based funding, which funds hospitals based on the services they provide. Ontario has also implemented activity-based funding for 40 per cent of revenues, Sutherland said.

Prof. Jason Sutherland of the UBC Centre for Health Services and Policy Research

These activity-based systems provide hospitals with an incentive to operate more efficiently and are linked to shorter hospital stays and more patients treated per bed, according to Sutherland’s research. B.C. introduced a pilot project using activity-based funding in 2010, but later cancelled it.

There are drawbacks to activity-based funding. Examples include a trend towards increasing the volume of patients receiving services that bring profits to the hospital, as opposed to services for those most in need, Sutherland said.

However, that money goes back into the hospital system, he said. The system can also be costly, but he noted the Ontario model involves caps to control spending.

READ MORE: Board rejects water features for Comox Valley and Campbell River hospitals

Changing the funding model isn’t a silver bullet for overcrowded hospitals, he said. Activity-based funding might result in higher volumes of patients going through hospitals, but many people still have nowhere to go for less acute medical services when they’re discharged.

These patients are known as “alternative level of care” or ALC patients, meaning they need care in a more appropriate setting outside of the hospital.

“We need a much more robust post-acute care setting or community care setting,” Sutherland said.

Island Health officials have said they’re implementing various community care programs in Campbell River, and 18 long-term beds were recently opened at the Discovery Harbour care home.

As for the kind of care space-based funding system proposed by Schmalcel last week, Sutherland said it hasn’t been implemented anywhere.

“However, in some provinces, alternate level of care patients have to pay a co-pay to the hospital for the bed they’re occupying,” he said in an email.

Asked if the real problem is simply a shortage of funding for health care, he said it’s an open question. But he noted that service delivery could likely be optimized.

“Is money always the answer here? I think we have plenty of examples where we could change things, and it’s an open question whether more money is needed.”

Sutherland also called for more public debate about what people want from their hospitals.

“Do we mind that 30 per cent of the beds are filled with long-term care patients? If that is okay as a society, then it’s fine,” he said. “And then we’ll have to build more hospitals, because we’re putting our long-term care patients in there.

“But if we want them to run efficiently and effectively and provide high-quality care, and not have patients in there who don’t need to be there, then we need big changes.”


@davidgordonkoch
david.koch@campbellrivermirror.com

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Good Food Boxes are packed in Gold River to go out to people of that community. Greenways is working on expanding the program to other communities including Campbell River. Photo supplied by Greenways Land Trust
Good Food Box program coming to Campbell River

Greenways’ program will provide food delivery to six communities in Strathcona area

Island Health chief medical officer Dr. Richard Stanwick receives a first dose of Pfizer vaccine, Dec. 22, 2020. (B.C. government)
COVID-19: Vancouver Island in a January spike while B.C. cases decrease

Island’s top doc Dr. Stanwick breaks down the Island’s rising numbers

Eden Robinson will be ‘on hand’ for a special online screening of Monkey Beach, based on her 2000 novel, presented by the Museum at Campbell River through the Tidemark Theatre Feb. 4. Photo by Bluetree Photography
Museum at Campbell River to screen Monkey Beach and Q&A with Eden Robinson

Last year’s Haig-Brown Writer-in-Residence’s work has skyrocketed to justifiable fame in the past year

Tahsis mayor Martin Davis stands with an old-growth tree in McKelvie Creek Valley. The village of Tahsis signed a Letter of Understanding with forestry company Western Forest Products to establish McKelvie watershed as a protected area. Photo courtesy, TJ Watt.
Landmark deal expected to protect Tahsis watershed from logging

Tahsis and WFP agree on letter of understanding to preserve McKelvie Creek Valley within TFL 19

Sawyer, a northern saw-whet owl that became synonymous with Mountainaire Avian Rescue Society, passed away peacefully over the weekend. Sawyer would make numerous public appearances with MARS staff in and around the Comox Valley and Campbell River. Photo supplied.
Popular MARS ambassador owl dies

Submitted MARS Wildlife Rescue has lost one of its mightiest ambassadors. Tiny… Continue reading

Dr. Penny Ballem, a former deputy health minister, discusses her role in leading B.C.’s COVID-19 vaccination program, at the B.C. legislature, Jan. 22, 2021. (B.C. government)
B.C. holds steady with 407 new COVID-19 cases Tuesday

14 deaths, no new outbreaks in the health care system

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Shown is Quality Foods at 319 Island Highway in Parksville. The Island-based grocery chain announced on Jan. 25 it made a $2-per-hour pay premium, implemented during the COVID-19 pandemic, permanent. (Mandy Moraes photo)
COVID-19: Quality Foods makes $2-per-hour employee pay premium permanent

Island-based grocery chain had extended increase twice in 2020

A Cessna 170 airplane similar to the one pictured above is reported to be missing off the waters between Victoria and Washington State. Twitter photo/USCG
Canadian, American rescue crews searching for missing aircraft in waters near Victoria

The search is centered around the waters northeast of Port Angeles

The North Cowichan/Duncan RCMP have arrested a prolific offender who is now facing more than 40 charges. (Black Press file photo)
‘Priority offender’ arrested in Cowichan Valley faces more than 40 charges

Tyler Elrix, 37, had a history of evading police; was ordered not to be in Vancouver Island

Jonathon Muzychka and Dean Reber are wanted on Canada-wide warrants. (Courtesy of Victoria Police Department)
Convicted killer, robber at large after failing to return to facility: Victoria police

Dean Reber, 60, and Jonathon Muzychka, 43, may be together

B.C. Premier John Horgan listens during a postelection news conference in Vancouver on Sunday, Oct. 25, 2020. THE CANADIAN PRESS/Darryl Dyck
30% of B.C. recovery benefit applications held up in manual review

The province says 150 staff have been reassigned to help with manually reviewing applications

Adam Dergazarian, bottom center, pays his respect for Kobe Bryant and his daughter, Gianna, in front of a mural painted by artist Louie Sloe Palsino, Tuesday, Jan. 26, 2021, in Los Angeles. (AP Photo/Jae C. Hong)
Kobe Bryant’s presence remains strong a year after his death

Tuesday marks the grim anniversary of the crash that took their lives

Surrey RCMP are investigating after a pedestrian was struck and killed at 183 Street and Highway 10 Friday night. (File photo)

Most Read