FINANCIAL POST COLUMN: B.C. Tories propose bold plan to reform health care
Former prime minister Kim Campbell is supposed to have said that “an election is no time to discuss serious issues.” She maintains she was misquoted, but elections do often boil down to platitudes and pablum. Serious policy reform need not apply.
Well, it appears not everyone received that memo. In advance of B.C.’s provincial election, which is due this fall, the province’s Conservative Party has already released a bold plan to reform health care. And yes, it actually goes beyond the safe position typically embraced by political parties across the political spectrum to simply spend more money on health care. Instead the Conservatives call for structural changes that have been used effectively in Europe for years. For the sake of all Canadians, political parties across the country should give the plan a look.
Most notably, the Conservatives commit to “activity-based funding.” At the moment, it’s common in Canada for provincial governments to fund hospitals by sending a large cheque at the start of the year and then hoping for the best. Block funding of this sort gives hospitals zero incentive to increase output. In fact, under this model hospital administrators may see patients as a drain on their budget: each new patient brings extra costs but no extra revenue.
In contrast, activity-based funding pays hospitals according to the number of patients they see, which is not unlike how your family doctor bills the government per patient-visit. For example, under activity-based funding, a B.C. hospital might receive $13,989 for each knee replacement it provides — that’s what they cost on average — or $4,439 for helping deliver a newborn. The more patients the hospital helps, the more money it receives.
This approach turns the health-care system on its head. Hospitals suddenly have an incentive to help as many patients as possible. So, when you walk into the hospital, you’re not another patient they have to treat, you’re a patient they want to treat, since treating you results in more revenue for the hospital. Parts of the health system that normally don’t return your calls would suddenly have the incentive to get back to you right away.
Not only does this approach change how hospitals view patients, it also focuses hospitals around activities that benefit patients. As one surgeon quipped, hospitals would have an incentive to deliver more care to patients rather than “changing the computer system … again.” Instead of hiring bureaucrats, hospitals would have the incentive to hire more frontline staff — doctors, nurses and technicians — who actually help patients.
Quebec has been using activity-based funding since 2016. It has helped boost productivity while reducing costs per procedure. As the latest provincial budget notes, “in radiation oncology, patient-based funding has increased productivity by 26 per cent, while the average cost of operations has decreased by seven per cent over the same period.” European countries that outperform Canada’s health care system also generally use this model.
A second policy the B.C. Conservatives commit to is a “wait times guarantee.” If patients face wait times that are longer than recommended for selected diagnostic and surgical procedures, they will have the option of paying for those surgeries outside the province and then receiving reimbursement from the government (according to “a set fee schedule”).
Patients in the European Union have had this option for over a decade. A patient who faces a long wait time — say three months for surgery — can travel to another EU country and receive treatment much sooner, if it’s available. This approach can also help patients who don’t want to travel for surgery: every time someone ahead of them on the waiting list goes abroad for treatment, they move up.
To be sure, elections are about many issues and voters will have to decide how the B.C. Conservatives’ overall platform stacks up against what their opponents are promising. But when it comes to health care, they’re clearly offering something refreshingly different: a plan to refocus health care on patients, using successful policies borrowed from better-performing universal health-care systems in Europe.
Colin Craig is president of the think-tank SecondStreet.org.
This column was originally published in The Financial Post on August 23, 2024.
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