Understanding Health System Funding Reform

The way that Ontario hospitals will be funded has changed. Last year, the provincial government introduced Ontario’s Action Plan for Health Care, which will be implemented in all hospitals over the next several years.

Hospitals previously received funding as one lump sum that would cover their services. The new funding system is designed to be more patient-centric and hospitals will be funded based on the number of patients they see, the services they deliver, the evidence-based quality of those services and the specific needs of the broader population they serve. This strategy will also see a shift of health care dollars into the community setting and hospitals may begin to consider specialities and focus on what they do best, so in other words not all hospitals will do all things.

At Muskoka Algonquin Healthcare, we support these changes to funding. The new plan uses evidence to inform health spending so that money truly follows the patient and drives quality improvement. We feel that funding reform is necessary to ensure that funding is provided where the population needs exist and achieves the best value. Over the next few years, we will be working to meet the challenge of this new funding system.

The new funding program will be implemented in stages over three years and is made up of two components: Health Based Allocation Model (HBAM) and Quality Based Procedures. Both are funded at pre-determined best practice rates and are based on the volume of procedures performed.

Beginning in the 2012/13 fiscal year, HBAM funding will account for 40 per cent of MAHC’s funding. Quality Based Procedures include hip and knee replacement surgery, cataract surgery and chronic kidney disease in 2012/13 and will account for up to six per cent of the hospital’s funding. Over the next two years, the number of procedures included in the category will increase until it represents 30 per cent of the hospital’s funding.

With help from the Ministry of Health and Long-Term Care, we will be working to meet the challenge of the new funding plans. As always, patients will be our first priority every step of the way.

Read more about Health System Funding Reform.