Inching towards activity-based funding in Canada: Looking back for the way forward Erik Hellsten Senior Specialist Health Quality Ontario
Erik Hellsten, Health Quality Ontario: The Future of Hospital Funding in Canada: Looking Back For the Way Forward
Jan 23, 2015
Erik Hellsten, Senior Specialist, Quality Based Funding, Health Quality Ontario delivered this presentation at the 2014 Activity Based Funding conference at Toronto Convention Centre. Presentations at the event explored the risks, benefits and experiences of activity-based funding from around the world. For more information about the annual event, please visit the conference website: http://www.healthcareconferences.ca/activitybasedfunding
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Inching towards activity-based funding in Canada:
Looking back for the way forward
Erik Hellsten Senior Specialist
Health Quality Ontario
“What is the best way to pay providers to deliver health services? The research evidence strongly suggests that there is no single answer; rather, one must consider the incentives and disincentives inherent in alternative health care funding models.” Deber R, Hollander MJ and Jacobs P. 2008. Models of Funding and Reimbursement in Health Care: A Conceptual Framework. Canadian Public Administration 51:3 381-405
Rule #1:
“What changed under DRGs?” “Formerly, they paid us for hospital days and hospital days we delivered.” “Now, they pay us for cases and…”
Or, be careful what you pay for...
…you might just get it
Hospital
funding
reform in
Canada
• „The third rail of the third rail‟
• Not to be discussed in polite company
• Something best done behind the scenes
Policy and
methodology
design
parameters
…you‟ve seen one ABF system
Once you‟ve seen one ABF system…
• Scope of services funded
• Case mix methodologies
• Volume policies (uncapped, „hard‟ vs. „soft‟ caps)
• Fixed vs. variable funding
• Pricing and costing mechanisms
• Phase-in plan
• Quality incentives
• Physician payment
Results may vary…
Much of what you get depends on where you start, the design of the ABF system, the implementation approach and the broader health care and fiscal environment
Böcking, W., Ahrens, U., Kirch, W., & Milakovic, M. (2005). First results of the
introduction of DRGs in Germany and overview of experience from other DRG
countries. Journal of Public Health, 13(3), 128-137.
• 1983: Hospital Medical Records Institute (later CIHI) develops first version of Case Mix Groups – analogous to DRGs
• 1987: HMRI develops Resource Intensity
Weights (based on 1985 New York cost data – later Maryland data)
• 1989 – 1990: Ontario and Alberta
introduce case mix-based hospital (re)allocation models to adjust global budgets – “with the intention that in the long term, these models would form the basis of all hospital funding.”
• 1993: Ontario introduces case funding
for transplants, followed by dialysis and other specialized services
Canada: newbies to this game? Not so much…
Early
efforts
1992 2000
Denmark Sweden
1993
Australia
1995
Italy
1997
Norway Spain South Korea
2004 2003 1998
Japan Finland England
2005
Germany
2002
Switzerland
1983
US France
International ABF adoption timeline
1969
Hospital global budgeting
system introduced in Ontario
1988
Transitional
Funding introduced
2004
IPBA used to
allocate $240M in
hospital funding
2007
HBAM
development
1992
JPPC
established
First tranche of additional WT
surgical volumes purchased on
price x volume basis
Ontario Case
Costing Project
established
2006
LHINs
created
1995-97
HSRC uses
efficiency-based
formula for hospital
funding reductions
Ontario hospital funding timeline
Parallel universes
Canadian case mix hospital funding allocation models, then and now Old wine in new bottles?
Ontario and Alberta,
circa 1989-1990
HBAM,
circa 2013
The Canadian hospital funding „reform‟ policy approach: Incrementalism and buying change
…but what do you do when the money runs out?
Average Length of Hospital
Stay for Acute Care, 2011
7.9 7.7
6.5 6.5 6.4 5.8 5.6 5.4
5.1 5.1 5.0 4.5
0
2
4
6
8
10
12
GER CAN* SWIZ UK OECDMedian
NETH NZ US FR SWE AUS* NOR*
Days
* 2010. Source: OECD Health Data 2013.
12
THE COMMONWEALTH
FUND
Where did incrementalism get us?
Hospital Spending per Discharge, 2011 Adjusted for Differences in Cost of Living
21,018
15,433
13,025 11,968
11,374 11,306
9,894 9,611 8,478 8,363
7,842
5,339
0
4,000
8,000
12,000
16,000
20,000
24,000
US* CAN* NETH SWIZ DEN* NOR* SWE* AUS* NZ FR OECDMedian
GER
Dollars ($US)
13
* 2010. Source: OECD Health Data 2013.
THE COMMONWEALTH
FUND
Percent of adults who needed elective surgery in past 2 years
Source: 2010 Commonwealth Fund International Health Policy Survey in Eleven Countries
Data collection: Harris Interactive, Inc.
Wait times for elective surgery
The Achilles‟ heel of Canadian health care
So what‟s different today?
British Columbia Patient-focused funding
Similar names, different approaches
• Going „deep‟, funding total costs for selected patient populations
• „Made-in-Ontario‟ methodology, run mostly in-house within the Ministry
• Key messaging around incentivizing quality and evidence-based practice
• Accompanied by a slew of related programs – performance indicators, guidelines, clinical engagement etc.
Ontario Quality-based Procedures
• Going „broad‟, funding portion of costs for all acute inpatient and day surgery activity
• Uses CIHI CMG+ methodology – model run mostly by CIHI
• Key messaging around access, throughput, efficiency
• Focus on „keeping it simple‟ with funding – quality focus left for other programs (e.g. NSQIP)
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000Ontario Hospitals: 2008/09 Average Cost Per Acute/Day Surgery Weighted Case
Large Community Hospitals (N = 65)
59% of Total CaseloadTeaching Hospitals (N = 14)
36% of Total Caseload
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000Ontario Hospitals: 2008/09 Average Cost Per Acute/Day Surgery Weighted Case
Large Community Hospitals (N = 65)
59% of Total CaseloadTeaching Hospitals (N = 14)
36% of Total Caseload
Similar challenges: Winners and losers Ontario hospitals: cost per weighted case
Canadian health systems:
Change
fatigue?
Political divine intervention Bail-outs, „mitigation‟, special treatment, ad hoc
policy tinkering and changes of government
The next frontier: linking hospital
funding and quality?
- Donald Berwick Administrator
Centers for Medicare and
Medicaid Services (2011)
“The payment
system we are
headed for in this
country is, and
should be, based on
how well your health
care services
perform and positive
patient outcomes.”
• Evidence on hospital P4P is mixed, complicated by study design flaws and selection bias; more rigorous studies have tended to find smaller effects (e.g. US Premier P4P program)
• New care pathway-oriented, case-based P4P programs show some promise (e.g. UK „Best Practice Tariffs‟)
• „Normative pricing‟: still more an art than a science
• Strongest evidence of impact for funding incentives linked to non-funding quality mechanisms: clinical registry adoption
The jury is still out…
Acute hospitalization Total cost: $11,609
Hospital services: $9,295
Physician services: $2,314
Re-hospitalizations within 30 days
Total cost: $9,679
3.6%
100%
Inpatient rehabilitation
Total cost: $4,705
Discharge from acute care
26.0%
Home care
Total cost: $898
42.7%
Home with
no services
31.3%
Total expected cost for the episode: $14,192
Total post-acute care cost: $2,583
An Ontario case study of the potential for a promising new payment innovation: Bundled payments for episodes of care
Ontario knee replacement episodes: index hospitalization plus 30 days of post-acute care
Acute hospitalization Total cost: $11,858
Hospital services: $9,193
Physician services: $2,665
Re-hospitalizations within 30 days
Total cost: $11,858
3.1%
100%
Inpatient rehabilitation
Total cost: $5,106
Discharge from acute care
53.4%
Home care
Total cost: $904
19.4%
Home with
no services
27.2%
Total expected cost for the episode:
$16,137
Total post-acute care cost: $4,065
LHIN 8
N = 4,807 Acute hospitalization Total cost: $11,354
Hospital services: $9,294
Physician services: $2,060
Re-hospitalizations within 30 days
Total cost: $9,416
3.0%
100%
Inpatient rehabilitation
Total cost: $7,062
Discharge from acute care
6.8%
Home care
Total cost: $803
64.0%
Home with
no services
29.2%
Total expected cost for the episode:
$13,147
Total post-acute care cost: $1,794
LHIN 10
N = 2,663
Using the episode of care lens to reveal regional variation in post-acute care
Ontario Health Technology Advisory Committee Recommendation June 17, 2005
…but is there any evidence to suggest this variation is inappropriate?
…in this case: yes
hospital funding
Beware of the complexity trap: If you can‟t understand what you‟re being paid to do, how can you do it?
Related Documents
