Ontario Liberals want hospitals to compete for cash

This might be asking for skewed reporting and other modes of spinning data so as to attract more cash. We will have to wait and see what happens. Ontario's ideas about saving money in health care often involve hiring expensive experts such as those at eHealth who seem to have wasted wads of taxpayer money and accomplished very little. This is from thespec.

Liberals would have hospitals compete for cash
Loweest bidder would get funding
Patients face might travel further to get care

ROB FERGUSON




Patients would have to travel farther for some operations and treatments but the savings to taxpayers could top $3 billion a year under radical hospital reforms being considered by Premier Dalton McGuinty's Liberals, the Torstar news service has learned.

The plan would have hospitals essentially forced to compete for cash by doing acute care in-patient surgeries and such treatments as hip replacements more cheaply than rivals, with the lowest-cost bidders getting more of the work, sources said Wednesday.

The new "patient-based payment" system would save an estimated 10 to 20 per cent – that's $1.8 billion to $3.6 billion – of the $18 billion in tax money now given to hospitals annually, mostly with no strings attached, said a consultant familiar with the concept.

"The savings come from the reduced duplication because hospitals compete with one another and don't try to be all things to all people," added one Liberal official, conceding that the change may not be welcomed in general hospitals or in those serving rural communities.

However, it would reward better-performing hospitals which could get more money based on the number of patients treated and successful outcomes for their health problems – because the more quickly they can cure or treat patients successfully, the more patients they can bring in.

Under the new system, patients might have to travel across town or to other municipalities as hospitals try to narrow the range of services and procedures they offer, to take advantage of economies of scale that keep costs down.

The government's concern with handing out money to hospitals for general use is that it's impossible to tell exactly where the cash is going and how efficiently it's being used, said another source. "We have no sense of what we're getting for that money. It's difficult to compare one hospital with another. What are the procedures costing?"

McGuinty, who is making "Open Ontario" the main theme for governing through to the October 2011 election in next Monday's throne speech, warned that voters have to keep an open mind on revamping the health-care system.

"One of the things that we necessarily must look at of course is the way that we deliver services. The big challenge for us ... is the ever-escalating costs associated with health care," McGuinty told reporters Wednesday.

"When I got here 20 years ago, I think it was 32 cents on the program dollar went to health care and now it's 46 cents. They tell me that in 12 years, it will be 70 cents on the dollar if we continue at the existing rate of growth," he said.

The danger is health-care costs, particularly with the wave of Baby Boomers turning 65, that will "crowd out" other priorities like education and the environment and the war on poverty and others.

"We have to find a way to come to grips with that. That will all be part of the consideration that we'll be speaking to in the throne speech."

The competitive model is already being used for 10 to 20 per cent of hospital budgets in key areas where the government has worked to cut waiting times for cataract surgeries, hip and knee replacements, MRIs and CT scans.

"It's created competition in the best sense," said Dr. Kevin Smith, chief executive officer of St. Joseph's Health Centre in Hamilton and chairman of the Ontario Hospital Association. "You see who's doing the best work at the lowest cost and who's getting the best results for patients."

The health ministry now pays for cataract surgery at $625 per procedure, CT scans at $250 per hour, MRIs at $260 hourly, and hip and knee replacements at $8,930 per procedure.

McGuinty has played his cards close to his chest on the cost-cutting efforts contained in Finance Minister Dwight Duncan's budget, expected by the end of the month. The government is facing a record deficit of $24.7 billion.

The government faced a rough ride in its first budget in 2004, instituting a health premium of up to $900 per person.

Liberal insiders at Queen's Park confide that the "patient-based payment" strategy is part of its "health-based allocation model" plan for the 14 regional local health integration networks overseeing the delivery of care.

NDP Leader Andrea Horwath of Hamilton said McGuinty's trial balloon "sets out some alarm bells about what this government's intentions are in terms of funding for health care."

Progressive Conservative MPP Peter Shurman (Thornhill) said the Liberals "keep spending more and more by insulating themselves in layers of bureaucracy." He was referring to the local health integration networks and problems at scandal-plagued eHealth Ontario.