‘Won’t fix our systems’: Doctor breaks down Alberta’s ‘patient-focused funding’ model

Dr. Braden Manns, a professor at the University of Calgary, joins Alberta Primetime's Michael Higgins to discuss the new hospital funding model.

The Alberta government launched new funding for hospitals tied directly to the number and complexity of surgeries performed. The premier says the model will incentivize hospitals to do more with resources and improve transparency. Dr. Braden Manns, a professor of medicine and health economics at the University of Calgary, joins Alberta Primetime’s Michael Higgins to discuss what he thinks the program will impact.

This interview has been edited for clarity and length.

Michael Higgins: How does this play as a solution for clearing surgical wait lists and getting Albertans to surgery quicker?

Dr. Braden Manns: You know the headline sounds pretty good, ‘patient-focused funding,’ and that sort of makes sense. Right now, surgery funding for hospitals flows to a global budget and what the government is doing is taking that money away from the global budget and will be giving it back to the hospitals as this ‘patient-focused funding,’ or what we call ‘activity-based funding.’ The money is based on how much it actually costs to provide that service and the goal is to do more surgeries, but of course it gets a little more complicated than that.

MH: In terms of those complications, what is the impact on the health system? Where does it leave quality of care?

BM: This government is really focused on access and access is important to Albertans, frankly to all Canadians. We’re not the only province that has done this. Quebec and Ontario have done this as well, to different extents. But Quebec did this, probably 15 years ago, and what we saw is that for surgeries following this patient-focused funding, the number of those surgeries go up, but the number of other surgeries don’t. So that’s one concern, that we’re going to see more of these types of surgeries and you can clearly see where this is going.

All of the surgeries that are in this patient-focused funding formula are ones that are done in the chartered surgical facility, so this will quickly move from a pilot and bolster access and volume in the chartered surgical facilities. Access is important, but what’s left behind are all those cancer surgeries, the heart surgeries that can only be done in hospitals, and this is going to again negatively impact access for that.

We can talk about quality for a long time, but right now we don’t assess quality in the chartered surgical facilities. We’ve actually backed away from assessing the quality of surgeries in the health system over the past three years. It’s just moved to access and a focus on that.

MH: How do you view comparative performance between surgeries in hospitals and chartered surgical facilities? Is there as much disparity as we heard?

BM: They’re not backstopped by intensive care units or in-patient beds, so they’re doing the easier surgeries. Yeah, you can do surgeries in the chartered surgical facilities more quickly. They take the easier cases, those are quicker to do. They don’t teach students, they don’t teach our residents. We need to train our future physicians and not bring in new staff and all of that stuff.

So why do they take the easier cases? Those are the ones you can do safely in the community, but those are also the ones that are a lot more profitable. You get paid the same essentially, for a case where it takes you two or three hours. Which ones are the chartered surgical facilities going to want? They want the two hour cases. What’s left in the hospital system are the sicker patients who need more support, who are going to take longer because they might need redo surgery, so it’s pretty unfair to compare. It’s not an apples to apples comparison.

MH: What are you watching for where the costing of surgeries is concerned under this new funding model? Especially as that costing applies to hospitals?

BM: My eyes bugged out when I saw the cost for the surgeries. The $8,500 for the hips and knees surgeries? It’s twice what the health system costs for those same types of surgeries. So I was scratching my head, why if they come in with such a high price? But then what you realize is that with patient-focused funding, let’s just say it’s $10,000 for a hip surgery, they’re taking that $10,000 away from the hospital in the global budget and they’re giving it back to them if they do the surgery.

If hospitals don’t keep up or don’t do the volume they did last year, they’re going to lose a lot of money. But that doubled price now is what the price is going to be for the chartered surgical facilities. I presume this is all meant to try to increase the number of surgeries that will be done in these chartered surgical facilities and it’s actually going to penalize the hospital. I was trying to understand why the prices were so high, but I think that’s the implication.

MH: The premier says this is about reducing downtime and incentivizing the best use of resources. What kind of pressure might this put on management at the local hospital level?

BM: Because we have not done a good job in workforce planning, you need three things for a surgery: money, a budget that’s allocated to you, you need the operating rooms and you need the staff and the surgeons and the anesthetist. When a patient goes to a chartered surgical facility, they are taking their surgeon, their anesthetist, and the operating team with them. Those people are not available in the public system. What we’ve seen with more contracted out surgeries over the past three years is longer wait times for surgeries that can only be done in hospital, so we’re not correcting that workforce challenge.

MH: You’ll often hear from frustrated Albertans, ‘The health system is broken, it’s time to try something new.’ How do you respond to that perspective? Even the willingness of Albertans to embrace privatization?

BM: I think 90 per cent of Canadians say that they’re frustrated and they’re willing to explore new solutions. I’m actually not against activity-based funding, as long as we regulate it and we understand that it’s going to do more of these types of surgeries, and that’s what Albertans want. They want joint surgeries, they don’t want as many cancer surgeries. These things just have implications and we have to understand that. I’m not against necessarily trying this, as long as we regulate it carefully.

The problem is when we implement things, it’s going to have unintended consequences. What we really need for the system is a long-term plan, not a plan that’s a two-year plan between electoral cycles. We need accountability of the system and more partnerships with doctors. There are solutions, it’s just that sometimes the ones that are easy to announce, they sound great. But that’s not the fix for our systems.