B.C. follows Europe's lead with pay-for-performance hospitals

by ROD MICKLEBURGH — August 3, 2007

VANCOUVER -- British Columbia has unveiled a multimillion-dollar pilot project that, if successful, could lead to a dramatic change in the way hospitals operate in Canada.

The project could also provide a way to unplug patient bottlenecks that continue to plague emergency wards across the country.

To be tried out in hard-pressed emergency departments at four large Vancouver-area hospitals, the project is based on a concept widely used in Europe known as pay-for-performance.

It provides incentive funding to hospitals based on efficiency and the services they provide for patients, rather than Canada's existing "bulk funding" system, which simply gives hospitals large budgets to use as they see fit.

In recent years, Britain's National Health Service has drastically revamped much of its public hospital funding in favour of pay-for-performance, with mixed, but mostly successful results.

Under British Columbia's $16.4-million venture, believed to be the first of its kind in Canada, hospitals will receive cash bonuses if they treat emergency patients within set time limits.

They will receive an extra $100 for every patient requiring hospitalization who is admitted to a bed within 10 hours, and $60 for every patient treated and discharged within two or four hours, depending on the urgency of their needs.

B.C. Health Minister George Abbott said Canada is the last country in the Western world to rely entirely on block funding for hospitals.

"I am convinced that incentive-based funding is a model for the future, as a way to try and ensure the best patient care," Mr. Abbott said yesterday, as he announced a total of $85-million in funding for 29 innovative health-care projects in the province.

By far the largest share of the projects will go to the incentive experiment in emergency departments at Vancouver Hospital, St. Paul's, Richmond General Hospital and Lion's Gate Hospital in North Vancouver.

Grant Innes, regional medical director of emergency services for the Vancouver Coastal Health region, agreed that the idea of pay-for-performance is controversial.

Critics argue that there is a danger of turning hospitals into profit-based institutions, hungrily competing for patients with other health-care facilities. But Dr. Innes said introducing cash incentives, which the hospitals will pour back into patient services, can reduce delays in care and improve patient access.

"Right now, at St. Paul's, we treat over 60,000 emergency patients a year," Dr. Innes said. "If we free up an additional 30 minutes per patient, that would allow us to see another 10,000 patients a year."

At the moment, he said, there is little incentive for hospitals to improve emergency department efficiency.

"Their reward is a greater patient work load, but no more work space, and no more staff. So in effect, we are punishing good performances."

Providing bonuses for swifter treatment of patients will allow hospitals to expand services and improve the system, he said. "If we achieve our timed targets, we can eliminate overcrowding."

But NDP provincial health critic Adrian Dix said there is a danger that incentive-based funding will prompt hospitals to push patients through the system too quickly.

"It gives more money to emergency departments, but are the incentives right? Do we want to move to a system that leads to hiring more accountants than new doctors?" Mr. Dix asked.

"This seems to be the creation of a statistical system to provide more money, rather than just providing the money. I guess the public will have to decide whether these are positive or perverse incentives. I have concerns that they are perverse."

Dr. Innes denied that patient care will suffer if hospitals benefit from quicker treatment.

"This is not rush, rush, rush. The time limits we have set are very reasonable, and longer than those in the [United] States and the United Kingdom."

Mr. Abbott said it is difficult to understand why Canada has relied on unwieldy block funding of hospitals for so long.

Source:The Globe and Mail