ESMAIL, MOIR: ‘Alberta’s latest reform will improve health care’

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Despite any fearmongering about “American-style” health care, the Smith government’s new patient-focused funding model for surgeries is another step towards better health care for Albertans.

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At an initial group of 12 public hospitals (including Rockyview General Hospital in Calgary and Royal Alexandra Hospital in Edmonton) the government will pay for a select set of orthopedic and eye surgeries on a per-patient basis. The plan is to expand this funding model, after careful assessment of results, and move away from lump-sum hospital budgets.

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This is hardly a radical move. Better-performing universal health-care systems across the developed world have long paid hospitals on a per-patient basis. The logic is simple. Instead of lump-sum budgets, which effectively make each patient a cost for the hospital, the new funding model incentivizes hospitals to provide more services and operate more efficiently by making patients a source of revenue. As a result, wait times (a chronic problem in Alberta) drop and taxpayers receive better value for their money.

Patient-focused model

Some countries with universal health care, including Sweden and Australia, began adopting this “patient-focused” model in the early 1990s. By the early 2020s, Canada was one of only five universal health-care countries (out of 31) that did not follow this approach, and some countries are now on their second or third generation of the model, incorporating new innovations to encourage an even greater focus on quality. Even within Canada, this is not new — Quebec began adopting the model nearly a decade ago.

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In other words, Alberta is not breaking new ground and in fact is well behind the curve in moving to what is, according to international evidence, a far better way to pay for hospital services.

Indeed, studies from around the developed world have repeatedly shown the shift to patient-focused funding helped increase the volume of care, reduced costs per patient and (perhaps most importantly for Albertans) shortened wait times, while also helping improve quality and access to advanced medical technology. For example, in England, the shift to patient-focused funding in the early to mid-2000s helped increase hospital activity and reduce the cost of care per patient — again, without negatively affecting quality of care. Sweden saw similar results in the early 1990s.

Critics off base

Yet once again in Alberta, opponents of genuine health-care reform claim this change will prompt hospitals to focus on “quicker, less complex procedures at the expense of comprehensive care, proper followup, and better health outcomes.” But you can make that same criticism of the current approach, where hospitals can focus on less complex patients to limit the drain on their lump-sum budgets. Rather than make spurious claims, these opponents of reform should look at the evidence from other universal health-care countries that moved to this model and improved access for everyone without reducing access for older patients or those with complex conditions.

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Clearly, there’s a reason why every top-performing universal health-care country with much shorter wait times and far better access to high-quality care — including the Netherlands, Switzerland, Germany and Australia — employs patient-focused funding for surgical care. Rather than learn from these countries, opponents of reform seem content with fearmongering to maintain the status quo, which has failed Albertans.

In reality, the evidence is clear. This new-to-Alberta funding model represents another meaningful step towards better health care for all Albertans.

Nadeem Esmail and Mackenzie Moir are analysts at the Fraser Institute.

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