Contracting for hospital services

Ontario proposes radical overhaul of hospital funding - The Globe and Mail

Attached is today's Globe story on the proposed system of compulsory contracting for hospital services that the Star reported on last week. Here's something from the hardly surprising department: they are already paving the way for the idea that the new funding model will not save money.

When a compulsory contracting model was introduced to home care, costs actually went up (to the market price, a government report rationalized). It also, of course, led to the wide-spread elimination of community-based not for profit organizations by for-profit corporations.

The tail end of the Globe story indicates that Ontario has the second lowest hospital costs per capita across Canada (just slightly higher than Quebec). But why not mess with a winner??

Even the OHA says the system wouldn’t work for smaller communities; that makes me think the government may make some attempt to mitigate the destabilizing impact of such a system in those areas.

Right or wrong, this story ties the new model to "HBAM" funding, which has been been proposed for a while. In the past, however, HBAM has not been tied to a system of compulsory contracting, or market based contracting, as far as I know.

I suspect the reference in the story to the University Health Network's pay for procedure is misleading – market-based systems do not work for highly complex or specialized procedures as there are too few potential providers.

Finally, note all the cash the government has found for some hospitals in recent months.


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