5/20/12

60% of hospitals forced to cut costs

Hamilton hospital managers are raising concerns about the new fee-for-service funding system for hospitals. The Hamilton Spectator reports that the new funding model will force 60 per cent of hospitals to lower their costs because the fees paid will be based on the cost per case of hospital's at the 40 percentile.

Every hospital in Hamilton has costs higher than the 40th percentile.  The Spectator adds that Hamilton hospitals say there is no way they can match the costs of community hospitals that send their toughest cases to them. They want to be compared against other hospitals that care for the sickest and most complex patients. 

"It's going to be fairly daunting," Dr. Bill Evans, president of Juravinski Hospital and Cancer Centre, told the Spec. "Whether it's truly possible to deliver the volume of care at that level of funding remains to be seen.... Fortieth percentile seems terribly low to me. But it is what it is and we'll just have to work with it."

Kevin Smith, the Hamilton Hospital CEO with close ties to the provincial government states, "There are issues, particularly in teaching and research, that we really need to better understand and those won't dovetail always with the lowest cost. I've heard lots of concerns, but I think there has been recognition that we will break some eggs along the way and we'll come back and look at it."

Smith suggests there may be some wiggle room: "It's saying if someone can do it at that rate, that's the rate we're willing to fund it at. If it's apples to apples, I think that is fair. If it's not apples to apples, that's the more difficult part. We're going to have a policy discussion about how we're going to handle it."

"We are concerned about it," said Dr. Wes Stephen, chief of surgery at Hamilton Health Sciences. Dr. Anthony Adili, chief of surgery at St. Joseph's Healthcare adds, "What the hospital is trying to grapple with right now is what impact will this new funding have."

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