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Alternative hospital funding proposal risky says study

October 27, 2014

TORONTO, ON — A new study says Cana­di­an fed­er­al and provin­cial pol­i­cy­mak­ers should be wary of fund­ing hos­pi­tals through an activ­i­ty-based fund­ing (ABF) mod­el.

This study is the first sys­temic review of world­wide evi­dence on ABF. It involved 19 researchers at sev­er­al Cana­di­an, Swiss and Aus­tralian uni­ver­si­ties, includ­ing Dr. Danielle Mar­tin, a physi­cian at Women’s Col­lege Hos­pi­tal and pro­fes­sor in the Depart­ment of Fam­i­ly and Com­mu­ni­ty Med­i­cine at the Uni­ver­si­ty of Toron­to.

Under ABF, hos­pi­tals receive a pre­de­ter­mined fee for each episode of care. The fee is intend­ed to cov­er the bun­dle of ser­vices and prod­ucts ordi­nar­i­ly pro­vid­ed to patients with par­tic­u­lar diag­noses, such as appen­dici­tis, pneu­mo­nia, trau­mat­ic injury or child­birth. The aim of ABF is to increase effi­cien­cy and reduce wait times.

How­ev­er the study, which was pub­lished in PLOS ONE, reveals that dis­charges from hos­pi­tals to post-acute ser­vices increased 24 per cent after imple­ment­ing ABF. Instead of recov­er­ing in hos­pi­tals, patients were moved to com­mu­ni­ty-based providers, such as con­va­les­cent care, long-term care, inpa­tient reha­bil­i­ta­tion facil­i­ties, skilled nurs­ing facil­i­ties and home­care.

“The mes­sage emerg­ing from this com­pre­hen­sive sys­tem­at­ic review of the world­wide evi­dence avail­able is that gov­ern­ments may not nec­es­sar­i­ly get the ben­e­fits they are expect­ing with activ­i­ty-based fund­ing,” warns Karen Palmer. The Simon Fras­er Uni­ver­si­ty adjunct pro­fes­sor in both health sci­ences and sci­ence is the study’s prin­ci­pal inves­ti­ga­tor and lead author. “There may be adverse con­se­quences for which gov­ern­ments are unpre­pared.”

British Colum­bia, Ontario and Que­bec are among the Cana­di­an provinces active­ly pur­su­ing ABF fol­low­ing its adop­tion in the Unit­ed States in 1983. ABF has since spread else­where, includ­ing Eng­land, Aus­tralia, Switzer­land and Ger­many.

The study’s inter­na­tion­al research team screened 16,565 arti­cles pro­duced dur­ing the last 30 years, find­ing 65 rel­e­vant stud­ies from Aus­tralia, Aus­tria, Eng­land, Ger­many, Israel, Italy, Scot­land, Swe­den, Switzer­land and the Unit­ed States.

The researchers con­clude that ABF encour­ages a “sick­er and quick­er” dis­charge of patients from hos­pi­tals. Com­pared to oth­er hos­pi­tal-fund­ing mech­a­nisms, study results show that ABF puts far more pres­sure on deliv­er­ing post-acute care in the com­mu­ni­ty and may also increase read­mis­sions to hos­pi­tal.

“In Cana­da, some hope that ABF will reduce wait­ing times through faster patient turnover. Our sys­tem­at­ic review found no con­sis­tent improve­ments in the vol­ume of hos­pi­tal care with ABF, par­tic­u­lar­ly in the num­ber of acute admis­sions,” says Thomas Agorit­sas, one of the study’s Swiss med­ical inves­ti­ga­tors and a researcher at McMas­ter Uni­ver­si­ty.

The authors point out that although Cana­da has pub­licly fund­ed hos­pi­tal and physi­cian care, there is com­par­a­tive­ly lit­tle pub­lic fund­ing for home care, reha­bil­i­ta­tion care and oth­er forms of post-acute care.

“We don’t under­stand what pre­cise com­bi­na­tion of ingre­di­ents makes ABF work bet­ter or worse. That means that things could go bad­ly wrong, includ­ing increas­es in death rates and increased admin­is­tra­tive costs—wasteful spend­ing our sys­tem can­not afford,” says Mar­tin, who notes that the results var­ied across hos­pi­tals and juris­dic­tions.

The study was fund­ed by the Cana­di­an Insti­tutes of Health Research.


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