Alternative hospital model unhealthy for patients, says SFU professor

Photo of Lions Gate Hospital from Vancouver Coastal Health and Professor
Photo of Lions Gate Hospital from Vancouver Coastal Health and Professor Karen Palmer from SFU via Flickr

The public should be concerned about the federal and provincial policymakers’ interest in an activity-based funding (ABF) method for hospitals, according to a new study led by a Simon Fraser University health services.

ABF is a system where hospitals receive a pre-calculated amount for each health care scenario. Hospitals would be paid based on each patient’s particular diagnosis opposed to receiving a large sum for everything. Currently, BC, Ontario and Quebec are among the Canadian provinces pursuing ABF following in United States’ adoption in 1983. The method has also spread to other countries like England, Australia, Switzerland and Germany.

The study published in PLOS ONE is the first system review with worldwide evidence on ABF, which involved 19 researchers at several Canadian, Swiss and Australian universities. Lead author and SFU adjunct professor Karen Palmer determined that that ABF encourages a “sicker and quicker” discharge of patients from hospitals before they are ready.

“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 Palmer. “There may be adverse consequences for which governments are unprepared.”

The study showed a 24 per cent increase in discharge from hospitals to post-acute services after ABF. More patients were discharged to community-based providers like nursing facilities and homecare.

Although the nation has publically funded hospital and physician care, in comparison there is little funding for forms of post-acute care such as home or rehabilitation care, the authors noted.

Swiss medical investigator and McMaster University researcher Thomas Agoritsas says that under ABF, the risks could outweigh Canada’s expectations for the funding.

“Countries worldwide have specific expectations when implementing ABF, but research shows they cannot count on meeting those expectations,” said Agoritsas. “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.”

Services and products normally provided to patients with a particular diagnosis like pneumonia or childbirth will be covered with the ABF pre-determined fee.

“If they move ahead with ABF, they should implement it in stages, and evaluate the impact as they proceed,” warned Palmer.

The system had varied results across hospital, which makes University of Toronto professor and physician Danielle Martin skeptical of the potential future model.

“We don’t understand what precise combination of ingredients makes ABF work better or worse,” she said. “That means that things could go badly wrong, including increases in death rates and increased administrative costs—wasteful spending our system cannot afford.”

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