Friday, September 24, 2010

Bringing market forces into the hospital

I headed into the local hospital for a quick day treatment in a clinic last week.
Two doctors were waiting to see a cluster of us. But the nurse who usually worked that clinic room was on holidays, which had been scheduled for some time.
The hospital hadn't arranged a replacement nurse. One doctor decided he couldn't work without nurse support. So half the patients were sent home to be scheduled for an appointment in another month or two.
That's a good example of the kind of problem the government hopes to fix with "patient-focused funding."
It makes sense. Now, the Health Ministry sets a budget and provides funds for the health authority. The authority allocates the money to different services, including hospitals, and decides how many surgeries, for example, it can do with the cash.
So there are no consequences for cancelling treatments because someone in the hospital didn't arrange a replacement nurse. The patients still have to come back. The hospital doesn't lose any funding.
Under patient-focused funding, that changes. The government holds back more of the block funding it once sent to health authorities. Hospitals and health authorities get paid a set amount per treatment on a per-patient basis.
Under that approach, the failure to get a nurse would be costly. Those cancelled treatments would mean lost revenue. So there would be an incentive to solve the problem.
Just as there would be an incentive to do things faster and at less cost, bringing in more revenue.
A hospital might decide to set up two adjacent operating rooms to do the same procedure, for example. While one patient is being operated on, another can be prepped for surgery. As soon as they're done, the teams switch places and the process starts again.
That would mean lower costs per patient. If the government were paying a set fee, the hospital or authority would have extra money for other projects.
It could even ask hospitals to bid for right to provide hip surgeries, for example, and pick the most cost-efficient.
There are catches, of course. The most obvious is the risk that corners will be cut. The B.C. Medical Association supports the idea, but wants safeguards to make sure cheap and fast doesn't take priority over patients' health and safety.
And the incentives, so far, aren't individual. It's hard to say if the person who didn't line up a replacement nurse would be motivated to act differently by the promise that the hospital would get more money as a result.
The bigger problem is likely that there are no real rewards for success.
The government is still rationing services. So even if a hospital is brilliant at some surgery, getting better results at a much lower cost, the Health Ministry will tell it to stop when the quota is done for the year.
Everyone involved can do great work, with no real reward.
There are solutions. The government, for example, could provide guarantees to medical service plan clients. Hip surgery in six months, or we fly to you to Seattle for the operation and pick up all the bills. Hospitals would know it was worth getting really good at hip replacement, because the ministry wouldn't want to fly patients to the U.S.
The whole initiative is just getting going. The government has set up a Health Services Purchasing Organization, headed by Dr. Les Vertesi (who is also Gordon Campbell's brother-in-law) to manage the process and is looking to have a large share of health spending managed this way.
By next year, the government hopes about $170 million will be taken out of health authority budgets to be spent by the purchasing organization.
There is another issue in all this, large enough to warrant a second column. Vertesi has been a strong advocate of a allowing a private health care alternative for people who can pay more for speedier treatment. And the patient-focused funding, Health Minister Kevin Falcon, could be used to buy services from private clinics.
That's not necessarily a bad thing. But it does raise some serious questions, which I will look at in a future column.
Footnote: Falcon announced an extra $23 million in "patient-focused funding" for tests and surgeries. Up to 33,000 patients would benefit, he said. Which means the $800,000 the government spent on the pro-HST flyer it tossed in the garbage would have helped 1,150 patients on waiting lists.


Anonymous said...

How many patients could have benefited if the $500 million stadium roof had been seen for what it is - overpriced, unaffordable, and unnecessary? What about the severence packages and bonuses, and game tickets, for the directors of BC Rail, how many patients would benefit from that kind of indefensible waste of tax dollars? Do I need to go on? Falcon was in on those decisions and many others that put the lie to his "concern" for British Columbians's health and welfare, if it gets in the way of any of his leader's whims. Kevin "Total Recall" Falcon is disingenuous, if nothing else, and anything he says should be regarded with a great deal of suspicion as well as caution, particularly when it comes to healthcare for anybody without big bucks in BC.

Raymond Graham

Anonymous said...

When the BC Liberals came to power in 2001 they made much of the fact that the previous regime did NOT know how much each operation cost at each facility.

Now that the BC Liberals have created a brand new bureaucracy - the Health Services Purchasing Organization (and how much is that going to cost in support staff, leases etc?) - we need to know what the benchmarks are.

What is the cost of a hip replacement at Vancouver General v. St. Pauls v. Prince George Regional Hospital or Kamloop's Royal Inland? What about Kelowna General Hospital's two step angioscopy/angioplasty v. Vancouver General's highly honed integrated machine?

Minister of Health Services Kevin Falcon says: 'Trust Us, we've put Gordon Campbell's brother-in-law in charge'. Ya right... we all know how Wells it went the last time a Campbell brother-in-law was put in charge.

Anonymous said...

In the Legislature, back in 2004, Joy MacPhail managed to draw out of the then new Transportation Minister, Kevin Falcon, when he might release of the details of spending $900,000 to stop the sale of Roberts Bank to public scrutiny. BC Rail financial statements are Consolidated, there's no document showing the break down on specific expenses.

MLA MacPhail asked if the information wouldn't be available till after the trial (possibly thinking it would be in a year or two at the most from when the raid on the legislature took place) to which MLA Falcon replied YES.... in essence he was thinking (its before the courts).

Within the CIBC World Markets fee there must be a ton of information that the public is not privy to including that of one Patrick Kinsella.

DPL said...

When Gordo and Co changed the running of hospitals to people he wanted to run things, the system went downhill. Massive salaries and no accountability from the hospital authorities. Nurses disappeared and the HEU contracts were broke, staff shortages were immediate, hospital hours limited. Contracting out was and still is a mess. The people making the big bucks are the culprit and nobody seems to get thumped. MRI machines only operate part time but run 24/7. I waited for about six months for a nerve test so when It was being done I asked the specialist doing the test, why the delay. Simple says he, the hospital won't hire a technician to do the tests, so he closes his office a couple days a week to do them himself. Not too smart an arrangement as the techs are trained as near as in Vancouver. Our daughter is a LPN and works very long hours, then is offered an additional 4 to 6 on overtime. They all could work seven days a week if their bodies could handle it. Would you or I want to have a medical procedure done by someone toward the end of their 16 hour day. I think not.

Operating rooms are time limited , the surgeons have their own teams and if someone doesn't show up they, not the system, gets the replacement. Are we prepared to get our operations done in some clinic like the one in Victoria, located above a furniture store, and done by the same surgeons who can't get operating time over at the hospitals. Cost saving , baloney. Poor management is the big problem not the medical workers no matter which profession. No one comments on the actual staff performance , it's always about the system and the system is run by Gordo's folks. Wait lists went sky high just after the election as the different procedures were cut. That shows us that with some management and some bucks things would work far better. Hiring Gordos' brother in law is just another big chunk of money going into his pocket, not the system. Not rocker science just poor planning at the top and the top is the Government and their overpaid boards.

Tony Martinson said...

Yes, let's please bring the Walmart ethos into health care. Here's the business plan: 'compete' with the public sector by undercutting costs and operating at a loss until the public sees that the private sector can do it cheaply, then once the public hospitals have all been defunded, the private operators can take over and charge whomever whatever they want.

Stephanie T said...

I fail to see how this will change anything. The health ministry still has the same finite budget so hospitals will still be limited in the number of procedures they can perform.

If a hospital decides to specialize in procedure "A", it will be at the expense of procedures "B","C" and "D". How does this benefit those of us who live outside of the lower mainland and would have to travel greater distances to have something done?

As far as I know, doctors are already paid on a per patient/per procedure basis. The only thing different in this funding model is the addition of a new, expensive layer of bureaucracy that will do nothing more than suck money out of patient care.

Kim said...

Paul, do you trust Kevin Falcon or Gordon Campbell to tell the truth? To base decisions on the public good?

Anonymous said...

Why I am not surprised to find lefties hanging out on a leftist blog site ?

Funny how you are all long on criticism but short on actual solutions. Maybe some of you high quality individuals will put your name forward to run as an MLA and show us all how it is done. I am sure it is a very easy job trying to please the likes of you fine folks.

DPL said...

Hey anon 10:00 , there will be a number of vacancies as the recalls get underway. I for one mentioned some solution. Get rid of many of the high paid low producing senior management would be a great start.Totaling up the salaries of those folks would curl even a Liberal hacks hair Start with Gordo's brother in law

kootcoot said...

"The hospital hadn't arranged a replacement nurse. One doctor decided he couldn't work without nurse support. So half the patients were sent home to be scheduled for an appointment in another month or two."

Try dealing with the Inferior Health Authority in the Hurtland. We get to drive 500-600 miles round trip through mountain passes to find out stuff in Trail or Kelowna that they could have told us over the phone. A friend recently was scheduled for surgery at the Hellhole known as Kelowna General based on a trip over for diagnostics. When he arrived he was told that they had changed their mind and he wasn't a candidate for the procedure after all. Another patient had to get all the way to Kelowna to participate in a telephone conference call with a specialist at the coast - I'm certain they realize we have phones here also and even used to have OR facilities.

Castlegar Hospital is now a big office building for the bloated bureaucracy of the IHA - we took the biggest cuts in services in our region so the IHA executives could enjoy the largest "performance" bonuses - based on savings achieved by closing hospitals and beds and services apparently!

It is totally absurd to force ill people to travel so far at great inconvenience and cost to talk to a doctor with NO EXAMINATION or even removal of shirt - in other words to conduct communication that could be done over the phone.......

Anonymous said...

I Like the ebay and marketing