Overhaul Time for understanding and fixing the health care funding: think tank


Sometimes you have to spend money to save money.

The provincial government must dedicate more resources to understanding and fixing the funding problems plaguing public health care as part of its overhaul of the system, says the head of a Halifax-based think tank.

But finding the political will to spend potentially millions of dollars researching and analyzing the way health care is funded in the province, studying everything from the costs of surgeries and diagnostic scans to running hospitals, may be difficult, says Charles Cirtwill, acting president of the Atlantic Institute for Market Studies.

“It’s very hard for a health minister to say ‘We’re going to take $5 million out of the system and get measurement and reporting right’ because everyone looks at that $5 million and says ‘How many nurses is that, how many doctors is that, how many lab technicians is that?’,” said Cirtwill.

“It’s a difficult balancing act.”

New Brunswick’s health care funding system is broken.

The provincial government spent $2.1 billion of its $6.6-billion budget last year on health care.

The Liberals increased the regional health authorities funding by $105 million, a 9.4 per cent increase.

Yet the eight health authorities in the province are expected to post $55 million in deficits this year.

Health Minister Mike Murphy has said the province cannot afford to continue increasing the health budget at the current growth rate.

He has also pledged to end the health authorities’ practice of accumulating deficits.

Once the deficits are dealt with, Murphy said this week he’s open to looking at new ways of funding health care in the province such as patient-focused funding.

Patient-focused funding is also known as volume-based, activity-based, or fee-for-service funding.

Under a mixed patient-focused funding model, health authorities in the province would only be given a portion of their annual budgets at the start of the year.

As patients visit facilities, the health authorities receive payments for the medical procedures performed.

The proponents of the patient-focused model have said it is so named because it is designed to turn the perception of patients as a drain on a hospital or health authority’s budget to a revenue gain.

They argue that patient-focused funding increases efficiency, encourages healthy competition and spurs on innovation and hospital specialization.

However, well before the province could move to a patient-focused health care funding system, it would need a comprehensive study on the benefits and risks of the model as well as how it would work in practice in New Brunswick.

Some of the needed information already exists, said Cirtwill.

“There’s a lot of this information out there but it’s not being effectively used and there’s not a lot of time and energy fixing the problems that have been identified (already),” he said.

Public concern with the state of the provincial health care system will drive politicians to act, said Cirtwill.

“Politicians are really good at taking the barometer of the people and they will go as far as the taxpayers are prepared to go,” he said.

“I think New Brunswickers and Canadians in general are open now to finding innovative ways to delivering the care that they know they need and they know they’re not getting.”

New Brunswick’s current funding system doesn’t provide enough of an incentive to make health authorities accountable for their spending, said Cirtwill.

“Right now”¦there are no penalties for bouncing over,” he said. “Health authority managers don’t lose money for going over budget. They don’t lose their jobs.”

“As long as we have a system where nudge, nudge, wink, wink ‘if you run over we’re going to make it up some how’, then we don’t have the incentives to deliver the best quality health care for the lowest cost.”