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Hospital funding model changing

Ontario is making changes to the way it funds hospitals to ensure families get access to the right health care, at the right time, and in the right place.

The new patient-based funding model will see hospitals funded based on how many patients they see, the services they deliver, the quality of those services, and other specific community needs.

Currently, hospitals get a lump sum based on their previous year’s budget with no link to the type or quality of care they provide.

Working in partnership with hospitals, Ontario will phase in the new patient-based funding model over the next three years.

The new model also will provide a better return for taxpayer dollars and result in:

  • shorter wait times and better access to care in their communities;
  • more services, where they are needed; and
  • better quality care with less variation between hospitals.

Allowing health care funding to follow the patient instead of the hospital is part of the McGuinty government’s Action Plan for Health Care, and builds upon the significant progress that has been made in improving Ontario’s health care system since 2003.

“Our current funding model for hospitals is out of date and doesn’t reflect the needs of the communities they serve,” said Health and Long-Term Care minister Deb Matthews.

“As part of our Action Plan, we are implementing a system that funds hospitals to increase services where needed, deliver quality care more efficiently, and serve more patients,” she added.

“The Ontario Hospital Association has been a long-time supporter of patient-based payment because it has tremendous potential to align hospital funding with positive patient outcomes,” noted Mark Rochon, interim CEO, the Ontario Hospital Association.

A total of 91 hospitals are transitioning to the patient-based funding model.

Fifty-five small hospitals will be excluded from the new model to recognize the unique role they play within their communities.

Other jurisdictions have been using this type of funding model, and have shown benefits such as decreased wait times and a higher number of procedures.

Sweden adopted a similar model in 1992, England in 2003, and British Columbia and Alberta in 2010.

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