Canada spends more than $47 billion a year on hospital care, and has over 70,000 hospital beds. Yet accessing these beds when they’re needed most remains an important public health concern. Patients regularly experience long emergency-room waits and cancelled surgeries as a result of the health system’s inability to make hospital beds readily available. Understandably, frustrations run high.
Changing the way health care is funded can be an important solution to this problem.
Many hospital beds are being used by patients who no longer require the specialized equipment or nursing care provided by a hospital, but, despite having been approved for discharge by their doctor, are awaiting placement in a continuing-care facility – either hospital-based rehabilitation, residential, or home care. They remain hospitalized because there are no appropriate continuing-care settings that can accommodate their medical and social needs. Such patients use 14 per cent (or 9,800) of the hospital beds in Canada each day – a stunningly inefficient use of hospital services that is unparalleled in other developed countries.
In a recent report, the Canadian Health Services Research Foundation targets the complex underlying factors that have made effective solutions to Canada’s “hospital-bed problem” difficult to implement.
First, there is a disparate mix of stakeholders with different objectives, including publicly funded physicians and hospitals, and a mix of publicly and privately funded continuing-care providers. They all need to work together to empty the beds currently occupied by patients who no longer need to be in hospital, and to divert future unnecessary hospital-based care. This is a tall order when financial incentives are not aligned among providers to achieve these fundamental goals.
Second, health-care providers are funded in “silos”: one silo funds hospitals, one funds doctors, and still others fund rehabilitative, residential, and home care. These silos can create perverse financial incentives that don’t optimize scarce health-care dollars. For example, hospitals are paid one lump sum to cover the care of all their patients, giving them little incentive to discharge a less expensive patient and, in return, admit a new, expensive patient without any change in revenue.
Similarly, with the exception of recent, and tentative, steps in Alberta and Ontario, continuing-care providers are not remunerated based on the complexity of patients, which makes it challenging for these providers to look beyond the additional costs of providing care to complex patients stuck in hospital beds.
So what options do we have?
Expanding acute hospital capacity is unappealing for multiple reasons. While it might resolve the problem temporarily, it fails to address the underlying issue of transitioning patients to continuing care. Even if the hospital space were available, few patients would want to live in a hospital setting. This is also the most expensive option, and has already been tried with no success.
Another option is to expand continuing-care capacity. However, the care and social needs of waiting patients are so varied that it would be difficult to manage the expansion in a way that effectively provided the right kind of care at the right time, in the right geographic area.
So what’s the solution?
Research has shown that financial incentives have been effective at motivating changes in the behaviour of health-care providers. To date, the use of financial incentives has not been pursued in Canada – in part because of its association with privatized health care. But cost-effective methods that free hospital capacity and don’t undermine Canada’s public health system should be seen as a step forward.
One potential solution is to change the way continuing-care providers are funded and align their financial incentives with those of hospitals. We should give continuing-care providers the financial tools to strengthen care co-ordination with hospitals, and ensure they are fairly reimbursed for accepting the most complex patients. A potential arrangement might take the form of a one-time, per-patient payment to continuing-care providers that accept patients who would otherwise remain waiting in hospitals.
Creating this incentive would accomplish two things: It would reward continuing-care providers for “pulling” patients to appropriate lower intensities of care, and it would free up the current stock of hospital beds.
Clearly, our current system undermines the provision of effective and safe care when Canadians need it most. Creating necessary financial incentives and investing in home-based care may be just what we need to improve hospital efficiency, free up hospital beds, reduce waitlists, and improve patients’ experiences with the health-care system.
Photo courtesy of Reuters.
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