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Fraser Institute News Release: Funding hospitals based on patient services means better health care for Canadians

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VANCOUVER, British Columbia, June 10, 2021 (GLOBE NEWSWIRE) — Paying hospitals based mostly on companies offered to sufferers, as an alternative of allocating pre-defined annual budgets, may enhance the amount and high quality of well being care companies whereas decreasing wait occasions for Canadians, finds a brand new examine launched at present by the Fraser Institute, an unbiased, non-partisan, Canadian public coverage think-tank.

“The best way we fund hospitals in Canada issues an incredible deal in terms of what number of sufferers are handled, and the way we both encourage or discourage hospitals to be extra environment friendly and productive,” stated Nadeem Esmail, senior fellow on the Fraser Institute and creator of Understanding Universal Health Care Reform Options: Activity-Based Funding.

The examine highlights the potential enhancements in well being care when hospitals are funded on a per affected person service foundation—also referred to as activity-based funding.

At the moment, hospitals throughout Canada are predominantly funded with lump sum funds, often known as world budgets, no matter what number of sufferers are handled or what remedies are carried out. This really incentivizes hospitals to deal with fewer sufferers to keep away from exceeding budgets.

However when hospitals are paid a pre-defined amount of cash for every affected person cared for based mostly on their specific situation and distinctive care wants, it creates highly effective incentives to deal with extra sufferers. In different phrases, when “cash follows sufferers”, sufferers rework from a drain on hospital budgets right into a income.

Crucially, almost each different developed nation with a common health-care system has moved in direction of activity-based funding in current many years, whereas Canada is among the many final to proceed to make use of lump sum funds.

And amongst these common well being care nations which have switched to per affected person companies hospital funding, activity-based funding has been discovered to enhance entry to companies, enhance price effectivity and enhance transparency all with out essentially rising whole expenditures.

“The proof from all over the world could be very clear—altering the incentives for hospitals improves look after sufferers,” Esmail stated.

“Whereas governments would possibly desire world finances funding for its administrative simplicity, it serves neither the pursuits of sufferers nor the pursuits of taxpayers who fund their care,” stated Esmail.


Nadeem Esmail, Senior Fellow
Fraser Institute

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Drue MacPherson, Fraser Institute
(604) 688-0221 ext. 721

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The Fraser Institute is an unbiased Canadian public coverage analysis and academic group with workplaces in Vancouver, Calgary, Toronto, and Montreal and ties to a world community of think-tanks in 87 nations. Its mission is to enhance the standard of life for Canadians, their households and future generations by learning, measuring and broadly speaking the consequences of presidency insurance policies, entrepreneurship and selection on their well-being. To guard the Institute’s independence, it doesn’t settle for grants from governments or contracts for analysis. Go to

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