Colin Craig is the President of SecondStreet.org, a public policy think tankA health care policy that has helped reduce wait times in Sweden, Australia, France and countless other better-performing universal health care systems is coming to Alberta. The timing couldn’t be better. Like the rest of Canada, too many Alberta patients are suffering on waiting lists. Wait times are longer than ever. Something needs to change — decades of governments throwing money at the system simply hasn’t worked.The good news is that Premier Danielle Smith’s April announcement will keep the universal aspect of health care that Albertans love. Patients will still walk into a clinic or hospital, get care like a knee operation and walk out without a bill to pay. Well, maybe they’re not walking out right after knee surgery, but you get the point — the experience will be similar for patients. What will change is that they will likely receive health services sooner..To understand what the government’s “patient-focused funding” policy change will do, think about it this way. Would you ever say to a grocery store, “Here's $300, please give me lots of groceries”? Nobody would ever do that, as the store would have no incentive to give you “lots of groceries.” (And what does “lots of groceries” even mean?)This is actually what most provincial governments do in Canada right now. They cut large cheques to hospitals each year and then ask them to do their best. There’s nothing to reward higher output and there’s no accountability. In fact, the opposite happens. Hospitals see patients as people they have to help rather than people they want to help. After all, each patient that walks in the door is a drain on their budget. This funding approach is known as “global budgeting” and it’s completely different from what Smith has promised to implement — “patient-focused funding” (also known as “activity-based funding”).In better-performing universal health care systems — Sweden, France, etc. — they pay hospitals based on their output. If a hospital or clinic provides a patient with a knee operation, the facility receives a set amount of funding from the government, say, $15,000. If the facility provides another patient with a knee operation, then it receives another $15,000. This approach encourages hospitals to help more patients as it results in more money. This is what Smith has essentially promised to implement..The proposed patient-focused funding approach also helps health facilities focus around spending money on expenses that actually help patients — doctors, nurses, equipment — instead of hiring, say, another vice-president. Further, once rates have been set, other providers can enter the market and compete to deliver care in a timely manner for patients, helping to drive innovation.Readers should note that this approach has already worked well in Quebec. Since 2015, the Quebec government has been experimenting with, and expanding the number of procedures that are covered under this funding formula. Consider this note from their 2024 budget:“In radiation oncology, patient-based funding has increased productivity by 26%, while the average cost of operations has decreased by 7% over the same period ... In imaging, patient-focused funding increased the volume of procedures in magnetic resonance imaging technical units by 22%, while the unit cost of these procedures declined by 4%.”Again, Australia, Sweden, France and countless other countries have used the funding model to increase output and improve access for their patients. Alberta doesn’t have to reinvent the wheel..Critics will of course denounce the change because that’s what critics do. But critics need to answer this simple question — why isn’t there a single province in Canada delivering excellent health care? NDP, Conservative, Liberal, it doesn’t matter who is in charge: not one of them can make the system work well despite record spending. What we need in Canada is health reform so we get a better bang for our buck. Smith’s patient-focused funding policy won’t solve all of the problems Alberta patients face, but considering how this policy has played out in other jurisdictions, Alberta patients have reason for hope. Colin Craig is the President of SecondStreet.org, a public policy think tank.
