Government and Policy
Ontario announces $469.5 million in new funding for
– The provincial government is supporting quality healthcare in Ontario
by investing an additional $469.5 million to operate Ontario's hospitals
– an increase of 4.3 per cent over last year, Health and Long-Term Care
Minister George Smitherman (pictured at left)
announced. Hospitals will receive a total of $11.3 billion in 2004/05.
"We are strengthening the financial stability of our hospitals and
enhancing care in priority areas, including shorter wait times for
cardiac care, cancer care, hip & knee replacements and cataract
surgery," Smitherman said. "At the same time, we are building effective
community services and promoting prevention and healthy living. This
will relieve stress on hospitals, which have been asked to do too much,
for too long, and will free them up to provide the acute care services
they are built to provide."
The McGuinty government's recent investments in community-based services
are key parts of its plan to transform the healthcare system in Ontario.
Smitherman recently announced significant investments in five key areas:
• $103 million new dollars
for home care during 2004/2005 and another $29.2 million in new funding
for community support services to assist people to live independently at
• $273 million to increase
the provincial share of public health care costs and a further $41.7
million to launch a three-year action plan – Operation Health Protection
– to restore public health;
• $406 million in new
funding for long-term care homes, which will grow to $531 million
• $65 million in new
funding in community mental health services;
• $111 million to enhance
front-line primary care and create Family Health Teams.
"This new funding represents a significant investment in the hospitals
of Ontario and will go a long way to support patient care services in
communities throughout Ontario," said Tony Dagnone, Board Chair for the
Ontario Hospital Association. "Ontario hospitals will continue to work
collaboratively with the Ontario government and other health care
providers to ensure that patients have timely access to health care
services when and where they need them."
This year will also see a new funding formula developed by the Joint
Policy and Planning Committee (JPPC), a partnership between the ministry
and the Ontario Hospital Association.
"The new funding formula advances the manner in which hospitals are
funded, and responds to the needs of all Ontario hospitals for a more
objective, equitable and transparent funding method," said Ken Deane,
Chair, JPPC Funding Formula Committee, and President and CEO of Hotel
Dieu Grace Hospital in Windsor. "The formula is another key element in
an accountability-based system."
This year new funding will be allocated using a new more equitable,
transparent funding model. The Hospital Funding Method, also known as
IPBA (which stands for Integrated Population-Based Allocation Model),
has been painstakingly developed over the past 14 years by the Ontario
Hospital Association (OHA) in partnership with the Ministry of Health
and Long-Term Care. This year, this model will be used to allocate
approximately 50% of the new operating funding for 2004/2005.
IPBA considers the characteristics of a hospital and the populations
that it serves in calculating the appropriate level of funding for that
Unlike methods that provide hospitals with "across the board" funding
increases, IPBA rewards hospitals for efficiency and compensates them
fairly for the needs of the populations they serve and services they
IPBA takes into account the unique characteristics of a particular
hospital, such as whether or not it is a teaching hospital, whether it
is geographically isolated, whether it provides more or less complex
services than its peers and whether it is large or small. IPBA also
looks at the characteristics of local populations to determine the types
and numbers of services that each hospital ought to be providing. These
characteristics include age, gender, population growth rates, income,
mortality, aboriginal population, geographic isolation and fertility
IPBA ensures that hospitals with similar characteristics will be
compensated at the same cost per unit of service, and expects hospitals
with similar populations to provide comparable amounts of services. If
similar hospitals do not receive the same level of funding, the
discrepancy can often be attributed to inefficiencies.
IPBA will lead to a more equitable and transparent method of allocating
funding than the historic "global" funding method, which did not reward
efficiency, respond to changes in the needs of communities or hospitals.
IPBA promotes hospital accountability by establishing target rates and
IPBA was reviewed and approved in 2003 by an international panel of
hospital funding experts from across Canada and Europe, who agreed that
it is an equitable and transparent funding model. Similar models are
being developed and implemented in other jurisdictions, including the UK