Government & policy
Alberta to change funding formula for
– Alberta is poised to make dramatic changes to the way hospitals and
nursing homes are funded, the head of the province’s health super-board
says. As of April 2010, Alberta Health Services will begin moving toward
what it calls “activity-based funding” in nursing homes.
The same funding model will be rolled out in hospitals, assisted living
centres and emergency medical services in April 2011.
In the case of nursing homes, activity-based funding will create
incentives for organizations to take patients with higher needs, said
Stephen Duckett (pictured), CEO of Alberta Health Services.
“What we’re trying to do is have some sort of equity across the province
and also equity for the proprietor,” said Duckett, after giving a speech
at the Edmonton Petroleum Club.
“At the moment, there is no incentive on a proprietor to take more
dependent people. Their entire incentive is to take less-dependent
people.” That leaves more dependent people in hospitals, waiting for
placement in the community, Duckett said. In Alberta, about 400 people
are in this situation each day.
“If we actually pay proprietors to take the more-dependent people,
they’re more likely to do so.”
Duckett said there is currently no consistency in how nursing homes are
“Essentially, each of the previous (health) regions developed different
ways of paying for the capital costs of nursing homes, different ways of
paying operating costs and different effective prices for the stay,”
Duckett told the Economics Society of Northern Alberta.
Alberta Health Services is now using a tool, created largely by the
University of Michigan Institute of Gerontology, that clusters residents
into 30 groups that represent their needs and how much they cost the
Using the activity-based funding model, Alberta Health Services will
compensate nursing homes based on the patients’ needs. For instance,
homes will get a certain amount of money for a patient with Alzheimer’s
who is also incontinent, and another cash infusion for a patient in a
wheelchair who needs to be hooked up with IV medications. Less money
will go to homes with less-complicated patients.
“We’re not actually looking to save money per se with this change in
April 2010, but obviously, in equalizing the payments, we’ve got to make
sure we don’t set the rate so that they are always the most expensive,
but set the rates as an efficient rate,” Duckett said.
“When I arrived here, there didn’t seem any rhyme or reason in how
different hospitals got funded and how different nursing homes got
funded, so in the end, the amount of money you got was the result of a
lobbying exercise and what we’re trying to do is make it a fair basis
Posted Nov.26, 2009