Capitalism touted as health care’s saviour

Canadian hospitals will continue to be plagued by over-crowding and other problems unless the current system of funding them with annual, no-strings-attached grants is tossed out and replaced with payments that specifically reward safe, effective and efficient care, says the head of one of the country’s biggest hospitals.
In a major speech this week, Dr. Arthur Porter of Montreal’s McGill University Health Centre called for government funding that is tied to specific services and harnesses free-market principles to prod institutions to treat patients better and more quickly. It is an idea sometimes advocated by think-tanks and physician groups, and that some provinces are experimenting with in limited projects, but Dr. Porter is among the first hospital administrators to publicly endorse a concept that would dramatically change the way they do business.
“Our current publicly funded, publicly delivered system creates little incentive to truly innovate. Hospital budgets are managed by limiting care, rather than increasing or improving care. We close beds when we lack resources,” he told the Economic Club of Canada. “We need to embrace the capitalism that helped build Canada whilst preserving the social values we have come to hold dearly.”
Some critics, though, suggest the idea would create “perverse” inducements, turning hospitals’ focus to the treatments that were easiest to deliver and generated the most lucrative fees, while more complex cases got shorter shrift.
Dr. Porter, who ran the Detroit Medical Center before taking over the MUHC in 2004, said he was compelled to think about the kind of “profound change” he is proposing as he oversaw a major new development project at the centre. His fear, he said, is that the state-of-the-art facility will open in 2014 and still have patients lined up in the hallways. That, said the administrator, “would be more than an embarrassment; it would be a failure.”
Hospitals now generally receive a global budget based on the experience of the previous fiscal year, which tends not to respond to fluctuating needs or encourage better performance and innovation, Dr. Porter said. Instead, he is proposing payments that are tied to services actually provided, and that offer incentives to hospitals for such goals as curbing re-admission of patients and medical errors, increasing efficiency and boosting patient satisfaction.