Rank those hospitals

As Canada’s provincial and territorial health ministers meet in Toronto this week to demand more money from the federal government, it’s clear that what former Prime Minister Paul Martin once called “a fix for a generation” has fixed nothing. Despite six per cent increases in health transfers every year for over a decade, emergency rooms around the country are still overcrowded, and waiting lists are still long.

Instead of more money, the provinces need to do more with the money they have. How can Canadians enjoy efficient, high-quality care? By appropriately rewarding the hospitals that provide it.

In this regard, the Quebec government seems to be taking at least a tentative step in the right direction with its plan to fund its hospitals using an activity-based formula, which is the norm in most industrialized countries, and abandoning historically defined global budgets. This will encourage them to increase their activities and reduce needless costs and lengths of stay, thus freeing up resources with which to treat more patients and improve access to care for those who find themselves on waiting lists.

But to be really effective, such a measure should be paired with the introduction of the kind of mandatory quality reporting that exists in Germany. In 2005, in order to provide more transparency and facilitate evidence-based decisions, Germany began requiring that all hospitals publish structured quality reports every two years.

These reports are meant to allow patients to compare the level of quality of each hospital, as well as helping doctors make referrals. They include information on which treatments a hospital conducted in a given year and how many of each, as well as the rate of complications and quality violations, comparing results with national averages when possible.

Hospitals competing for patients can use quality reports to promote their services and quality level, with those hospitals offering higher quality being able to attract more patients. This leads to an upward spiral of quality in which everyone benefits, as long as the hospital-funding system allows for quality to be rewarded.

In other words, quality reports not only serve patients as a transparency tool and hospitals as a marketing tool; they also encourage hospitals to improve quality. They furthermore help public health experts and scientists develop better clinical guidelines, and medical societies and public health authorities analyze and address system-wide quality issues.

In terms of concrete results, the hard data on the improvement of hospital quality in Germany speaks for itself. Just from 2013 to 2014, more than 15% of the 416 different quality indicators showed significant improvements, meaning lower complication rates during and after hospital treatment, a speedier recovery, and a lower lethality rate.

A good example of such a case is the 27% reduction in hospital mortality after Transcatheter Aortic Heart Valve (TAVI) procedures within just one year. Another can be found in the treatment of pneumonia, where 12 of 17 indicators saw significant improvements. A decade after the first reports, many quality issues have been successfully tackled and overall care has significantly improved.

Germany is now even adding an additional layer to its hospital compensation system. Besides merely reimbursing for a procedure, hospitals are also starting to receive compensation based on treatment quality. This creates additional incentives to improve quality outcomes, as it translates directly into revenue.

Some have criticized the hospital quality reports for being too complicated to read, but a representative poll of Germans found that 70% of patients who had used them had no problem understanding them.

And for those who do find the raw reports difficult to understand, several health insurance funds and patient groups offer search functions on their websites that help patients compare the quality of a given treatment in different hospitals. These are easy to use, being similar to hotel ranking portals like TripAdvisor.

More money has not fixed the chronic problems plaguing Canada’s health care system. Replicating successful reforms adopted around the world—like Germany’s mandatory quality reporting—would provide healthy incentives, resulting in an overall win for patients, hospitals, and doctors.

Frederik Roeder is an Associate Researcher at the MEI, Youri Chassin is an Economist and Research Director at the MEI. They are the authors of "Quality Reporting in German Hospitals: A Model for Quebec." The views reflected in this op-ed are their own.

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