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Healthcare: Activity-based funding, emergency rooms, and operating rooms are essential to the mini-hospitals’ success

Montreal, February 6, 2024 – Activity-based funding and the inclusion of emergency rooms and operating rooms are crucial if the Quebec government’s independent mini-hospitals project is to be successful, points out a Montreal Economic Institute study released this morning.

“With its independent mini-hospitals project, the Legault government needs to avoid reproducing the administrative model that contributed to our interminable healthcare waiting lists,” explains Emmanuelle B. Faubert, author of the study and economist at the MEI. “Thanks to activity-based funding, the patient is no longer a cost, but rather a source of revenue for the hospital, changing the incentive structure for administrators.

“This would encourage them, among other things, to reduce the amount of time doctors and nurses spend filling out forms, so they can spend more time with patients.”

Historically, Quebec’s healthcare system has been funded mostly based on historical volumes, with budgets revised once a year.

Activity-based funding provides for fixed remuneration based on the different medical acts carried out, added to the current year’s budget.

The author explains that this kind of funding changes the incentive structure for administrators, since additional patients are no longer seen as a threat to the stability of the facility’s finances.

In its most recent budget, the provincial government signalled its intention to implement activity-based funding, also known as patient-centred funding, to all physical care by 2027-2028.

The MEI also notes the importance of including emergency rooms, given the lack of hospital capacity in Quebec.

“Since the beginning of the year, the occupancy rate of Quebec ERs has topped 100 per cent every single day,” says Ms. Faubert. “It is very clear that the mini-hospitals would help reduce waits and increase treatment capacity with their emergency rooms.”

The occupancy rate of Quebec ERs broke reached 114 per cent as of yesterday.

On average, over 9,000 Quebecers visit one of the province’s emergency rooms every day.

The MEI also recommends the inclusion of operating rooms in order to help lower surgery wait times.

“There are more Quebecers on waiting lists for surgery than there are people living in Levis,” says Ms. Faubert. “By adding new operating rooms, the mini-hospitals will increase the number of surgeries that can be performed in Quebec.”

A total of 170,829 Quebecers were on a waiting list for surgery as of December 30, 2023.

The MEI study is available here.

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship. 

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