Better Treatment, Better Care (4)
hospitals that deliver private care or for profit anyway i mean the mayo clinic
is not for profit john hopkins university is not-for-profit cleveland
clinic i think is not-for-profit as well and so that's also another another model
that could be built in to the system do you how common is that to have a
not-for-profit model as an alternative to publicly delivered
uh very common and private not-for-profit and private for-profit
the meaningful distinction is who is the residual claimant of the profit in a
for-profit obviously is the shareholder the owner
the shareholders plural whereas in a not-for-profit it's the entity because
there's no ability to redistribute that profit it doesn't mean that in a private
organization a not-for-profit isn't seeking to have a surplus or a residual
because that does allow them then to fund things like research to fund all
the things that create that prestige around a facility like johns hopkins or
mayo that's distinctly different from a government business enterprise where the
residual simply goes back to government the incentive is to ensure that all of
the money is consumed in whatever manner not necessarily in a patient-focused
manner depending on the incentives of the payment system um one of the
interesting arguments that we often here in canada is well if we if we allow
private hospitals to exist in canada the americans would immediately come up and
create an american health care system but i think you make the exact right
point so we're afraid of the mayo clinic coming to toronto we're afraid of johns
hopkins setting up in downtown calgary uh we're afraid of cedar sinai coming to
downtown vancouver what are we afraid of when we have world-class healthcare
facilities delivering some of the best healthcare in the world south of the
border yes there are issues in the american universal the american system
and i think people who are very focused on universality don't entirely
understand the issues that are happening south of the border but there is some
incredible care down there and some incredible knowledge and wouldn't it be
wonderful if we had the opportunity to access some of that in this country i
love the way you described this though as we're not talking about taking money
off the top it's what happens to the residual so in a for-profit model
residual from delivering good service at a better cost and attracting more
patients delivers that residual that goes to
shareholders the residual in a non-profit would again go back to
reinvestment in the nonprofit and the residual in the public sector would go
back to government but wouldn't that be the solution wouldn't it be telling the
hospital system hey if you get some residual you can buy that fancy new
equipment you can expand that wing of the hospital you can hire more staff
could you could you create a model within our public system that would give
the incentive for efficiency knowing that the reward of that would stay
within the hospital i think changing the way we fund
hospital characters in a manner create that approach so activity-based funding
currently in canada we fund hospitals largely on global grants there's a small
portion of activity activity-based funding in ontario but that's kind of it
right now and so every year hospitals get a great big bag of money and they're
told go look after people and the incentives are fairly clear then we want
to treat as few patients as possible fill the hospital with reasonably
healthy patients because they don't cost very much to care for bed blocking is a
very interesting activity in that approach
inefficiency in the use of or is actually beneficial to the hospital from
a budgetary perspective because every patient is a drain on the budget
if we turn that around and have money follow patients to hospitals instead of
the hospital we'll have some fun for you to exist
because obviously there are things that occur that really can't be actively
funded but generally speaking every patient is going to bring to the door a
small bag of money with them based on the medical condition they're presenting
with and certain unique characteristics that will
impact the cost of their care and the more patients you treat the more you
will earn hospital and the more patients you'll be able to treat the more you'll
have this residual to do whatever you want with internally within your
facility that turns the system entirely on its head and also you do have a
system very much like this where hospitals now if they were to expand
invest in new medical technologies invest in better use of their or better
scheduling systems uh change the way they're you're operating services so
that they're reducing costs where it doesn't make sense to patients and
focusing on patients attracting patients to the hospital shorter waiting times
would be one of the options in there we're creating that effective market
system with government-owned hospitals having private for-profit and
not-for-profit delivery private competitive delivery inside that
construct further enhances that because of the incentives that are associated
with private ownership both for and not for profit relative to government i
think the current system is a great example of how not to do it exactly
though we have any number of investments that have been made where the hospital's
gone raised the money charitably created and built a new wing but it doesn't open
because the government won't fund it they bought a new mri and it goes in a
closet because the government won't fund it activity-based funding now changes
that system entirely and leaves it up to the hospital to
decide what investments make sense and what don't
maybe aside from capital but certainly on the operating side you know it
doesn't make the health administrators look very good the way you've described
this it to to because you think that people
get into the caring profession because they want to deliver the best possible
care to as many patients as possible and make sure that they have as many great
outcomes as possible it seems bizarre that someone would go into that
caring profession with the idea of not using the resources to full capacity and
not getting the best equipment and reducing the amount of operating room
room space i there's there's something that i think i'm kind of missing about
what what an administrator is trying to achieve with that
i don't think it's about the people i think it's about the incentives that are
so that are ingrained in the system for those people we have some of the best
medical practitioners in the world we know this but when you have a physician
who has a limit on how much operating time they can receive when you have
young physicians who can't get jobs and accessing operating rooms
it's not about the physician that we have a long waiting list it's because
the system isn't allowing them to operate
we may have very well intentioned hospital administrators who want to do
the very best for patients but they know every year they get a budget and they
can't exceed that budget or if they do there will be some difficult
conversations and ultimately you'll be funded in but they won't be fun
conversations and so the incentive for them is to ensure that
they don't exceed that budget which means the summer slowdown for surgical
services the christmas slowdown it assists them on a budgetary basis it's
about the incentives in the system it's not about the people we have great
people in the health care system they just need the right incentives
you know i think this became tragically apparent in the last year as we were
dealing with the coveted pandemic because we had no capacity in our our
hospital beds our acute care beds and no real capacity in our icu and you
mentioned this that there's an incentive for
hospitals to keep relatively low-cost
patients in the system so you mentioned the term
bed blockers so is that what's happening is that to have the bed full
it at least allows for some just i'm trying to understand it i'm trying to
i'm really struggling just to see this through because it would seem to me
you'd want to have that patient in an appropriate
facility in a long-term care facility as quickly as possible to open up that bed
so that you could treat more patients so i'm i'm trying to understand why the
incentive is to keep those beds blocked with patients who shouldn't be there
if you think from a budgetary perspective every patient who comes to
the door increases the cost of the hospital and a patient with a higher
level of acuity or more serious condition will increase cost more than a
patient who is reasonably healthy so a person who's coming in and being treated
now is in a bed in the hospital which is limiting access to that particular bed
and if that patient is in reasonably good shape we're now basically providing
hospital hotel services for that individual so the medical care
requirements quite low which makes them less costly than clearing that bed and
allowing the next difficult patient in i think a lot of what we're suffering
though is years of chronic underfunding or years of what might be coined
political intended politically intended funding
we did an analysis in british columbia a number of years ago now looking at
non-medical workers in the hospital system and found pay differentials of 20
or 30 percent more in a hospital for services that in many ways are not
different from hotel services when a hospital is in some ways a giant hotel
for sick people it still needs bakers there's no reason they should make
thirty or forty percent more than a basement at a downtown hotel but
apparently the bread is very good at the hospital
there's cleaning services those are a little more difficult but the pay
differential was only about 17 18 percent payroll were making 30 or 40
percent more chefs were making more it's interesting where the money is gone
and you can sort of follow the political will on it and we've got a health care
system i recall and we have to rewind a little bit there was a westjet flight
that was coming in it had an event in the air it had to land in calgary on an
emergency and one of the news reports that came out shortly afterwards was if
this plane had had a serious event and we had a large number of injuries we
actually don't have enough emergency space in the city of calgary a city of
over a million people to look after one plane of individuals 150 200 people
in serious medical distress this is in a modern advanced economy and one of the
best funded universal access healthcare systems in the developed world to put a
point on it in one of the best funded systems in the country alberta is a
reasonably wealthy province and we couldn't deal with an airplane landing
at the calgary airport with a serious number of injured individuals because of
a serious turbulence event we're now going through a pandemic with this same
health care system it's years of underfunding that have brought us to
this point it's well time we fix this thing just in case this happens again
let's be ready and prepared with a better health care system so when you
see years of underfunding do you mean funding the wrong way or do you mean
actually not enough dollars funding the wrong way we've got more