To ensure we have high quality and affordable health care we need to scale up Ontario’s understanding of what hospital funding reforms work.

If there’s one thing provincial governments across Canada can agree on, it’s that the status quo in health care is no longer good enough to deliver equitable access to high-quality care in a cost-efficient manner. Ontario’s Ministry of Health led the way under the previous government by altering how hospitals are paid, in an effort to encourage implementation of best practices in patient care.

In 2012, Ontario hospitals started replacing some of their global budgets — the annual amount hospitals traditionally receive to fund all patient care — with payments for quality-based procedures, or QBPs. These “patient-based” payments give hospitals a predetermined fee for each diagnosis (like pneumonia) or each procedure (like knee replacement) when patients are admitted.

Successfully executing big policy change in hospitals is hard work. So has it worked so far in Ontario? Yes and no. And are there lessons for other provinces? Unequivocally, yes.

Some hospitals managed the change to QBP funding better than others, in part because some hospital leaders used the change as a catalyst for more conversations between the clinical and administrative sides of the hospital about how best to implement better processes of care for patients. The “secret sauce” seems to be strong collaboration between experts who understand patient care best — like doctors, nurses and patients themselves — and those who understand how hospitals work — like finance experts, hospital decision support teams and policy analysts.

The good thing about paying hospitals through global budgets is that they are predictable, stable and administratively very simple. The bad thing about global budgets, critics argue, is that they lack incentives to boost efficiency and are not always transparent or equitable. Also, funding hospitals through global budgets may not foster health care service innovations for populations with the greatest needs, especially if government and hospital spending priorities don’t align.

The hope was that QBPs would lead to improved access to care, reduced costs per admission, reduced variation in both costs and clinical practice and, most important, improvements in the quality of patient care. As part of the funding shift, hospitals were also given clinical handbooks — outlining evidence-based care pathways for each QBP diagnosis and procedure. These were meant to give doctors, nurses and other care providers better guidance on how to provide “the right care, in the right place, at the right time” and at the right cost.

So how did this all pan out?

We recently published a study showing that, as with most complex system change, some hospitals managed better than others at rolling out QBPs. To understand how the implementation process unfolded, we interviewed 46 people who were involved in the design or implementation of QBPs, including 22 hospital executives from five case study hospitals. As one senior hospital executive put it, “I think the hospitals are pushing back and saying, ‘Slow down, because this is tougher to manage than we thought and it’s got all kinds of complication in the implementation.’”

Hospitals that were able to adapt showed a high degree of readiness for change and had good capacity to manage it. But hospitals struggled to adapt if they didn’t have the management capacity to support the required changes.

Hospitals that were able to adapt showed a high degree of readiness for change and had good capacity to manage it. But hospitals struggled to adapt if they didn’t have the management capacity to support the required changes in processes of care. For example, a senior hospital executive described the challenge with management capacity like this: “Some of the hospitals — where we know they’ve invested in developing their team, developing their capacities for quality improvement, their board is already focused on quality improvement, they take their quality improvement process seriously, the quality committee is engaged at the board level, leadership is engaged — in that kind of a culture, it will be easier for them to take on a new priority QBP implementation than in a hospital that hasn’t done that groundwork within their organization already.”

Beyond challenges with management capacity, implementing all the recommendations in the clinical handbooks was difficult for some hospitals, especially for complex medical conditions like heart failure, where the changes involved multiple departments and stakeholders. In comparison with procedurally oriented QBPs, like repairing hip fractures, medically complex QBPs with a high degree of clinical uncertainty required more sophisticated and clinically nuanced adoption tools to help with implementation, and these supports were not always available.

Change never goes as planned, and large-scale change in complex health care systems is no exception. Old patterns can be difficult to break. The first time you try, failure may seem inevitable, but as every entrepreneur knows, it should be viewed as an opportunity to learn and try again. Whether as individuals or as actors within complex systems, knowing when to admit that it’s time to change course is critical to any improvement. This is why health system leaders committed to achieve the goals of better patient care and outcomes at reduced costs can benefit from working with researchers who can help them honestly look at what is working and what isn’t.

We suggest that a structured process for implementing any health system change be put in place to help identify and choose the right tools for the job — meaning the right supports for each initiative — so that adoption of new initiatives is enabled and desired outcomes are achieved. Adoption tools include, for example, clinical decision support systems, simple checklists, mentoring, audit and feedback, continuing education, communities of practice and clinical champions. To this end, we propose that those seeking change — regardless of the setting — ask three questions: Who needs to do what differently? Why isn’t that happening now? What can we do to enable change and overcome barriers?

Our research shows that any big change takes big courage from all involved, a shared vision of what the change looks like, and clear communication among all stakeholders. Ontario’s efforts to explore how to implement change are valuable and instructive, and Ontario’s Ministry of Health, hospitals, provincial health care agencies and care providers should be lauded for their efforts.

To help ensure that high-quality affordable health care is available to all Canadians, we should work together to spread and scale up across the nation Ontario’s successes in understanding what works and what doesn’t when implementing hospital funding reforms, like QBPs. We should also continue to experiment and evaluate initiatives that seek to align innovations in health funding with innovations that better integrate patient care, and that offer insight into how best to implement health system change.

Illustration: Shutterstock, by William Potter.


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