The provincial government hasn’t given up on health care reforms despite delivering a surprise budget two weeks ago that boosted health spending by 15 per cent, said Finance Minister Ted Morton.
Speaking Tuesday just outside St. Albert, Morton said he didn’t like the $4.7-billion deficit that came with the finance portfolio he took over in late January. He added that an increase in health care spending was necessary.
“We realized that the job that we gave to Alberta Health Services — transform the way care is delivered in this province — was a more expensive operation than we anticipated at the start,” Morton said to a breakfast gathering organized by the Athabasca-Redwater PC Association.
In the last fiscal year the province found $1.3 billion in savings and allotted most of it to health care, wiping out the $1.1 billion deficit accrued by Alberta Health Services and then entering a five-year funding deal that will provide AHS with six per cent increases in each of the first three years.
“This does not mean that we’re surrendering or retreating on health care reform. It means that we’re putting the money there that we think we need to put there to get the job done,” Morton said.
Last week Alberta Health Services board chair Ken Hughes said the province is continuing its move towards activity-based funding. The new model will roll out in seniors’ facilities April 1.
A sharp turn away from the current block-funding system, activity-based funding is based on patient need, as defined by an internationally accepted system called RAI — Resident Assessment Instrument.
The system will create a level playing field across facilities, provide more transparency to taxpayers and smooth out inefficiencies, Hughes said.
“It creates a real discipline about how we spend money,” Hughes said. “There’s never going to be unlimited resources for health care. We need to spend every nickel we get as effectively as we possibly can.”
The new funding model will be implemented in hospitals starting in April 2011, he said.
Hughes didn’t share numbers but said the transition costs will be offset by savings and added that most of the changes can be accommodated by existing personnel.
“This will be a breakthrough year, I think, for health in Alberta,” he said.
Alberta’s large physical size and relatively small population makes it a poor fit for this type of funding model, said David Eggen of Friends of Medicare. Activity-based funding is tailor-made for private delivery, he said. It also tends to create specialized facilities and a lack of general service hospitals.
“It’s very experimental and limited in its merits,” he said. “For small regional centres, this should sound very large alarm bells.”
Hughes made the announcement in a speech to the Calgary Chamber of Commerce rather than issuing an official press release, which raised Eggen’s eyebrows.
“It sounds as though they’re floating some balloons on it,” he said.
Alberta Liberal critic Kevin Taft said activity-based funding is the latest management trend that is over-promising and doomed to under-deliver.
“It’ll be a gold mine for the accountants and the IT people. The information requirement for this system is mind boggling,” Taft said.
“Rather than pouring time and money into this kind of management gimmick, I’d rather push the decision-making out to the local people, give them the resources they need to do their job,” he said.