Alberta
Health Care Overhaul: AHS to be laser focused on Acute Care and Continuing Care outcomes
Refocusing on patient-centred care
A refocused health care system will improve health outcomes for Albertans and empower health care workers to deliver quality care across the province.
Alberta’s front-line health workers provide exceptional care to patients and families, and Alberta’s government is committed to supporting their work by providing a high-functioning health care system. Alberta’s government has been working to address wait times and health care service disruptions, but challenges still exist in the system, including accessing community care like family doctors and local health services. The current health care system’s structure limits the government’s ability to provide system-wide oversight, set system priorities, and to require accountability for those priorities on behalf of Albertans.
To overcome current challenges and deliver the right care for Albertans at the right time, Alberta is refocusing the health care system. These changes will focus on the priority sectors of primary care, acute care, continuing care and mental health and addiction to ensure Albertans receive the best care within a single, fully integrated, high-functioning system.
These changes will improve front-line service delivery, and front-line jobs will be protected during this transition. Albertans will continue to access health care services where they regularly receive their care during the system’s transition period and beyond.
“Albertans deserve access to the health care they need, when and where they need it. Health care workers move mountains for their patients every day. For too many years, Alberta’s health care system has been too complex and uncoordinated, leading to unacceptable wait times and poorer health outcomes for Albertans. It’s time to change that. It’s time to put Albertans first in every health care decision and give our front-line experts the right space to properly care for Albertans. This is why we are refocusing the health system to provide better care for generations of Albertans to come.”
“We are at a critical juncture when it comes to health care in Alberta. We need to refocus how the system is structured and create a path forward that will get us the outcomes Albertans deserve. This work will take time and it will not be easy. We will lean on the world-class talent and expertise that exists in our health care system every step of the way. I ask health care workers to join us on this important journey so they can work in a better system – for them and for their patients.”
“Minister LaGrange has acknowledged that our health care system needs urgent reform. This work will only succeed with the involvement and leadership of physicians. The AMA looks forward to meaningful consultation and collaboration as these reforms are further elaborated.”
From the Fraser Institute
On Monday, the Smith government announced that beginning next year it will change the way it funds surgeries in Alberta. This is a big step towards unlocking the ability of Alberta’s health-care system to provide more, better and faster services for the same or possibly fewer dollars.
To understand the significance of this change, you must understand the consequences of the current (and outdated) approach.
Currently, the Alberta government pays a lump sum of money to hospitals each year. Consequently, hospitals perceive patients as a drain on their budgets. From the hospital’s perspective, there’s little financial incentive to serve more patients, operate more efficiently and provide superior quality services.
Consider what would happen if your local grocery store received a giant bag of money each year to feed people. The number of items would quickly decline to whatever was most convenient for the store to provide. (Have a favourite cereal? Too bad.) Store hours would become less convenient for customers, alongside a general decline in overall service. This type of grocery store, like an Alberta hospital, is actually financially better off (that is, it saves money) if you go elsewhere.
The Smith government plans to flip this entire system on its head, to the benefit of patients and taxpayers. Instead of handing out bags of money each year to providers, the new system—known as “activity-based funding”—will pay health-care providers for each patient they treat, based on the patient’s particular condition and important factors that may add complexity or cost to their care.
This turns patients from a drain on budgets into a source of additional revenue. The result, as has been demonstrated in other universal health-care systems worldwide, is more services delivered using existing health-care infrastructure, lower wait times, improved quality of care, improved access to medical technologies, and less waste.
In other words, Albertans will receive far better value from their health-care system, which is currently among the most expensive in the world. And relief can’t come soon enough—for example, last year in Alberta the median wait time for orthopedic surgeries including hip and knee replacements was 66.8 weeks.
The naysayers argue this approach will undermine the province’s universal system and hurt patients. But by allowing a spectrum of providers to compete for the delivery of quality care, Alberta will follow the lead of other more successful universal health-care systems in countries such as Australia, Germany, the Netherlands and Switzerland and create greater accountability for hospitals and other health-care providers. Taxpayers will get a much better picture of what they’re paying for and how much they pay.
Again, Alberta is not exploring an untested policy. Almost every other developed country with universal health care uses some form of “activity-based funding” for hospital and surgical care. And remember, we already spend more on health care than our counterparts in nearly all of these countries yet endure longer wait times and poorer access to services generally, in part because of how we pay for surgical care.
While the devil is always in the details, and while it’s still possible for the Alberta government to get this wrong, Monday’s announcement is a big step in the right direction. A funding model that puts patients first will get Albertans more of the high-quality health care they already pay for in a timelier fashion. And provide to other provinces an example of bold health-care reform.
Nadeem Esmail
Senior Fellow, Fraser Institute
From the Montreal Economic Institute
Alberta’s move to fund acute care services through activity-based funding follows best practices internationally, points out an MEI researcher following an announcement made by Premier Danielle Smith earlier today.
“For too long, the way hospitals were funded in Alberta incentivized treating fewer patients, contributing to our long wait times,” explains Krystle Wittevrongel, director of research at the MEI. “International experience has shown that, with the proper funding models in place, health systems become more efficient to the benefit of patients.”
Currently, Alberta’s hospitals are financed under a system called “global budgeting.” This involves allocating a pre-set amount of funding to pay for a specific number of services based on previous years’ budgets.
Under the government’s newly proposed funding system, hospitals receive a fixed payment for each treatment delivered.
An Economic Note published by the MEI last year showed that Quebec’s gradual adoption of activity-based funding led to higher productivity and lower costs in the province’s health system.
Notably, the province observed that the per-procedure cost of MRIs fell by four per cent as the number of procedures performed increased by 22 per cent.
In the radiology and oncology sector, it observed productivity increases of 26 per cent while procedure costs decreased by seven per cent.
“Being able to perform more surgeries, at lower costs, and within shorter timelines is exactly what Alberta’s patients need, and Premier Smith understands that,” continued Mrs. Wittevrongel. “Today’s announcement is a good first step, and we look forward to seeing a successful roll-out once appropriate funding levels per procedure are set.”
The governments expects to roll-out this new funding model for select procedures starting in 2026.
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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
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