New way of funding acute care draws praise, criticism

By Al Beeber - Lethbridge Herald on April 9, 2025.

LETHBRIDGE HERALDabeeber@lethbridgeherald.com

The Alberta government’s announcement of a new acute care funding model is being met with both criticism and support.
The province announced last week that it is reforming acute care funding through what it calls a patient-focused funding model, which pays hospitals based on the services that they provide.
The government says its grant to Alberta Health Services has increased by $3.4 billion since 2018-19 and even though 20,000 more surgeries were performed in the province last year, it says residents deserve wait times that meet recommendations.
The province says activity-based funding “improves transparency, ensuring care is delivered at the right time and place as multiple organizations begin providing health services across the province,” and that it is based on the number and type of patients treated as well as the complexity of their care.
The province says a record number of surgeries — 304,595 — were done in 2024-25 and 310,000 are expected to be completed in the  current year. “It is crucial that funding models evolve to keep pace with the growing demand and complexity of services.”
Patient-focused funding means hospitals are paid for the services they deliver and according to University of Calgary clinical associate professor Glen Sumner, efficiencies may improve and wait times drop.
The Health Sciences Association of Alberta, however, feels the new model will incentivize for-profit corporations at the expense of  patient care and sustainable staffing levels.
“Surgeries aren’t just performed by surgeons,” said HSAA President  Mike Parker in a release. “It takes a multi-disciplinary team of health care professionals looking after Albertans at every stage of their health care journey. Yet today, there was no commitment from the government to retain or recruit the staff necessary to make a real  difference in surgical wait times.”
The HSAA believes that tying funding to the number and type of surgeries provided “will create incentives for private companies to  cherry-pick low-complexity surgeries that maximize profits. Without a  real investment in retaining and recruiting staff, this model will leave Alberta’s hospitals under-resourced and understaffed” and any benefits to patients will likely be temporary.
“Once these for-profit companies successfully corner the market, prices will go up and the cost to taxpayers will go through the roof,” said Parker. “Meanwhile, the number and quality of major surgeries  performed in the public system will go down, as hospitals lose staff  and become forced to rent public suites back to specialists within these same corporations.”
But Krystle Wittevrongel of the Montreal Economic Institute says the new model follows international best practices.
Wittevrongel, who holds Masters degrees in science and public policy from the University of Calgary, says that “international experience has shown that, with the proper funding models in place, health systems become more efficient to the benefit  of patients.
“For too long, the way hospitals were funded in Alberta incentivized treating fewer patients, contributing to our long wait times.”
According to the MEI, the gradual adoption of activity-based funding in Quebec has led to higher productivity and lower costs in that  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,” says the institute.
“Being able to perform more surgeries, at lower costs, and within shorter timelines is exactly what Alberta’s patients need, and Premier (Danielle) Smith understands that,” says Wittevrongel.
The province expects to begin implementation of patient-focused funding for some procedures next year.

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