Grant: Operating Grant

In most provinces, hospital funding is currently allocated through global budgets. While this funding policy has been perceived as being effective at constraining expenditure growth, 2010 marked a significant shift in hospital funding policy for British Columbia (BC), announcing a move towards activity-based funding (ABF). ABF is a policy wherein hospitals are partially remunerated based on the volume and characteristics of the patients they treat. The incentives of ABF induce hospitals to reduce lengths of stay and increase the number of hospitalizations per bed, potentially reducing waits of stay. Clearly, reduced wait times is an important outcome to policymakers, but this policy does not take into account the effect of incentives to increase the amount of hospitals care on the health of its residents. While an important body research suggesting that increasing the supply of care does not translate into significant gains in health, the relationship between hospital funding policies designed to increase the 'volume' of hospital care and patients' health have yet to be specified. The objectives of this study are to determine the relationship between volume-driven hospital funding policies being pursued in BC and gain in health, an important issue which represents a serious gap in the current knowledge-base. The direction and magnitude of this relationship will inform hospital funding policy and will be immediately relevant to policymakers in BC, Alberta and Ontario, other provinces having announced ABF policies.