Alberta to tie hospital funding to number, type of procedures performed
Alberta’s government is set to implement a new funding model for public hospitals that will tie funding to the number and type of procedures performed. Premier Danielle Smith believes that this “activity-based” model, expected to be fully implemented for some surgeries in 2026, will lead to cost savings by encouraging competition among public and private providers. The goal is to reward providers for delivering better results and drive efficiency in the healthcare system.
Smith argues that the current top-down approach lacks incentives to improve patient care and allocate resources effectively. By linking funding to patient outcomes, the government aims to make healthcare more efficient, reduce wait times, increase transparency, and attract more surgeons to the province. Under this new model, government funding will follow the patient, and hospitals will be required to be more innovative and efficient in their operations.
Critics, however, are concerned that this shift towards activity-based funding could accelerate the privatization of healthcare in Alberta. Opposition health critic Sarah Hoffman of the Alberta NDP warns that the focus on competition may come at the expense of quality care. The Health Sciences Association of Alberta also raises concerns that private providers may prioritize profitable, low-complexity surgeries, potentially leaving public hospitals under-resourced and understaffed.
While the new funding model will not be applied to small rural facilities, general admissions, and emergencies, it is intended to address inefficiencies in the province’s busiest hospitals. Health Minister Adriana LaGrange assures that doctors and facilities will be compensated for performing more complex surgeries under the new system.
Dr. Shelley Duggan, President of the Alberta Medical Association, emphasizes the importance of maintaining quality standards in the healthcare system. She stresses the need for appropriate safeguards to ensure that hospitals prioritize patient outcomes over volume of procedures. Health policy researcher Andrew Longhurst from Simon Fraser University warns that the focus on activity-based funding may incentivize hospitals to discharge patients quickly, potentially compromising patient care.
As Alberta transitions away from Alberta Health Services towards a new healthcare model, the debate over the impact of activity-based funding continues. While proponents believe it will drive efficiency and improve patient outcomes, critics fear it may lead to the erosion of public healthcare in favor of private providers. The key will be to strike a balance between cost savings and quality care as the province moves forward with these changes.
