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78 Health systems in transition Canada 3.8 Payment mechanisms 3.9.1 Paying for health services To the extent that hospitals are integrated in RHAs in Canada, there is no purchaser–provider split. In the case of those hospitals that contract with RHAs – for example, all hospitals in Ontario and Catholic hospitals in Western Canada – most payments are generally made on the basis of the previous year’s allocation adjusted for inflation and budget growth. However, some RHAs have introduced or experimented with other modes of funding, including activitybased, patient-centred and incentive-based funding models (McKillop, 2004; Sutherland, 2011a). There has been limited study of payment systems for health care organizations in Canada. 3.9.2 Paying health workers Most non-physician health care personnel are paid a salary to work within hierarchically directed health organizations. Within this group, regulated nurses are the most numerous. Most nurse remuneration and conditions of work are negotiated through collective bargaining by nurses’ unions and province-wide employer organizations, often with provincial governments setting broad fiscal parameters. Nurse dissatisfaction with working conditions and stagnant remuneration during the provincial health reforms led to labour strife and rising sick leave by the latter part of the 1990s. Since that time, staffing levels have climbed and nurse remuneration has improved considerably as governments and health organizations have attempted to recruit nurses in a tight labour market (CIHI, 2011a). The majority of physicians continue to be remunerated on the basis of fee for service (FFS) although alternative payment methods including capitation, blended (salary and fee) payments are also applied – most commonly salary and fee or capitation and fee. In recent years, incentive-based bonuses have become more common. While many health policy analysts have been critical of the incentives created by FFS – including the incentive for overprovision of medical services – the system remains popular among many physicians and the organizations that represent them (Grignon, Paris & Polton, 2004). Since family physicians continue to provide the majority of primary care services in Canada, primary care reform has involved some shifts in payment systems. Provincial ministries of health have considered the advantages and disadvantages of fee for service, capitation and mixed payment systems. In
Health systems in transition Canada 79 addition, some ministries have also begun to implement pay for performance incentives, group-based profit sharing and fundholding systems (Léger, 2011). However, these “alternative payment systems”, so-called in Canada because they pose an alternative to fee-for-service systems, should not be seen as synonymous with primary care reform (Hutchison et al., 2011). In a number of cases, alternative payment is being used to pursue objectives that have little to do with altering existing forms of primary care. In some provinces for example, alternative payments are concentrated in specialties such as cancer care and psychiatry, while in other provinces, alternative payments contracts are provided for after-hours coverage of patients in primary care settings (Glazier et al., 2009; CIHI, 2010c).
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Contents Preface . . . . . . . . .
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Preface The Health Systems in Trans
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Acknowledgements The HiT on Canada
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List of abbreviations Abbreviations
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Abstract Canada is a high-income co
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The European Observatory on Health
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