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Hospital financing in Canada Barer, Morris Lionel, 1951- Apr 30, 1993

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Morris L. BarerHOSPITAL FINANCING IN CANADAAPRIL,1993Health Policy Research UnitDiscussion Paper SeriesHPRU 93:60THE UNIVERSITY OF BRITISH COLUMBIACentre for Health Servicesand Policy ResearchHOSPITAL FINANCING IN CANADAMorris L. BarerHPRU 93:60 APRIL, 1993HOSPITAL FINANCING IN CANADAMorris L. BarerHPRU 93:60 APRIL, 1993HEALTH POLICY RESEARCH UNITCentre for Health Services and Policy Research429 • 2194 Health Sciences MallUniversity of British ColumbiaVancouver, B.C. CANADAV6T 1Z3The Centre for Health Services and Policy Research was established by the Board ofGovernors of the University of British Columbia in December 1990. It was officiallyopened in July 1991. The Centre's primary objective is to co-ordinate, facilitate, andundertake multidisciplinary research in the areas of health policy, health services research,population health, and health human resources. It brings together researchers in a varietyof disciplines who are committed to a multidisciplinary approach to research, and topromoting wide dissemination and discussion of research results, in these areas. TheCentre aims to contribute to the improvement of population health by being responsive tothe research needs of those responsible for health policy. To this end, it provides aresearch resource for graduate students; develops and facilitates access to health and healthcare databases; sponsors seminars, workshops, conferences and policy consultations; anddistributes Discussion papers, Research Reports and publication reprints resulting from theresearch programs of Centre faculty.The Centre's Health Policy Research Unit Discussion Paper series provides a vehicle forthe circulation of preliminary (pre-publication) work of Centre Faculty and associates. It isintended to promote discussion and to elicit comments and suggestions that might beincorporated within the work prior to publication. While the Centre prints and distributesthese papers for this purpose, the views in the papers are those of the author(s) .A complete list of available Health Policy Research Unit Discussion Papers and Reprints,along with an address to which requests for copies should be sent, appears at the back ofeach paper.HOSPITAL FINANCING IN CANADAMorris L. BarerDirector, Centre for Health Services and Policy ResearchandProfessor, Department of Health Care and EpidemiologyThe University of British ColumbiaandAssociate, Population Health ProgramCanadian Institute for Advanced ResearchThis paper was prepared for the OECD/OTA Study of International Differences inHealth Care Technology and Costs.- i -AcknowledgementsI am indebted to a number of people who provided much of the material on whichthis. paper is based, either in the form of written (published and internalunpublished) reports and papers, or by way of personal communication. Theseinclude Phil Jacobs, George Pink, Linda Bakken, Steve Kenny, Dave Arbuthnott,Bob Evans, Regis Blais, Jean-Marie Lance, Carol Clemenhagen, Barb Markham,Sean Drain, and Douglas Fletcher, the first five of whom also kindly providedcomments on an earlier draft. This work was made possible in part by fundingassistance from the Canadian Institute for Advanced Research, through itsPopulation Health program of which the author is an Associate.The simple story of Canadian hospital financing -- single-source (tax­based) public funding through provincial Ministries of Health to individualinstitutions through prospective global budgets -- offers a relativelyaccurate general picture which, nevertheless, masks both theprovincial/territorial variations in the details, and the different ways inwhich capital and operating costs are funded and allocated.The objective of this paper is to put some (but not all the) flesh on thebones of this story, with a particular focus on recent new funding initiatives(using a few selected provinces for details), and on the less well-understoodcapital funding process.A. A Short Historical PreambleHospitals1 were brought into Canadian -Medicare- (that is, becamepublicly funded not-for-profit institutions) under the Hospital Insurance andDiagnostic Services Act of 1956 (Taylor, 197B). All provinces had met theterms and conditions for federal cost sharing by 1961. Since then, hospitalcare in Canada has been provided through largely publicly owned and fundednot-for-profit institutions. There is virtually no private hospital sector inCanada,2 although there is a vibrant private long-term or continuing caresector which includes a variety of chronic care institutions (but significantparts of which are also publicly funded).Funding of hospitals in the early years of the pUblic program wascharacterized either by 'line-by-line' budgeting or per diem reimbursement .Under the former, individual institutions negotiated specific budgetary lineitems with provincial Ministries of Health, with the overall budgetaryHere and throughout, references to -hospitals- are to acute andrehabilitation care facilities some of which also contain some extended carebeds. For more detail on hospital classifications, see Canadian HospitalAssociation (1992), and Statistics Canada (various years).2 While the Canadian Hospital Directory lists over 50 private hospitals,most of these are psychiatric, drug and alcohol rehabilition and long termcare facilities .2allocations being the aggregation of the line items. Reallocation of fundsbetween different line items was severely restricted, and the effort entailedin scrutinizing the line-by-line detail eventually persuaded Ministries tomove away from this approach. Per diem reimbursement involved retrospectiveadjustments to hospital operating budgets according to patient loads, whichleft Ministries of Health with a large open-ended line in their budgets.)Funding increases were relatively generous in the 1960s, with hospitalexpenditures per capita increasing 7.6% per annum in real terms4 over thedecade, in part because Ministries tended to pick up year-end deficits.The old line-by-line bUdgeting approach has largely disappeared;5 themove away from this approach, to ·global budgeting" began in the" late 1960'sin Ontario (Detsky, stacey and Bombardier, 1983). Under this system thefunding allocation for year t was based on a series of relatively mechanicaladjustments to the year t-1 actual expenditures. Special provisions were madefor new programs, unanticipated and justifiable volume increases, or otherunforeseen circumstances, but hospitals gained considerable flexibility inmoving funds between operating lines, and the effort required of Ministrystaff was significantly reduced. Retrospective line-by-line review wasinvoked in situations where hospitals over-ran their budgets, but for manyyears this change lacked 'teeth', with most over-runs being picked up byprovincial Ministries of Health. Quebec moved to close off year-end coverageof deficits, and a number of provinces, led by Quebec, experimented with avariety of ·incentive reimbursement schemes· intended to induce hospitals touse their funds more efficiently. But this movement had a rather chequered) For example, in British Columbia a special request for additionalfunding amounting to almost 25% of the hospital sector expenditure estimateswas required to cover actual per diem reimbursement in 1980/81 (Haazen, 1991).4 This increase was over and above general inflation. Per capitahospital expenditure data are taken from Barer and Evans (1986) and deflatedusing a GDP implicit price index (Canada, Department of Finance (1992».5 In fact some 20% of budgets in Quebec continue to be determined on aline-by-line basis (Contandriopoulos, 1988), and Alberta only very recentlymoved away from this method of budget approval (Jacobs et al., 1992).3history (Glaser, 1987; Contandriopoulos, 1988), in part because of glaringfailures to understand the motivations of the key hospital stakeholders.'Only in the more fiscally-constrained late 1980's (and now in spades inthe early 1990's) have Ministries of Health become more forceful in developinginsitutional expectations that budgets are not a starting point, but a bindingccnst.reInt ." Concurrent with this recent more hard-nosed approach have comea number of attempts to refine the criteria used to allocate funds acrossinstitutions. The -global budgeting- picture described above remains arelatively accurate portrayal of the process today; in most'provinces (Albertabeing one exception; see below) the more recent funding innovations are beingapplied only to that component of year t funding which represents an increaseover the total provincial hospital 'globe' for the previous year. In short,to a large extent, any relative inefficiencies and inequities that existed ineach province when it went to global budgeting have been largely fossilized,and in many instances may have been exacerbated since that time by therelatively ad hoc process of allocating new funds and covering deficits (Pink,1993) .The statistical picture mirrors this general evolutionary story.Hospital expenditures increased about 10% per annum during the 1960s,declining sharply to just under 6% in the 1970's, and continuing on down, to4.6% in the 1980's (all figures in real terms).8 As Figure 1 shows, theeffect of this increasingly constrained expenditure environment has been tostabilize, and then reduce, hospital expenditures as a share of total health, For example, for a number of years in Ontario, hospitals could not rundeficits, but could also not retain the full amount of any surpluses. Notsurprisingly, actual expenditures clustered very tightly around approvedbudgets.7 Of course there are practical limits to this process. In someprovinces Ministries faced with hospital deficits may not, for a number ofreasons, be able simply to let such hospitals shut down. The resultingpolitical hue and cry makes this an impractical option.8 Hospital expenditure data for 1960-1970, 1970-1980, and 1980-1990 are,respectively from Canada, Health and Welfare Canada (1979, n.d. 1984, and1992). The GDP implicit price indexes used to construct real growth rates areall from Canada, Department of Finance (1992).FIGURE 1.Hospital Costs over Total Health CostsCanada, 1960 - 19910.46 I Io.45- ---.--.-----__a __ a ------.--------------.----.---O.~-.-----·--------·----------------·---·-~·----·---···.---.------------.-------.- ---.-----...-..----------...-------------------....------.. -----.---.-..-.O.~-.---··-------···-------------~----··--------·---·----------.------.--.----- -.-------~ -------- ----------.-------- -------.- -.--..--o.~2- --..-----.-.--.--- __ a .--0.~1o.~-.-----...------------··--------·---------------------------------------------.---------...----------..-----.---------.------~--.-----------------.--------0.39038 ' ,• iii iii , iii iii iii ii' iii , , iii , , iii61 63 65 67 69 71 73 75 77 79 ·81year83 85 87 89 915care expenditures. While health care costs in Canada have increasedconsiderably as a share of gross national product since 1956, much of thisincrease came in the early pre-medical care insurance period (up to 1971)which was also characterized by rapid expansion in hospital capacity andrelatively generous line-by-line budgeting (Barer and Evans, 1986; Evans,1984) . Since then, health care costs as a share of GDP were stable during the1970's and then again during the 1980's (after a sharp increase early in thatdecade that was, in part, recession-induced). The share of GDP consumed byhospital expenditures reflects this overall pattern (Figure 2).With the worsening economic situation in Canada in the early 1990's, thefinancing of the hospital sector is coming under even greater strain. Whilethe national data beyond 1991 are not yet available (and the 1991 data arepreliminary estimates), they will almost certainly show additional reductionsin the rate of expenditure growth, even while expenditures as a share of grossdomestic product have increased (because the recession has had a severe impacton the denominator of this measure). For example, in the next fiscal year(1993/94), Ontario hospitals have been told to expect no increase in funding,a far cry from the heady 4% - 10% days during the mid-1980s.Unfortunately Canadian published data sources do not provide informationon hospital capital expenditures. Health and Welfare Canada includes a-Capital- line in its annual expenditure estimates, but of course these willinclude construction, renovation and equipment costs for all health carefacilities. Since hospital capacity has grown at quite different rates andtimes than, for example, continuing care facilities, one cannot infer hospitalcapital expenditure growth rates from -Capital-. One can gain a sense ofcurrent levels using provincial expenditure statistics, as described insection C. below.B. The Current Situation - Operating CostsAs noted above, hospital operating costs are funded largely out ofFIGURE 2.Canada Hospital Cost over GDP1947 -19910.04 i iO.O~-r·-------------- ·--·----·--------·--------~--------.- .----..-----.--.----. ~.----..-.----.----------.----------------.-----.-------.-...-------.....-..--o.o~-+.-----.------.-.----.--- -.------.---------------- . .. . __A ••_. • • •• ----.,-----...------•••-----.--••- ••--------••••--0.01 !:i-t .-.---:::;IIJ.....--....--------.------.--.. ------.---.------.--.-------.---.--------.-----------.---------.-~---.------.-.------.-.------.--.-..-.------0.0~!:i-+·-----·-·------·-------·-··----··------·-----·-----.--.---..-.---.. --.--.. ------.------...--.-----.------.-.-----------0.0~!:i-+--------·------·-------------·-----·---·-·----·-.----- ...----...------.------..-----.-------.-..------.----.---.------...--.---...-.------.-.-----------.001 I i• I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I47 49 !:i1 ss !:i!:i sr ss 61 6~ es 67 69 71 7~ 7!:i 77 79 81 8~ es 87 89 91year7general tax revenues (provincial taxes and federal transfers).9 But fundsavailable for annual operations are not restricted to the allocation for thispurpose from the provincial Ministry/Department of Health. Hospitals are able(indeed increa~inglY encouraged) to calIon a variety of other potentialsources of revenue to supplement Ministry budgets. Charges to patients for-luxury- accommodations (semi-private or private rooms) where these are notmedically necessary provide a significant source of revenue for someinstitutions. 10 An equally important revenue source is diagnostic services(laboratory tests, radiology and ultrasound exams, ECG's etc.) provided toout-patients. Even where these services are supervised by privatepractitioners with no employment status at the hospital, the hospital maycharge the provincial medical plan for the technical component of the fee(where relevant). If salaried medical staff provide the service, the wholefee would accrue to the hospital.Some provinces, such as Ontario, restrict the range of such ambulatoryservices, so as to avoid competition between publicly-funded hospitals and'private' diagnostic practices (which are, nevertheless, also publicly fundedthrough medical fees-for-service) (Pink, 1993). Thus, hospitals in Ontariocannot charge the provincial medical plan (OHIP) for laboratory tests tooutpatients, unless such tests are available only within "t he hospital sector.But they can charge for a variety of other diagnostic services not availablein the 'private sector' (e.g . most scans and scopes) .While a number of provinces have, over the years, used a variety ofpremiums to raise a component of hospital funding, only Alberta does so now.Even when they were in effect, hospital care could not legally be denied toCanadian residents even if premium payments were in arrears, because of theuniversality provisions in the federal HIDS Act.10 A number of provinces have in the past imposed a variety of othersmall hospital user fees, for such things as emergency department visits.With the passage of the Canada Health Act of 1984, federal fiscal transferscould be withheld on a dollar-for-dollar basis from any province continuing toallow user fees for -medically necessary- services. By 1986 such fees hadvirtually disappeared from the Canadian landscape, because any province thatallowed them to persist would be imposing 'double jeopardy' on its residents ­- out-of-pocket payment plus the withholding of an equivalent amount offederal tax dollars.8Other sources of funding include 'revenue centres' such as parking,cafeterias, gift shops, the provision of non-insured patient services orservices to patients from other provinces or out-of-country, and even theprovision of specialized hospital consulting services (Pink et al., 1991) .11Nevertheless, provincial and federal tax revenue continues to be thesource of the lion's share of funding for hospitals in Canada . But there areno tax revenues earmarked specifically for hospitals. While the federaltransfers come to the provinces for health care programs governed by theCanada Health Act, these funds fall far short of the total cost of theseprograms. Therefore they are simply treated as part of general provincial taxand transfer revenues. 12 Provincial Ministries of Health must then competewith other Ministries for a piece of the general revenue pie, and then mustallocate that piece across hospitals, other health care institutions, agenciesand programs, private health care providers (the majority of whom arephysicians), and some research agencies and programs. Because hospitalexpenditures comprise the single largest expenditure item within provincialMinistry of Health bUdgets,13 they are subjected t~ special scrutiny. Aminiscule reduction in hospital allocations will easily fund a variety ofother programs, a fact that has escaped neither those programs nor Ministry ofHealth staff.While the details of the budget development, approval and allocation11 One particularly innovative and comprehensive approach to revenuegeneration was the establishment of the St. Michael's Hospital Health Centrein Toronto, a remarkable example of product line expansion (Pink et al .,1989). This free-standing building was purchased by the hospital andattracted a variety of patient-service-related tenants (e.g . a family medicalpractice, a women's health clinic, a nutrition clinic, etc.).12 Indeed, many of the more fractious episodes in federal-provincialrelations during the past two decades have arisen over disputes about theshrinking cash transfers from the federal government, or the uses to whichfederal funds were being put by individual provinces.13 For example, in 1991/92 total grants to hospitals in British Columbiawere $2 .2 billion for a population of about 3 million . This represented over40% of the total Ministry of Health budget in that year . Similarly, hospitalexpenditures represented about 42% of public health care expenditures inOntario in 1992, down sharply from about 50% in 1983. This reflects theoverall trend shown in Figure 1.9process vary across provinces, one can sketch out a general story withoutstraying too far from the specifics of any province. Budgets are basedlargely on approved budgets from the previous year, with the allowableadjustments depending on province-specific factors such as new programs,patient volume increases, anticipated wage settlements, or other policiesaffecting the bed capacity of each hospital. Ministry staff generallydevelop estimates of each hospital's funding requirements based on theapproved budget from the previous year, anticipated adjustments for increasesin the costs of 'factors of production' (salaries, pharmaceutical, surgicaland other supplies), and any new or expanded programs. This might be labelleda 'service-based' approach to budget estimation. The amount of interactionbetween Ministry staff and individual institutions during this phase of such abudget development process varies considerably across jurisdictions. Theseindividual institutional estimates will be aggregated to an overall hospitals'line' in the Ministry's "estimates" process.An alternative approach, adopted recently in British Columbia forexample, begins with overall hospital expenditures in the previous year, anddevelops a case for adjustments not so much on the basis of new hospitalprograms or increased hospital factor costs, but rather on the basis ofchanges in the characteristics (size and composition) of the population, andinformation on alternative means of providing services to that population -- amore 'population-based' approach, at least in philosophy.The hospitals 'line' which emerges out of either of these approaches willbe subject to modification as a result of internal negotiations over theoverall size of the request that is to go forward from the Ministry. As notedabove, the hospitals 'line' is far and away the largest item in the Ministryestimates, so that it comes under the microscope even in the best of times.But two factors characterizing the current situation, one'environmental', one the result of new policy directions,14 ensure that14 Of course it would be naive to think that the emergence of thesepolicy directions was unrelated to the 'environmental' crisis.10hospital funding is even more sUbject to scrutiny presently. First, and mostobvious, is the fiscal crisis facing all provincial governments. As a resultof declining federal transfers for health care, slow (or no) growth inprovincial tax revenues, and increasing demands on social support programsbecause of slow economic growth, provincial governments are finding themselveswith very little room to manoeuvre, and hospital funding makes a very largetarget. Second, a number of new and major provincial restructuringinitiatives involve attempts to create a more efficient and 'patient-friendly'match of patient needs and levels of care by downsizing large urban hospitals,expanding community-based programs, and more generally moving patients ·Closerto Horne· (Manitoba Health, 1992a; B.C. Royal Commission on Health Care andCosts, 1991). With the reduction in bed capacity comes an expectation ofreduced budgetary requirements.At the conclusion of the internal Ministry estimates process, a globalhospitals' line will go forward to the provincial Department of Finance, orTreasury Board, as part of the Ministry's request for funds. This requestwill be scrutinized by members of Treasury Board staff assigned to Health, aspart of the process of determining allocat ions across competing sectors(education, social services, justice, health, housing, etc .). Out of thisprocess will corne recommendations that are taken forward to the provincialCabinet (comprised of the elected Ministers for each sector) for approval.The approved budget will then have to withstand debate in the provincialHouse of Commons, before it passes into law. At that point, Ministries willknow what their allocations are to be for the fiscal year. 15 In someprovinces the approved budget comes with very specific directives as to theinternal allocation across Ministry programs, allowable salary increases, andthe like. Elsewhere, the approved global budget is returned to the Ministry,at which point decisions regarding the allocation of funds to individualprogram areas within the Ministry must take place if the approved amount is15 Unfortunately this stage is often reached well into the fiscal yearfor which estimates are being debated, so that hospitals must run on faith andhope for the early part of the fiscal year.11different than the budget request. In either case, the allocation toindividual institutions is still a matter of internal Ministry responsibility.The estimates process itself will usually have generated the informationnecessary for this latter exercise. For example in Manitoba, where thehospitals budget line is developed by aggregating individual institutionalestimates after adjustments for factor cost increases and new programs, theallocation of the available funding across institutions mirrors quite closelythe relative size of the individual budgets developed during the estimatesprocess. Whatever the detailed processes, hospital budget levels have been,and continue to be in most provinces, dominated by the levels in theimmediately preceding year. 16New approaches for allocating hospital funding have been adopted inrecent years in a number of provinces . It is important to note, however, thatall of these initiatives (at least to date) still leave the "pr ev i ous year ~sbase budget for each institution largely intact. In some provinces the newadjustments are applied only to the annual increment in overall funding levels(i.e . new funds for year t are allocated on the basis of the 'new rules',while the base budgets remain relatively unchanged), while in one province(Alberta) the adjustments are limited to a small (5%) proportion of eachhospital's previous year's budget.Nevertheless, these approaches indicate an increased interest amongMinistries of Health in making budgets more sensitive to the relativeefficiency of different institutions given the mix of patients served(Alberta, Ontario), or to changes in population composition and patient flows(or the ·needs· of a hospital's catchment area) (British Columbia) . 17 These16 In 1988, for example, the previous year's funding accounted for 92%of the funding allocated to Ontario hospitals, the remainder being made up ofa variety of adjustments for inflation, volume increases, and new/expandedprograms (Lave, Jacobs and Markel, 1991).17 As with so many other health and social policy initiatives, Quebecwas out ahead of the other provinces in experimenting with peer group-basedincentive reimbursement programs (Glaser, 1987), but appears to be doingrelatively little on this front presently.12three experiences are described in somewhat more detail below, as illustrativeof the types of changes occurring presently in the funding of Canadianhospital operating costs.AlbertaThe Alberta Acute Care Funding Plan (ACFP) was designed to redistribute acomponent of inpatient operating costs from more, to less, efficientinstitutions (Alberta Health, 1991). It involves the estimation for eachhospital of a hospital performance measure (HPM), the number of case- andseverity-adjusted days treated per dollar of inpatient expense. The higherthe measure, the more efficient the hospital; the funding adjustment is thenbased on the relative position of each hospital's HPM.A detailed description of the methodology underlying the HPM is beyondthe intent of this paper and is, anyway, available elsewhere (Jacobs et al.,1992; Greenaway-Coates, 1990; Alberta Health, 1991). In skeletal form, themethod begins by estimating inpatient costs for each hospital by netting out avariety of non-inpatient activity centres and a share of joint activities(such as diagnostic services and administration) from the hospital's totaloperating costS. 18 Each of the hospital's inpatient cases is then assignedto one of about 1100 refined diagnosis related groups (RDRG's), on the basisof its diagnostic group, diagnostic or procedure code, and level of co-morbidity or complications. Each RDRG has a resource intensity weightassigned to it. The weights are constructed by marrying per diem cost/chargeinformation from New York State, with RDRG average length of stay informationbased on recent historical experience in Alberta (after trimming outliers) .Minor case weight adjustments are made for outlier (length of stay) cases onthe grounds that these are of extraordinary severity which would not beadequately reflected in the RDRG weight.This patient classification system, together with the case weight18 This process of inpatient cost estimation is a modified form of amethodology developed in the late 1970's for the purposes of hospitalinpatient cost comparisons (Barer and Evans, 1980; Barer, 1981).13calculations for the province, provides the means to calculate a measure ofweighted cases for each hospital. The measure of weighted cases (WC) is thenscaled up or down to take account of other factors alleged to influenceinpatient costs per case, namely the size of the institution (number ofinpatient beds) and the extent of its teaching ro1e. 19The adjusted weighted cases (AWC) then become the numerator of the (HPM),the denominator being total estimated inpatient costs for the institution. 20The resulting HPM values for each hospital are converted to index values(base=100), and each hospital's index value determines its budget adjustment.For example, if a hospital had a value of 125, it would be eligible for afunding adjustment amounting to 25% of its previous year's approved budget.In practice, however, the adjustments to date have been limited to 5% of theprevious year's base.There are a number of serious problems with this system, some of whichare being actively worked on even as this paper is being written, others ofwhich are flaws more generic to any system of reimbursement tied tocase/severity mix and case weights. The system is a 'service-based' approachto adjusting hospital funding, which takes as given (and therefore implicitly'alright') the "efficiency" of the average hospital. It rewards or penalizesinstitutions not on the basis of their designated roles, the patientpopulation they serve, or the technical efficiency with which they meet19 This latter adjustment is motivated by evidence from Canadianhospital cost analyses (e.g. Barer, 1982) indicating that, even after oneextracts the costs of direct teaching-related activity in estimating inpatientcosts, the teaching function continues to have indirect effects on thoseinpatient costs.20 In fact the official and published literature on the ACFP creates anaura of additional complexity that is simply not there (Jacobs et a1., 1992;Alberta Health, 1991). Specifically, it suggests that the measure of WC foreach hospital is divided by actual cases, to construct something mislabelledthe "severity predicted cost per case" (SPCC) (which does not, in fact, haveanything to do with cost per case -- it is a measure of the average caseweight). Then this SPCC, after adjustment for size and teaching activity, isdivided by the actual cost per case. This amounts, of course, to dividingboth the numerator and denominator by the unadjusted number of cases, asuperfluous step that, nevertheless, makes the whole technical exercise seemmore complex and less logical than it is.14specific objectives, but on the basis of their prior care-providingexperience, as reported by them, and the costs incurred as a result of thatcare provision. A hospital that aggressively pursued community-basedpartnerships that had the effect of keeping patients out of hospital couldeasily end up being penalized under such a system, while a hospital that usesclever accounting practices to move inpatient costs out of the denominator ofits HPM and creative patient classification to increase the value of thenumerator, would end up being rewarded. 21A major problem with the use of this type of funding system in a Canadiancontext is that it bases its weights on American charge data. 22 This resultsfrom two factors: first, there are as yet no reliable patient-centred costdata systems in place in Canadian hospitals, and second, the provinces whichhave adopted case mix-adjustment of inpatient funding have chosen to use costsas a key component of their weight calculations. There are other approachesto estimating the relative complexity/severity of cases (see, e.g. Evans andWalker, 1972; Barer, 1982), but these have received much less development and,perhaps more importantly, much less marketing than the DRG-based systemdeveloped in the United States. 23The adjustment factors for hospital size and ·teachingness· have alsocome under attack for being rather arbitrary and not particularly sensitive to21 Of course ·case mix creep· is no stranger to the United states, wheresuch reimbursement systems have been in place for much longer. As Botz (1991)notes, no case weight system, no matter how carefully constructed, is going tobe devoid of case-shifting incentives. The extent to which such case shiftingoccurs will depend on the degree of clinical flexibility in the patientclassification system, and how adept institutions become at ascertaining thedifferences between the marginal revenues and costs associated with each casemix/severity category.22 Whether or not these are adjusted for the relationship between costsand charges in New York state seems moot, as the New York patterns of care arelikely to be more service intensive, for comparable patients, than those inCanada. Only if they were uniformly more service intensive across all typesof cases would such an adjustment be appropriate for application in a Canadiansetting . This seems to be asking for an extraordinary leap of faith.23 Indeed, much of the literature in this area simply assumes that costdata must be used to develop case weights. See, e.g. Lave, Jacobs and Markel(1991). The potential circularity in such approaches seems to have been lostby their general acceptance in the United States. Pity.15the phenomena which they are supposed to capture. Efforts are presentlyunderway to alleviate some of these problems, but these efforts beg the largerquestion of whether such adjustments are appropriate at all and, if so,whether there are other similar types of adjustments that ought to beconsidered as well . Inevitably, each hospital will claim that the key factorsthat make it unique have not been captured within the adjustment process .Indeed, it could be argued that all hospitals would not be happy unless anduntil sufficient adjustments had been incorporated to ensure that somehospitals were better off, and none were worse off, than at present. 24ontarioThe recent patient case mix-based adjustments to global budgeting inOntario are similar in a number of respects to that described above forAlberta. Indeed, the Ontario system also computes a measure of weighted casesusing resource intensity weights constructed as a hybrid of New York hospitalcost/charge data and Canadian length of stay data, and then constructs ameasure of relative cost per weighted case (the inverse of Alberta's weightedunits per inpatient $) using a method similar to that described above toestimate inpatient costs (Lave, Jacobs and Markel, 1991, 1992; Pink, 1993).But there are a number of differences as well, both in methodology, andin the way in which the resulting measure of relative efficiency is applied inthe funding allocation process. For example, the Ontario process makes noadditional size or teaching status adjustments, but instead attempts to createhospital peer groups (based on teaching status, size, and geographic location)and to make allocation adjustments within the context of those groups.Furthermore, it uses patient Case Mix Groups (CMG's) designed for Canadian userather than the U.S .-based RDRG's . The 'reallocation' amounts for which ahospital is eligible are limited both by the fact that the funding adjustmentsare applied only to separate designated periodic pools of -equity- or -growth-24 Jacobs et aI. (1992) describe a number of other problems with theAlberta system which will not be repeated here.16funding, and by some predetermined % of the previous year's budget (for thegrowth adjustment, currently a maximum of 2% for any hospital). The ·growthformula· incorporates (weighted) inpatient and a variety of non-inpatientservices, and by adjusting the 'price' weights attached to these differentservices (e.g. day surgery, outpatient clinics), the Ministry of Health alsoattempts to create incentives to shift the mix of services .Thus in Ontario this process has not (as yet) been used to reduce aninstitution's previous year's approved budget. Instead, it has replaced theold formula of providing general increases to all hospitals for inflation,unadjusted volume increases, and new or expanded programs. Furthermore, it isplagued by all of the problems identified above for Alberta, plus some of itsown (Lave, Jacobs, and Markel, 1991, 1992). For example, the problems withthe process of adjustment for bed size and teaching status in Alberta werenoted above. In Ontario, the construction of the peer groups has, to date,been relatively unsophisticated (although it has been improved from theoriginal seven groups) and so is equally subject to criticism from thehospitals themselves.To date a number of pools of equity funds have been allocated, the mostrecent in the fall of 1992 (personal communication, G. Pink, March 1993; seealso, Pink, 1993) . These sums represent a very small proportion (well under1%) of total hospital operating expenses. Funds available for •growth"adjustments have also been limited, to about 1% of total base budgets. Evenin severely constrained fiscal environments such as that found in Ontariotoday, these amounts may not be sufficient to effect the sorts of equity andefficiency shifts sought by the provincial Ministry of Health.~.British Columbia 25Like Ontario, British Columbia's recent budget allocation adjustmentshave been applied only to 'new' or incremental budgetary allocations to the2S Much of the information on which this section is based is taken fromHaazen (1992). The critical analysis is, however, mine.17hospital sector as a whole. But unlike in Ontario and Alberta, thisincremental funding is not allocated solely on the basis of 'weighted servicevolumes' (although historical utilization rates do playa role in determiningestimated population -needs-; see below). By adopting a population- ratherthan institution-based focus, it attempts to ensure that new funds followprospective patients, that is that the funding adjustments are sensitive toregional changes in population growth and age structure, and to changes inpatterns of care-seeking. It appears to be a serious attempt to begin toalign hospital funding more closely with underlying population needs forinstitutional care, although to date it can only be regarded as a tentativebeginning in that direction. It is, however, being complemented by localinitiatives to plan future bed capacity on the basis of an overall provincialbeds/population target of 2.75 beds per 1000 population, with individualhospital capacity determined by projected relative growth in population, andby estimated patterns of referral or care-seeking.Like the Ontario and Alberta systems, the British Columbia approach tofunding allocation relies heavily on the HMRI (Hospital Medical RecordsInstitute) database which contains detailed records on each patient dischargedfrom a Canadian hospital. These data are used to compute provincial age- andsex-specific utilization rates for each of five types of care: acute orrehabilitation days; long term (chronic) care provided in acute carehospitals; intensive care; inpatient surgery; and day surgery. These (recent)historical utilization rates are applied to age- and sex-specific changes inthe provincial popUlation to estimate aggregate changes in service use foreach level of care, for the province as a whole. 26The changes in service -needs- are then allocated to hospitals on thebasis of where the population changes have occurred, and the existing referralpatterns for each level of care. Thus if historical utilization patternssuggested that a particular large urban hospital provided 20% of inpatientsurgery for the residents of its own region, plus 80% of inpatient surgery for26 For example, the 1993/94 model will use data from 1991/92.18residents of the rest of the province, then 20% of the population-based ohangein such surgical utilization for that region, plus 80% of the ohange for therest of the province, would be 'assigned' to that hospital.The result of this process is five separate measures of population-basedutilization change for each hospital. These are then aggregated to a singlevolume-change figure for each hospital, using relative resource weightsdeveloped by i nt e r na l Ministry staff. For example, a weight of 3 .5 isassigned to an intensive care day, 1.65 to a day involving a surgical service(in- or out-patient), 1.0 to an acute/rehabilitation inpatient day, 0.45 foran extended or continuing care day, and 0.4 for a newborn patient day . Usingthese weights, new ·weighted patient days· (NWPD) can be computed for eachhospital.The final technical step in the process is to compute a measure of costper ·weighted patient day· for each institution, by dividing the most recentyear's total operating costs by total weighted patient days. The relativevalue of this measure for each hospital is then used to adjust that hospital'sNWPD, on the assumption that higher costs per weighted patient day imply amore complex than average mix of patients within the five service categories .The result of this exercise is adjusted new weighted patient days (ANWPD) foreach hospital. The available incremental funding is then allocated on thebasis of each hospital's share of total provincial ANWPD.While on first blush this approach may seem more 'need-driven' than thatbeing applied in Alberta or Ontario because it is less dependent on 'servicepatterns', in fact this may be no more than an illusion. First, historicalpatterns of utilization are used to estimate population-based expected changesin utilization. This procedure locks in whatever service patterns are used tocompute the age-specific provincial rates. If the proportion of those ratesthat is inappropriate varies either by level of service or by age, thenregions experiencing atypical changes in population age structure, andhospitals offering relatively more or less of particular types of servicesthan average, may be differentially, and inappropriately, affected in terms of19the attribution of new service ·needs· to particular institutions.Second, the two-part approach to weighting patient days is questionableon a number of counts. The differentiation of types of care is not likely tobe sufficiently discriminating to take account of the fact that differenthospitals may treat quite different segments of the case distribution (interms of resource intensity) within any level of care. 27 And the adjustmenton the basis of cost per weighted patient day may simply make matters worse.For example, if a hospital has below average severity patients in all fivelevels of care, but is an inefficient facility, its NWPD value will be scaledup in computing ANWPDlThus this approach draws on existing patterns of utilization and on theexisting cost performance of each institution, in its computation of therelative call of each hospital on new ·population/demographic· funding. Itis, perhaps, less subject to institutional manipulation than the systemsemployed in Ontario and Alberta. On the other hand, it seems far lesssophisticated in distinguishing the resource intensity of different types ofcases, yet has very little (at least yet) to compensate in terms ofpopulation-based ·needs· information.There are efforts underway within the Ministry of Health to make someadjustments. First, factors other than age and sex that may contribute to orbe correlated with individual variations in ·need", are being incorporatedwithin a more comprehensive model for computing NWPD. Second, efforts arebeing made to adjust each hospital's NWPD not by its own cost per WPDexperience but rather by a composite average cost experience based on peerhospitals. While still imperfect, these would both seem to be improvingchanges.Where To Next?In the coming years, one might anticipate some convergence of case-mix-27 For example, only ten different weights are used to distinguish amonginpatient days (personal communication, B.C. Ministry of Health, March 1993) .20based and population-based approaches to budget allocation, and increases inthe shares of hospital bUdgets that are subject to such reallocation criteria.A hybrid approach might, for example, draw on the richness of a CMG- or RDRG­type patient classification system to distinguish the resource requirements ofalternative types of patients, develop case weights based on real resource usein ·efficient· Canadian hospitals, and use population-based methods andappropriateness evidence to estimate the volumes within each patient category.But such an integrated system is likely to be at least a decade away, in partbecause the Canadian hospital sector lacks the information systems necessaryto support this type of approach (on this point, see, e.g., Auditor General ofBritish Columbia, 1989). In the meantime, one can expect to see moretechnical 'fiddling' in the provinces that have been involved in these newinitiatives, additional provinces becoming involved in similar efforts, andincreasing proportions of total budgets being subject to these types ofreallocation procedures.Payment for Factor InputsThe largest single component of hospital operating costs is salaries ofhospital employees. For example, in Quebec in 1991/92, salaries and benefitsrepresented about 75% of total hospital operating costs (J.M. Lance, personalcommunication, January, 1993). The employees in most provinces arerepresented by a small number of different trade unions, and province-widewages are negotiated, and often determined by arbitrators who do not feel inthe least bound by hospitals' -ability to pay- . Thus, for most Canadianhospitals, wage settlements are exogenous factors that must be dealt with inliving within their budgets. Often if a collective agreement runs over anumber of years, and the wage 'pushes' are known in advance, Ministries ofHealth will make explicit allowance for at least part of this in their annualallotments to hospitals. For example, in the letter sent to all Manitobahospitals by that province's responsible Associate Deputy Minister in the latespring of 1992, explicit note was made that the Ministry allocations would21fund salary increases in existing collective agreements (Manitoba Health,1992b) .Other major cost items are pharmaceuticals and surgical supplies. Insome provinces, bulk purchase arrangements are in place. Hospitals nationwidemay enter into bulk purchasing arrangements and, in the past, have been ableto take advantage of their purchasing power to negotiate reduced rates forpharmaceuticals. However, as a result of recent federal legislation,introduced in response to pressure from the American government (stimulated bythe multinational pharmaceutical firms based there), the ability of such jointpurchase arrangements to reduce pharmaceutical costs is likely to be severelyundermined.Services provided in hospitals by physicians are remunerated in a varietyof ways . For the vast majority of physicians, hospitals serve as 'no cost'workshops. Physicians are paid fees-for-services provided to theirhospitalized patients , but are responsible for none of the hospital costsincurred. General/family practitioners may admit patients directly tohospital, or may refer their patients to specialists who may then subsequentlyrecommend hospitalization. In either case, the primary care practitioner canfollow the patient, and can bill the provincial medical plan for hospitalvisits, or for any surgical procedures or assists.Many specialists (particular tertiary care sub-specialists) are hospital ­based. Indeed, some have their offices within the physical confines of thehospital (although whether they pay rent or share other overhead is oftenunclear) . The vast majority of these are paid fees-for-services fromprovincial medical plans . There are also a sizable number of diagnosticphysicians (radiologists and pathologists) in salaried hospital positions.Many of the services they provide are, nevertheless, paid on a fee-for-servicebasis to the hospital. A small (but growing) number of specialists arenegotiating alternative payment arrangements with provincial medical plans.For example, a teaching hospital-based neonatology unit may negotiate with theMinistry for sessional (half-day) payments to its practitioners, or even for22block operating funding. These funds will generally flow to the hospitalseparately from its operating budget, coming from a different branch of theprovincial Ministries of Health.In general the only physician costs that will appear in a hospital'soperating budget will be for salaried medical staff, such as the heads ofclinical departments or diagnostic salaried positions, post-graduate medicalstudents (interns and residents), or physicians serving in administrativeposts (e.g. CEO or vice-president, medicine). These costs represent only avery small fraction of the total cost of hospital-based physician services.Equipment Depreciation and the Interface between Operating and capitalAccountsIn general, equipment depreciation is handled in an ad hoc, andrelatively unsatisfactory, way in Canadian hospital accounts. Publisheddepreciation expense figures are not reliable indicators of the underlyingvalue of equipment, or of the extent of consumption of the useful life ofequipment in any year, and practices vary markedly across provinces. In manyprovinces, capital depreciation is 'reimbursed' through the operating side ofhospital accounts, but the actual funding which flows to hospitals fordepreciation may have virtually nothing to do either with the useful life, orthe current replacement cost, of the underlying equipment. No depreciationappears on the operating side for building depreciation.For example, Manitoba 'pays back' hospitals for equipment purchases overa 16 year period, and this will appear in the hospital's operating budget.But the sixteen years is an arbitrary 'pay-back' period unrelated to theuseful life, or replacement cost, of the equipment. Part of the equipmentpurchase approval process in Manitoba involves seeking information from thehospital on the likely operating cost implications of new equipment. If suchequipment is going to involve significant additional operating requirements,such as additional staff or maintenance contracts, it may be treated as a -newprogram- proposal and require a more extensive vetting within the Ministry.There is, of course, a quite obvious reason for this seeming lack of23relationship between capital and operating costs. since the majority ofcapital costs are covered by the same provincial Ministries of Health, andsince the replacement of equipment when it is obsolete will also be largelycovered by a separate pool of Ministry funds, there is no compelling reason onthe hospital side to expend any significant energy in depreciation expenseesti~ation, or on the Ministry side in flowing earmarked depreciation funds tohospitals.This leads us rather naturally to a more detailed consideration of themanner in which provincial Ministries of Health control the process of fundingallocations for capital -- equipment and buildings.C. The Current Situation - Capital CostsAs with the operating cost funding and allocation process, the details ofcapital funding vary considerably across provinces (Deber, Thompson and Leatt,1988; Bayne and Walker, 1989; Smith, 1990). But here even moreso than on theoperating side (where there are some relatively new approaches being developedin some provinces), the provincial specifics are probably less important thanthe general story.The first, and perhaps most important piece of that story in terms ofunderstanding Canadian hospital funding, is (as noted immediately above) thatthe same provincial Ministries of Health from which hospitals derive the vastmajority of their operating funds, are also the major sources of funding and,perhaps more important, the control pointa, for capital equipment purchasesand building construction. While in many provinces hospitals (or theircommunities) are responsible for some component (usually less than 50%) of thefunding for new construction or major new equipment, the final decision as towhether to build, or in the case of equipment, to buy, nevertheless almostalways rests with the Ministry of Health. 2828 The exceptions to this rule tend to be purchases of major diagnosticequipment which are funded from private (philanthrop ic) sources, often withoutthe approval of the provincial Ministry of Health and without any guaranteethat the implied operating costs will be covered in future years' budgets .24This means that funding for hospital capital emerges from the same typeof process described above for operating funds. Ministries of Health developcapital funding budgets, which will be scrutinized and usually modified byprovincial Treasury Boards or Departments of Finance before being returned tothose Ministries as part of their annual budget. But the process differs intwo key respects from that associated with operating budget funding. First,despite the fact that Ministries retain effective control over what getspurchased because of their formal approval processes, their significantfinancial contributions to the capital purchases, and the fact that hospitalswill be dependent on operating funding from them for any such purchases, thoseMinistries of Health, on average, do not come close to funding 100% of capitalcosts. Second, the determination of how the Ministry's capital funds will beallocated across competing projects bears no similarity to the process ofallocating operating costs. In fact, because most Ministries only partiallyfund capital projects, even those projects approved by a provincial Ministrywill only move forward if the hospital (or the community) can raise theremaining funds. This inevita~ly means, for example, that "by design ordefault, ... capital equipment acquisition is based, not on objectively definedneeds but on the success of fund raising campaigns. Not only the nature ofthe equipment being sought but numerous other factors such as hospitalprominence, location and overall program appeal can affect a hospital'sability to attract public funds· (Bayne and Walker, 1989).The levels of funding from Ministries of Health commonly vary with thetype of project (e.g. they will often be different for equipment than forcapital construction) and with the type of hospital (e.g. rates of Ministryfinancing participation will tend to be higher for provincialtertiary/teaching facilities than for small community facilities) . But whileone can find descriptions of the formal decision processes used in mostprovinces in determining levels of co-funding, there is much lessdocumentation of how decisions are reached as to which projects move forwardand which are not approved. Indeed, a common allegation is that such25decisions often have more to do with a community's political persuasion orwith the presence of an influential local politician or community member, thanwith any 'grand provincial plan' for capital replacement or expansion (see,e.g., Smith, 1990). Furthermore, the actual provincial level of cost-sharingdoes not always match the 'advertised' formula (again, see Smith (1990),particularly the description of Ontario).Most provinces lack any formal capital replacement plan. Indeed, veryfew appear to have any centralized source of information on the asset base outin the field, in terms of types of assets, age, cost-effectiveness andreplacement cost. Hospitals report the cost of new capital stock in theAnnual Returns which they file with Statistics Canada each year. But it isnot clear how complete these reports are, or how consistently such data havebeen reported, both over time and across provinces, and they provide nopicture of replacement costs (Thompson, Youmans and Letouze (1984); Thompsonand Letouze (1984)). Without such fundamental information, it is no surprisethat many provinces lack any capital funding strategy.This is also reflected in the sorry state of Canadian capital expendituredata, as noted in section A. above . While the official health expenditurestatistics (Health and Welfare Canada, various years) report a -Capital- lineitem, it cannot be used reliably to ascertain hospital capital expenditures .First, it is not restricted to hospitals. Second, federal officials mustestimate hospital capital costs using provincial Ministry expenditures and theofficial provincial cost-sharing formulae. To the extent that such formulaeunderstate actual practice, the Health and Welfare Canada data will understatecapital expenditures. Third , capital purchases made by hospitals withoutMinistry approval may not be included at all.Any ·equipment purchases in any province that proceed without Ministryapproval (e.g. the funds for the equipment are raised privately) are notguaranteed the necessary operating funds. Indeed, provincial Ministries frownon such purchases, and may even penalize hospitals who proceed with suchpurchases . Nevertheless, they continue to occur. For example, Ontario26hospitals tend to purchase equipment as part of the process of developingclaims for funding of new programs (Lave, Jacobs, and Markel, 1991).One can gain a sense of the relative importance of capital and operatingcosts within provincial Ministry of Health budgets, by seeking such datadirectly from each province. But these do not generally distinguish betweenplant and equipment. For example, in 1991/92 hospital capital expenditures bythe B.C. Ministry of Health amounted to just under 4% of operating costs(before depreciation) (personal communication, S.R. Kenny, Jan. 1993). Theequivalent figure for Quebec was slightly higher, between 5% and 6% (personalcommunication, J.M. Lance, Jan . 1993). But in general, provincial Ministryexpenditures on capital are dwarfed by annual operating costs.Of course this does not mean that such expenditures are unimportant.Indeed, decisions regarding expenditures for ~ capital create a stream ofoperating cost commitments that often last well beyond any accounting evidenceof the original capital purchase (~arer and Evans, 1990). Ministries areincreasingly requiring that requests for approval of (particularly new)capital expenditure include an 'economic case' (i.e. that the new capital willeither~ operating costs by improving technical efficiency, or that it willlead to improvements in patient outcomes sufficient to justify theexpenditures). But there are very few situations where new capital will evenpotentially reduce costs and, even in those cases where such cost reductionscan be identified, they rarely materialize in practice. As a result,Ministries of Health tend to be skeptical of such claims (Auditor General ofBritish Columbia, 1989). As for improving cost-effectiveness, oftentimeshospital equipment requests are for 'life-saving' equipment that has not beenSUfficiently evaluated to make any such case (ibid.). Provinces such asQuebec and British Columbia have recently established formal technologyassessment capabilities to assist them in evaluating such requests; mostprovinces rely on ad hoc technical advisory committees to review the likelyutilization of new equipment, whether the clinical expertise is available, andwhere the most logical site(s) might be. The new technology assessment27offices provide the means to bring external evidence on effectiveness andefficiency to such internal committee processes.As for replacement of existing capital, particularly hospital buildings,very few provinces have any long range plan in place. Many of the country'shospitals were built during the health care construction boom of the 1950s and1960s29 (although some of the key institutions are much older than that).Such capital will eventually need to be at least upgraded, and since thisrepresents the major component of future capital requirements, Canadianhospitals are likely to see Ministries of Health become increasingly stingywith respect to new facilities or equipment as the need to upgrade or replaceexisting physical structures becomes more pressing (Thompson, 1988). BritishColumbia has recently attempted to ameliorate this situation by allowinghospitals with excess operating funds to apply to the Ministry forauthorization to use such funds to purchase equipment, without invokingadjustments to their base operating budgets (Haazen, 1992).Beyond these general descriptions, a more accurate account requires thatone focus on a specific province, because there is considerable variation inthe mix of sources of funding, and in the detailed processes followed forbringing capital projects on stream. Accordingly, we describe the situationsin British Columbia and Manitoba in somewhat more detail below. 3o They areexamples, respectively, of provinces in which Ministry capital funding fallswell short of 100%, and in which the general rule is that capital projects(both equipment and capital construction/renovation) are funded 100% by theprovincial Ministry of Health.29 Between 1951 and 1971, the bed capacity of Canada's hospitals doubled(Barer and Evans, 1986).30 Space precludes the level of detail that would furnish acomprehensive picture even for these provinces. Because decisions and sourcesof funds tend to vary at least with the value/type of equipment and the typeof hospital, the interested reader is encouraged to consult representatives ofthe individual provincial Ministries of Health for more detail. For arelatively comprehensive picture of the situation in each province in 1987,see Smith (1990). But capital funding is a dynamic process, and the detailsare constantly undergoing change.28British Columbia J1Hospital construction and renovation are guided by a five year rollingcapital plan which must be approved by the elected representatives responsiblefor the various provincial Ministries (the -Cabinet-) .32 In order to have aproject incorporated within this plan, a hospital must submit a proposal tothe Ministry for consideration. But hospitals are, at least in principal,also required to gain the support of their regional hospital district, beforetheir proposal goes forward. 33 The Ministry considers each request againstcompeting priorities for hospital (and other health care facility)construction requests, bearing in mind projected regional needs for beds ofvarious types. The current Ministry of Health target is 2.75 beds/1000population, and just-announced provincial planning initiatives are intended tobring those beds closer to the population distribution in the province, and tomove beds away from tertiary care settings wherever possible (BritishColumbia, 1993).A successful proposal is returned to the originating hospital with-approval in principle-, at which point funds are made available in theprovincial hospital capital budget for the planning phase of the project, andfunds are tentatively earmarked for subsequent phases in the remaining yearsJ1(1990) .The material in this section borrows heavily from Barer and Evans32 The significance of this should not be underestimated. It means thathospital capital funding is approved at the highest provincial governmentbody. This means both that capital expenditures are controlled by the samebroad governmental process that dictates other Ministry of Health budgetaryallocations, and that provincial capital planning, such as it is, can be avictim of political influence.33 The province is divided into twenty-nine official regional hospitaldistricts (RHD), which are geographic areas employed for a variety of planningpurposes. The operating funds for the RHDs derive from local propertytaxation. Approval of a project by a hospital's RHD is particularly importantin the largest urban district, where many institutions may concurrently bedeveloping major capital projects. (See Greater Vancouver Regional HospitalDistrict (1991) for more details on the local approval process). But regionscomplain, often bitterly, about the fact that they are expected to contributeto projects financially (often quite substantially; see below) yet at the sametime they do not have commensurate 'control' over the project approval process(which is, in the final analysis, still dominated by the Ministry of Health) .29within the five year plan. The hospital must then develop a more detailed'functional program' and a number of 'physical design' proposals .With Ministry approval comes a commitment of 60% of the costs of theproject (including the cost of the land and providing servicing to thesite) . 34 The hospital must find the remaining funding, from its RHD and/orfrom,other private sources (increasingly including its own Foundation) .35The exception to this rule is the full Ministry funding of provincial tertiarycare facilities (such as the provincial Cancer Agency and parts of theprovince's Children's Hospital).A similar process is in place for requests for capital equipment.Hospitals must submit "annual rolling five-year equipment plans, with fairlydetailed specifications for the first year" (Haazen, 1992, p. 82). The plansare composed of two parts, one containing equipment associated with newprograms or costing in excess of $100,000, the other containing all remainingitems. They are reviewed with the hospital's RHD before being submitted tothe Ministry . Items in part one must go through much the same sort ofinternal approval process as capital construction projects; 60% of approvedpurchases are funded by the Ministry. But each hospital receives an approvedfunding level for items on the second part of the list and, if the list isapproved, it is approved in toto. That is, once a hospital receives approval,it is free to purchase any items on its part two list, until it has exhaustedits part two funding . The funding level for each hospital is determined onthe basis of the hospital's size, role and mix of beds, but again the Ministry34 In practice the RHD is responsible for raising 100% of the funds,usually through the issuing of debentures. The Ministry then covers its shareby contributing 60% of the costs of carrying the debentures and by paying down60% of the value of the debentures to retirement. This entire process iscoordinated by the Ministry of Health through the Regional Hospital DistrictFinancing Act.35 For example, all the major urban teaching hospitals in Vancouver (theprovince'S largest city) have their own hospital foundations, which areactively involved in soliciting funds from the private business sector andfrom individual donors on an ongoing basis. One enterprising hospital runs alocal lottery a couple of times a year, offering an upscale condominiumapartment as the carrot, and raising in excess of half a million dollars fromeach lottery.30funds only 60% of that level. Hospitals are thus forced to pare their own'wish lists' in order to stay within the available cost-shared funding.Although hospitals are free to make purchases from within their submittedlists, actual purchases are audited for consistency with the hospitals'rolling five year equipment plans. Furthermore, hospitals may still require-mor e detailed approval of specific items if they wish to be able to calIonRHO funds (see, e.g., Greater Vancouver Regional Hospital District (1991».If new equipment is associated with a new service or facility, thehospital must also submit a request for adjustment to its base operatingbudget to take account of the expanded functional role. A hospital cannotexpect to receive support on operating account for an unapproved capitalacquisition.Thus, virtually all the funding for hospital capital derives from theprovincial Ministry of Health (at least 60% of all approved purchases), theregional hospital districts, or hospitals' own charitable foundations. Thereare occasional instances of hospitals raising the funds necessary for a majorequipment purchase, and even receiving the required operating funds from theRHO. These appear (to date) to be rare exceptions to the general rule,although in an environment of continued restraint, such innovative fundingarrangements may become more common, as they appear to be doing in Ontario(Pink et al., 1991). While the Ministry is under no operating cost obligationin such situations, it can also not prevent the operation (although if theoperating funds are found within the hospital's approved operating budget, itcan certainly scrutinize, and adjust if necessary, the budget for futureyears). Furthermore, private practitioners are free to bill the province'sMedical Services Plan for the professional component of any fees, associatedwith the use of the equipment, that are in the negotiated medical feeschedule.ManitobaAs in British Columbia, the Manitoba Department of Health maintains a31five year capital plan for major construction/renovation projects, and suchprojects go through an approval process quite separate from the process ofestablishing annual operating budgets. J 6 Unlike in British Columbia, theprovince funds 100% of the costs of such projects, not including the cost ofserviced land, unapproved 'embellishments' or space, or changes occurringafter the project tendering process has been completed.All capital requirements for renovations, expansions, maintenance, orfire and life safety upgrades are included in this five year capital program.The program provides borrowing authority and sets out repayment requirementsand operating budget implications for each capital project. Once a project iscompleted, the approved operating costs are rolled into the operating budget.Each approved project receives funding separately for two phases: designand construction. Larger facilities have planning departments that undertakethe early design and planning work; some projects receive some financialsupport from the Department to support this early functional planning phase.The functional plan for each project must arise out of a 'role statement' forthe institution. This is intended to ensure that capital expenditureallocations are consistent with the over-arching strategic policy directionsof the province's health care system which, in turn, are attempting to moreclosely align health care expenditures of all types with health needs(Manitoba, 1992a). The role statement phase concludes with a projectdefinition which specifies the programs/services and volumes that will drivethe remaining phases of the planning process for each capital project.The subsequent phases of each approved project -- functional planning,architectural design, and construction -- each require approval, and .t heDepartment of Health is heavily involved in reviewing and approving thevarious stages within each of these phases. Once a functional program isapproved by the Ministry, the hospital is able to proceed with the designJ6 In addition, the province can provide funding of up to $500,000 outof a contingency project fund. This fund is intended primarily forunanticipated major repairs or maintenance which the hospital is unable tocover from its operating funding.32phase. At that point the Ministry will provide interim borrowing authoritywhich the hospital can take to its chosen financial institution. A "letter ofcomfort" can be provided to a financial institution on request. Such a letteressentially assures the lending institution that the province stands behindthe project.Approval of architectural plans gives the hospital leave to seekcompetitive site preparation and construction bids (at least five arerequired). The bids are reviewed by the facility and Department of Healthstaff, the lowest 'appropriate' bid is chosen and a tender price is fixed.The hospital generally borrows the funds, then once a project is complete,converts the loan into some form of long term debt such as debentures, whichare paid down by the province through contributions of principal and interestincluded in the hospital 's operating budget .Major equipment purchases are also funded largely by the Department ofHealth. Hospitals do periodically purchase unapproved equipment, but theMinistry not only feels no obligation to fund the operating costs associatedwith such equipment, but can actually reduce a hospital's operating budget ifunapproved equipment is used. Hospitals can purchase equipment using theirdepreciation account, other funds provided by the hospital (e.g. donations,fund-raising), or approved borrowings for equipment. They are also able topurchase equipment that is an approved part of a capital project using projectfunds.Manitoba remains more involved than does the British Columbia Ministry inapproving relatively small equipment purchases . Small rural hospitals arefree to proceed with purchases up to $5,000 without prior approval. For largeurban hospitals the equivalent is $20,000. Any other proposed purchases mustgo through the Department's capital approval process. Once approval has beenreceived, a hospital may proceed to tender and, after final approval of one ofthe competitive bids, to purchase. The Department covers the cost of theequipment by way of straight-line contributions to the hospital's depreciationfund for sixteen years (irrespective of the value of the equipment or its33likely useful life).Because many hospitals have insufficient funds in their depreciationaccounts to cover necessary equipment replacement (in part due to the slowpayback for equipment that becomes obsolete, in part due to rapidly increasingprices for such equipment), Manitoba has established a separate -CapitalEquipment Approved Borrowing Fund- which amounted to slightly more than $9million in 1992/93 (for a population of slightly over 1 million). This fundis intended to augment funds available through depreciation accounts and tosupport new program initiatives. All hospitals can submit 'wish lists', whichare reviewed and prioritized by Department staff. Some Manitoba hospitals areable to supplement their depreciation fund through private donations.Hospitals are also able to move up to 20% of revenues generated from non­Ministry sources (e.g. private room charges, parking, etc.) to theirdepreciation fund. While hospitals are not supposed to dispose of equipmentwithout Ministry approval, in practice this happens frequently, and theproceeds also find their way into the depreciation funds. Nevertheless, allprospective purchases exceeding the levels noted above still requireDepartment of Health approval. The private sources of funding provide animportant means for hospitals to cope with a funding mechanism that isinsensitive to useful life, price changes, and other factors that may "l eavedepreciation fund balances below necessary levels of funding for approvedequipment purchases.In the case of major new imaging equipment, the province has establisheda tiered structure. of imaging advisory committees, one for each type of majorequipment (e.g. C.T., M.R.I., ultrasound). Each committee collects input fromrepresentatives in each region, and is responsible for making recommendationsto the Ministry for equipment diffusion that will best meet the overall needsof the province's population. The recommendations of these committees thenplay an important role in the process of vetting and approving purchaserequests from individual hospitals.34Thus, the processes in British Columbia and Manitoba are relativelysimilar, although the financial involvement of the province in Manitoba is farmore substantial, and the level of equipment funding requiring detailedscrutiny in Manitoba is far lower than in British Columbia.Most provinces have no formalized long term plan for the orderlyreplacement of depreciated capital. Nor do they seem to have any detailed andaccurate accounting of capital inventory. A number of provinces have begun tomove in this direction through the establishment of multi-year planning andfunding approval processes, and through requiring that hospitals reportregularly on all equipment purchased. Funding sources and approval processesvary considerably across provinces.In ConclusionThe major features of hospital financing in Canada have not changedappreciably in the past 20 years. During that time, all provinces have movedaway from line-by-line budgeting of operating costs; all now practice someform of global budgeting. It seems fair to note that, while efforts toimprove the efficiency of hospital operations and to make hospital capacitymore responsive to population health needs, are beginning to emerge, thiscountry has as yet seen only very timid moves in those directions. For themost part, the allocation of operating funds across institutions is dictatedby historical happenstance, and more political energy is devoted to overallexpenditure control than to attempts to realign the allocation of funds 'underthe globe'.Hospital capital planning and funding appears still quite chaotic in mostprovinces, being driven in large part not by any overall assessment ofpopulation needs or the cost-effectiveness of alternative capitalconfigurations, but rather by ·needs· as defined by the staff andpractitioners of institutions that stand to be the major beneficiaries of new35capi tal spending. 37Nevertheless, Canada has been relatively successful in containinghospital expenditures over the past 20 years, at least relative to its closestneighbour. Its relative success seems now unequivocally tied to its methodsof finance and control -- single payors responsible in each province for bothcapital and operating costs -- which have the effect of keeping the resourceintensity of each day of hospital care at levels well below those found in theUnited States (Evans, Barer and Hertzman, 1991).Whether this rather effective top down budgetary control can continue tosurvive is the billion dollar question. The race appears to be on, withprovinces attempting to stay one step ahead of the pressures for rapidadoption of new, predominantly cost- (and health care income-) expanding,technological innovations. Provincial Ministries of Health are developing newpolicies intended to result in more appropriate placement of significantsegments of traditional hospital populations. They show every intention ofbecoming more, rather than less, stingy with hospital funding, even as thehospital sector raises alarm bells about waiting lists for 'high tech'interventions, decaying capital, and declining quality of care.One outcome that seems relatively predictable is that private, andincreasingly creative, sources of funding will become ever-more importantoutlets for hospitals, at least as means to raise funds for capital projects.Just how they will fund the operating costs remains the interesting question .But human ingenuity knows no bounds when there are incomes at stake, and thetemptation for Ministries to cost-shift by giving hospitals more rope may beoverwhelming. Canada's overall health care cost control record will stand orfallon the tenacity and perseverance of its provincial Ministries of Healthin dealing with the issue of hospital financing.37 Both British Columbia and Manitoba are currently involved in majorinitiatives intended to circumvent these past problems. In both provinces,capital planning is now beginning to be tied more closely to populationmovements, taking into consideration alternative approaches to deliveringservices. One would expect this to become more widespread over the next fewyears .36ReferencesAlberta Health (1991, 1992), Acute Care Funding Plan Newsletter, vols. 1 and2, Edmonton: Alberta HealthAuditor General of British Columbia (1989), Comprehensive Audit of HospitalPrograms, Victoria: Legislative Assembly, Province of B.C .Barer, M.L. (1981), Community Health Centres and Hospital Costs in Ontario,Occasional Paper 13, Toronto: Ontario Economic Council.Barer, M.L. (1982), -Case Mix Adjustment in Hospital Cost Analysis:Information Theory Revisited-, Journal of Health Economics 1:53-80.Barer, M.L. and R.G. Evans (1980), -Hospital Costs over Time: Approaches toPrice Deflation and output Standardization-, unpublished mimeo, Vancouver:University of British Columbia, Division of Health Services Research andDevelopment.Barer, M.L. and R.G. Evans (1986), -Riding North on a South-bound Horse?Expenditures, Prices, Utilization and INcomes in the Canadian Health CareSystem-, in R.G. Evans and G.L. Stoddart, eds., Medicare at Maturity:Achievements, Lessons and Challenges, pp. 53-163, Calgary: University ofCalgary PressBarer, M.L. and R.G. Evans (1990), -Reflections on the Financing of HospitalCapital: A Canadian Perspective-, HPRU Paper 90:17D, Vancouver, Health PolicyResearch Unit, Division of Health Services Research and Development,University of British ColumbiaBayne, L. and M. Walker (1989), -Capital Equipment Acquisition: A DiscussionPaper-, Vancouver: Stevenson Kellogg Ernst and Whinney.Botz, C.K. (1991), -Principles for Funding on a Case Mix Basis: Constructionof Case Weights (RIWs)-, Healthcare Management Forum 4(4): 22-32.British Columbia (1993), New Directions for a Healthy British Columbia,Ministry of Health and Ministry Responsible for Seniors.British Columbia Royal Commission on Health Care and Costs (1991), Closer to~, Victoria: Crown Publications Inc.Canada, Department of Finance (1992), Economic Reference Tables, ottawaCanada, Health and Welfare Canada (1979 ; n.d. 1984), National HealthExpenditures in Canada, Ottawa:HWCCanada, Health and Welfare Canada (1992), -Health Expenditures in Canada: FactSheets-, ottawa: Policy, Planning and Information Branch, HWCCanadian Hospital Association (1992), Canadian Hospital Directory 1992-1993,Ottawa: CHADeber, R.B., G.G. Thompson and P. Leatt (1988), -Technology Acquisition inCanada: Control in a Regulated Market-, International Journal of TechnologyAssessment in Health Care 4:185-206.Detsky, A.S., S.R. Stacey, and C. Bombardier (1983), -The Effectiveness of aRegulatory Strategy in Containing Hospital Costs-, New England Journal ofMedicine 309: 151-159.37Evans, R.G. (1984), Strained Mercy: The Economics of Canadian Health Care,Toronto: ButterworthsEvans, R.G., M.L. Barer, and C. Hertzman (1991), -The Twenty Year Experiment:Accounting For, Explaining, and Evaluating 'Health Care Cost Containment inCanada and the United States-, Annual Review of Public Health 12:481-518.Evans, R.G. and H.D. Walker (1972), -Information Theory and the Analysis ofHospital Cost Structure-, Canadian Journal of Economics 5:398-418.Glaser, ·W.A. (1987), Paying the Hospital: The Organization, Dynamics, AndEffects of Differing Financial Arrangements, San Francisco: Jossey-BassGreenaway-Coates, A. (1990), -Development of the Hospital Performance Index-,technical brief prepared for the ACFP, Kingston: Case Mix Research, Queen'sUniversity.Haazen, D.S. (1992), -Redefining the Globe: Recent Changes in the Financing ofBritish Columbia Hospitals-, in R. Deber and G. Thompson, eds., RestructuringCanada's Health Services System: How Do We Get There from Here?, . pp. 73-84,Toronto: University of Toronto Press.Jacobs, P., E.M. Hall, J.R. Lave and M. Glendening (1992), -Alberta's AcuteCare Funding Project-, Healthcare Management Forum 5(3) :4-11.Lave, J.R., P. Jacobs and F. Markel (1991), -Ontario's Hospital TransitionalFunding Initiative: An Overview and Assessment-, Healthcare Management Forum4 (4) :3-11.Lave, J.R., P. Jacobs and F. Markel (1992), -Transitional Funding: ChangingOntario's Global Budgeting System-, Health Care Financing Review 13:3, 77-84.Manitoba Health (1992a), Quality Health for Manitobans: The Action Plan,Winnipeg: Manitoba HealthManitoba Health (1992b), Letter from F. DeCock to Board Chairs of allhospitals and health care facilities, May 20.Pink, G.H. (1993), -Hospital Operating Funding in Ontario, Canada-, paperprepared for the Symposium on Global Budgeting and Health Care Financing inNew York State, Albany, N.Y., Jan. 13, 1993.Pink, G.H., R.B. Deber, J.N. Lavoie and E. Aserlind (1991), -InnovativeRevenue Generation-, Health Management Forum 12 (Winter) :33-41.Pink, G.H., R.B. Deber, J.N. Lavoie and E. Aserlind (1989), -Innovative FundRaising: The St. Michael's Hospital Health Centre-, final report, project no.6606-3989-HT, National Health Research and Development Program, Health andWelfare Canada.Smith, K. (1990), Capital Funding of Canada's Hospitals, Ottawa: CanadianHospital Association.statistics Canada (various years), Hospital Annual Statistics, Publicationnumber 82-003S, suppl. #20 (formerly publication number 82-232), Ottawa:statistics CanadaTaylor, M. (1978), Health, Insurance and Canadian Public Policy, Montreal :McGill-Queen's University PressThompson, C. (1988), -Hospital Capital Funding in Canada-, Dimensions,November: 15-18.38Thompson, C. and D. Letouze (1984), -Hospital Capital Shows Signs of Old Age:Part 11-, Dimensions, December:19-22Thompson, C., J. Youmans and D. Letouze (1984), -Hospital Capital Shows Signsof Old Age: Part 1-, Dimensions, November:34-36HEALTH POLICY RESEARCH UNITCentre fqr He~lth S.ervlces and Polley Research429 • 2194 Health ScIences MallUniversity of Br)~lsh C~lumblaVancouver, ~.C. CANADAV6T 1Z3Telephone: (604) 822-4810FAX: (604) 822-5690DISCUSSION PAPERS & REPRINTSHPRU 88:1R Barer, M.L.,.Garnl, A. and Lomas. J. (1989), "Accommodating RapidGrowth In Physician Supply: Lessons from Israel, Warnings for Canada",International Journal of Health Services 19(1):95-115. Originally releasedIn February, 1988.HPRU 88:2R Evans, R.G., Barer, M.L., Hertzman, C., Anderson, G.M., Pulclns, I.R. andLomas, J. (1989), "The Long Goodbye: The Great Transformation of theBritish Columbia Hospital System", Health Services Research 24(4):435­459. Originally released March, 1988.HPRU 88:3R Evans, R.G. (1989), "Reading the Menu With Better Glasses: Aging andHealth Policy Research", In S.J. Lewis (ed.), Aging and Health: LinkingResearch and Public Polley, Lewis Publishers Inc., Chelsea, 145-167.Originally released April, 1988.HPRU 88:4R Barer, M.L. (1988), "Regulating Physician Supply: The Evolution of BritishColumbia's Bill 41", Journal of Health Politics, Polley and Law 13(1):1-25HPRU 88:5R Anderson, G.M. and Lomas, J. (1989), "Reglonallzatlon of Coronary ArteryBypass Surgery: Effects on Access", Medical Care 27(3):288-296.Originally released May, 1988.HPRU 88:6R Barer, M.L., Pulclns, I.R., Evans, R.G., Hertzman, C., Lomas, J. andAnderson, G.M. (1989), "Trends In Use of Medical Services by the ElderlyIn British Columbia", Canadian Medical Association Journal 141:39-45.Originally released July, 1988HPRU 88:70 The Development of Utilization Analysis: How, Why, and Where It's Going.August 1988. (G.M. Anderson, J. Lomas)D =Discussion Paper R =ReprintHPRU 88:8D Squaring the Circle: Reconclllng FIHI-for-Servlce with Global ExpsndltureControl. September 1988. (R.G. Evans)HPRU 88:9D Practice Pattems of Physicians with Two Year Residency Versus One YearInternship Training: Do Both Roads Lead to Rome? september 1988.(M.T. Schechter, S.B. Sheps, P. Grantham, N. Rnlayson, R. Sizto)HPRU 88:10R Anderson, G.M. and Lomas, J. (1988), "Monitoring the Diffusion of aTechnology: Coronary Artery Bypass Surgery In Ontario", AmericanJournal of Public Health 78(3):251-254HPRU 88:11R Evans, R.G. (1988),""We'll Take Care of It For You": Health Care In theCanadian Community", Daedalus 117(4):155-189HPRU 88:12R Barer, M.L., Evans, R.G. and Labelle, R.J. (1988), "Fee Controls as CostControl: Tales From the Frozen North", The Milbank Quarterly 66(1):1-64HPRU 88:13R Evans, R.G. (1990), "Tension, Compression, and Shear: Directions,Stresses and Outcomes of Health Care Cost Control", Journal of HealthPolitics, Pollcy.and Law 15(1):101-128. Originally released December,1988.HPRU 88:14R Evans, R.G., Robinson, G.C. and Barer, M.L. (1988), "Where Have All theChildren Gone? Accounting for the Paediatric Hospital Implosion", In R.S.Tonkin and J.R. Wright (eds.), Redesigning Relationships In Child HealthCare, B.C. Children's Hospital, 63-76HPRU 89:1D Physician Utlllzation Before and After Entering a Long Term CareProgram: An Application of Markov Modelling. January 1989. (H. Krueger,A.Y. Ellencwelg, D. Uyeno, B. McCashin, N. Pagllccla)HPRU 89:2R Hertzman, C., Pulclns, I.R., Barer, M.L., Evans, R.G., Anderson, G.M. andLomas, J. (1990) "Flat on Your Back or Back to your Flat? Sources ofIncreased Hospital Services Utilization Among the Elderly In BritishColumbia", Social Science and Medicine 30(7):819-828. Originally releasedJanuary, 1989.HPRU 89:3R Buhler, L., Glick, N. and Sheps, S.B. (1988), "Prenatal Care: A ComparativeEvaluation of Nurse-Midwives and Family Physicians", Canadian MedicalAssociation Jouma/139:397-403D =Discussion Paper R =Reprint2HPRU 89:4R Anderson, G.M. and Lomas, J. (1989), "Recent Trends In Cesarean sectionRates In Ontario", Canadian Medical Association Journal 141:1049-1053.Originally released February 1989.HPRU 89:5D The Canadian Health Care System: A King's Fund Interrogatory. March1989. (A.G. Evans)HPRU 89:6R Anderson, G.M., Spitzer, W.O., Weinstein, M.C., Wang, E., Blackburn, J.L.and Bergman. U. (1990), "Benefits. Risks. and Costs of PrescriptionDrugs: A SCientific Basis for Evaluating Polley Options", ClinicalPharmacology and Therapeutics 48(2):111-119. Originally released April,1989.HPRU 89:7R Evans. R.G. (1990), "The Dog In the Night Time: Medical PracticeVariations and Health Policy". In T.F. Andersen and G. Mooney (eds.), TheChallenges of Medical Practice Variations, The McMillan Press Ltd.London. 117-152. Originally released June 1989.HPRU 89:8R Evans. R.G. (1991). "Life and Death. Money and Power: The Politics ofHealth Care Finance". In T.J. Litman and L.S. Robins (eds.) Health Politicsand Policy (2nd edition) Part 4(15):287-301. Originally released June, 1989.HPRU 89:9R Barer, M.L.. Nicoli. M•• Diesendorf. M. and Harvey. R. (1990). "FromMedlbank to Medicare: Trends In Australian Medical Care Costs and UseFrom 1976 to 1986", Community Health Studies XIV(1):8-18. Originallyreleased August 1989.HPRU 89:10D Cholesterol Screening: Evaluating Alternative Strategies. August 1989.(G. Anderson, S. Brlnkworth. T. Ng)HPRU 89:11R Evans, R.G., Lomas, J•• Barer. M.L.. Labelle. R.J•• Fooks. C•• Stoddart. G.L.,Anderson, G.M., Feeny. D., Gafnl, A., Torrance, G.W. and Tholl, W.G.(1989), "Controlling Health Expenditures - The Canadian Reality", NewEngland Journal of Medicine 320(9):571-577HPRU 89:12D The Effect ofAdmission to Long Term Care Program on Utilization ofHealth services by the Elderly In British Columbia. November 1989. (A.Y.Ellencwelg, A.J. Stark, N. Pagllccla. B. McCashin, A. Tourigny)D =Discussion Paper R =Reprint3HPRU 89:130 Utilization Patterns of Clients Admitted or Assessed but not Admitted to aLong Term Care Program - Characteristics and Differences. November1989. (A.Y. Ellencwelg, N. Pagllccla, B. McCashln, A. Tourigny, A.J. Stark)HPRU 89:14R Anderson, G.M., Pulclns, I.R., Barer, M.L., Evans, R.G. and Hertzman, C.(1990), IIAcute Care Hospital Utilization Under Canadian National HealthInsurance: The British Columbia Experience from 1969 to 1988", Inquiry27: 352-358. Originally released December, 1989.HPRU 9O:1R Anderson, G.M., Newhouse, J.P. and Roos, L.L. (1989), "Hospltal Care forElderly Patients with Diseases of the Circulatory System. A Comparisonof Hospital Use In the United States and Canada", New England Journal ofMedicine 321 :1443-1448HPRU 90:20 Poland: Health and Environment In the Context of Socioeconomic Decline.January 1990. (C. Hertzman)HPRU 90:30 The Appropriate Use of Intrapartum Electronic Fetal Heart RateMonitoring. January 1990. (G.M. Anderson, D.J. Allison)HPRU 9O:4R Anderson, G.M., Brook, R. and Williams, A. (1991) "A Comparison of Cost­Sharing Versus Free Care In Children: Effects on the Demand for Office­Based Medical Care", Medical Care 29(9):890-898. Originally releasedJanuary, 1990.HPRU 9O:5R Anderson, G.M., Brook, R., Williams, A. (1991) "Board Certification andPractice Style: An Analysis of Office-Based Care", The Journal of FamilyPractice 33(4):395-400. Originally released February, 1990. Originallyreleased February, 1990.HPRU 90:60 An Assessment of the Value of Routine Prenatal Ultrasound Screening.February 1990. (G.M. Anderson, D. Allison)HPRU 9O:7R Nemetz, P.N., Ballard, D.J., Beard, C.M., Ludwig, J., Tangalos, E.G.,Kokmen, E., Weigel, K.M., Belau, P.G., Bourne, W.M. and Kurland, L.T.(1989) "An Anatomy of the Autopsy, Olmsted County, 1935 through 1985",Mayo Clinic Proceedings 64:1055-1064o =Discussion Paper R = Reprint4HPRU 9O:8R Nemetz, P.N., Beard, C.M., Ballard, D.J., Ludwig, J., Tangalos, E.G.,Kokmen, E., Weigel, K.M., Belau, P.G., Bourne, W.M. and Kurland, L.T.(1989) "Resurrecting the Autopsy: Benefits and Recommendations", MayoClinic Proceedings 64:1065-1076HPRU 9O:9D Technology Diffusion: The Troll Under the Bridge. A Pilot Study of Lowand High Technology In British Columbia. March 1990. (A. KazanJian, K.Friesen)HPRU 9O:10R Sapphires In the Mud? The Export Potential of American Health CareFinancing. Enthoven, A.C. (1989), "What Can Europeans Learn fromAmericans?", Evans, R.G., Barer, M.L. (1989), Comment. Health CareFinancing Review, Annual Supplement 1989HPRU 90:11D Healthy Community Indicators: ThePerils of the Search and the Paucity ofthe Find. March 1990. (M. Hayes, S. Manson Willms)HPRU 9O:12D Use of HMRI Data In Nineteen British Columbia Hospitals and FutureDirections for Case Mix Groups. April 1990. (K.M. Antioch)HPRU 9O:13R Evans, R.G. and Stoddart G.L. (1990) "Producing Health, ConsumingHealth Care", Social Science and Medicine 31(12) 1347-1363. Originallyreleased April, 1990.HPRU 9O:14D Automated Blood Sample-Handling In the Clinical Laboratory. June 1990.(W. Godolphln, K. Bodtker, D. Uyeno, u-o, Goh)HPRU 9O:15R Anderson, G., Sheps, S.B., Cardiff, K., (1990) "Hospital-based UtilizationManagement: a Cross-Canada Survey", Canadian Medical AssociationJournal 143 (10):1025-1030. Originally released June, 1990.HPRU 9O:16D Hospital-Based Utilization Management: A Literature Review. June 1990.(S. Sheps, G.M. Anderson, K. Cardiff)HPRU 9O:17D Reflections on the Financing of Hospital Capital: A Canadian Perspective.June 1990. (M.L. Barer, R.G. Evans)D =Discussion Paper R =Reprint5HPRU 9O:18R Evans, R.G. Barer, M.L and Hertzman, C. (1991), "The 2o-Year Experiment:Accounting For, Explaining, and Evaluating Health Care Cost ContainmentIn Canada and the United States", Annual Review of Public Health 12:481­518. Originally re/easBd Ssptember, 1990.HPRU 9O:19D Accessible, Acceptable and Affordable: Financing Health Care In Canada.September 1990. (R.G. Evans)HPRU 9O:20D Hungary Report. October 1990. (C. Hertzman)HPRU 90:21D Unavailable for Circulation.HPRU 9O:22R Anderson, G.M., PUlclns, I. (1991), "Recent trends In acute care hospitalutilization In Ontario for diseases of the circulatory system", CMAJ145(3):221-226. Originally released October, 1990.HPRU 9O:23D Environment and Health In Czechoslovakia. December 1990. (C.Hertzman)HPRU 9O:24D Perceptions and Realities: Medical and Surgical Procedure Variation ALiterature Review. January 1991. (S. Sheps, S. Scrivens, J. Galt)HPRU 91:1R Nemetz, P.N., Tangalos, E.G. and Kurland, L.T. (1990), "The Autopsy andEpidemiology -' Olmsted County, Minnesota and Malmo, Sweden", APMIS98:765-785HPRU 91:2D Putting Up or Shutting Up: Interpreting Health Status Indicators From AnInequities Perspective. May 1991. (C. Hertzman, M. Hayes)HPRU 91:3R Barer, M.L (1991), "Controlling Medical Care Costs In Canada" (Editorial),Journal of the American Medical Association 265(18):2393-2394HPRU 91:4D The Meeting of the Twain: Managing Health Care Capital, Capacity andCosts In Canada. June 1991. (M.L. Barer, R.G. Evans)D =Discussion Paper R =Reprint6HPRU 91:5R Barer, M.L., Welch, W.P. and Antioch, L. (1991) "Canadian-American HealthCare Comparisons: Reflections On The HIAA'S Analysis", Health Affairs10(3):229-239. Originally released June, 1991.HPRU 91:6D Toward Integrated Medical Resourt:41 Policies for Canada: BackgroundDocument. June,1991. (M.L. Barer, G.L. Stoddart) Cost: $45.00HPRU 91:70 Toward Integrated Medical Resource Policies for Canada: Appendices.June, 1991. (M.L. Barer, G.L. Stoddart) Cost: $30.00Note: /fyou tlle ordering 91:60or91 :7D, pleasetrJBke your cheque payable to The University ofSritish Columbia and enclose it with thisfist.HPRU 91:8D Bulgaria: The Public Health Impact of Environmental Pollution. August,1991. (C. Hertzman)HPRU 91:9D Reflections on the Revolution In Sweden. September, 1991. (R.G. Evans)HPRU 91:10D The Canadian Health Care System: Where are We; How Old We Get Here?October,1991. (R.G. Evans, M.M. Law)HPRU 92:1D On Being Old and Sick: The Burden of Health Care for the Elderly InCanada and the United States. December,1991. (M.L. Barer, C. Hertzman,R. Miller, M.V. Pascali)HPRU 92:2R Manson Willms, S. (1992) "Housing for Persons with HIV Infection InCanada: Health, Culture and Context", Western Geographic Series Vol.26:1-22.HPRU 92:3D Environment and Health In the Baltic Countries. Aprll,1992.(C. Hertzman)D =Discussion Paper R =Reprint7HPRU 92:4R Barer, M.L., Evans, R.G. (1992) "Interpreting Canada: Models, Mind-Sets,and Myths", Health A"alrs 11(1):44-61HPRU 92:5D Aids Risk Taking Behaviour Among Homosexual Men: Soclo­demographic Markers and Polley Implications. June, 1992. (R.S. Hogg,K.J.P. Craib, B. Willoughby, P. Sestak, J.S.G. Montaner, M.T. Schechter)HPRU 92:6D The Adequacy of Prenatal Care and Incidence of Low Birth Weight Amongthe Poor In Washington State and British Columbia. June, 1992. (S. Katz,R.W. Armstrong, J.P. LoGerfo)HPRU 92:7D Medication Profiles on AdmIssion vs. Discharge In Patients at a GeriatricReferral centre. November, 1992. (J.H. Schechter, M. Donnelly, M.T.Schechter)HPRU 92:8D What Seems to be the Problem? The International Movement toRestructure Health Care Systems. November, 1992. (R.G. Evans)HPRU 92:90 A Compendium of Studies on Environmental Risk Perception In B.C.November, 1992. (C. Hertzman, S. Kelly, A.S. Ostry, D. SClarretta,K. Teschke)HPRU 93:1D Evaluation of VI-care: A Utilization Management Program of the GreaterVictoria Hospital Society. January, 1993. (G. Anderson, S. Sheps,K. Cardiff)HPRU 93:2R Barer, M.L.• Stoddart, G.L. (1993) "Toward Integrated Medical ResourcePolicies for Canada: Canadian Medical Association Journal Series",Canadian Medical Association Jouma/146 (3), (5), (7), (9), (11)j 147 (1), (3),(5). (7), (9), (11)j 148 (1)HPRU 93:3R Evans, R.G. (1993) "The Canadian Health-Care Financing and DeliverySystem: Its experience and Lessons for Other Nations", Yale Law & PolleyReview 10(2)D =Discussion Paper R =Reprint8HPRU 93:4R Tan, J.K.H., McCormick, E., Sheps, S.B. (1993) "Utilization Care Plans andEffective Patient Data Management", Hospital & Health ServicesAdministration 38:1 SpringHPRU 93:50 Nursing Resources In British Columbia: Trends, Tensions and TentativeSolutions, February, 1993. (A. Kazanjian, L. Wood)(FIe: bjnMpnl11.new)o=Discussion Paper R = Reprint9

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