A survey of hospital administrators throughout Ontario was conducted to determine their views about the strengths and weaknesses of the new Transitional Funding system, especially as it existed between Phase One and Phase Two when many changes were taking place.
The basic findings of the survey are presented. The authors go on to explore some of the answers and determine whether the hospital's reponses were influenced by their participation in the process and whether they were “winners” or “losers” as a result of the changes.
This type of information should be useful to policy makers in Ontario as they modify the overall hospital financial system, and also be useful to policy makers outside the province who are contemplating making such changes.
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References
1.
A detailed discussion and evaluation of the changes in Phase Two is found in LaveJ.R. and JacobsP., Evaluation of Transitional Funding, Phase Two, a report prepared for the Ontario Hospital Association and the Ontario Ministry of Health.
2.
LaveJ.R.JacobsP., and MarkelF.1991. Ontario's hospital Transitional Funding initiative: An overview and assessment. Healthcare Management Forum4(4): 3–11.
3.
The committees were not establishedde novo.Some of these committees, such as the growth committees, were operating prior to Transitional Funding.
4.
Although we use the term “underfunded” to denote a hospital whose cost per weighted case is less than that of its peer group, it should be noted that an alternative term “funding imbalance” is preferred by some.
5.
Changes between Phases Two and Three were less dramatic than those between Phases One and Two. These changes include some minor changes in CMG categories and a moderation of the per diem weights for outlier cases.
6.
HalpineS.1990. CMGs: From Version 1 to CMG 1990. Toronto: Hospital Medical Records Institute. Unpublished.
7.
BotzC.K.1991. Principles for funding on a case mix basis: Construction of care weights (RIWs). Healthcare Management Forum4(4): 22–32.
8.
The specific formulas for the Phase Two RIWs are presented below. In these formulas, NYTC is the average New York cost per case for a given CMG (in calculating this cost the atypical cases were excluded from the data base); LOS is the average length of stay for the typical case in the CMG; RA is the New York routine and ancillary cost per patient day for that CMG. Typical Case: The weight for each typical cases was set as: Typ HMRI CostCMG = NYTCCMG + (HMRI LoSCMG — NY LoSCMG) * RACMG This formula adjusts the New York total cost per case for a given CMG to account for differences in the length of stay between Canada and New York State for that CMG. Death Cases: The weight for each death cases was set as: 1.22 [Typ HMRI CostCMG + RACMG • (LOS case — HMRI LoSCMG)] Under this formula, the weight for each death case is directly proportional to the length of stay of that case. The 1.22 adjustment factor was used because analysts determined that in the New York data the average per diem cost of a death cases was 1.22% higher than the average per diem cost of a typical case. Transfer Cases: The weight for each transfer case was set as: 1.12[Typ HMRI CostCMG + RACMG • (LOS Case — HMRI LoSCMG)] With the exception of the multiplier factor, the method for setting the weight for transfer cases is identical to that for death cases. The multiplier is lower because analysts found that, relative to the average per diem cost of typical cases, the average cost per day for transfer cases was not as high as it was for death cases. Signouts. The same approach was used to establish the weight for signouts. However, there was no multiplier factor. Outliers: The weight for each outlier case was set as: Typ HMRI CostCMG + .5RACMG(TrimcMG — HMRI LosCMG) + RACMG(LOS case — TrimCMG).
9.
Not all of the $25 million went to acute care hospitals. Some of this was set aside for chronic care hospitals.
10.
The specific question was: Please indicate the following components of the Transitional Funding system in Phase Two in terms of your degree of satisfaction with that component. 1 = very satisfied; 2 = somewhat satisfied, 3 = neutral, 4 = somewhat dissatisfied and 5 = very unsatisfied.
11.
For example, the question with respect to growth was: The growth formula should (specify one or more answers) be left unchanged; include modified weights (RIWs) for outpatient surgery: Include modified weights (RIWs) for non-surgery outpatients; measure inpatient growth more in terms of cases and less in terms of days; measure inpatient growth more in terms of days and less in terms of cases; and other. This work was supported by the Ontario Hospital Association and the Ontario Ministry of Health. We would like to thank Wendy Young for helpful comments on earlier drafts of this paper. ™ CMG and RIW are registered trade marks of the HMRI.
