Transitional funding: changing Ontario's global budgeting system

In 1988, Ontario introduced transitional funding, a collaborative process between the Ministry of Health and the hospitals to modify Ontario's global budgeting system. The goals are to achieve greater equity; encourage hospital efficiency, and promote a shift from inpatient to outpatient services. To implement these goals, inpatient care is being measured in terms of case-mix groups, i.e., a classification system comparable to the diagnosis-related groups. However, since there is no patient level cost data, cost weights are being derived from patient-level data from New York State. Transitional funding draws attention to both positive and negative aspects of global budgeting.