Hospital reimbursement in Alberta: outcomes management is on the way

The Alberta government has initiated a process to alter fundamentally the way it pays hospitals. As with most provinces, Alberta has been paying hospitals for what they spend. The new Alberta model will initially pay hospitals for what they do and ultimately will pay hospitals for what they ought to do; that is, for the outcomes that should be achieved. This article describes the initial step of what is expected to be a lengthy journey. The principles underlying the model are: it should be a prospective case-based system; there should be performance linkages between types of hospitals; severity should be incorporated into the model; and cost or cost proxies should be used where possible in weight development and clinical concerns, both nursing and medical, should be addressed. For the past two years funding adjustments have been made on the basis of the calculation of a Hospital Performance Index (HPI). The HPI is the average predicted cost per case divided by the unweighted average actual cost per case. The HPI is intended as an interim measure only. Ultimately, the system will evolve into a true prospective case-based system with volume controlled via role statements and linked to clinical outcomes.