Nothing much has changed since the last time Alberta’s United Conservative Party Government trotted out its “patient-focused funding” scheme for hospitals. It’s still a bad policy that will force hospitals to game the system, increase bureaucracy, and hurt patients while delivering few benefits.
Naturally, this is not what the UCP claimed yesterday in an announcement that this bad idea will soon be rolled out in a dozen public hospitals in Alberta or in its April 7, 2025, announcement that the scheme was in the works.
“Patient-focused funding is about making sure resources follow the patient and the care being delivered,” said the canned quote assigned in yesterday’s press release to Hospital and Surgical Health Services Minister Adriana LaGrange, now one of Alberta’s quadrumvirate of health ministers.
“Exploring innovative ways to allocate funding within our health care system will ensure that Albertans receive the care they need, when they need it most,” she enthused in last year’s version when she was still Alberta’s one and only health minister.
Neither of these statements is likely to turn out to be true.
As for Premier Danielle Smith, her canned quote yesterday was more interesting, pointing clearly to the neoliberal ideology she has espoused throughout her years in right-wing media and right-wing government.
“The current global budgeting model has no incentives to increase volume, no accountability and no cost predictability for taxpayers,” she said. “By switching to an activity-based funding model, our health care system will have built-in incentives to increase volume with high quality, cost predictability for taxpayers and accountability for all providers.”
It is certainly true that with activity-based funding, as this U.S.-style funding model is more accurately known, Alberta’s health care system will have incentives to increase volume. Not necessarily the services that are needed, though. The rest, as we shall see, is pish-posh.
“Patient-focused funding,” it should be noted, is a tendentious euphemism intended to leave the impression it will make things better for patients, which it will not.
Now seeing as the government has repeated its announcement, I am going to repeat significant parts of my response to its 2025 version.
I asked then: “What will really happen when the United Conservative Party Government puts Ms. Smith’s new acute-care funding model into effect at Alberta hospitals?”
And Jonathon Ross, a clinical professor of medicine at the University of Toledo in Ohio, answered in a 2013 article.
“I would advise extreme caution and careful assessment of the implications for cost, quality, access, equity and efficiency before adopting this hospital funding model,” wrote Dr. Ross in a piece for the Canadian Healthcare Network.
Activity-based funding, he asserted, “has serious side effects.”
“One of the dangers is that ABF can be used to ‘game the system,’” Dr. Ross said. “When you pay hospitals according to diagnosis, the incentive is to increase or otherwise modify your diagnosis so your hospital will make more money. And that’s exactly what happened when the United States implemented ABF for U.S. Medicare patients.”
“Here in the States, we have a small army of nurses reviewing every case in hospital to remind us to use special words just the right way so we can get more money for each case,” he observed. “The incentive is to list all of the diagnoses you can possibly list for every patient, as some of these will increase the payment even if it does not change your management one bit.”
In addition, he warned, there will also be additional pressure to discharge patients too soon, as if there wasn’t already. “If the hospitals game the codes upward, then you need another army of regulators to catch them and code them back down,” he explained. “There is now a large hospital bureaucracy whose job it is to up-code the severity of illness of Medicare patients and another large Medicare bureaucracy trying to figure out how to stop the hospitals from gaming the system.”
Nothing had changed by last year since Dr. Ross wrote that article. In a January 2025 Substack, Nobel Prize winning economist Paul Krugman showed that this is one of the reasons the U.S. health care system costs Americans so much.
“Medicare is supposed to provide older Americans with the health care they need,” he said. “Yet instead of focusing solely on how best to achieve that goal, we have an arms race between insurance companies trying to game to system to charge more and deliver less and government officials trying to rein them in.” (Well, I guess we won’t have government regulators trying to rein them in in Alberta or, Heaven forbid, the Republic of same!)
In both news releases, last year and now, the government also perpetrated its ongoing fraud about how the U.S.-inspired “reforms” it’s importing are somehow European in origin.
As Canadian health researcher and political economist Andrew Longhurst wrote this year in January, “the Alberta government decontextualizes international health systems.” While he was speaking of the government’s blatantly false claim that heavily regulated dual-physician practice as permitted in Germany and the Netherlands is the same as what is being proposed by the government in “red tape” averse Alberta, the same intentionally misleading claims can be found in the Smith Government’s media statements about activity-based funding.
“Instead of bolstering our public health care system, and our publicly administered, publicly delivered surgical services, the Alberta government is undermining our hospitals by requiring them to compete for funding,” Alberta Friends of Medicare Director Chris Gallaway said yesterday.
“Alberta has operating rooms sitting empty and unused every single day because this government would rather pursue convoluted schemes to subsidize private profits, even while their failed privatization strategy has already reduced public capacity,” he said.
“Activity-based funding pushes hospitals towards quicker, less complex procedures at the expense of comprehensive care, proper follow-up and better health outcomes,” said Opposition Hospital and Surgical Facilities Critic Sarah Hoffman, a former Alberta health minister.
Yesterday’s announcement said all hospitals where the program will be piloted are operated by Alberta Health Services and Covenant Health. Edmonton’s Royal Alexandra Hospital and Calgary’s Rockyview Hospital are on the list.
But the government’s goal, as Premier Smith has made clear, is to introduce private hospitals to the mix, furthering her drive to privatized, U.S.-style health care. When that happens, private hospitals will try to scoop up the easy cases and dump the complicated ones on the public system, then claim to be more efficient.
Smith needs to see a doctor (psychiatrist).
The UCP and Danielle Smith are another version of Ralph Klein. Utilizing bad neoliberal policies to cut funding to the public healthcare system, and putting lives at risk. How much more foolish can you get?
That Andrew Longhurst piece is very good. Longhurst shows that the model we’re moving towards is not really “European-style”, but might be considered Australian-style, which is probably not a good thing (Aussie rules health care, anyone?). However, maybe we SHOULD be looking at whether some form of genuinely European-style health care system would be an improvement on what we have now. The other point that jumps out at me from the Longhurst article is that average pay for physicians is much higher in Alberta than in most of Europe (and Australia!). Median pay might be a better measure, but it seems possible that one fundamental problem with our system is that we’re simply paying the doctors far too much. They have valuable skills and knowledge, of course, and I’m sure they’re mostly nice people, but are they really worth almost twice as much, on average, as their Dutch counterparts? Maybe it’s not a coincidence that the Netherlands also has many more doctors per capita than we do?
Corwin: A few points in response to your observations: Alberta GPs have to pay for their own office/clinical space and staff out of their pay packet. The history is many of the doctors of the 1950s wanted to be “free” independent contractors and to also be paid for piece work (fee for service) something the labour unions rightly fought against for decades. So, now their net income after costs is not as generous as their relatively high-income level may suggest.
This is a nice way of saying the consequences of their short-sighted predecessors is now coming back to bite all of us on our gluteus-maximus.
The European models usually have the clinics as a publicly funded facility to which the doctors are attached as salaried staff. In Denmark each clinic serves a particular geographic area and residents are simply assigned to the local clinic which provides cradle to grave medical care with very sophisticated regional hospitals for more complex medical treatments. The clinics typically have several GPs on staff as well as Nurse Practitioners, and other specialized staff much like our public health nurses.
Just to note a bit of further history: In the 1910-20s Alberta farmers, especially in the SE of Alberta set up their own public hospitals staffed with doctors and nurses on salary to provide free medical care for County residents. This model is what inspired the CCF under Tommy Douglas to introduce public health insurance in Saskatchewan in the 1960s. After a rather unpopular Doctor’s Strike, the CCF compromised with the anti-communist tenor of the times and did not follow the more effective model pioneered in Alberta 50 years earlier.
Corwin two of my friends were retired doctors who had worked under a two tiered healthcare system in Europe and they both stated that it will never work in Canada and their reasons made perfect sense.
Firstly we don’t have nearly enough doctors and nurses to make it work. Secondly our populations aren’t concentrated like they are in Europe and Thirdly it will destroy healthcare services in Rural Alberta. Why would doctors and nurses remain working in rural Alberta when they can make a lot more in the private for profit facilities in the cities? Why would they?
Another major reason we can’t run a system like that of Europe is an acronym: CUSMA, or the Canada-US-Mexico [Trade] Agreement. It, along with its pre-Trump predecessor NAFTA and the initial Mulroney-Reagan Canada-US Free Trade Agreement, is rife with landmines for our nationwide universal single-payer public health system.
One of the most significant landmines is what is known as “national treatment”. Basically, what this means is that Canada cannot put restrictions on foreign — specifically, American — corporations that are not applied to Canadian corporations. So, in the area of health care, we cannot admit Canadian private insurance providers into the public health care system without also throwing the doors open to huge predatory US health insurance corporations.
Under the current system, the insurance industry can only provide coverage for those services that are not part of the public system — prescription pharmaceuticals, outpatient physiotherapy, optical and dental care, cosmetic procedures and surgery, non-psychiatric mental health services, etc.
But under the series of trade agreements that have plagued us since 1989, if we let any private insurance even slip a toenail through the door of the public care system, we have to throw those doors wide open and allow the American corporate care industry to barge in uninvited and unregulated. It’s not even a slippery slope: it’s an ice-covered edge of a steep cliff.
The Europeans don’t face that kind of issue, so they have more ability to permit some level of private insurance — and regulate the bejeezus out of it to protect the public — without jeopardizing the fundamentals of their health care systems. We don’t have that as an option.
When are Albertans going to stop believing the smooth talking Smith can or wants to improve our health care system? Since she been in power things have not gotten any better, despite many initiatives by her and many would say they have actually got worse.
To understand Smith, we should look at her track record. First she was part of a dysfunctional school board the province had to step in and get rid of to fix. Second, she became a successful opposition leader who then betrayed and nearly destroyed her own party. Now she is pushing a divisive referendum on separation that most Albertans do not want, in part to distract from her recent private health care scandals.
This is far from all of the terrible things she has done, but some of the more notable ones that span decades. This is at least 3 strikes. When are some Albertans going to stop giving her the benefit of the doubt?
She has been consistently incompetent, duplicitous and dysfunctional. In keeping with that, her latest health care initiatives will also achieve nothing positive for most Albertans.
Perhaps what you signal out as her shortcomings are what many oil country partisans want: good old time religion in the schools, a landscape more like Fort Mac and less like national parks (which will carved out along with fortified military instalations), a skyline littered with abandoned oil contraptions spewing heaven knows what, millions of kilometres of buried pipes filled a toxic brew of who knows what, clear cut forests, mountains of coal, streams filled poison, pick up trucks with rifle racks (locked and loaded) to deal with rural crime and urban drugs, decrepid chains of private hospitals operating without interference. The profiteers will be long gone, having run from their liabilities. A new age is dawning in some parts of the world, exactly where the winners have their escapes. Alberta may become such a liability that I may change my referendum vote and flee. Maybe not the place I want to be?
Forcing hospitals to compete for funding is the antithesis of community based patient care funding. Funding based upon diagnosis is a zero sum game. People will be diagnosed so that the hospital can receive tax payer funds as opposed to being diagnosed in order to provide proper medical care.
Conservatives have weaponized competition. According to the UCP it is good to promote competition between players on the same team, undermining the idea of team, when it comes to “saving” tax payer dollars, which never turns out to be the case. However, when it comes to conservatives they monopolize their interests. Look at the media landscape, oligarchs who are profit driven have bought up all MSM in order to push their corporate agenda. Case in point is that the protest rally that took place across Alberta on May 29th was barely covered in the MSM and quickly forgotten in spite of the fact that thousands were out marching the streets. There is only the voice of the business class to be heard.
Perhaps it is too late to realign our public trust from profit making to community based underpinnings. However, with investment into the public health care system we can make inroads towards repairing the glaring damage that the UCP have done to our health care system. I am certain that Sarah Hoffman will know what to do to rescind UCP policy and return the medical system back to communities.
In the meantime, there is much work to be done to reshape the government from a fascist terrorist group to a community based, fiscally responsible, entity. Pay off the debt. Bring in renewable energy. Stop using public funds to pay for private enterprise. Change funding formulas to support community based medical and education institutions. Bring in a tax system that is not based on the Bible, but based on sound fiscal policy. Promote local media newspapers and so on so that people can easily find out what is happening in their communities. Create an agenda that is inclusive so that all community members are welcome, not the UCP exclusionary policies that pit people against one another. There will need to be firings, but the people who put UCP policy into practice must be replaced by those who give a tinkers damn about our common good and our collective futures.
Conservatives are always trying to save money – which they never do – so that their friends can skim off profits in all areas of public life. These people happily eat and drink from public coffers, but say it is a bad thing to do for everyone else. They do not understand the difference between selfish profit taking and sharing. They think that by enriching friends the trickle down theory will come into play. This is a spurious notion which has been proven to be awash with problems. It does not work for the many only for the few. And by giving in to the wishes of a few people instead of helping out the general public, in other words governing, the UCP has destroyed themselves. The UCP are not a government but a cabal of ruthless criminals.
What’s in it for Danielle Smith?
Power! She wants to save her political skin!
It is funny how all the experts accurately predicted everything bad that would happen should MAGA types like the UCP seize power. You can’t explain that.
Smith and this UPC government must be making a lot of cabbage under the the gurney these days. They are greedy and they seem to really hate Alberta taxpayers. And these private hospitals…., let me guess at the end of the paper trail, they’ll mostly be American owned. So just like with what Mulroney started, all the money made in Canada, won’t get re-invested in Canada, to help Albertans and Canadians, it’ll all be funnelled to the U.S..
Personally, I want to get hired as the individual who writes the placard slogans that appear on the front of the podium at these recycled announcements. They seem to be a mix of bland optimism and generic outcomes.
“Delivering more surgeries, faster”. While more surgeries being performed is a laudable goal, my preference as I lie on the operating table is that the surgical team be focused on the quality of the outcome, not increasing their ‘activity based funding’. These are after all, human lives we are dealing with, not widgets.
More meaningless word salad nonsense and evasiveness from a professional rhetorician, designed to impress all of the gullible soft headed individuals in the audience.
Accountable how and to whom? Is the current Premier legally liable for the decades long systemic failures and documented lack of accountability resulting in patient deaths that are entirely preventable? If not, why not?
“In jurisprudence, duty refers to a legal or moral obligation imposed on an individual or entity to act in a certain manner or refrain from specific actions. It forms the foundation of liability, as legal responsibility arises when a duty is breached.”
“Duties can arise from law, contracts, torts, or social obligations, such as the duty to exercise reasonable care, perform contractual promises, or respect others’ rights. The concept ensures order and fairness in society, as every person is expected to act in accordance with legal and moral standards. Breach of duty is central to establishing liability and determining remedies.”
The failures of accountability are longstanding ( “A recommendation without funds to support it, or make change, means that no change is actually happening,” he said. “So for those of us working on the front lines, no substantial change has been made. ” “I think that it needs to be said that these deaths are predictable,” Thirsk said. “We have evidence of that. It’s going to happen again. I think that ultimately this is a long-standing, decades-long failure of accountability. “)
because no penalties of any significance exist, or if penalties do exist they are simply not enforced in any meaningful way.
Finally, the legal system is only seen as an effective tool when it benefits and furthers the narrow ideological agenda of the current Alberta Premier:
Thanks for posting this.
Yeah, but you still need staffed operating rooms, and recovery rooms. Which means hiring doctors, nurses, and other ancillary staff. My understanding for the backlog in emergency rooms is that there is no space and staff in hospitals right now. Maybe the the first move to help the hospital system is to create more long-term care spaces and move those patients out of hospitals.
Agreed. And, more investment into prevention, from stronger workplace health and safety laws, to stringent, strictly-enforced safety-focused road traffic laws, to *gasp* mass immunization programmes, to getting tobacco and vape products out of the hands of young people, to improving primary care and chronic disease management, to public pharmacare to keep people well and out of hospital.
Marlaina can’t be trusted. This is a poorly-disguised sleight-of hand way of giving even more taxpayer dollars to the likes of Sam Mraiche.
Incentive based models have been used in the US. There are numerous examples of how sites manipulated the system to maximize profits. Patient care did not improve. Reference is a book called “Better Health Economics”
“Exploring innovative ways to allocate funding”….
Stupidest thing I ever saw. Wiffle-waffle babblespeak.
You’re either securing funding that meets the needs of the community or you are not. “Oh hi, yer dying of cancer but how about we give ya that hip replacement because it’s cheaper and we’re using our innovative funding allocation”
JFC, will the media FOR ONCE just go, “and for those of us idiots in the audience, can you explain what that means *exactly*” when they’re interviewing this woman?
The gish galloping is making my brain hurt. And I used to write funding proposals as part of my job.
Seems to me like a ‘change the channel’ announcement to deflect attention away from the Smith/UCP seperation mess.
The UCP appears to have more in common with the Keystone Cops that they do with
good politics.
Remember the signed “public health guarantee “ from the UCP when they got into power Lol!
The guarantee now involves carving out pieces of our healthcare system to the private sector until there is no public system left.
The next step will be that the private entities will be set up to be sold to larger, multinational corporations. The guarantee will be that the UCP politicians will make more back- room deals, load up with shares of those corporations and line their pockets. Remember David’s previous comments about “follow the money”? Spot on.
Where Smith is concerned: “Nothing good can happen, only bad.”
Hello DJC and fellow commenters,
The other day, just for interest, I tried to follow the trail of telehealth in Alberta, who provides it and how much profit they make. the . The long and short of it is that telehealth is provided by a corporation which, in the first quarter of this year made a profit greater than the profit for first quarter of last year. They seem to be doing well profit-wise and that is where some our public health care money is going. This corporation is involved in providing other aspects of health care administration here and is quite profitable overall. If health care is provided by the public system, there is no profit motive and the money spent to provide corporate profit will be spent on providing health care.
The idea of making hospitals compete for public money is absurd. Hospitals should be spending their resources on providing health care, not on paying people working on how to game the system.
As I have mentioned, I lived in the U S for a couple of years and I saw how the cost of health care is so expensive that many ordinary people cannot afford it. If your are, say, injured in an auto accident, the costs to families even after insurance pays a part can be in the hundreds of thousands of dollars. This is a profit-driven system.
There is zero benefit to citizens of making health care a private for-profit enterprise.
The whole debate around public vs private health care has never seemed very difficult to me. The goal of public health care is to deliver appropriate treatment in a timely manner to achieve the best possible outcome for the patient. The goal of private health care is profit. Every voter in Alberta who thinks that they could possibly need hospital care at some point in their life should ask themself which type of hospital they would prefer to be treated in.
Who dat standing between minster LaGrange and premiere Smith?
You accept supply-side economics, you get supply-side economics. A yummy trickle.
I grew up in Quebec. English Montreal..West Island. I can well remember what the the constant talk of separation did to my Province. We lost investment. Lots of it.
Just as bad, many of my friends moved away. They or their parents were transferred to Toronto or south to the US. Many of my contemporaries were like me. They purposely decided to attend universities outside Quebec in the knowledge that they would never come back. Or when they graduated from McGill or Concordia applied for jobs outside the Province. As my sister did and purposely did her second degree in BC.
Our Premier, IMHO, has done an incredible disservice to Alberta, Albertans, and Canadians.
All for the benefit of retaining her leadership of the UCP and bending to every request of the TBA group. It is all about her.
So far, the response of the federal government to Alberta’s healthcare malpractice has been … crickets.
Today’s Star piece by Althia Raj on Carney’s heavy-handed approach to caucus management includes an anecdote about a MD Lib backbencher who was told not to bother the PM about Alberta’s 2-tier plans. At least that MD MP made the effort. So far we’ve not heard a peep from newly-elected physician MP Danielle Martin whose 2017 book on healthcare reform forcefully dismissed privatization as any kind of fix.