Health System Funding Reform

Frequently Asked Questions

What is Health System Funding Reform?

Health System Funding Reform is an essential component of Ontario's health system transformation. It will create a provincial funding model that is both responsive to the emerging health care needs of the population and encourages the adoption of best practices. The link between funding and the delivery of care will encourage patient-centred care and a system focused on improved outcomes.

Why is the government doing this now?

In 2012-13, health care consumed 42 cents of every tax dollar. Without a change of course, health spending would eat up 70 per cent of the provincial budget within 12 years.

Our population structure is changing. We're living longer and as we age, the more we depend on our health care system. We now have access to more and better drugs to prevent and treat disease, and there is a rise in the rate of chronic disease such as diabetes and high blood pressure.

The current rate of growth is not sustainable. To ensure the health care system is there for our loved ones and future generations, we must start doing things differently.

How does this align with the government’s priorities?

Ontario's Action Plan for Health Care was introduced in January 2012. The government's vision is to make Ontario the healthiest place in North America to grow up and grow old. The Ministry of Health and Long-Term Care will do this by getting better value from our health care dollars. The action plan will result in health care delivered in a more efficient way that improves quality for patients.

When is this being implemented?

Funding reform started in 2012/13 and will be phased in over four years. The phasing-in of the new model is allowing health service providers to anticipate changes and plan for impacts. The ministry wants to minimize disruption of services and impact on health human resources. Assistance is being provided by the ministry, LHINs and peers in terms of education, toolkits and other transitional supports.

What are the benefits of Health System Funding Reform?

The main benefits of Health System Funding Reform (HSFR) include :

As of 2015/2016, HSFR will comprise 70 per cent of the funding envelope provided to hospitals with the remaining 30 per cent based on global funding. 

There are two key components to HSFR:

Which Quality-Based Procedures have been launched?

In 2012/13 Quality-Based Procedures included:

Hip replacement surgery
Knee replacement surgery
Cataract surgery
Chronic Kidney Disease

Starting in 2013/14, additional Quality-Based Procedures include:

GI Endoscopy
Chemotherapy – Systemic Treatment
Congestive Heart Failure
Chronic Obstructive Pulmonary Disease
Vascular (Non-Cardiac)

While the QBPs may initially be focussed on patients in hospitals, work has begun to expand into the community and into other areas of the health care sector. 

What provisions are being made for academic hospitals/centres?

HBAM includes a cost adjustment that takes into account teaching activities at a hospital. Large community hospitals that have a teaching component also receive this adjustment.

How are small hospitals defined and how will their funding be allocated?

A small hospital is defined as a hospital with fewer than 2,700 acute and day surgery cases for any two of the prior three years.  There are 55 small hospitals that will continue to be funded on a global budget basis. However, if a small hospital provides a Quality-Based Procedure, it will be funded according to the Quality-Based Procedure policy.

How will funding be allocated for forensic health in-patient facilities?

Forensic mental health will continue to be funded on a global budget basis.

Will Community Care Access Centres (CCACs) be given any flexibility around budget allocation because of current short-term contractual obligations?

Existing contracts between CCACs and their contracted health care providers may be due for renewal each year. Many variables come into play in those negotiations.  If a CCAC experiences a funding change or if Health Based Allocation Model (HBAM) service evidence suggests a need to change the way services are delivered, it may need to adjust the volume expectations in contracts. Mitigation strategies will be introduced to ensure that funding changes can be reasonably absorbed by CCACs. 

How will these changes affect long-term care home licensees?

The long-term care sector is already substantially funded using methodology that reflects the needs of the residents they serve. Proposed changes to long-term care homes would be implemented in future years.

There will be little impact on long-term care homes in the short-term.

Where can I get more information?

If you are a Local Health Integration Network (LHIN) and/or health service provider (for example, a hospital or CCAC), please email your questions to the ministry at or call (416) 327-8379.

Stakeholders in the health care sector may access a password protected site at .

For More Information

Call ServiceOntario, Infoline at 1-866-532-3161
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