Transforming Ontario's Health Care System Care Stories

Quality-Based Procedures Help Approach to Budgeting

The coming of Quality-Based Procedures (QBPs) under the Health System Funding Reform was a challenge that Mount Sinai Hospital prepared for several years to meet. "We embraced it. I don't think this is more work. I think it's different work. I think this is just a different way now, to report, to look at finances and to budget," explained Fernando Pica, Mount Sinai's VP of Finance.

QBPs set the price the government will pay hospitals for certain procedures based on best clinical practices and required quality. They served to focus Mount Sinai's attention from the top to bottom to achieve quality improvements in patient care that it had already begun to pursue. "The ministry's funding approach was an opportunity for us to push forward the work that has always needed to happen. QBPs gave us - and continue to give us -- a target to wrap continuous improvement around," added Sandra Dietrich, the hospital's Senior Director, Corporate Performance.

Pica, who is new to the public health sector, responded with his private sector approach to budgeting when QBPs were introduced in 2012. "QBPs, to the private sector guy, meant the customer just told you what they were willing to pay," he said. "Sandra's team was able to tell me, for example, that a hip and knee procedure cost x dollars at the hospital - the nurses that are involved in these procedures cost this, the supplies that we use costs this, lab services cost this, etc." Pica said. "From there we were able to establish targets at the functional centre level that would contribute to improving the our performance relative to the QBP price point and feed that information back to the budget owners  in a language that they clearly understood. So, the lab people can say when a hip comes in we've got to do procedure A, B and C and," Fernando says, "from the target we've got to move on those three items to improve our performance."

Pica and Dietrich stressed that the hospital did not undertake a blunt cost cutting exercise. They examined every cost associated with a particular QBP, such as hip and knee surgery and looked at how to improve the quality of each hospital service that contributes to patient care in that procedure. "It's quality and safety first. We have learned that when we lead with quality out comes and safety, we can see improvements in cost. ," Dietrich said. "But we can work better together as a team to achieve the end goal of having both - some cost reduction and high quality and safety."

Mount Sinai was primed for this budget exercise of tying improving quality to reach set targets due to work already taking place at the hospital during the last three years. The hospital had already been introducing performance measures, benchmarking and increasing efficiency to free up more time to focus on patients. Building on this foundation, the hospital launched an education program from the board down to the frontlines. The program engaged staff at all levels to make changes to QBPs that were better for patients and for the hospital's bottom line. More than 400 staff and management received training on quality improvement. Clinicians in particular were engaged in driving and leading change.

Hip and knee surgery was the test area. The goal was to reduce the time patients spend in hospital to two days - about a 50 per cent reduction - by improving all aspects of the procedure from how soon patients get out of bed and start physiotherapy to earlier planning for how they will be supported once they're back at home. The earlier discharge goal was achieved in six months without any increases in readmission rates.. This has translated into a cost reduction of 12 per cent in hip and knee surgery over the past year.

Successful changes made in the hip and knee surgical area are spreading to other areas of the hospital as Mount Sinai works to find patient care improvements and cost savings for QBPs that are slated to roll out in future. "This has drawn the administrative side of the hospital closer to the patient and clinical care side. My message to other organizations is to embrace it. Incorporate the funding formula into all aspects of planning, budgeting and reporting.  Don't take a wait and see attitude," Pica said.

Questions?
Contact the Health System Funding Reform helpline at HSF@ontario.ca or call 416-327-8379.

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