Payroll. Canada Your organization currently has operations in Ontario, New Bruns

Question

Payroll. Canada

Your organization currently has operations in Ontario, New Brunswick and Alberta. The organization is planning on expanding into the provinces of Manitoba and British Columbia within the next six months. The Manager of Finance has asked you for information on the health care funding methods used in those two provinces.

Prepare a memo providing information on how health care is funded in each jurisdiction, how it is calculated, reported and remitted and what the impact on payroll would be, if any.

Explanation / Answer

Memo: Healthcare funding in Canada: Manitoba and British Columbia

The Finance Manager

2-Sep-2018

From

XYZ

Subject: Information on healthcare funding to expand operations in Manitoba and British Columbia

I would like to bring in your attention some important information on healthcare funding methods used in Canada.

Health care in Canada is funded at both the provincial and federal levels. The financing of health care is provided via taxation both from personal and corporate income taxes. Additional funds from other financial sources like sales tax and lottery proceeds are also used by some provinces.

At a federal level, funds are allocated to provinces and territories via the Canadian Health and Social Transfer (CHST). Transfer payments are made as a combination of tax transfers and cash contributions.

Alberta, British Columbia, and Ontario also charge health premiums to supplement health funding, but such premiums are not required for health coverage as per the Canada Health Act.

Canada`s healthcare system is predominately public, with 70% of healthcare funding coming from the public-sector and the remaining 30% from the private-sector.

Following are the healthcare funding methods, factors to decide allocation of funds and its impacts:

1.Global Budgets: The most common funding model in Canada is global budget, where a fixed payment amount is allocated to a provider to cover operating expenses for a period of time, usually one year. Funding amounts are typically based on factors such as historical budgets, inflation and politics, and are provided irrespective of the number of patients or levels of demands on resources.

One weakness of global budgets is that, under the impetus to meet budget targets, providers might restrict access to services, limit the number of admissions to facilities or reduce quality of care.

2. Activity-Based Funding (ABF): A funding method where healthcare providers are allocated funds based on the type and volume of services they provide, and the complexity of the patient population they serve. ABF has also been used to address specific policy objectives, such as reducing wait lists, increasing hospital quality, encouraging competition among hospitals and enhancing the monitoring of hospital activity.

3. Bundled Payments: A recently-developed, alternative funding method in which a single payment is used to fund all of the care related to a condition or medical event within a fixed time period, spanning providers and locations.

A ‘bundle’ is defined as the set of treatments or services provided to a patient over a pre-defined timespan, or ‘episode’. For example, if a patient has a joint replacement, the bundle of care could be all care provided during an episode, from entering the hospital to 90 days after discharge. If the cost to providers of treating a patient is more than the set funding amount for the bundle, providers must cover the difference; if the cost of treating a patient is less than the set amount, providers keep the surplus. This arrangement gives providers the incentive to deliver efficient, effective, and high-quality care to avoid costly readmissions and re-hospitalizations.

4. Integrated Funding Models: Increasing integration between isolated health sectors (e.g. primary care, acute care, mental health, pharmaceuticals) is a goal of many health systems, including Canada, and may be facilitated though integrated funding models.

5. Hospital Quality: High-quality care important to both patients and policy-makers and refers to the degree to which health care services increase desired health outcomes and are consistent with evidence-based medicine. Some countries have linked funding to quality, in an attempt to provide incentives for improvement.

Conclusion: There are many indicators to decide the healthcare funding method. A funding method can be chosen based on organization’s policies, funding policies at federal and provinces level and keeping in mind the pros and cons of each method.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.