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The federal government’s continued obsession with austerity and balancing the budget comes at the cost of higher household debt, fewer services, and weakened job growth. Canadians have better options that could lift many out of poverty and reduce inequality. That’s the message in the 2015 Alternative Federal Budget (AFB), released today by the Canadian Centre for Policy Alternatives (CCPA).

Dec. 16 2014,

Most Canadians probably don’t realize that health care in Canada is quietly undergoing a major transformation in funding that could significantly impact patients. Three provinces – Quebec, Ontario and British Columbia – are implementing a new funding model for hospitals and other provinces are watching with interest.

Canadian hospitals have been traditionally funded through annual lump-sum payments – global budgets – meant to pay for all care each institution delivers. The good thing about global budgets is that they are predictable, stable and administratively simple. The problem with global budgets, critics argue, is they lack incentives to boost efficiency, are not transparent and funding is not targeted to priority areas.Enter activity-based funding (ABF). Under ABF, hospitals receive a pre-determined fee for each episode of care, intended to fund the bundle of services provided to each patient with a particular diagnosis, regardless of the actual costs for any particular patient. The fee is expected to account for the anticipated complexity, type, volume and intensity of care ordinarily provided to clinically similar patients.