Ontario proposes radical overhaul of hospital funding

Province aims to cut costs by adjusting budgets based on community demographics

The new approach would do away with the global hospital budgets that for decades have allocated funding evenly across the board, and could reshape the way health spending priorities are set. Premier Dalton McGuinty's so-called Health Based Allocation Model, or HBAM for short, would divert more money to hospitals in regions where the population is growing and aging . The proposed model, which may be announced as soon as the provincial budget later this month, would also reward better-performing hospitals. They would be in line for additional money based on how cost-effectively they treat patients.