To disperse funds to the health authorities, ministry staff:
- identify the government commitments that affect each health authority,
- determine the amount of funding that remains after making allocations to its core program area commitments, and
- use the Population Needs-Based Funding model (PNBF) tool to help allocate the remaining funding.
The ministry also allocates funding to the health authorities through a Patient-Focused Funding (PFF) model. The model provides financial incentives to the health authorities to encourage delivery of acute care services for a competitive set price. The objective of the PFF model is to reduce wait times and increase same-day surgical procedures.
Of note, because of balanced budget legislation, Health Authorities are not allowed to spend more than their allotted amount and are therefore required to keep spending within their budget limits.
PNBF is a method of allocating a pool of health funds among regions, based on their population’s relative need for health care.
When using the PNBF tool, ministry staff consider the following factors:
- Population demographics - The size and demographic composition of regional populations by age, gender and socio-economic status determine the need for health care services.
- Utilization - The use of health care services by the provincial population varies significantly by age, gender and socio-economic status.
- Inter-regional flows - Because residents can receive services in other health authority regions than the one they reside in, the model re-allocates funds to the health authorities providing the services.
- Regional costs - Adjustments are made for differences in the cost of delivering health care in different regions due to remoteness or to the higher costs inherent in large, specialized acute care facilities.
In January 2010, the ministry developed an additional tool that divides the population of B.C. into 13 population segments (e.g. end of life, cancer, maternity, frail in long term care, etc.). These segments are used as a more precise measure and predictor of health care utilization. Age distribution is overlaid over these segments to show the percentage of health services used by a particular age group, segment, or age group within a particular population segment.
It is important to highlight that PNBF is simply a tool to help inform Ministry of Health staff in allocating health authority funding. It is not the sole tool used to allocate health authority dollars. Health Authority budgets are typically based on the previous year, with adjustments made for a variety of reasons, including targeted initiatives, capital projects, P3 operations and operating pressures.