Published in the Financial Post.
Canadian hospitals are capacity-constrained and expensive and therefore not the best care setting for patients who no longer need acute care and the bed that comes with it. Yet these “alternate level care” (ALC) patients accounted for 17 per cent of all acute-care bed days in Canada (excluding Quebec) in 2022-23. Reducing this unnecessary use of limited acute-care capacity could help ensure hospital beds are open for Canadians when they need them.
High ALC volume is one of the most vexing and complex health system challenges, but there are ways to address it. Relatively modest improvement could help reduce the risk of hospital bed shortages. ALC occupancy, which ranges from 14.5 to 26.1 per cent across provinces, pushes the hospital system past 85-per cent occupancy, the rule-of-thumb rate for avoiding bed shortages.
The average occupancy rate across the Organisation for Economic Co-operation and Development (OECD) was 69.8 per cent in 2021. Canada is one of three OECD countries with an occupancy rate above 85 per cent, the other two being Israel and Ireland. We also had the fewest hospital beds per capita in that high-occupancy group. Overall, we have 2.5 hospital beds per 1,000 population, putting us 35th out of 43 rich countries. Reducing the number of ALC patients and the lengths of their stays could significantly reduce acute-care capacity concerns: Just a one-sixth reduction in ALC days would bring acute-care occupancy below the 85-per cent threshold for preventing bed shortages.
How do we do that? By improving incentives, smoothing discharge pathways and investing more in home and community-based care.
Although ALC patients are responsible for 17 per cent of hospital days, they account for only 6.2 per cent of hospital cases. Hospitalizations that include some ALC days involve an average of 22.4 days — more than three weeks — in ALC, compared to an average of just 8.1 total days of stay for all hospitalizations. A relatively small number of patients is clearly causing bottlenecks in the system. About half are seniors waiting for placement into residential care.
Why aren’t these bottlenecks cleared more quickly? Lack of access to preventive and primary care can result in emergency-room visits when alternate care, including home care and other social services, would be more appropriate. And lack of capacity in home care or long-term care (LTC) can result in patients remaining in hospitals much longer than they should.
To fix this problem, we need to: create more seniors’ care spaces; expand home care; improve access to primary care; and ensure support services are accessible and affordable. This would both reduce the number of people hospitals see in the first place and also allow for more rapid discharge of those patients who do come into care.
These policy prescriptions are not new. Analysts have been proposing them literally for decades. Why haven’t they been adopted? In many cases, incentives work against them or substitute services aren’t available.
In many provinces, hospitals have an incentive to designate ALC patients as chronic and in need of long-term care because doing so enables them to recoup some of their costs by charging a daily fee equivalent to what the patients would be charged for room and board in an LTC home. They can only do this, however, if the patient does need continuing or chronic care — in other words, is likely destined for permanent institutional care.
In terms of the incentives seniors and their families face, hospital fees are usually roughly equal to daily LTC charges. In Ontario, the “chronic care copayment” is $66.95 per day. In Alberta, the “ALC accommodation charge” is $66.30 per day. In British Columbia, a standard rate of $46.59 per day applies for “time-limited services.” These fees provide no incentive to leave the hospital, especially if the available LTC bed is not the patient’s preferred choice.
Ontario is trying to make the incentives that patients and administrators face more compatible with a better allocation of scarce resources within the system. By law, patients must be charged an extra $400 per day — on top of the $66.95 daily charge they’re already paying — if they decline an available bed. This increases patients’ incentive to move to LTC, though it does penalize any patients who prefer to wait for a particular LTC location/bed to become available. The result of the policy is that, in 2023, 60 per cent of ALC patients transferred to LTC did not get their first choice of home, while 1.3 per cent (99 patients) were placed in an LTC home selected by a placement co-ordinator without their consent.
On the other hand, the hospital does not recoup any ALC costs if a patient is destined to be discharged home. That means hospitals may prefer LTC as a discharge pathway, even when an ALC patient’s ongoing needs could be adequately met with home and community care supports.
Many early entrants to LTC previously lived alone or in rural areas, suggesting the lack of home and community care may also contribute to the ALC problem. Governments should consider ways to increase access to the less-intensive support services provided in homes. Many retirement homes provide advanced care services similar to those available in LTC but are too costly for many seniors. This unused capacity could help to alleviate the strain on hospital acute care, reduce the wait list for over-capacity LTC and meet the needs of the ALC senior in a more appropriate setting.
Administration can also contribute to the problem. Ten per cent of patients have their hospital stay extended while waiting for home-care services or supports. About half of patients with an extended stay wait nine or fewer days, but one in 10 wait 40 or more days. Co-ordination between hospitals and community care organizations is complex and many factors can contribute to delays in transfers. Many post-discharge care facilities do not accept patients on weekends or have set hours in which they will accept them. Care coordinators might get as little as 48 hours notice that a patient will be discharged. In Ontario, LTC homes have five days to assess an application and respond to a Community Care Access Centre, but there is no penalty for delayed responses. A quarter to a third of applications are reportedly rejected by long-term care homes. Anecdotal information suggests patients’ behavioural problems (including those that may be dementia-related), weight or need for too much assistance with daily living were the main reasons for rejection. Re-orienting hospital discharge policies and pathways to support a “home first” strategy could ease LTC backlogs and reduce the number of ALC patients. Doing so, however, will require better coordination between the various organizations arranging and providing care.
In sum, incentives for physicians, families and hospitals generally encourage both longer than optimal hospital stays and earlier eligibility for LTC than necessary. Hospitals need to review their discharge policies so clinicians and front-line workers aren’t pushed toward recommending LTC when home care would be cheaper and better for patients. They also need to provide more notice to care co-ordinators in order to reduce wait times. For their part, provinces need to examine their fees to ensure no one — clinician, hospital or senior — is encouraged to provide or receive more elaborate health care than necessary. They also need to work on the availability and affordability of senior care, and ensure community care organizations are well co-ordinated with hospitals.
Rosalie Wyonch, senior policy analyst at the C.D. Howe Institute, leads its Healthcare Policy Research Initiative.
