Insights April 2019

Collateral Damage: The Unintended Consequences of Misguided Hospital Funding Reform

David Wasserstein, Karen S. Palmer and Noah Ivers


To improve value in healthcare systems, policy makers seek to limit funding for so-called low value procedures that provide little or no benefit and could pose the potential for harm. However, in circumstances where it is not the procedure itself that is low value but the context in which it is used (“appropriateness”), indiscriminate funding reform carries substantial risks.

A one-size-fits-all strategy does not account for variation in physician practice. Restricting options for all when a small proportion of physicians are responsible for a largely disproportionate number of the low-value procedures can lead to the unintended consequence of limiting patient access to appropriate-use, high-value care.

Consider funding for Magnetic Resonance Imaging (MRI) as a hypothetical example. Some MRIs occur for acute low back pain in the first six weeks after onset when no other clinical red flags are present, even though imaging is no longer recommended (Choosing Wisely, 2019). Others occur for suspected brain tumours. Imagine if funding for all MRI funding was reduced in an effort to discourage low value imaging. If there were no resultant decrease in the number of low value MRIs ordered for low back pain, then high value MRIs for suspected brain tumours would be under-funded.

Instead of across-the-board funding cuts, we believe a targeted approach that considers best clinical practices is imperative.  Data on physician practice patterns can reveal outliers – both physicians with practices to emulate (positive deviants), and physicians with disproportionate inappropriate use. Below, we explore this issue by examining knee arthroscopy in Ontario.

In March 2015, funding reform for knee arthroscopy in Ontario hospitals was implemented in conjunction with a handbook (HQO and MOHLTC, 2018) outlining appropriate use of this procedure. The handbook notes that knee arthroscopy used in the context of degenerative knee disease (i.e., typical osteoarthritis) represents inappropriate low-value care, but in the context of knee reconstruction (e.g., ligament repair) it represents appropriate, high-value care. This recommendation is supported by high quality data and multiple practice guidelines (Siemieniuk et al. 2017) (NICE, 2019).

While indiscriminately reducing funding for all knee arthroscopy might reduce costs and low-value utilization, it would also affect appropriate use. Specifically, it would increase wait times for repair and reconstructive procedures if outlier surgeons continue to use operating time to perform low value procedures at a similar proportion. 

There is ample evidence that practice pattern variation in knee arthroscopy may include a small number of surgeons performing a large proportion of low-value procedures. Hospital level data from Ontario, Canada, showed that just a few hospitals had twice the average rate of repeat arthroscopy or total knee replacement within 2 years of an index knee arthroscopy (HQO and MOHLTC, 2018). Similarly, data from the English National Health Service demonstrated that between 11 and 16% of provider groups performed more than twice the national average rate of knee arthroscopic debridement (Abram et al. 2018).

We believe that a better approach would be to understand why variation occurs. This knowledge would support implementation of Quality Assurance (QA) strategies that focus on physicians who frequently perform potentially inappropriate, low-value interventions, rather than on system-wide broad-based funding change. Supportive and potentially sustainable QA strategies to maximize value, without unintended consequence, include:

  1. physician audit coupled with targeted feedback and mentoring to support outlier physicians in updating knowledge and changing practice (Ivers et al. 2012)
  2. billing review to detect and deter inappropriate or abusive billing (Government of BC, 2019)
  3. external review of outlier practice by hospitals, or organizations with a vested interest in ensuring high-quality care in a sustainable health system (e.g., government agencies such as Health Quality Ontario, professional groups such as Ontario Orthopaedic Association); and/or
  4. “surgical signature” to profile practice patterns of individual surgeons (Birkmeyer et al. 2013). Celebrating the work of positive deviants – providers with minimal volumes of potentially low-value care – by asking them to share their success stories and/or by redistributing funds to centres of excellence is another promising option (Ivanovic et al. 2015)

Whole system solutions are simple, but are unlikely to address scenarios where only a few players cause most of the variation. Funding reform that limits both appropriate and inappropriate care is unsophisticated and misguided; the equivalent of using a hammer when a chisel will do. We prescribe a more thoughtful, data-driven, and targeted approach to reducing variation in care, curbing inappropriate interventions, and improving value.

About the Author(s)

David Wasserstein MD MSc MPH FRCSC, Division of Orthopaedic Surgery, Department of Surgery, University of Toronto, Toronto, ON, Sunnybrook Research Institute, Sunnybrook Health Sciences Centre, Toronto, ON

Karen S. Palmer, MPH, MSc, Women’s College Research Institute, Women’s College Hospital, Toronto, ON, Faculty of Health Sciences, Simon Fraser University, Burnaby, British Columbia, Canada

Noah Ivers MD CCFP PhD, Women’s College Research Institute, Women’s College Hospital, Toronto, ON, Institute for Health Policy, Management and Evaluation, University of Toronto, Toronto, ON, Department of Family and Community Medicine, University of Toronto, Toronto, ON


Abram, S.G.F., A. Judge, D.J. Beard, H.A. Wilson, A.J. Price. Oct 2, 2018. “Temporal trends and regional variation in the rate of arthroscopic knee surgery in England: analysis of over 1.7 million procedures between 1997 and 2017. Has practice changed in response to new evidence?” Br J Sports Med. 2018;

Birkmeyer, J.D., B.N. Reames, P. McCulloch, A.J. Varr, W.B. Campbell, J.E. Wennberg. Sept 28, 2013. “Understanding regional variation in the use of surgery.” Lancet.382(9898):1121-1129. doi:

Choosing Wisely Canada. ND. “Imaging tests for low back pain: When you need them and when you don’t.” Retrieved April 15, 2019. https://choosingwiselycanada.”org/wp-content/uploads/2017/05/Low-Back-Pain-EN.pdf

Government of British Columbia, “Billing Integrity Program”. ND. Retrieved April 15, 2019. 

Health Quality Ontario and Ontario Ministry of Health and Long Term Care. July 2018. Quality-Based Procedures: Clinical Handbook for Knee Arthroscopy.” Retrieved April 15, 2019.

Ivanovic, J., C. Anstee, T. Ramsay, S. Gilbert, D.E. Maziak, F.M.Shamji, R.S. Sundaresan, P.J. Villeneuve, A.J. Seely. Oct 2015. “Using surgeon-specific outcome reports and positive deviance for continuous quality improvement.” Ann Thorac Surg. 100(4):1188-95 doi: 

Ivers, N., G. Jamtvedt, S. Flottorp, J.M. Young, J. Odgaard-Jensen, S.D. French, M.A. O’Brien, M. Johansen, J. Grimshaw, A.D. Oxman. “Audit and Feedback: Effects on professional practice and healthcare outcomes.” June 13, 2012. Cochrane Database of Systematic Reviews. Issue 6. Art. No.: CD000259. doi:

National Institute for Health and Care Excellence. February 2014. “Do Not Do Recommendation”. Retrieved April 15, 2019.

Siemieniuk, R.A.C., T. Agoritsas, R. Brignardello-Petersen, R. Buchbinder, L. Lytvyn, G. Knutsen, H. Macdonald, H.M.Wilson and A. Kristiansen. 2017. BJM 357:j1982, doi:


Be the first to comment on this!

Note: Please enter a display name. Your email address will not be publically displayed