The Unintended and Unexpected Impact of Downsizing

OBJECTIVES In this project we assessed the impact of 1992 budget cuts ($50 million, or approximately 7% of urban hospitals' budgets) on the relative costliness of Manitoba's hospitals. The cuts targeted the teaching hospitals, those institutions we had found to be particularly costly in a previous Manitoba Centre for Health Policy and Evaluation study. RESULTS Unexpectedly, we found that because budget cuts were smaller proportionately than the number of beds closed, the care at the teaching hospitals (as well as at several other hospitals) became relatively more, not less, costly. Also quite contrary to public perceptions, once other expenditures such as new hospital programs and expansions were accounted for, the actual change in urban hospital expenditures over the years compared was less than 1%. CONCLUSIONS The study highlighted the importance of monitoring program outcomes.