Health Minister Kevin Falcon announced health care funding reforms that will change the way the province hands out cash to hospitals.

Under the new 'patient-focused' model, hospitals receive financial incentives for delivering services for a fixed price. It's a shift away from the traditional funding model in Canada, where hospitals receive lump sums that aren't connected to performance targets. Now, hospitals will be essentially competing for patient business for services like knee-replacement surgeries or breast cancer screenings.

The province is setting aside $250 million to implement the program at 23 of the biggest hospitals in B.C. That money will be administered through a new body, the B.C. Health Services Purchasing Organization.

The objectives of the reforms are to reduce overnight stays and wait lists for surgical procedures, and also expand emergency room funding.

"We must reform how we fund health care," Falcon said at a press conference today. "We can't continue to spend to maintain the status quo. This is the way of the past. It is not the way of the future."

But Debra McPherson, president of the B.C. Nurses' Union, said the move will significantly increase the workload for her unions' members.

"This is being introduced without any discussion with us about the human resources," McPherson said. "Where will they get the staff from to do this? My fear is that this is a Trojan horse to contract services through the private sector."

NDP health critic Adrian Dix said it's possible this proposal could lead to more for-profit health providers bidding for funding, but added that his main concern is that the model "pits hospitals against one another for scarce resources," and said that, as a result, small and regional hospitals will likely be negatively impacted.

"I think what's needed in health care instead is more collaboration," Dix said.

If the program proves successful, it will be expanded to hospitals across the province, said Falcon.

Ontario introduced 'pay-for-performance' legislation last week that ties emergency room wait times and patient satisfaction to the salaries of hospital CEOs.

Colleen Kimmett reports for The Tyee.