Moving rocks: Block-funding in PEI as an incentive for cross-sectoral reallocations among human services

In 1993, Prince Edward Island introduced block-funding to five Health and Community Services regional boards for all human services except education. We view this as the introduction of a financial incentive (or removal of a disincentive) to undertake cross-sectoral reallocations to address the broader determinants of health. We use case-study methods to evaluate the way in which this incentive was communicated from policy makers to the regions, how the regions interpreted the policy makers' signals, and how the regions responded. The block-funding incentive became a ''fuzzy'' signal to the regions, because it was communicated as part of a larger reform package that included expenditure reductions, devolved governance, and the need for integration and coordination. Nevertheless, the regional boards interpreted the block-funding as facilitating cross-sectoral reallocations, but because of various concerns, including opposition expressed by their employee providers, as well as their physicians and the public, they moved only cautiously to exploit the incentive. Most regions focused more on enhancing administrative efficiency through integration and coordination than on cross-sectoral reallocations to address the determinants of health. Finally, lessons for other jurisdictions are outlined based on the PEI experience.