Ontario is considering a plan that would effectively have hospitals compete against each other for patients. (Canadian Press)

The Ontario government is considering a drastic change that would effectively have hospitals competing with each other for patient care.

Health Minister Deb Matthews says the province is looking to move towards a "patient-based payments" system that could save millions of dollars every year, with hospitals that provide the lowest-cost treatments getting more patients, work and money.

Ontario already bases some of its funding on this type of model, notably in emergency rooms.

But the reform being considered by the Health Ministry would broaden those incentives, which could result in some procedures being centralized in certain hospitals or cut in others.

According to NDP health critic France Gelinas, the move could mean patients in areas outside major centres would almost certainly have to travel for treatment

"Ontario's families are concerned about any plan that could take important health services away from their community, bring inequity of access, pit rural and northern hospitals against urban ones, or hospitals in wealthy neighbourhoods against those in poorer ones," said Gelinas.

In the legislature on Thursday, Matthews defended the idea, saying, "It is time to innovate. We need to make sure we are getting the very best value for the money that we spend on health care."

Matthews said the government's strategy to reduce wait times is built on patient-based payments, and the ministry has been exploring options for this system since last year.