RAJ REPORT

Activity-based hospital funding healthy way to go – Grattan Institute—————–When state finances are tight, such large differences cry out for attention. There is also a moral imperative: it is unethical to ration services or shift costs to consumers when there is inefficiency in the system that, with better management, could be reduced and the savings used to address unmet needs or future cost pressures.

Leave a comment


When state finances are tight, such large differences cry out for attention. There is also a moral imperative: it is unethical to ration services or shift costs to consumers when there is inefficiency in the system that, with better management, could be reduced and the savings used to address unmet needs or future cost pressures.

The opportunity to free up this money comes because all states and territories are implementing activity-based funding for their public hospitals. Under this system, hospitals are funded on the basis of what they do – their activity – not in block grants or on the basis of previous funding arrangements, as used to be the case.

The costs of patients vary for a host of legitimate reasons, even after taking their illnesses into account. Some people may respond better to treatment; social factors such as homelessness also may affect treatment plans. The idea with activity-based funding is that these types of variation among patients will even out, with some costing more than average and some less.

Among hospitals, you’d also expect some variation. But the difference among Australian hospitals is far greater than is reasonable. Activity-based funding changes the incentives for public hospitals as the payment they get from state governments and the commonwealth is based on the average costs of similar patients nationally for commonwealth payments and in their state for state funding.

 

 

 

 

 

 

 

 

Activity-based hospital funding healthy way to go – Grattan Institute.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s