Intramural health care budgeting.

In the last years endeavours have been made in several health systems to get a firm grip on the explosive cost development in hospitals which amounts to nearly half of all health care expenditures. The fee-for-service system for doctors coupled with the professional autonomy leads to expansion of quality and quantity of services provided. In many systems hospitals are financed on basis of output items as patient days, examinations and therapies. As hospital costs are in the short run preponderantly constant prices fixed at average costs are higher than marginal costs. This situation favours expansion of services as in that case marginal revenue exceeds marginal cost. Inversely the decrease of services provided generates losses for the hospital. In systems, where financing takes place in the way of budgets like the U.K., Denmark and Italy, the authorities have more influence on the cost development in the system. In systems where the hospitals are financed by social security on basis of output, arrangements are now made to bring budgetary elements in the financing of these institutions. In France the "Budget Global" will be applied to services financed by the Sécurité sociale. In Belgium arrangements have been made to contain the amount of patient days allowed for reimbursement and in the Netherlands in 1983 budget-financing has been introduced for all general and teaching hospitals. In 1984 this system also applies to all other intramural institutions. If a way has been found to focus the financing mechanism of these institutions on budgeted costs, the way is open for budgeting these institutions. A very important problem in this context is the budget formula, which will be used to determine the budgets. In this respect a distinction can be made between internal and external budgeting. Internal budgeting is understood here as a process whereby the hospital itself puts a limit to the use of resources or adapts its resources to budget constraints coming from the outside. External budgeting can be defined as the budgetary constraint given from the outside by third parties to the hospitals. Of course, both internal and external budgeting are narrowly interrelated. The distinction between these two ways of budgeting should be sought in the character of the budget formula. External budgeting should be based on global indications whilst internal budgeting should be more differentiated than the external budget formula.(ABSTRACT TRUNCATED AT 400 WORDS)     

Global budgeting of hospitals in Hong Kong.

Policy-makers in industrialized countries face the dilemma of having to contain soaring hospital costs while resisting any reduction in the quality and quantity of hospital services. Among the many hospital financing systems, centralized control via global budgeting is advocated by some to be the most effective in containing hospital costs. Containing hospital costs, however, is but one aspect of the trade-off between cost containment and quality of care. The hospital financing system of Hong Kong provides some insights into the extent to which cost control can be achieved through global budgeting; and its impact on the accessibility of hospital care. The case of Hong Kong highlights three necessary conditions for effective cost control: (1) the payer must have a clear policy stance on overall public spending; (2) the payer must have a clear policy stance on the importance of hospital care relative to other goods and services; and (3) the payer must also have the will and ability to limit hospital spending within finalized global budgets. However, successful cost containment in Hong Kong affects the accessibility of hospital care. In a time of population growth and economic prosperity, new community needs seem to have preceded government plans and actions to build hospital facilities.     

Implementing prospective budgeting for Dutch sickness funds.

Most if not all social policies entail redistribution of scarce public resources from central government to regional and local authorities, to individual citizens or non-government agencies. Governments use a wide variety of instruments to allocate public funds, including direct state provision of subsidies and goods and services, setting budgets at different levels, and regulation of social insurance schemes. Most industrialised countries have developed budget models based on implicit or explicit allocation criteria. Governments usually start by determining global budgets for an entire category of public spending and then specifying the amounts allocated for categories of spending, and next, the budgets for individual agencies. Within such a 'cascading' model, the lower level budgets may be more controversial than the global budgets, as they directly affect the amounts available to individual actors in the system, e.g. hospitals or health insurance agencies. Setting budgets not only shifts decision-making authority but also financial risks from the central government to decentralised actors. The introduction of the prospective budgeting model for the Dutch sickness funds illustrates why determining budgets is not merely a matter of choosing objective allocation criteria, but also, of interaction between state and stakeholders. In the typical Dutch neocorporatist policy arena, where organised interests share responsibilities with government for the shaping and implementation of social policies, the health insurance agencies actively participated in the development of the budget model.     

Marketing budgeting in nonprofit hospitals

The authors summarize the results of an investigation of the marketing budgeting practices of nonprofit hospitals. They examine various dimensions of budgeting behavior, including (1) the prevalence of budgeting methods that are widely used in the marketing of consumer and industrial goods, (2) the relationship between budgeting practices and the budgeting process, and (3) the relationship between budgeting practices and hospital strategy and performance. The authors also discuss implications for marketing executives and directions for future research.     

Public trust in Dutch health care

This article describes the development of a valid and reliable instrument to measure different dimensions of public trust in health care in the Netherlands. This instrument is needed because the concept was not well developed, or operationalized in earlier research. The new instrument will be used in a research project to monitor trust and to predict behaviour of people such as consulting "alternative practitioners". The idea for the research was suggested by economic research into public trust. In the study, a phased design was used to overcome the operationalization problem. In the first phase, a qualitative study was conducted; and, in the second, a quantitative study. In the first phase, more than 100 people were interviewed to gain insight into the issues they associated with trust. Eight categories of issues that were derived from the interviews were assumed to be possible dimensions of trust. On the basis of these eight categories and the interviews, a questionnaire was developed that was used in the second phase. In this phase, the questionnaire was sent to 1500 members of a consumer panel; the response was 70 percent. The analysis reveals that six of the eight possible dimensions appear in factor analysis. These dimensions are trust in: the patient-focus of health care providers; macro policies level will have no consequences for patients; expertise of health care providers; quality of care; information supply and communication by care providers and the quality of cooperation. The reliability of most scales is higher than 0.8. The validity of the dimensions is assessed by determining the correlation between the scales on the one hand, and people's experience and a general mark they would assign on the other. We conclude that public trust is a multi-dimensional concept, including not only issues that relate to the patient-doctor relationship, but also issues that relate to health care institutions. The instrument appears to be reliable and valid.     

Mental health services and outcome-driven health care.

Mental disorders and mental symptoms often go untreated in both chronic care and primary care settings. However, they covary with functional disability. They are likely to impair social and occupational function in medical outpatients and to cause excess instrumental and cognitive disability in frail older persons. In both groups, they are frequent and often remediable. The costs of untreated mental disorders are often shifted to caregivers and to society in general. To ensure adequate mental health care requires a reorientation of medical care toward optimizing function and well-being as well as longevity. Such a reorientation will necessarily entail more attention to treatable mental disorders. Research is needed to (1) develop firm knowledge on which to base integrated medical and mental health treatment and (2) evaluate the potential economic benefits of combined care. Incentives must be changed if such a paradigm of care is to prosper.     

Hospital budgeting in the Netherlands: Effects upon hospital services

This article analyses the impact of the transition from outputreimbursement to prospective budgeting upon hospital services.In the period immediately after the adoption of budgeting importantchanges in hospital services can be observed, such as a dropin admissions and the occupancy rate and falling treatment Intensityratios (number of treatments per admission/outpatient visit).Hospital services prove sensitive to incentives built into thepayment system. The specific impact upon services depends uponthe design of the budgeting system. Changes in hospital healthservices can be seen as the result of cost containment strategiesof hospital management. Some instruments for cost containmentwere: a reduction of staff; a more selective use of beds; andmore stringent procedures for investments in medical technology.The common characteristic of these instruments is that theyall reduce the volume of resources for the treatment of patients.Hospital management lacks effective instruments for more directlyinfluencing the medical treatment process.     

PBMA (programme budgeting marginal analysis)--its role in the future purchasing arrangements for health care services

The movement of the purchasing process in health care from a central to local level has to be accompanied by an accountability process which makes local purchasers accountable within an agreed national and area framework for their decisions and implementation of change. This paper focuses on PBMA and its applicability to health boards and general practitioner fundholders in future purchasing arrangements. It is argued that it is a useful tool which may provide a basis for more rational discussion about use of resources, both at a micro and macro level, than the current arrangements.