IDEAS home Printed from https://ideas.repec.org/p/chy/respap/30cherp.html
   My bibliography  Save this paper

Introducing activity-based financing: a review of experience in Australia, Denmark, Norway and Sweden

Author

Listed:
  • Andrew Street

    (Centre for Health Economics, University of York)

  • Kirsi Vitikainen
  • Afsaneh Bjorvatn
  • Anne Hvenegaard

Abstract

We review and evaluate the international literature on activity-based funding of health services, focussing especially on experience in Australia (Victoria), Denmark, Norway and Sweden. In evaluating this literature we summarise the differences and pros and cons of three different funding arrangements, namely cost-based reimbursement, global budgeting and activity-based financing. The institutional structures of the four jurisdictions that are the main focus of the review are described, and an outline is provided about how activity-based funding has been introduced in each. We then turn to the mechanics of activity-based funding and discuss in detail how patients are classified, how prices are set and how other services are funded. Although concentrating on the four jurisdictions, we draw on wider international experience to inform this discussion. We review evidence of the impact of activity-based funding in the four jurisdictions on efficiency, activity rates, waiting times, quality and overall expenditure. Finally we conclude with a brief commentary of some of the challenges that would have to be faced if implementing activity-based funding.

Suggested Citation

  • Andrew Street & Kirsi Vitikainen & Afsaneh Bjorvatn & Anne Hvenegaard, 2007. "Introducing activity-based financing: a review of experience in Australia, Denmark, Norway and Sweden," Working Papers 030cherp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:30cherp
    as

    Download full text from publisher

    File URL: http://www.york.ac.uk/media/che/documents/papers/researchpapers/rp30_introducing_activity-based_financing.pdf
    File Function: First version, 2007
    Download Restriction: no

    References listed on IDEAS

    as
    1. David Epstein & Anne Mason, 2006. "Costs and prices for inpatient care in England: Mirror twins or distant cousins?," Health Care Management Science, Springer, vol. 9(3), pages 233-242, August.
    2. Keeler, Emmett B. & Carter, Grace M. & Trude, Sally, 1988. "Insurance aspects of DRG outlier payments," Journal of Health Economics, Elsevier, vol. 7(3), pages 193-214, September.
    3. Jonas Schreyögg & Tom Stargardt & Oliver Tiemann & Reinhard Busse, 2006. "Methods to determine reimbursement rates for diagnosis related groups (DRG): A comparison of nine European countries," Health Care Management Science, Springer, vol. 9(3), pages 215-223, August.
    4. Llewellyn, Sue & Northcott, Deryl, 2005. "The average hospital," Accounting, Organizations and Society, Elsevier, vol. 30(6), pages 555-583, August.
    5. Anni Ankjær-Jensen & Pernille Rosling & Lone Bilde, 2006. "Variable prospective financing in the Danish hospital sector and the development of a Danish case-mix system," Health Care Management Science, Springer, vol. 9(3), pages 259-268, August.
    6. A. Street & D. Dawson, 2002. "Costing hospital activity: the experience with healthcare resource groups in England," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 3(1), pages 3-9, March.
    7. Marisa Miraldo & Maria Goddard & Peter C Smith, 2006. "The incentive effects of payment by results," Working Papers 019cherp, Centre for Health Economics, University of York.
    8. Mikkola, Hennamari & Keskimaki, Ilmo & Hakkinen, Unto, 2002. "DRG-related prices applied in a public health care system--can Finland learn from Norway and Sweden?," Health Policy, Elsevier, vol. 59(1), pages 37-51, January.
    9. Jackson, Terri, 2001. "Using computerised patient-level costing data for setting DRG weights: the Victorian (Australia) cost weight studies," Health Policy, Elsevier, vol. 56(2), pages 149-163, May.
    10. Ellis, Randall P. & McGuire, Thomas G., 1986. "Provider behavior under prospective reimbursement : Cost sharing and supply," Journal of Health Economics, Elsevier, vol. 5(2), pages 129-151, June.
    11. Street, Andrew & Duckett, Stephen, 1996. "Are waiting lists inevitable?," Health Policy, Elsevier, vol. 36(1), pages 1-15, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:kap:porgrv:v:17:y:2017:i:2:d:10.1007_s11115-015-0337-8 is not listed on IDEAS
    2. Delo, Caroline & Leclercq, Pol & Martins, Dimitri & Pirson, Magali, 2015. "Costs of disposable material in the operating room do not show high correlation with surgical time: Implications for hospital payment," Health Policy, Elsevier, vol. 119(8), pages 1126-1132.
    3. Roberta Longo & Marisa Miraldo & Andrew Street, 2008. "Price regulation of pluralistic markets subject to provider collusion," Working Papers 045cherp, Centre for Health Economics, University of York.
    4. Miraldo, M & Crea, G & Longo, R & Street, A, 2014. "Collusion in regulated pluralistic markets," Working Papers 15402, Imperial College, London, Imperial College Business School.
    5. Zeynep Or & Thomas Renaud, 2009. "Activity based payment in hospitals: Principles and issues drawn from the economic literature and country experiences," Working Papers DT23, IRDES institut for research and information in health economics, revised Mar 2009.
    6. Socha, Karolina, 2014. "Mixed reimbursement of hospitals: Securing high activity and global expenditures control?," COHERE Working Paper 2014:3, University of Southern Denmark, COHERE - Centre of Health Economics Research.
    7. Zeynep Or & Thomas Renaud & Laure Com-Ruelle, 2009. "One price for all? Sources of cost variations between public and private hospitals," Working Papers DT25, IRDES institut for research and information in health economics, revised May 2009.
    8. Anne Mason & Marisa Miraldo & Luigi Siciliani & Peter Sivey & Andrew Street, 2008. "Establishing a Fair Playing Field for Payment by Results," Working Papers 039cherp, Centre for Health Economics, University of York.
    9. Baxter, Pamela E. & Hewko, Sarah J. & Pfaff, Kathryn A. & Cleghorn, Laura & Cunningham, Barbara J. & Elston, Dawn & Cummings, Greta G., 2015. "Leaders’ experiences and perceptions implementing activity-based funding and pay-for-performance hospital funding models: A systematic review," Health Policy, Elsevier, vol. 119(8), pages 1096-1110.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chy:respap:30cherp. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gill Forder). General contact details of provider: http://edirc.repec.org/data/chyoruk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.