Limited Consequences of a Transition From Activity-Based Financing to Budgeting: Four Reasons Why According to Swedish Hospital Managers

Abstract

Activity-based financing (ABF) and global budgeting are two common reimbursement models in hospital care that embody different incentives for cost containment and quality. The purpose of this study was to explore and describe perceptions from the provider perspective about how and why replacing variable ABF by global budgets affects daily operations and provided services. The study setting is a large Swedish county council that went from traditional budgeting to an ABF system and then back again in the period 2005-2012. Based on semistructured interviews with midlevel managers and analysis of administrative data, we conclude that the transition back from ABF to budgeting has had limited consequences and suggest 4 reasons why: (1) Midlevel managers dampen effects of changes in the external control; (2) the actual design of the different reimbursement models differed from the textbook design; (3) the purchasing body’s use of other management controls did not change; (4) incentives bypassing the purchasing body’s controls dampened the consequences. The study highlights the challenges associated with improvement strategies that rely exclusively on budget system changes within traditional tax-funded and politically managed health care systems.

Centrality and compatibility of institutional logics when introducing value-based reimbursement

“…From a regulative perspective it was evident that not everyone was informed about the regulative changes, since information was “buffered” through management. This has previously been shown to affect whether healthcare providers adapt to regulative changes ( Ellegard and Glenngard, 2019 ). Further, it was also clear that management had other demands to take into account, which was evident when quality aspects of physiotherapy were neglected.…”

“…Establishing understanding requires leadership skills such as communication with, and motivation of, involved staff ( Nilsson and Sandoff, 2015 ). It is also important to acknowledge the importance of managers who can dampen and modify external demands ( Ellegard and Glenngard, 2019 ). Further, our study showed that professional groups that lacked representation in the design of the programme, considered that as a problem, since each professional category can contribute with different perspectives in the care chain.…”

“…As a bridge between these levels of healthcare systems, managers play a crucial role by motivating staff, and give stability through differing strategies ( Oliver, 1991 ; Burnett et al , 2016 ; Korlén et al , 2017 ). However, managers can also function as a buffering zone and dampen the impact of external demands, such as financial incentives in a reimbursement programme ( Ellegard and Glenngard, 2019 ). Previous studies have shown that managerial stability and competence in aligning external demands with an internal strategy, strongly influence healthcare providers' response to financial and quality challenges ( Oliver, 1991 ; Burnett et al , 2016 ).…”

Promises and pitfalls of value-based reimbursement in healthcare : A mixed method health economic approach

“…Thus, for a policy reformation to be successful, these different logics need to be taken into account. It is also important to acknowledge the importance of managers, who can dampen and modify external demands (Ellegard & Glenngard, 2019).Some of the spine surgery clinics used interdisciplinary teams to assess patients before the VBRP was introduced. After the introduction, several clinics said that they were looking for similar solutions.…”

“…From a regulative perspective it was evident that not everyone was informed about the regulative changes, since information was "buffered" through management. This has previously been shown to affect whether healthcare providers adapt to regulative changes (Ellegard & Glenngard, 2019). Furthermore, it was also clear that management had other demands to take into account, which was evident when quality aspects of physiotherapy were neglected.…”