Case payment: a New South Wales perspective

This paper addresses the role of casemix systems within the NSW public health system. In NSW, Areas and Regions are funded according to a casemix modified population-based funding formula (Resource Allocation Formula). The RAF is compared with case payment as a means of funding hospitals. It is argued that because of the current shortcomings in casemix funding, including output orientation, inapplicability to ambulatory and non-acute inpatients, and limited scope for global expenditure control, case payment should not be introduced as the mechanism for funding hospitals. However, it is recognised that there is scope to combine population-based funding at area/region level, with case payment to individual agencies.