Hospital financing in Belgium: recent changes and future options

Area of Science:

• Health Economics
• Healthcare Management

Background:

• Belgium introduced a prospective pricing system for hospital operating costs starting in 1982.
• This system involves assigning hospitals a budget envelope calculated on a per diem basis.

Purpose of the Study:

• To evaluate the impact of the prospective pricing system on Belgian hospitals' financial status.
• To assess the control of health insurance expenditures under the new financing model.

Main Methods:

• Hospitals are assigned an annual budget based on per diem rates, with a variable component linked to patient days.
• Budget determination involves comparing hospital performance against a reference group of similar institutions.
• Analysis of hospital financial situations and health insurance expenditures before and after system implementation.

Main Results:

• The financial situation of Belgian hospitals has significantly improved since the introduction of prospective pricing.
• Health insurance expenditures related to hospitals were effectively controlled, rising at a lower rate than inflation in 1984 and 1985.

Conclusions:

• The prospective pricing system has positively impacted hospital finances and expenditure control in Belgium.
• The success of this financing model suggests its principles should be extended to medico-technical departments to manage rising medical costs.