Should hospitals use zero-base planning and budgeting?

Area of Science:

• Health Services Research
• Healthcare Management
• Public Health Policy

Background:

• Evaluating hospital programs is crucial for resource allocation and efficiency.
• Traditional budgeting methods may not adequately assess the value of all hospital services.
• The Zero-Based Program Budgeting (ZBPD) methodology offers an alternative approach to program evaluation.

Purpose of the Study:

• To assess the applicability and effectiveness of the Zero-Based Program Budgeting (ZBPD) methodology in evaluating hospital programs.
• To determine the limitations of ZBPD for non-discretionary hospital services.
• To identify specific hospital services where ZBPD could be a valuable evaluation tool.

Main Methods:

• Analysis of the Zero-Based Program Budgeting (ZBPD) methodology.
• Comparison of ZBPD principles with the nature of hospital programs, distinguishing between discretionary and non-discretionary services.
• Case study or theoretical application of ZBPD to selected hospital services.

Main Results:

• The "decision package" approach of ZBPD is generally incompatible with non-discretionary hospital programs due to their mandatory nature.
• ZBPD's effectiveness is significantly limited when applied to services that are essential and not subject to budget-based prioritization.
• ZBPD demonstrated potential utility for specific, carefully selected hospital services that exhibit characteristics amenable to the "decision package" evaluation.

Conclusions:

• The Zero-Based Program Budgeting (ZBPD) methodology is not a universally applicable tool for all hospital programs.
• ZBPD's core "decision package" concept is ill-suited for evaluating non-discretionary hospital services.
• Targeted application of ZBPD to select hospital services may yield valuable insights for management and resource allocation.