Effects of budgeting on health care services in Dutch hospitals

In 1983 hospital budgeting was introduced in the Netherlands. We studied the effect of the enactment of budgeting on the efficiency and effectiveness of health care.

In four different age groups, the admission rate, length of stay, type and number of surgical inpatient procedures, and hospital mortality were measured in all short-term hospitals from 1977 through 1988. Data were standardized by age and sex.

For the total population, the hospital admission rate and the operation rate decreased after 1982. However, for the subgroup of patients beyond the age of 65 both rates are still on the rise, but the increase in the admission rate for elderly patients has slowed significantly since 1983. The tendency toward a shorter length of stay, together with the diminished admission rates, led to a 22% decrease in standardized hospital days between 1982 and 1988. The severity of the operations increased. Most operations performed on elderly patients were aimed at improving the quality of their lives rather than lengthening their life expectancy. The hospital mortality rate decreased in all age groups.

The findings suggest that modern medicine in the Netherlands has become more efficient and more effective. Better health care for older patients was achieved within the same budget. The tendency toward more efficiency by hospitals has been reinforced since 1983.