Implications of a global budget for facility-based health spending

This paper compares the five-year forecast growth in hospital, nursing facility, and home health expenditures to the growth that would result if three alternative global budget targets were met. Implementing a global budget offers the potential for substantial savings, but achieving this potential would be difficult. Except in the hospital inpatient sector, it would be nearly impossible to meet a target based on growth in gross domestic product without finding a way to curtail the current trend of volume increases. We believe it also would be necessary to reduce the gap between economywide inflation and inflation in the prices of goods and services that health facilities buy.