Funding Models for Australian Public Hospitals

Organizational Behavior and management

FUNDING MODELS
1
Answer 1.
Funding model
Best Practices Pricing
In this model, the price depends upon on the best package of service or model of care.
The packages are based on the way of providing services and these services have been
working according to the expert opinion (Auer, Chaney, & Sauré, 2018). A standard price is
also set according to the way and quality of providing services. It is determined as per the
treatment of a patient which is actually provided according to the expert’s opinion. The
hospital’s receives compensations on unavoidable cost due to logical variation which is
calculated by the Market Forces Factor. The department of health in hospital always try to
reduce the cost to gain the cost-reducing incentive. It has been seen that the 66 Australian
hospitals use this model by improving the quality and safety with the help of incentive
program (Hellsten, Chu, Crump, Yu, & Sutherland, 2016). Public hospitals of Australia used
this model to improve the quality of services and also for the reducing cost of a treatment.
Normative strategy
Under this model, pricing is set according to the delivery of care. Australian Hospitals
provide the incentives on the basis of delivery of care and according to this scheme
disincentive is also declared at the time of inappropriate delivery of care. Normative obstetric
delivery is profitable for the hospitals. Australian Public hospitals used Normative pricing
model to improve the delivery of care by earning the incentives. Australian Hospitals used
this model at the time of agreement that constitutes desirable and undesirable care. The
purpose of using normative strategy by Australian public hospitals is to incentivise surgery
procedure which is yet to be developed (Eagar, et al., 2013).

FUNDING MODELS
2
Quality strategy
In this model, the incentives are based on the higher rate of participation in social and
supporting activities. Incentives will be determined on the basis of presence of patient instead
of feedback comes directly with the patient. It is assume that if there is good number of
patient comes in the hospital means the feedback and outcomes is also good. Australian
Public hospitals use this model to improve the quality of services and it also enhances the
hospital participation in social events. Australian Public hospitals used this model to measure
the performance of hospitals to improve the services (Nagle, & Müller, 2017).
Paying for performance
The main aims of this model are to create the direct link between quality and safety.
In this model, good services are awarded and the poor outcome is penalised. Incentive is
measured as per the outcomes which are achieved by an individual satisfaction. Australian
public hospitals used this model to enhance the quality of services of the hospitals and
encourage the hospitals for providing the best services to patients. Australian public hospitals
also used this model at the time of surgical services. Awards system motivates the hospitals
to become the number one hospital in the industry (O'Reilly, et al., 2012).
Answer 2.
National Efficient Price
National Efficient Price is developed in Australia by providing the incentives to
improve the health of people. National Efficient price was introduced by IHPA publishes to
determine the services of public hospital of each financial year. National Efficient Price also
supports the Activity Based Funding to promote the Common health for public hospital