Activity Based Funding: The implications for Australian health policy

Abstract

This thesis answers the question: Has the throughput of patients in public hospitals changed since the introduction of Activity Based Funding? A multi-case study of one New South Wales Metropolitan and one Regional Local Health District, was conducted. Hospital admissions and visits to Emergency Departments of patients with chronic diseases, are analysed over the period 2009 to 2013. Changes in patient throughput are identified, and seven possible explanations for these changes, such as a change in demography of patients or a change in clinical practice, are explored. An index (the PARI) was developed from which the potential revenue and resource implications for each clinical condition, in each hospital, in each Local Health District, are examined. The findings from this study are discussed within the theoretical framework of Alford’s (1974) structure interests at three levels: first, the micro level (public hospitals and patient care); second, the meso level (public health policy for publicly-owned and operated health services); and third, the macro level (the role of the state vis-à-vis capital accumulation, interest groups and the global health market)«br /» «br /» It is concluded that, many patients who were ‘eligible’ to be treated in a setting other than that of an inpatient, were admitted to hospital for their treatment. Activity Based Funding has, however resulted in patients spending fewer days in hospital. The implications of these findings are that: (i) the ‘bio-medical’ model of the provision of health care will continue, and the interest of current interest groups preserved; (ii) the increasing amounts of public expenditure to the private sector, means less funding is available for publicly-owned and operated health services; and (iii) more of the cost of health care is being passed from the taxpayer to the consumer. The greatest change in dominant interests, since the work of Alford, is the growing influence of multi-national companies that supply health-related goods and infrastructure globally, which hinders the development of a competitively strong domestic industry.