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John
Snelson

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Health Care and Hospitals - Activity Based Funding and Costing

John Snelson is a specialist in product, process, activity and network costing, activity based funding, performance measurement, profit improvement and cost management in many industries. These skills have been applied in the health industry, and included coverage of :-

  • general and public hospitals;
  • emergency facilities;
  • teaching and university hosptals;
  • aged and palliative care institutions; and
  • regional and remote health activities, delivery, processes and outcomes.

    In particular, I have a specialist experience in costing, activity based funding, transfer pricing and the identification, valuation and compensation for Public Service Obligations. In the health care industry, there has been a longterm reliance on DRGs (diagnostic related groups of services, processes and activities). These provide some basis for activity based costing - however, activity based funding is a different matter and depends on the objectives of the funding - as it can be used to drive efficiencies and behavioural changes as well as pure compensation. Impact on private hospital services and funding requires specialist activity based calibration so as to protect and foster both sectors of heath care delivery fairly and accurately.

    Many countries have introduced an activity based payment system to finance acute care hospitals. Some systems are focused on the subsidisation of PSOs and others are geared to driving efficiencies founded on sharing the costs between provinces and states with the federal fiscal sharing system.

    The principle of paying hospitals according to their activity in relation to homogeneous groups of patients has some obvious advantages to improve efficiency and the transparency in health care funding.

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