Introducing Activity-Based Financing: A Review of Experience in Australia, Denmark, Norway and Sweden

We review and evaluate the international literature on activity-based funding of health services,focussing especially on experience in Australia (Victoria), Denmark, Norway and Sweden. Inevaluating this literature we summarise the differences and pros and cons of three different fundingarrangements, namely cost-based reimbursement, global budgeting and activity-based financing.The institutional structures of the four jurisdictions that are the main focus of the review are described,and an outline is provided about how activity-based funding has been introduced in each.We then turn to the mechanics of activity-based funding and discuss in detail how patients areclassified, how prices are set and how other services are funded. Although concentrating on the fourjurisdictions, we draw on wider international experience to inform this discussion...