Issue Brief | May 29, 2018

Toward Hospital Global Budgeting: State Considerations

Robert Murray, Global Health Payment 

As state policymakers seek to identify strategies to deliver higher-quality care at lower costs, payment reform efforts have largely centered on moving from a fee-for-service health care system based on paying for volume, to one based on paying for value. More recently, payment models including prospective episode-based payment, hospital global budgets and per member per month global capitation arrangements have gained attention. This issue brief provides an overview of hospital global budgeting, which represents a middle-ground approach between the narrow bundling of services and global capitation that transfers higher levels of financial risk to a hospital.

The State Health Policy Highlight Implementing Global Budgets: Opportunities and Challenges provides a brief overview of hospital global budgets for state health officials interested in whether global budgets may be an option for their state.