Activity-based funding ‘pilot initiatives’ planned for this year  

A number of “preparatory pilot initiatives” to support full activity-based funding (ABF) in the acute hospital sector are planned this year, this newspaper understands.

In 2012, the Government committed to moving away from the traditional method of funding healthcare through block grants. Instead, an ABF model was to be introduced. ABF is a model by which healthcare facilities are funded based on their level of activity. It was listed as a priority under Sláintecare.

Progress on ABF was discussed during the November 2025 meeting of the productivity and savings taskforce. The taskforce is co-chaired by the HSE CEO and the Secretary General of the Department of Health.

According to minutes, members were told that there were plans to make ABF the main budget allocation method from 2028, focusing on activity, productivity, and efficiency

A Department of Health spokesperson told the Medical Independent that “the intention” is to move towards ABF becoming the primary mechanism for allocating acute hospital funding from 2028, replacing reliance on historic block allocations. However, they added that “this reflects a clear policy direction rather than a fully finalised implementation model”.

While the objective is for ABF to operate on a national basis, including across all regions, “the precise scope, phasing, and mechanics of the transition are still being worked through.”

This includes how ABF will interact with regional funding arrangements, specialist services, smaller hospitals, and services where activity-based models are less appropriate.

The spokesperson added that the focus for ABF over the coming years is on expanding coverage, improving data quality, and strengthening the link between funding, activity, and efficiency, rather than a single large change in 2028.

The spokesperson said that there “are two value-based funding initiatives under consideration for 2026 as part of preparatory pilot initiatives to support full ABF implementation”.

However, a final decision on these has not yet been reached.

“The value-based initiatives planned for 2026 are intended to complement and inform the evolution of ABF, helping to refine how activity-based funding can better support productivity and patient outcomes as the system matures.”