The inclusion of outpatient (OPD) and emergency department (ED) data in hospital activity-based funding (ABF) budgets will not take place until 2028 at the earliest, the Medical Independent (MI) has learned.
While the HSE National Service Plan 2025 commits to advancing this process, it does not outline a specific timeline.
When asked about the issue by MI, a HSE spokesperson said incorporating OPD and ED activity into ABF “remains a work in progress”.
According to the spokesperson, the Health Pricing Office (HPO) expects implementation to begin in 2027, with the data informing hospital budgets from 2028 onward.
ABF was initially implemented in Ireland in 2016 and currently covers admitted care, inpatients, and day cases in 44 acute hospitals.
On average, approximately 68 per cent of total hospital expenditure is included in ABF.
The spokesperson said ABF is currently operating with a 75 per cent “transition adjustment”.
This means that hospitals are only subject to 25 per cent of the funding changes that would result from full ABF implementation. The remaining 75 per cent is held back to cushion the financial impact as hospitals adjust to the funding model.
“The ongoing implementation of ABF will result in the transition adjustment being lowered again for the 2026 budgets, with the exact percentage to be finalised by HSE senior leadership and the Department of Health,” the spokesperson said.
According to the 2025 NSP, this year the HSE is assessing “the enhanced use” of ABF.
“The first work package involves the creation of a data visualisation tool, which will provide each ABF hospital with a detailed analysis of patient activity,” according to the spokesperson.
“Its purpose is to enable hospitals to examine some of the factors that affect current ABF performance and provide peer hospital comparisons.”
The areas chosen for analysis are those that most influence performance in ABF, such as length of stay and complexity. The initiative was developed in consultation between the HSE national productivity unit and the HPO.
The second complementary work package consists of “a deep dive” into the operational and technical factors that may influence performance in ABF.
One hospital site in each of the six health regions has been selected for this project.
“The enhanced use of ABF data is still under discussion with HSE management and the Department of Health to agree on a future strategic programme in this area,” according to the spokesperson.
“This will be informed in part by the outcome of the deep dives in the six sites.”
The spokesperson said there are no specific plans to prepare a new ABF implementation plan.
However, they added “this may be reviewed as we progress through 2025, following consultation with HSE senior management, and engagement with the HSE board and Department of Health”.
The last ABF implementation plan covered the period 2021-2023.
This report found that many of the targets previously set in relation to the funding model had not been reached.
“A renewed focus is required on the development of a classification and funding approach for outpatient care, with progress to date limited due to significant variability in the quantity and quality of outpatient data and lack of consistency in reporting specifications,” it stated.
The 2021-2023 implementation plan also stated that actions such as integrating performance management of ABF into organisational performance management required “a more established and mature” system before they could be implemented.
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