Extension of activity-based funding a ‘priority’ for Department of Health

On 22 June, Assistant Secretary at the Finance and Evaluation Division in the Department of Health, Mr Colm Desmond, wrote to the Head of the Healthcare Pricing Office, Ms Maureen Cronin, about the future plans for ABF, such as the model to fund outpatient activity.

According to Mr Desmond, the “embedding and extension” of ABF remained a priority objective for the Department.

Although Mr Desmond wrote that some of the underlying policy context had changed since the introduction of ABF, he added that the reference in the Sláintecare Report to the need for the expansion and extension of the funding model was “indicative of the commitment to the long-term implementation of ABF”.

“In order to ensure progress continues to be made in the embedding and extension of ABF, including progress on the collection of outpatient data, it is important that a new activity-based funding implementation plan is developed without delay,” according to the letter seen by MI through Freedom of Information legislation.

Mr Desmond stated that the new plan should encompass: Extension of ABF to further hospitals; future plans for a pricing model for outpatient activity; and the phasing-out of transition arrangements.

He said he would consult with the HSE’s Chief Financial Officer Mr Stephen Mulvany to discuss any operational issues arising.

“The System Financing and Value Unit will continue to support the HSE in advancing this shared objective to the next stage,” added the letter.

ABF is an approach that sees providers funded in line with the activity they undertake. The first ABF implementation plan covered 2015 to 2017.

Implementation of ABF represents a significant change from the previous block grant allocation model, which was unable to link funding with activity and led to criticism of the health service’s inability to stay within its budget.