specialists of their own specialty. They work as private entrepreneurs and make use of the hospital facilities.
Financing of hospital care - Budget system
In the financing of hospital care many parties are involved. It is a mix of guidelines set by the government and an advisory body and negotiations between the hospitals, the specialists and the insurance companies. Besides, the specialists have their own negotiations with the insurance companies.
When we talk about the budget system, we mainly talk about the variable costs of the hospital, that is: the number of admissions, the number of outpatient visits, the number of nursing days, etcetera. These variable costs are set in budgets which directly relate to the volume of activity, that is, the production of a hospital. Each year agreements are reached between the hospital and the insurers with regard to the amount of the production.
This budget system has quite an impact on the internal hospital organization. The specialist income was (and still is) partly determined by the number of treatments, investigations, nursing days, etcetera, which they bring about. This system is called: fee-for-service. You could say: you get paid for activities. This is not the right way to control health care costs, because it makes the specialists have an interest in a high production. The introduction of the budget system, therefore, had a lot of influence on the internal processes of the hospital. Until 1982 every hospital was financed according to an open-end system: practically everything a hospital spent, was reimbursed.
