Advantages And Disadvantages Of Casemix Funding In Health Care

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1) Funding in Health Care Industry

Australian health care industry is funded from various sources, reflecting the treatments and health services provided by the hospitals. There are two types of funding systems are worked in Australia, the casemix based funding and another is fixed per diem based funding. Most of the government and privet hospitals are used the casemix based funding system though there are some hospitals who used fixed per diem base funding system.  Casemix funding : Now a day’s most of the public and private hospitals used this funding system. Casemix funding model is based on output funding model. It is also known as activity based funding model. Casemix classifications put patients
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It is also useful for clinical research, financial management, identifying the epidemiological pattern and disease trends.
- Casemix system using the DRGs increase the number of admissions and decrease the average length of stay.

• Disadvantages
- This system focused on profitable patients who provided less care, admit more patients and shortens the length of stay despite the quality of care provided to each patient episode.

 Fixed per diem based funding Some of the private hospitals still uses the fixed per diem based funding model. This funding model works on the basis of funding a fixed amount is paid by the person’s per day of hospital stay and the health services delivered by the hospital.
• Advantages
- This system is helpful to the hospital to reduce the cost of the procedures and increase the length of stay.
• Disadvantages
- This will be helpful to reduce the cost of the procedure but increase the average stay of the patient so the extra cost has to pay by patient to hospital. Compared to these the casemix system works better because it provides quality of care in a
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Most of the states and territories has some different type of activity based funding model using casemix classification to count the episodic treatments provided to patient. This model of funding is adopted by the department of health in 2012. The independent hospital prizing authority is responsible for the framework of the national efficient prize of care given in public hospital. Using these model of funding hospital provides healthcare facilities at low cost so the hospital makes a profit for that services and has the reason to expand that services. So the sets of relative prices of all the facilities and procedures will be influenced to invest in new facilities and services of the hospitals. Although there are some problems in this funding model such as the hospital with fixed price for each service will make loss on that services and to cope up with that hospital has to respond in number of ways e.g. reduce the waste, cut unnecessary cost including more cheaper healthcare procedures, changing in the staffing pattern such as preferred the enrolled nurse rather than registered nurse to improve the cost efficiency. Sometimes these reasons may compromise with the quality of

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