The use of resources to produce hospital services raises three questions, the first of which is: how do you make efficient use of these resources to satisfy “unlimited” needs with limited services? The second is: how equal and equitable is the health system? The third is: what kind of relationship is there between efficiency, equality, and equity? The financing of healthcare services answers the question “who pays for health care?” while the payment methods or reimbursement answers the question “how are the health providers paid?” Income tax, social security contributions, and out-of-pocket money are the main means of financing hospitals. Each of them can enhance equity and equal access to healthcare services. Payment methods can be split into retrospective and prospective methods. The main retrospective method is fee-for-service while some of the prospective methods are pay per procedure, pay per day, pay per case, global budgeting, and capitation. A relatively new prospective method is DRG (Diagnosis-Related Group) payment which reimburses the hospital a fixed amount for its services to a given patient for a given treatment. A pay-for-performance (P4P) program complements the prospective method and aims to incentivize hospitals to improve the quality of their services and efficiency.nIn particular, this chapter:
Analyzes the concepts of efficiency, equality, and equity in the healthcare sector
Examines in an analytical way the different methods of financing and reimbursing hospitals.