The effect of financing on the allocation and production efficiency of the Hungarian health care system — Placing primary care into focus

Abstract

The increased supply and the demand-driven explosion of global health care costs threaten the sustainability of health care services, mandating optimisation of cost-efficiency via health policy. As of July 1 2006, preventive-curative health care has been reimbursed using a centralised, closed prospective method; thus Hungarian health care providers operate budgets allocated through macro, mezzo or micro-level allocation mechanisms. Lacking sufficient incentives for patient care on the lowest level of care, production efficiency is the only tool left to increase efficiency. Nonetheless, one of the bigger challenges of the twenty-first century is managing chronic diseases that mandate continuous complex care encompassing all levels of care and the optimisation of patient referral methods. However, current allocation mechanisms have not yet reflected this paradigm shift. The paper discusses how capitation financing, by providing strict budgetary constraints, a framework for local political goals and enhancin...