Briefing Note on Hospital Funding in Albania

This approach has resulted in hospital resources no longer matching population size or needs over time. The current funding system has led to several problems, including limited discretion for hospital managers, inability to transfer staff or funds between departments, and varying funding levels and bed numbers across regions. Managers have little control over their budgets, and staff cannot be transferred to meet demand. Physicians and nurses often expect extra payments, and directors are appointed for reasons other than management skills. Funding levels and bed numbers vary dramatically by region and district, with some regions having more than 50% greater funding levels relative to populations served than others. Occupancy levels are low, and people do not seek hospital care due to a lack of confidence. A proposed funding model for Albania involves allocating a fixed budget among hospitals based on their populations served and share of workload. This approach is distinct from reimbursement models, where hospitals are paid for each service provided. The allocation model aims to make funding determinations as equitable as possible based on evidence. Factors such as beds and budgets per population could be used to improve funding allocations in the next 2-3 years, with data collection and analysis enhancing the methodology over time. In subsequent years, the use of DRG or case-mix information could be considered to include workload and intensity of care provided by hospitals. However, it is not recommended to use case-mix systems to fund hospitals directly due to the expense and time required for implementation. Global budgets are recommended to provide hospital management with greater flexibility and control over their funding, allowing them to assign resources to areas of greatest need and create efficiencies and good quality care. As a condition of global budgets, hospitals should have a governance system and qualified management appointed based on merit for a reasonable term, with corruption under control. A good funding model is essential for hospital funding, regardless of whether a health insurance system or national health services system is in place. Other necessary tools include a package of services defined for each hospital, a good costing system for hospital services, and a set of performance indicators to measure success in hospitals.