Royal College of Surgeons in Ireland
Hospital response to Activity-Based Funding and price incentives....pdf (715.63 kB)

Hospital response to Activity-Based Funding and price incentives: evidence from Ireland

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journal contribution
posted on 2024-02-07, 10:05 authored by Gintare ValentelyteGintare Valentelyte, Conor Keegan, Jan SorensenJan Sorensen
Activity-Based Funding (ABF) is a funding policy incentivising hospitals to deliver more efficient care. ABF can be complemented by additional price incentives to further drive hospital efficiency. In 2016, ABF was introduced for public patients admitted to Irish public hospitals. Additionally, a price incentive to perform laparoscopic cholecystectomy as day-case surgery was introduced in 2018. Private patient activity in public hospitals was subject to neither ABF nor price incentive. Using national Hospital In-Patient-Enquiry activity data 2013–2019, we evaluated the impact of ABF and the price incentive for laparoscopic cholecystectomy surgery in Ireland. We exploit variation in hospital payment for public and private patients treated in public acute Irish hospitals and employ a Propensity Score Matching Difference-in-Differences approach. We estimate the funding change impacts across outcomes measuring the proportion of day-case admissions and length of stay. We found no significant impact for either outcomes linked to ABF introduction. Similarly, no impacts linked to the price incentive were observed. It appears providers of laparoscopic cholecystectomy in Irish public hospitals did not react to the new funding mechanisms. The implementation of the funding policies did not improve hospital efficiency. Further strengthening of these new funding mechanisms are required to deliver more efficient care.


Health Research Board (HRB) SPHeRE Programme (Grant No. SPHeRE-2018-1)



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Published Citation

Valentelyte G, Keegan C, Sorensen J. Hospital response to Activity-Based Funding and price incentives: evidence from Ireland. Health Policy. 2023;137:104915

Publication Date

15 September 2023

PubMed ID



  • Healthcare Outcomes Research Centre
  • School of Population Health

Research Area

  • Population Health and Health Services




  • Published Version (Version of Record)