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ORIGINAL RESEARCH article

Front. Public Health
Sec. Health Economics
Volume 12 - 2024 | doi: 10.3389/fpubh.2024.1398227

Framework for Responsive Financing of District Hospitals in India

Provisionally accepted
Shankar Prinja Shankar Prinja 1*Gaurav Jyani Gaurav Jyani 1Aarti Goyal Aarti Goyal 1Sameer Sharma Sameer Sharma 1Tarandeep Kaur Tarandeep Kaur 1Thiagarajan Sundararaman Thiagarajan Sundararaman 2
  • 1 Department of Community Medicine & School of Public Health, Post Graduate Institute of Medical Education and Research (PGIMER), Chandigarh, India
  • 2 Department of Preventive and Social Medicine, Jawaharlal Institute of Postgraduate Medical Education and Research (JIPMER), Puducherry, Puducherry, India

The final, formatted version of the article will be published soon.

    Introduction: The current financing of public-sector district hospitals in India relies on historical budget allocations rather than actual utilization or healthcare needs. We utilized empirical data on healthcare delivery costs to develop the financing framework for these hospitals using a blended payment approach. Methods: The primary data on cost of delivering services in 27 district hospitals across nine states of India was analysed along with indicators influencing the demand and supply of health services. Payment for outpatient, inpatient, and indirect services was assessed using the risk adjusted global budget, case-based bundled payment, and per-bed-global budget, respectively. Risk adjustment weights were computed by regressing the cost of outpatient care with demand and supply side factors which are likely to influence the utilization or the prices. Budget impact analysis was conducted to assess the fiscal implications of this payment approach, accounting for current care standards and two scenarios: upgrading district hospitals to Indian Public Health Standards (IPHS) or medical colleges. Results: The average annual budget for a district hospital in India is estimated at ₹326 million (US$3.35 million), ranging from ₹66 million to ₹2.57 billion (US$0.8 - 31.13 million). Inpatient care comprises the largest portion (78%) of the budget. Upgrading to IPHS-compliant secondary hospitals or medical colleges would increase average budgets by 131% and 91.5%, respectively. Conclusion: Implementing a blended payment approach would align funding with healthcare needs, enhance provider performance, and support ongoing financing reforms aimed at strategic purchasing and universal health coverage.

    Keywords: Health financing, Healthcare Cost, blended payment, Strategic purchasing, District hospitals, Health budget, budget impact, Provider payment

    Received: 09 Mar 2024; Accepted: 30 Sep 2024.

    Copyright: © 2024 Prinja, Jyani, Goyal, Sharma, Kaur and Sundararaman. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

    * Correspondence: Shankar Prinja, Department of Community Medicine & School of Public Health, Post Graduate Institute of Medical Education and Research (PGIMER), Chandigarh, India

    Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.