The rationale for the use of casemix systems as part of the budgetary process is the wish to base funding on measured costs and activity, rather than on less objective systems of resource allocation. It is also used to fund hospitals based on their mix of cases. The national casemix programme operates in 34 hospitals nationally. Those whose cost per case is higher than the mean have some of their funding redistributed to those whose cost per case is lower. The peer group sets the mean for each type of case treated, not my Department.
As part of the 2004 financial allocation, based on 2002 activity and costs, a negative adjustment of €1.079 million has been applied to James Connolly Memorial Hospital based on its performance relative to other hospitals which participate in the system. The hospital's in-patient base price — the cost of a standard case — was €731, which is 18.6% higher than the mean as a result of its costs rising faster than its peers. This resulted in the negative adjustment.
Hospitals are not penalised for excessive length of stay; credit is given to all hospitals for long-stay patients. Account is taken of hospitals' unique issues and they are invited to make submissions on such issues each year. The programme is operated in an open and transparent fashion, and full details of the clinical and financial information on which casemix budget adjustments are based is provided to all participating hospitals. It is a matter for local management, in consultation with their board, to review these issues and identify how best to address these matters going forward.
A comprehensive review of the entire national casemix programme has been carried out by the casemix unit of my Department. The intention of the review was to ensure that the system remains fair and accurate, and robust enough to incorporate all the strategic developments being proposed in the medium term. A report on the matter is being prepared which will make recommendations for the enhancement of the model.