Programme Budget

A budgeting approach that organises spending around specific programmes or services rather than departmental line items.

Source: Mooney, Russell & Weir 1986

Programmes are normally defined by patient group, condition or care objective, so that all spending directed at a common purpose is gathered regardless of which department incurs it. The boundaries are conventions rather than natural divisions, and the difficulty lies with patients whose care spans several programmes and with inputs shared between them, including diagnostics, theatres and general wards. Where a shared input cannot be attributed cleanly, it is apportioned on a stated basis, and the choice of basis affects the resulting picture, so the convention adopted should be reported alongside the figures.

Source: Mooney, Russell & Weir 1986

Construction maps existing expenditure onto the programme structure, working from departmental ledgers, activity records and staffing to establish how much of each department's spending is directed at each programme. The exercise is substantial, since financial systems record spending by organisational unit rather than by purpose, and much of the work is estimating the share of shared resources consumed by each programme. The output describes where the money currently goes rather than where it should go, which is why it is only the first half of the method.

Source: healtheconomics.wiki

A programme budget describes the current pattern of spending and by itself changes nothing. Marginal analysis is the accompanying step in which candidates for expansion and for reduction are identified within and between programmes, each expressed as an increment with its cost and its expected effect on health, and the two lists are then compared so that resources move where the gain from the last unit spent is greatest. The essential feature is that both directions are required, since a process that identifies only desirable expansions produces a wish list rather than a reallocation.

Source: Mitton & Donaldson 2004

The data requirement is the first obstacle, since attributing existing spending to programmes is laborious and the marginal effects of expansion and reduction are rarely known with any precision. The second is that the method requires a forum with the authority to move resources across departmental boundaries and the willingness to use it, which many organisations lack. The third is that reallocations achieved are typically small relative to the total, so the effort can appear disproportionate unless the exercise is treated as a recurring discipline rather than a single project.

Source: Mitton & Donaldson 2004

It shows the total resource directed at a condition or population across every department that contributes, which no departmental view can assemble, and it therefore makes visible how much a system spends on one area relative to another. That comparison is the precondition for asking whether the distribution matches need or produces the most health, a question departmental budgeting never poses because each unit is examined against its own history. It also exposes spending that continues without any current rationale, which the departmental base conceals.

Source: Mooney, Russell & Weir 1986