3.1 Funding models and value-based healthcare

Funding models play a pivotal role in determining how healthcare services are financed, organised and delivered in a healthcare system, directly impacting access to care, quality of services, patient outcomes and overall sustainability. Understanding different funding models is crucial for policymakers, healthcare administrators, providers and patients in order to make informed decisions and implement effective strategies to address healthcare challenges.

Traditional payment models have been shown to contribute to care fragmentation, as some fee schedules do not provide incentives for care providers to coordinate care with other healthcare providers. (Conrad, 2015). In contrast, value-based healthcare focuses on aligning financial incentives with patient outcomes, promoting coordination and efficiency. By adopting funding models that prioritise value over volume, healthcare systems can enhance service quality, improve patient outcomes and ensure long-term sustainability. Thus, knowledge of various funding models is essential for devising strategies that address the multifaceted challenges of healthcare, ultimately leading to a more effective and patient-centred system.