By NextBestFitPhase 1: Enactment & build · Step 1.8
Set hospital global budgets
Months 6–18; annual negotiation thereafter · UHA regional offices; Payment Rates BoardDiscuss this step
How other countries handled this same piece of implementation, what happened, and what it means for this plan.
Side by side
| Country | Approach | Result | Lesson for this plan |
|---|---|---|---|
| This plan (U.S.) | Each hospital gets an annual operating budget covering all UHP patients, negotiated with its regional office. In aggregate, hospital spending goes from $1.63T to $1.62T (price effect −$69.9B, utilization +$51.5B). | ||
| Canada | Hospitals funded through annual global budgets; Ontario and B.C. added activity-based funding for some procedures to cut waits. | Low spending growth; long surgical waits as hospitals limit OR time to stay within budget. | Global budgets need volume adjustments; the plan uses ±3% corridors. |
| Germany | DRG per-case payment (G-DRG) since 2003 with volume discounts. | Short waits but among the highest hospital admission rates in the OECD. | Per-case payment boosts volume, both needed and unneeded. |
| Taiwan | Sector global budgets with floating point values: fees fall if volume exceeds budget. | Hard spending cap; hospitals and staff report burnout. | Floating point values control cost but squeeze providers. |
| United States (Maryland) | All-payer hospital global budgets since 2014. | Hospital spending growth held below the national trend; hospitals remained solvent. | Global budgets can work in the U.S. setting. |
Canada
- What they did
- Hospitals funded through annual global budgets; Ontario and B.C. added activity-based funding for some procedures to cut waits.
- What happened
- Low spending growth; long surgical waits as hospitals limit OR time to stay within budget.
- Lesson for this plan
- Global budgets need volume adjustments; the plan uses ±3% corridors.
Sources: Fraser Institute (2025)
Germany
- What they did
- DRG per-case payment (G-DRG) since 2003 with volume discounts.
- What happened
- Short waits but among the highest hospital admission rates in the OECD.
- Lesson for this plan
- Per-case payment boosts volume, both needed and unneeded.
Taiwan
- What they did
- Sector global budgets with floating point values: fees fall if volume exceeds budget.
- What happened
- Hard spending cap; hospitals and staff report burnout.
- Lesson for this plan
- Floating point values control cost but squeeze providers.
United States (Maryland)
- What they did
- All-payer hospital global budgets since 2014.
- What happened
- Hospital spending growth held below the national trend; hospitals remained solvent.
- Lesson for this plan
- Global budgets can work in the U.S. setting.
Sources: CMS Innovation Center / RTI (2023)
More precedent
- Maryland all-payer global budgets (2014–present).
- Canadian provincial hospital global budgets (since the 1970s); Ontario has moved part of funding to activity-based payment to reduce waits.