Canadian Health Information Management Association Practice Exam

A common type of hospital funding based on previous year’s expenditures is known as?

1. Activity based funding

2. Block funding

3. Line by line funding

4. Service based funding

The correct answer is: Block funding

Block funding is a common type of hospital funding that provides a fixed amount of money to healthcare facilities based on a predetermined budget, typically informed by the previous year's expenditures. This method allows hospitals to have a set budget to manage their operations over a specific period, often a fiscal year. The funding is generally not influenced by the volume of services provided or the number of patients treated, making it easier for hospitals to predict their financial resources and allocate them accordingly. This funding model can help maintain stability in healthcare service delivery, especially in environments where funding sources may vary or be constrained. It encourages healthcare facilities to manage their resources efficiently, focusing on maintaining quality care within the budget provided.