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MGMT5007 Management And Organisational Behaviour

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MGMT5007 Management And Organisational Behaviour

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Course Code: MGMT5007
University: Curtin University

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Country: Australia


1.Identify which of the four funding models defined by Egar et al. (2013) are used by the public hospitals in Australia and briefly describe its use.
2.To what extent do you agree or disagree that the National Efficient price may provide an incentive to improve the health status of any selected segment of the Australian population.


1.Funding model
Best Practices Pricing
In this model, the price depends upon on the best package of service or model of care. The packages are based on the way of providing services and these services have been working according to the expert opinion (Auer, Chaney, & Sauré, 2018). A standard price is also set according to the way and quality of providing services. It is determined as per the treatment of a patient which is actually provided according to the expert’s opinion. The hospital’s receives compensations on unavoidable cost due to logical variation which is calculated by the Market Forces Factor. The department of health in hospital always try to reduce the cost to gain the cost-reducing incentive. It has been seen that the 66 Australian hospitals use this model by improving the quality and safety with the help of incentive program (Hellsten, Chu, Crump, Yu, & Sutherland, 2016). Public hospitals of Australia used this model to improve the quality of services and also for the reducing cost of a treatment.
Normative strategy
Under this model, pricing is set according to the delivery of care. Australian Hospitals provide the incentives on the basis of delivery of care and according to this scheme disincentive is also declared at the time of inappropriate delivery of care. Normative obstetric delivery is profitable for the hospitals. Australian Public hospitals used Normative pricing model to improve the delivery of care by earning the incentives. Australian Hospitals used this model at the time of agreement that constitutes desirable and undesirable care. The purpose of using normative strategy by Australian public hospitals is to incentivise surgery procedure which is yet to be developed (Eagar, et al., 2013).
Quality strategy
In this model, the incentives are based on the higher rate of participation in social and supporting activities. Incentives will be determined on the basis of presence of patient instead of feedback comes directly with the patient. It is assume that if there is good number of patient comes in the hospital means the feedback and outcomes is also good. Australian Public hospitals use this model to improve the quality of services and it also enhances the hospital participation in social events. Australian Public hospitals used this model to measure the performance of hospitals to improve the services (Nagle, & Müller, 2017).
Paying for performance
The main aims of this model are to create the direct link between quality and safety. In this model, good services are awarded and the poor outcome is penalised. Incentive is measured as per the outcomes which are achieved by an individual satisfaction. Australian public hospitals used this model to enhance the quality of services of the hospitals and encourage the hospitals for providing the best services to patients. Australian public hospitals also used this model at the time of surgical services. Awards system motivates the hospitals to become the number one hospital in the industry (O’Reilly, et al., 2012).
2.National Efficient Price
National Efficient Price is developed in Australia by providing the incentives to improve the health of people. National Efficient price was introduced by IHPA publishes to determine the services of public hospital of each financial year. National Efficient Price also supports the Activity Based Funding to promote the Common health for public hospital services. Activity based Funding is the principal mode of funding which is used in public and private hospitals.
We agree that National Efficient Price improves the health status of indigenous people of Australian by providing the incentive to the public hospitals. NEP gives priority to ICU adjustment for patient from that the death rate is decreasing. Medical facilities can be easily available at the time of emergency which decreases the death rate and helps the people in staying healthy. There are many facilities which are provided by the Australian Hospitals just because of gain of the incentives such as private patient services, specialist psychiatric age adjustment, patient remoteness and others. For providing the quality of services the Australian public hospitals provide specialist psychiatric facilities; in which the treatment is provided to the patient as per his age and mentality. Thus, it is agreed that NEP is beneficial for the Indigenous people of Australia.
There are two main purposes of NEP. The first purpose of NEP is to evaluate the amount of commonwealth government funding for public hospitals services. The second purpose of NEP provides the signal of efficient cost of providing the public hospital services (Martin, 2017). It also helps the people to get the services at the lower cost. Each step of National Efficient Price helps in improving the public hospital services. It determines the scope of public hospitals services which is eligible for commonwealth funding under the National Health Reform Agreement.  Commonwealth government funds helps to improve the services of public hospitals. The variation of cost of delivering the health services is also determined by the National Efficient Prices which helps to deliver the effective cost of services. Incentives are provided on the quality of services which is used to enhance the quality of services of public hospital that is beneficial for patients. By reducing the cost of services, Australian government also provide the incentive which encourages the hospitals to reducing the cost every year. It states that the NEP improves the health services by proving the incentives (Modak, Modak, Panda, & Sana, 2018). 
From the above analysis, it has been seen that the Australian government provides incentives to improve the health services of public hospitals of Australia. It is observed that quality of services and cost is determined by NEP which is beneficial for patients. It helps to reduce the cost of delivering services and improving the quality of services and that is how the NEP improves the health services of Australia.
Auer, R. A., Chaney, T., & Sauré, P. (2018). Quality pricing-to-market. Journal of International Economics, 110, 87-102.
Chiappini, H. (2017). Social impact funds: Definition, assessment and performance. Springer.
Eagar, K., Sansoni, J., Loggie, C., Elsworthy, A., McNamee, J., Cook, R., & Grootemaat, P. (2013). A literature review on integrating quality and safety into Hospital Pricing Systems. Retrieved from: https://www.safetyandquality.gov.au/wp-content/uploads/2012/12/Literature-Review-on-Integrating-Quality-and-Safety-into-Hospital-Pricing-Systems1.pdf
Hellsten, E., Chu, S., Crump, R. T., Yu, K., & Sutherland, J. M. (2016). New pricing approaches for bundled payments: Leveraging clinical standards and regional variations to target avoidable utilization. Health Policy, 120(3), 316-326.
Martin, D. (2017). Strategic pricing with rational inattention to quality. Games and Economic Behavior, 104, 131-145.
Modak, N. M., Modak, N., Panda, S., & Sana, S. S. (2018). Analyzing structure of two-echelon closed-loop supply chain for pricing, quality and recycling management. Journal of Cleaner Production, 171, 512-528.
Nagle, T. T., & Müller, G. (2017). The strategy and tactics of pricing: A guide to growing more profitably. Routledge.
O’Reilly, J., Busse, R., Häkkinen, U., Or, Z., Street, A., & Wiley, M. (2012). Paying for hospital care: the experience with implementing activity-based funding in five European countries. Health economics, policy and law, 7(1), 73-101.

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