Revising a financial allocation model

A university medical center (UMC) cannot function well without a suitable financial allocation model. The internal distribution of money determines which activities get priority and where boundaries arise. The financial allocation model therefore has a direct effect on the day-to-day reality of the entire organization.

Such a model often works well for years, but can gradually lose its connection with current goals and challenges. When that happens, a revision is necessary. It is a far-reaching process, because many people depend on the existing allocation and changes have major consequences.



  • Healthcare providers
  • Strategy
  • Financing

A solid plan of approach and a careful process
The first step was to set up a program organization and draw up a plan of approach. This sets out why a revision is needed, which objectives the new model should support and which substantive principles guide the work. From the outset, we opted for a careful process with broad involvement from the executive board, management and works councils. This is crucial in order to build support and ensure legitimacy.

Developing the allocation model
The substantive elaboration was an intensive collaboration between experts from the UMC and Gupta. In working groups and advisory groups, we discussed which activities deserve priority and which incentives are needed or unwelcome. Recommendations were continuously tested against the agreed principles and reviewed for feasibility by technical experts. This produced a broadly supported and substantively solid foundation for the new model.

From construction to implementation
Building the model itself is a technical exercise: collecting and analyzing data and translating it into a workable system. Implementation, however, is at least as important. An allocation model only becomes valuable once it is actually used and embedded in the organization. We therefore started, already during the construction phase, to spread knowledge, train employees and integrate the model into existing ways of working. This is an important step toward realigning the allocation of resources with the strategic goals of the organization.

Aile.van.Huijstee2

Aile van Huijstee’s experience

Strategist

We wanted to keep the financial allocation model as simple as possible. That makes it manageable and understandable. At the same time, we obviously wanted to do justice to the complexity of reality. In the end we found a good balance.”