7 ways to start working now on the new hospital financing reform

A new financing system is coming: below will you find what must change in your management reports, and how the V4H Cockpit could help you get there.

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The Belgian hospital landscape is on the eve of a fundamental reform. The federal coalition agreement 2025–2029 (1) lays the foundations for a pathology-based core funding of hospitals.

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The logic itself is not entirely new. Through the justified bed days in the Financial Resources Budget (FRB) and the lump-sum financing of low-variable care, part of the funding already works per pathology today. What changes is the scope: payment per pathology becomes the core of the system, and in doing so it rewrites the economic logic behind care delivery. That has far-reaching consequences for the way a hospital needs to be managed. Here are 7 ways where hospitals would be wise not to sit still.

1. Map your patient mix and revenue position

Belgian funding already steers at pathology level today. For the nursing day budget (part B2 of the FRB), a hospital is funded based on justified bed days: for each pathology (APR-DRG) and severity level (SOI – Severity of Illness), only the national average length of stay is considered. Hospitals that keep patients longer bear the cost of those extra days themselves. In addition, the government has for years been encouraging hospitals to perform procedures that can be done in the outpatient care in the one-day clinic. (2)

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With pathology-based core funding, that logic goes a significant step further. Whereas today a large share of revenue still comes in per activity performed, so that more activity mean more revenue, the hospital will soon receive a fixed payment per admission, differentiated by pathology and severity level. From now on, what counts is how many patients you treat and how efficiently you organise their care, while maintaining the quality of care.

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The question your management should already be asking today: do we know our own patient mix by specialty, by department and by pathology?

↗ The V4H Cockpit: Provides insight into volume, case mix and patient profile by department and by pathology (DRG-SOI).

2. Measure the real cost per pathology

In the new model, the payment per pathology is set by the government. For low-variable care, this has been a reality since 2019: physician fees per admission are covered by a fixed, prospective global amount, regardless of exactly what happens during the stay. If that principle is applied more broadly, the efficiency gain or loss for a much larger share of activity will rest with the hospital itself. What the care pathway looks like for each pathology, and what it really costs us to treat a patient with pathology X, thus becomes the most strategic question on the board of directors.

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That requires a level of granularity that most hospital accounting systems do not offer today. You need insight per pathology, broken down by activity (operating room, nursing department, medication, implants, lab, imaging, etc.) and by cost item (staff, materials, overhead costs and infrastructure).
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Only once you know that cost price can you compare: what will we receive per pathology, what does it cost us today, and where does the difference lie?

↗ The V4H Cockpit: Calculates the full cost per DRG-SOI based on, among other things, accounting, billing, pharmacy and staff data —and compares it with the benchmark.

3. Build a pathology P&L for management

A traditional hospital budget works with cost centres and global budgets. That is no longer enough. To manage a pathology-funded model, your management needs a pathology P&L: an overview per pathology group that combines volume, payment, cost and contribution, supplemented with process parameters such as average length of stay, and quality indicators.

The question shifts from 'How was our year?' to 'Which pathologies are financially healthy, and which are vulnerable?'

That information is also the basis for scenario analyses ahead of the introduction of the new model: what does the planned nomenclature structure mean for our activity portfolio? Which departments or pathologies will become financially vulnerable? Where are the opportunities?

↗ The V4H Cockpit: The SLIM report and the hospital dashboard give management exactly this overview — by department, by pathology, with improvement potential in euros.

4. Check and protect registration and coding quality

Hospitals already invest heavily in registration. Through the Minimum Hospital Data (MHD), the APR-DRG and severity level determine the number of justified bed days, and therefore the FRB. Hospitals are thus aware of how important complete coding of main and secondary diagnoses is.

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What is likely to change is the pace. Today, coding often happens only months after discharge: MHD data are submitted every six months and feed into the budget with a delay of several years. Once payment is billed per admission, coding must be finalised at the time of billing. Hospitals already experience this today for low-variable care: the APR-DRG and severity level must be known quickly in order to charge the correct lump sum.
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That puts pressure on the coding department and on how doctors keep their records. Is the medical record complete at discharge? How much time passes between discharge and coding? Are there differences between doctors or departments in how complete records are? And does coding quality hold up when the pace must increase?
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Coding faster must not come at the expense of coding correctly. The distinction between better registration and adjusted coding therefore deserves ongoing attention.

↗ The V4H Cockpit: Includes a data quality report that highlights inconsistencies and gaps in the data supplied — a starting point for targeted improvement of registration practice.

5. Process management per pathology

Belgian hospitals are already driven based on the length of stay, precisely because the FRB funds justified bed days. In a system with a fixed payment per admission, the focus shifts from length of stay alone to the efficiency of the entire care pathway: examinations, operating room, nursing department, one day clinic, medication and implants. Any resource used that does not contribute to the patient's outcome becomes a cost the hospital bears itself.

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That opens a broader conversation. Why does the same procedure take longer in our operating room than in comparable hospitals? Why do we order more lab tests or imaging for the same pathology? And as for length of stay: is there a clinical explanation, or are there process bottlenecks such as waiting times for rehabilitation, delayed discharge planning or internal transfers?

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Process management starts with process data. Only once you know what is being used per case can you make targeted adjustments.

↗ The V4H Cockpit: Benchmark per DRG-SOI on length of stay, surgical duration, medication use and staffing — for medical, nursing and pharmacy management.

A hospital that keeps patients with a given pathology 1.5 days longer than comparable institutions already feels this today in its justified bed days. Soon, not only that extra bed day but also every examination will fall within the same fixed payment. The question 'is this clinically justified or is there a process bottleneck?' must therefore be asked for the entire care pathway.

6. Underpin capacity planning economically

In a pathology-funded model, a bed, an OR block or a nursing hour is no longer a neutral cost item. The question shifts: which pathologies fill our capacity, what are their costs and revenues, and which alternatives are blocked as a result?

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This applies to the operating room, where the combination of high fixed costs and variable use puts structural pressure on margins. A hospital that increases its OR occupancy from 68% to 76% with the same staffing levels fundamentally improves its cost position, as experience at member hospitals shows.

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Capacity planning becomes strategic: which activities do we scale up, which do we not, and how do we organise that efficiently per campus or within a partnership?

↗ The V4H Cockpit benchmarks surgical duration and staffing in detail by procedure type and by DRG.

7. Monitor quality and financial performance together

Belgium has had a pay-for-performance program for hospitals since 2018. Alongside pathology-based core funding, the coalition agreement provides a significant budget for pay-for-performance: financial incentives based on quality and outcome indicators. Quality is therefore no longer only a moral or accreditation responsibility; it becomes a revenue factor.

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This means your management must structurally combine financial and clinical information. A pathology that looks financially positive but scores worse on readmissions or complications will soon yield less in a pay-for-performance model.

In the new model, efficiency without quality is not a sustainable strategy.

Hospitals that invest in measuring and monitoring clinical outcomes now will soon be in a stronger position, both financially and in their relationships with patients, doctors and policymakers.

↗ The V4H Cockpit: Value4Health is actively working on integrating quality indicators into the Cockpit, so that financial and clinical performance can be monitored together.

One platform, seven answers

The V4H Cockpit is not a tool for one department or one manager. It is built to let the whole organisation work from the same data: financial management, medical management, nursing management and pharmacy, with insights that are relevant at every level.

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That is exactly what pathology-based funding requires: a shared picture of what care you deliver, what it costs, how efficiently you organise it, and how you perform compared with similar institutions.

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Almost twenty Belgian hospitals already work with these insights today. They run scenario analyses, have constructive conversations with medical departments, and are better prepared for the financial reform that lies ahead.

References:
(1) Federaal Regeerakkoord 2025-2029. URL: Regeerakkoord-Bart_De_Wever_nl.pdf
(2) Budget van Financiële Middelen (BFM) | FOD Volksgezondheid: this page contains an overview of procedures for which funding is provided for the one-day clinic (List A)