Which type of hospital funding is determined by previous year’s expenditures?

Block funding is characterized by its reliance on a predetermined budget based on the organization's previous year's expenditures. This type of funding model allocates a fixed amount of money to hospitals, allowing them to manage their resources within that set budget over a specific period, usually a fiscal year. The logic behind block funding is to provide financial stability and predictability for hospitals, enabling them to plan their operations and services more effectively.

The emphasis on the previous year's expenditures means that the funding is reflective of historical spending patterns, which can encourage hospitals to maintain service levels and manage their finances based on established operations. The fixed nature of block funding can lead to challenges if there are unexpected changes in patient volume or the introduction of new services, but it also allows for a straightforward budgeting and financial planning process.

In contrast, other funding types like activity-based funding are more dynamic and linked to the volume and types of services provided, while line by line funding generally refers to detailed budget reporting and approval for specific expenses rather than an overall budget, and service-based funding focuses on costs associated with providing specific healthcare services rather than historical expenditures.