• R Viney, M Haas, M Shanahan, and I Cameron.
• Centre for Health Economics Research and Evaluation, Central Sydney Area Health Service and University of Sydney, Camperdown, Sydney, Australia.
• J Health Serv Res Policy. 2001 Jul 1; 6 (3): 133-8.

ObjectivesTo identify factors that influence the cost-effectiveness of hospital-in-the-home (HITH) and to discuss the impact of funding arrangements in creating incentives or disincentives for the establishment of HITH services.MethodsA review of HITH services in Australia was undertaken. Based on the review, factors affecting the relative costs of HITH and conventional care were identified, in particular, the effect of funding and organisational arrangements on the incentives for managers and providers to choose between HITH and conventional care.ResultsThe review of HITH services identified a wide range of models of HITH in Australia. Factors identified as important to the success of HITH included demographic and location issues, referral mechanisms, the choice of staffing and the management of the programme. However, it was clear that the structure of the programme often related to funding arrangements. Issues such as 'incentive funding', establishment costs and opportunity for cost-shifting were identified as being relevant to incentives for the efficient provision of HITH.ConclusionsEvaluations are essential to inform decisions about whether HITH is likely to be a viable and cost-effective alternative to inpatient care. However, the relative costs of HITH and conventional care will depend on local factors. From the point of view of the decision-maker, these will be affected by funding and organisational arrangements. Funders must be aware that complex financial incentives may mask the true costs of HITH services relative to hospital services. They need to ensure that the incentives created by funding arrangements are transparent.

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