Review Article

Budgeting in Healthcare Systems and Organizations: A Systematic Review



Background: Budgeting is the process resource allocation to produce the best output according to the revenue levels involved. Among the constraints that healthcare organizations, including hospitals, both in the public and private sectors, grapple with is budgetary constraints. Therefore, cost control and resource management should be considered in healthcare organizations under such circumstances.

Methods: We aimed to identify methods of budgeting in healthcare systems and organizations as a systematic review. To extract and analyze the data, a form was designed by the researcher to define budgeting methods proposed in the literature and to identify their strengths, weaknesses, and dimensions. The search was conducted in Google Scholar, Web of science, Pub med and Scopus databases covering the period 1990-2022.

Results: Overall, 33 articles were included in the study for extraction and final analysis. The study results were reported in four main themes: healthcare system budgeting, capital budgeting, global budgeting, and performance-based budgeting.

Conclusion: Each budgeting approach has its own pros and cons and requires meeting certain requirements. These approaches are selected and implemented depending on each country's infrastructure and conditions as well as its organizations. These infrastructures need to be thoroughly examined before implementing any budgeting method, and then a budgeting method should be selected accordingly.


1. Wildavsky A (2018). Budgeting as a political process. The Revolt Against the Masses. Routledge, 24(1): 338-49.
2. Aziz H, Shah N (2021). Participatory budgeting: Models and approaches. Pathways Between Social Science and Computational Social Science. Springer, 215-36.
3. Ostaev GY, Gogolev I, Kondratiev D, et al (2019). Strategic budgeting in the accounting and management system of agricultural enterprises. Indo American Journal of Pharmatheutical Sciences, 6(4):8180-6.
4. Talmon N, Faliszewski P (2019). A framework for approval-based budgeting methods. Proceedings of the AAAI Conference on Artificial Intelligence: 33(1):2181-88.
5. Anessi-Pessina E, Barbera C, Langella C, et al (2020). Reconsidering public budgeting after the COVID-19 outbreak: key lessons and future challenges. Journal of Public Budgeting, Accounting & Financial Management,32(5):957-65.
6. Angerer-Fuenzalida FM (2018). Quality and importance of health policy, reform, and public health topics: a study in physician assistant education. J Physician Assist Educ, 29(2):89-98.
7. Massuda A, Hone T, Leles FAG, De Castro MC, Atun R (2018). The Brazilian health system at crossroads: progress, crisis and resilience. BMJ Glob Health, 3(4):e000829.
8. Pourmohammadi K, Shojaei P, Rahimi H, Bastani P (2018). Evaluating the health system financing of the Eastern Mediterranean Region (EMR) countries using Grey Relation Analysis and Shannon Entropy. CostEff Resour Alloc, 16(1):1-9.
9. Safarani S, Ravaghi H, Raeissi P, Maleki M (2018). Financial challenges of teaching hospitals and providing solutions. J Educ Health Promot,7:155.
10. Hofmarcher MM, Quentin W (2013). World Health Organization. Austria: health system review.
11. Gupta KS, Rokade V (2016). Importance of quality in health care sector: a review. J Health Manag, 18(1):84-94.
12. Chernichovsky D (2019). Health system reforms in industrialized democracies: an emerging paradigm. Milbank Q, 143-76.
13. Casasnovas GLI (2019). Health care and cost containment in Spain. Health care and cost containment in the European Union: Routledge, 401-41.
14. Mossialos E, Le Grand J (2019). Cost containment in the EU: an overview. Health care and cost containment in the European Union, pp: 1-154.
15. Sharfstein JM, Stuart EA, Antos J (2018). Global budgets in Maryland: assessing results to date. JAMA, 319(24):2475-6.
16. Roberts ET, McWilliams JM, Hatfield LA, et al (2018). Changes in health care use associated with the introduction of hospital global budgets in Maryland. JAMA Intern Med, 178(2):260-8.
17. Petrou P (2016). Global Budget for Cyprus’ National Health System: The Promised Land or a No Man’s Land? Value Health Reg Issues, 10:67-72.
18. Lai HP, Tang MC (2018). Hospital efficiency under global budgeting: evidence from Taiwan. Empir Econ,55:937-63.
19. Burgos JAM, Kittler M, Walsh M (2020). Bounded rationality, capital budgeting decisions and small business. Qualitative Research in Accounting & Management, 17(2): 293-318.
20. Reiter KL, Song PH (2013). Hospital capital budgeting in an era of transformation. J Health Care Finance, 39(3):14-22.
21. Smith DG, Wynne J (2006). Capital budgeting practices in hospitals. Int J Healthc Technol Manag, 7(1-2):117-28.
22. Emami A, Jalalian A, Sadeghi SH (2020). Review of Operational Budgeting System in Iran and USA. Polit Res Q, 11(43):25-49.
23. Barasa EW, Cleary S, Molyneux S, English M (2017). Setting healthcare priorities: a description and evaluation of the budgeting and planning process in county hospitals in Kenya. Health Policy Plan, 32(3):329-37.
24. Lu CT (2011). Relationships among budgeting control system, budgetary perceptions, and performance: A study of public hospitals. Afr J Bus Manag, 5(15):6261-70.
25. Rajan D, Barroy H, Stenberg K (2016). Budgeting for health. Strategizing National Health in the 21st Century. A Handbook Geneva,pp: 393-444.
26. Kamau JK, Rotich G, Anyango W (2017). Effect of budgeting process on budget performance of state corporations in Kenya: A case of Kenyatta National Hospital. International Academic Journal of Human Resource and Business Administration, 2(3):255-81.
27. Tsofa B, Molyneux S, Gilson L, Goodman C (2017). How does decentralisation affect health sector planning and financial management? a case study of early effects of devolution in Kilifi County, Kenya. Int J Equity Health, 16(1):1-12.
28. Karila A, Vakkuri J, Lehto J (2020). Budgetary bias in the Finnish public hospital system. International Journal of Public Sector Management, 33(4):401-18.
29. Arthur FE (2016). Budgeting in Budget Management Centres (BMCs) in Sekondi/Takoradi Metro Health Directorate. Journal of Social Science for Policy Implications, 4(1):63-90.
30. Atuilik WA, Peregrino-Brimah RA, Salia H, Adafula B (2019). Budgeting and budgetary control in the Ghana health service. J Econ Int Finance, 11(6):60-67.
31. Tomblin S, Braun-Jackson J (2001). Health budgeting models and the experience of newfoundland and labrador: why haven’t we moved to a needs-based system? Institute for Health Information, 15(2):16.
32. Dredge R (2004). Hospital global budgeting. World Bank, Washington, DC.
33. Berenson RA, Upadhyay DK, Delbanco SF, Murray R (2016). Global Budgets for Hospitals. Milbank Quarterly, 94(2):255-59.
34. Murray J (2018). Toward hospital global budgeting: State considerations. State health and value strategies: Driving innovation across states.
35. Chen B, Chen CS, Liu TC (2018). Impact of provider competition under global budgeting on the use of cesarean delivery. Health Serv Res, 53(2):747-67.
36. Yan J, Lin H-H, Zhao D, Hu Y, Shao R (2019). China’s new policy for healthcare cost-control based on global budget: a survey of 110 clinicians in hospitals. BMC Health Serv Res, 19(1):1-11.
37. Chou SY, Deily ME, Lien HM, Zhang JH (2010). Global budgets and provider incentives: Hospitals’ drug expenditures in Taiwan. Pharmaceutical markets and insurance worldwide: Emerald Group Publishing Limited, pp:103-122.
38. Lai HP, Tang MC (2018). Hospital efficiency under global budgeting: evidence from Taiwan. Empir Econ, 55(3):937-63.
39. Guan X, Zhang C, Hu H, Shi L (2020). The impact of global budget on expenditure, service volume, and quality of care among patients with pneumonia in a secondary hospital in China: a retrospective study. BMC Public Health, 20(1):1-6.
40. Galarraga JE, Frohna WJ, Pines JM (2019). The impact of Maryland's global budget payment reform on emergency department admission rates in a single health system. Acad Emerg Med, 26(1):68-78.
41. Ko YL, Wang JW, Hsu HM, Kao CH, Lin CY (2018). What happened to health service utilization, health care expenditures, and quality of care in patients with acute pancreatitis after implementation of global budgeting in Taiwan? Medicine, 97(41).
42. Ho S-JK, Chan L, Tompkins DL (2003). Capital budgeting and entrepreneurial organizations: A survey of hospital practices. The Journal of Entrepreneurial Finance, 8(1):111-27.
43. Mukherjee T, Al Rahahleh N, Lane W (2016). The capital budgeting process of healthcare organizations: A review of surveys. J Health Manag, 61(1):58-76.
44. Holcomb AJ, Smith DG (2020). Hospital capital budgeting during a public health crisis. J Health Care Finance, 46(4):23-36
45. Mitton C, Dionne F, Donaldson C (2014). Managing healthcare budgets in times of austerity: the role of program budgeting and marginal analysis. Appl Health Econ Health Policy, 12(2):95-102.
46. Tsofa B, Musotsi P, Kagwanja N, et al (2021). Examining health sector application and utility of program‐based budgeting: County level experiences in Kenya. Int J Health Plan Manag, 36(5):1521-32.
47. Abolhallaje M, Mousavi SM, Jafari M (2014). Implementation of performance-based budgeting in the health system: luxury or necessity? Iran J Public Health, 43(11):1593-4.
48. Waithaka D, Tsofa B, Kabia E, Barasa E (2018). Describing and evaluating healthcare priority setting practices at the county level in Kenya. Int J Health Plann Manage, 33(3):e733-e50.
49. Tsofa B, Molyneux S, Goodman C (2016). Health sector operational planning and budgeting processes in Kenya—“never the twain shall meet”. Int J Health Plann Manage, 31(3):260-76.
50. Hepburn VA, Eger III R, Kim J, Slade C (2007). Structuring a framework for public health performance-based budgeting: a Georgia case study. J Public Health Manag Pract, 13(2):173-9.
51. Keshavarzi MH JA (2015). Feasibility study of performance-based budgeting in Shiraz University of Medical Sciences and Health Services. Health Accounting, 1(7):83-61.
IssueVol 52 No 9 (2023) QRcode
SectionReview Article(s)
Budget Budgeting Health system Healthcare organization

Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
How to Cite
Homauni A, Markazi-Moghaddam N, Mosadeghkhah A, Noori M, Abbasiyan K, Zargar Balaye Jame S. Budgeting in Healthcare Systems and Organizations: A Systematic Review. Iran J Public Health. 2023;52(9):1889-1901.