HOSPITALS are being told to spend €3bn of their funding this year to trial run a "money follows the patient" system of paying for surgical operations.
The system is a key element of the Government's universal healthcare insurance plan which is being launched today.
Under the system, hospitals will be paid per treatment which is costed by a pricing office.
The bill will take into account factors such as the patient's age and complexity of the procedure.
The aim is to eventually move away from the system of block funding for hospitals which is regarded as not promoting efficiency.
A spokeswoman for the HSE said: "Funding of approximately €3bn is being initially allocated to the 38 hospitals in the 'money follows the patient' process.
"Some final adjustment to this value may take place when discussions with a small number of hospitals are concluded."
"It is important to note that this €3bn is a component of the total block funding to hospitals and is not new funding," she added.
A national information and pricing office, which is being set up on a small-scale administrative basis, is expected to provide detailed pricing information and ensure hospitals are not being paid too much or too little.
The spokeswoman said that all areas of acute admitted care – patients who need a hospital bed overnight and those treated on a day-case basis – are included in the 'money follows the patient' scheme.
According to the Department of Health: "From the patient's perspective, the new funding model won't involve any change in how they obtain hospital services and interact with professionals.
"However, it is about improving the efficiency and effectiveness of the delivery of hospital care. In line with these aims, the new model should enhance value for money and improve overall patient experience.
"By boosting productivity, the model should reinforce the important work of the Special Delivery Unit in improving access for public patients."
"In developing policy and implementation plans for full introduction of the funding model, the issue of quality has been considered and built-in at each stage of the process," it said.
It insisted that the "new funding model does not seek to reduce budgets, rather it will encourage hospitals to use the resources at their disposal more efficiently.
"It provides a more transparent funding mechanism and it more fairly rewards hospitals for the activity that they undertake."