SUMMARY

The main objective of this study is to analyse the impact of financing systems on the performance of Portuguese hospitals. In particular, to analyse the impact of these systems on costs per admission and per patient day, and also on average length of stay and number of admissions. This is an aggregate approach of the hospital care industry where the hospital is the unit of analysis. The study is based on a sample of panel data (36 hospitals over the 1985-1994 period), used to estimate a behaviour cost function. It is concluded that costs per admission have decreased over the time period and that length of stay was the main factor influencing it. KEY WORDS – hospitals; financing systems, prospective paymen