In contrast to fixed rates for individual services or cases, a Global Budget provides a fixed amount of funding for a fixed period of time (typically one year) for a specified population. The main goal is to limit the amount of money that a company can spend in order to limit the total amount of money spent within the system. This method differs from "line-item budgeting," which divides the budget into specific line items such as salaries, drugs, equipment, and maintenance. Managers are frequently unable to change line-item allocations without the approval of funders. A Global Budget is essentially a one-line budget that allows management more flexibility in allocating resources.
Global Budgets can be classified as "soft" or "hard." A soft global budget is one in which the purchaser or payer assumes some or all of the costs.
Once you have set the Global budget you are expected to assign all your purchases to it.
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