for smaller primary healthcare facilities incremental budgeting based on historical amounts is a more common approach reforms on facility budget setting is therefore an important policy area ongoing provider payment reform initiatives such as the potential use of diagnosisrelated groups can help make budgets be more needsbased service providers do not always receive clear guidelines on general budget envelopes to work with when submitting draft budgets this is understood to be an important reason why requests from health service providers are often seen by provincial health departments as being too high to be realistic