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How should hospital reimbursement be refined to support concentration of specialised services?

Bojke, Chris, Grašič, Katja and Street, Andrew ORCID: 0000-0002-2540-0364 (2018) How should hospital reimbursement be refined to support concentration of specialised services? Health Economics, 27 (1). e26 - e38. ISSN 1057-9230

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Identification Number: 10.1002/hec.3525


The English National Health Service is promoting concentration of the treatment of patients with relatively rare and complex conditions into a limited number of specialist centres. If these patients are more costly to treat, the prospective payment system based on Healthcare Resource Groups (HRGs) may need refinement because these centres will be financially disadvantaged. To assess the funding implications of this concentration policy, we estimate the cost differentials associated with caring for patients that receive complex care and examine the extent to which complex care services are concentrated across hospitals and HRGs. We estimate random effects models using patient-level activity and cost data for all patients admitted to English hospitals during the 2013/14 financial year and construct measures of the concentration of complex services. Payments for complex care services need to be adjusted if they have large cost differentials and if provision is concentrated within a few hospitals. Payments can be adjusted either by refining HRGs or making top-up payments to HRG prices. HRG refinement is preferred to top-payments the greater the concentration of services among HRGs.

Item Type: Article
Official URL:
Additional Information: © 2017 The Authors CC BY 4.0
Divisions: Health Policy
Subjects: R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
Date Deposited: 03 Oct 2017 14:09
Last Modified: 06 Apr 2024 03:54

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