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Paying for the quantity and quality of hospital care: the foundations and evolution of payment policy in England

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  • Katja Grašič
  • Anne Mason
  • Andrew Street

Abstract

Prospective payment arrangements are now the main form of hospital funding in most developed countries. An essential component of such arrangements is the classification system used to differentiate patients according to their expected resource requirements. In this article we describe the evolution and structure of Healthcare Resource Groups (HRGs) in England and the way in which costs are calculated for patients allocated to each HRG. We then describe how payments are made, how policy has evolved to incentivise improvements in quality, and how prospective payment is being applied outside hospital settings. Copyright Grašič et al. 2015

Suggested Citation

  • Katja Grašič & Anne Mason & Andrew Street, 2015. "Paying for the quantity and quality of hospital care: the foundations and evolution of payment policy in England," Health Economics Review, Springer, vol. 5(1), pages 1-10, December.
    • Handle: RePEc:spr:hecrev:v:5:y:2015:i:1:p:1-10:10.1186/s13561-015-0050-x
    DOI: 10.1186/s13561-015-0050-x
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    References listed on IDEAS

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    1. Daidone, Silvio & Street, Andrew, 2013. "How much should be paid for specialised treatment?," Social Science & Medicine, Elsevier, vol. 84(C), pages 110-118.
    2. Diane Dawson & Andrew Street, 1998. "Reference costs and the pursuit of efficiency in the 'new' NHS," Working Papers 161chedp, Centre for Health Economics, University of York.
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    Cited by:

    1. Gaughan, James & Gutacker, Nils & Grašič, Katja & Kreif, Noemi & Siciliani, Luigi & Street, Andrew, 2019. "Paying for efficiency: Incentivising same-day discharges in the English NHS," Journal of Health Economics, Elsevier, vol. 68(C).
    2. Gaughan, James & Siciliani, Luigi & Gravelle, Hugh & Moscelli, Giuseppe, 2020. "Do small hospitals have lower quality? Evidence from the English NHS," Social Science & Medicine, Elsevier, vol. 265(C).
    3. Francesco Longo & Luigi Siciliani & Andrew Street, 2019. "Are cost differences between specialist and general hospitals compensated by the prospective payment system?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(1), pages 7-26, February.
    4. Chris Bojke & Katja Grašič & Andrew Street, 2018. "How should hospital reimbursement be refined to support concentration of complex care services?," Health Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 26-38, January.
    5. Miqdad Asaria & Katja Grasic & Simon Walker, 2016. "Using Linked Electronic Health Records to Estimate Healthcare Costs: Key Challenges and Opportunities," PharmacoEconomics, Springer, vol. 34(2), pages 155-160, February.
    6. Chris Bojke & Adriana Castelli & Katja Grašič & Andrew Street, 2017. "Productivity Growth in the English National Health Service from 1998/1999 to 2013/2014," Health Economics, John Wiley & Sons, Ltd., vol. 26(5), pages 547-565, May.
    7. Helen Hayes & Jonathan Stokes & Matt Sutton & Rachel Meacock, 2024. "How do hospitals respond to payment unbundling for diagnostic imaging of suspected cancer patients?," Health Economics, John Wiley & Sons, Ltd., vol. 33(5), pages 823-843, May.
    8. Zuzana Kotherová & Martina Caithamlová & Juraj Nemec & Kateřina Dolejšová, 2021. "The Use of Diagnosis-Related Group-Based Reimbursement in the Czech Hospital Care System," IJERPH, MDPI, vol. 18(10), pages 1-18, May.
    9. Nils Gutacker & Andrew Street, 2018. "Multidimensional performance assessment of public sector organisations using dominance criteria," Health Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 13-27, February.
    10. Giuseppe Moscelli & Hugh Gravelle & Luigi Siciliani, 2021. "Hospital competition and quality for non‐emergency patients in the English NHS," RAND Journal of Economics, RAND Corporation, vol. 52(2), pages 382-414, June.
    11. Camilleri, Carl & Jofre-Bonet, Mireia & Serra-Sastre, Victoria, 2018. "The suitability of a DRG casemix system in the Maltese hospital setting," Health Policy, Elsevier, vol. 122(11), pages 1183-1189.
    12. Chris Bojke & Katja Grasic & Andrew Street, 2015. "How much should be paid for Prescribed Specialised Services?," Working Papers 118cherp, Centre for Health Economics, University of York.
    13. Milstein, Ricarda & Schreyoegg, Jonas, 2016. "Pay for performance in the inpatient sector: A review of 34 P4P programs in 14 OECD countries," Health Policy, Elsevier, vol. 120(10), pages 1125-1140.
    14. Giuseppe Moscelli & Hugh Gravelle & Luigi Siciliani, 2018. "Effects of Market Structure and Patient Choice on Hospital Quality for Planned Patients," School of Economics Discussion Papers 1118, School of Economics, University of Surrey.
    15. Katherine Dick & John E. Schneider & Andrew Briggs & Pascal Lecomte & Stephane A. Regnier & Michael Lean, 2021. "Mendelian randomization: estimation of inpatient hospital costs attributable to obesity," Health Economics Review, Springer, vol. 11(1), pages 1-12, December.

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