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Measuring the activity of mental health services in England: variation in categorising activity for payment purposes


  • Jacobs, Rowena
  • Chalkley, Martin
  • Böhnke, Jan R.
  • Clark, Michael
  • Moran, Valerie
  • Aragón, M. J.


In the context of international interest in reforming mental health payment systems, national policy in England has sought to move towards an episodic funding approach. Patients are categorised into care clusters, and providers will be paid for episodes of care for patients within each cluster. For the payment system to work, clusters need to be appropriately homogenous in terms of financial resource use. We examine variation in costs and activity within clusters and across health care providers. We find that the large variation between providers with respect to costs within clusters mean that a cluster-based episodic payment system would have substantially different financial impacts across providers.

Suggested Citation

  • Jacobs, Rowena & Chalkley, Martin & Böhnke, Jan R. & Clark, Michael & Moran, Valerie & Aragón, M. J., 2019. "Measuring the activity of mental health services in England: variation in categorising activity for payment purposes," LSE Research Online Documents on Economics 101333, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:101333

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    References listed on IDEAS

    1. Conrad Kobel & Josselin Thuilliez & Martine Bellanger & Karl-Peter Pfeiffer, 2011. "DRG systems and similar patient classification systems in Europe," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00643049, HAL.
    2. Giuseppe Moscelli & Rowena Jacobs & Nils Gutacker & Maria Jose Aragón & Martin Chalkley & Anne Mason & Jan Böhnke, 2019. "Prospective payment systems and discretionary coding—Evidence from English mental health providers," Health Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 387-402, March.
    3. John Appleby & Renu Jobanputra, 2004. "Payment by Results," New Economy, Institute for Public Policy Research, vol. 11(4), pages 195-200, December.
    4. Marini, Giorgia & Street, Andrew, 2007. "A transaction costs analysis of changing contractual relations in the English NHS," Health Policy, Elsevier, vol. 83(1), pages 17-26, September.
    5. O'Reilly, Jacqueline & Busse, Reinhard & Häkkinen, Unto & Or, Zeynep & Street, Andrew & Wiley, Miriam, 2012. "Paying for hospital care: the experience with implementing activity-based funding in five European countries," Health Economics, Policy and Law, Cambridge University Press, vol. 7(1), pages 73-101, January.
    6. Anne Mason & Maria Goddard, 2009. "Payment by results in mental health: A review of the international literature and an economic assessment of the approach in the English NHS," Working Papers 050cherp, Centre for Health Economics, University of York.
    7. Jan Wolff & Paul McCrone & Anita Patel & Claus Normann, 2016. "Determinants of per diem Hospital Costs in Mental Health," PLOS ONE, Public Library of Science, vol. 11(3), pages 1-14, March.
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    More about this item


    mental health funding; provider payment; episodic payment; variation; costs;
    All these keywords.

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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