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Paying for efficiency: incentivising same-day discharges in the English NHS

Author

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  • Gaughan, James
  • Gutacker, Nils
  • Grašič, Katja
  • Kreif, Noemi
  • Siciliani, Luigi
  • Street, Andrew

Abstract

We study a pay-for-efficiency scheme that encourages hospitals to admit and discharge patients on the same calendar day when clinically appropriate. Since 2010, hospitals in the English NHS are incentivised by a higher price for patients treated as same-day discharge than for overnight stays, despite the former being less costly. We analyse administrative data for patients treated during 2006–2014 for 191 conditions for which same-day discharge is clinically appropriate – of which 32 are incentivised. Using difference-in-difference and synthetic control methods, we find that the policy had generally a positive impact with a statistically significant effect in 14 out of the 32 conditions. The median elasticity is 0.24 for planned and 0.01 for emergency conditions. Condition-specific design features explain some, but not all, of the differential responses.

Suggested Citation

  • Gaughan, James & Gutacker, Nils & Grašič, Katja & Kreif, Noemi & Siciliani, Luigi & Street, Andrew, 2019. "Paying for efficiency: incentivising same-day discharges in the English NHS," LSE Research Online Documents on Economics 101650, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:101650
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    File URL: https://researchonline.lse.ac.uk/id/eprint/101650/
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    Cited by:

    1. Messerle, Robert & Hoogestraat, Fenja & Wild, Eva-Maria, 2024. "Which factors influence the decision of hospitals to provide procedures on an outpatient basis? –Mixed-methods evidence from Germany," Health Policy, Elsevier, vol. 150(C).
    2. Gintare Valentelyte & Conor Keegan & Jan Sorensen, 2021. "Analytical methods to assess the impacts of activity-based funding (ABF): a scoping review," Health Economics Review, Springer, vol. 11(1), pages 1-15, December.
    3. Huitfeldt, Ingrid, 2021. "Hospital reimbursement and capacity constraints: Evidence from orthopedic surgeries," Health Policy, Elsevier, vol. 125(6), pages 732-738.
    4. Idaira Rodriguez Santana & María José Aragón & Nigel Rice & Anne Rosemary Mason, 2020. "Trends in and drivers of healthcare expenditure in the English NHS: a retrospective analysis," Health Economics Review, Springer, vol. 10(1), pages 1-11, December.
    5. Kreutzberg, Anika & Eckhardt, Helene & Milstein, Ricarda & Busse, Reinhard, 2024. "International strategies, experiences, and payment models to incentivise day surgery," Health Policy, Elsevier, vol. 140(C).
    6. Valentelyte, Gintare & Keegan, Conor & Sorensen, Jan, 2023. "Hospital response to Activity-Based Funding and price incentives: Evidence from Ireland," Health Policy, Elsevier, vol. 137(C).
    7. Brick, Aoife & Walsh, Brendan & Kakoulidou, Theano & Humes, Harry, 2025. "Variation in day surgery rates across Irish public hospitals," Health Policy, Elsevier, vol. 152(C).

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    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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