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How much should be paid for specialised treatment?

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  • Daidone, Silvio
  • Street, Andrew
Abstract
English health policy has moved towards establishing specialist multi-disciplinary teams to care for patients suffering rare or particularly complex conditions. But the healthcare resource groups (HRGs), which form the basis of the prospective payment system for hospitals, do not explicitly account for specialist treatment. There is a risk, then, that hospitals in which specialist teams are based might be financially disadvantaged if patients requiring specialised care are more expensive to treat than others allocated to the same HRG. To assess this we estimate the additional costs associated with receipt of specialised care. We analyse costs for 12,154,599 patients treated in 163 English hospitals in fiscal year 2008/09 according to the type of specialised care received, if any. We account for the distributional features of patient cost data, and estimate ordinary least squares and generalised linear regression models with random effects to isolate what influence the hospital itself has on costs. We find that, for nineteen types of specialised care, patients do not have higher costs than others allocated to the same HRG. However, costs are higher if a patient has cancer, spinal, neurosciences, cystic fibrosis, children's, rheumatology, colorectal or orthopaedic specialised services. Hospitals might be paid a surcharge for providing these forms of specialised care. We also find substantial variation in the average cost of treatment across the hospital sector, due neither to the provision of specialised care nor to other characteristics of each hospital's patients.

Suggested Citation

  • Daidone, Silvio & Street, Andrew, 2013. "How much should be paid for specialised treatment?," Social Science & Medicine, Elsevier, vol. 84(C), pages 110-118.
    • Handle: RePEc:eee:socmed:v:84:y:2013:i:c:p:110-118
    DOI: 10.1016/j.socscimed.2013.02.005
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. 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.
    3. Chris Bojke & Katja Grasic & Andrew Street, 2014. "The Costs of Specialised Care," Working Papers 103cherp, Centre for Health Economics, University of York.
    4. 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.
    5. 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.
    6. Pei-Jian Lin & Yih-Chearng Shiue & Gwo-Hshiung Tzeng & Shan-Lin Huang, 2019. "Developing a Sustainable Long-Term Ageing Health Care System Using the DANP-mV Model: Empirical Case of Taiwan," IJERPH, MDPI, vol. 16(8), pages 1-33, April.

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