Estimating the costs of specialised care:updated analysis using data for 2009/10. Report to the Department of Health

Payment by Results is predicated on the assumption that patients allocated to the same Healthcare Resource Group (HRG) are equally costly to treat. This may be untrue for some patients, such as those who receive specialised care or who are transferred between hospitals. We assess whether and by how much such patients have higher costs than those allocated to the same HRG. Hospitals that treat such patients might be paid a top-up to the HRG tariff to reflect these higher costs.