Innovation in European healthcare – what can Sweden learn? - LIF

NHS hospitals are reimbursed for services through a
scheme known as Payment by Results’ (PbR)
• Payment by Results (PbR) is the national tariff system by which hospitals and providers are reimbursed for
their activity.
• The main currency of healthcare activity linked to PbR is the Healthcare Resource Group (HRG).
• An HRG is essentially a case-mix grouping of different patient diagnosis and treatment procedures
clustered because they are known to consume similar types of resources.
• Medical intervention and patient diagnoses are classified based on the OPCS-4 and ICD-10 classification
systems. The data is grouped and coded into Health Resource Groups (HRGs).
• These resources also factor in non-clinical costs such as food, cleaning, and estate costs, all of which may
be utilised between a patient’s period of admission to discharge.
• The price for standard clinical procedures is known as the ‘reference costs’, which are national average
costs throughout the NHS. Tariffs are adjusted for long/short hospital stays, clinical best practices,
specialised care, and market forces for geographical variation.
• PbR has continued to expand in scope since its establishment. At its start it only covered about £100 million
of activity, mainly in elective procedures, with plans to cover as much secondary care expenditure as
possible –about £60 billion. Primary care expenditure for GPs, dentists, opticians, and prescribing (about
£20 billion) have thus far been covered by national contracting and funding arrangements.
• PbR can be flexible and allow for deviation from tariff rules. For example, ‘innovation payments’ give
commissioners flexibility in paying for a new drug or device which gives better care than in the tariff.
128