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Topic 4 Reading Costs And Prices For Inpatient Care In England Notes

Accounting Notes > Accounting in the New Public Sector Notes

This is an extract of our Topic 4 Reading Costs And Prices For Inpatient Care In England document, which we sell as part of our Accounting in the New Public Sector Notes collection written by the top tier of LSE students.

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"Costs and prices for inpatient care in England: Mirror twins or distant cousins?" (Epstein and Mason, 2006)

"Costs and prices for inpatent care in England: Mirror twins or distant cousins?" (Epstein and Mason, 2006) Introducton

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Unlike most other countries with similar payment mechanisms, hospitals in England will have few alternative sources of income once the tariff system is fully implemented Cost-per-case tariff system for the reimbursement of hospital services aims to promote o Productivity o Patient choice o Competition Powerful incentives for change Exposes purchases and providers to considerable financial risks, a state that has been termed "constructive discomfort" Budget for the NHS of which 18% is used by the DoH for central services, research and training Within the resource limit, PCTs are responsible for purchasing nearly all healthcare services on behalf of their local population PCTs have traditionally purchased inpatient healthcare from publicly owned hospitals, but now also purchase from independent not-for-profit hospitals (foundation trusts) and private providers In April 2005, there were 259 NHS hospitals, 25 foundation trusts and 6 independent providers offering services to NHS patients

The reimbursement system for inpatent services in England

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Until April 2004, nearly all hospital healthcare for NHS patients was purchased from NHS rpvoiders by PCTs through locally negotiated block contracts o Providers were paid a fixed amount often irrespective of activity o Prices were typically based on historic costs of the providers New reimbursement system - 'Payment by Results' (PbR) o PbR is a national prospective tariff system that aims to promote:
? 1) efficiency and value for money
? 2) patient choice, more flexible market entry and competition amongst providers
? 3) service innovation and improved quality
? 4) reduced waiting times
? 5) fairness and transparency o The same tariff is paid for an elective inpatient as a daycase o Gives a clear financial incentive for hospitals to transfer services to daycase where possible o Tariff for each spell in order to promote a strong incentive for change, based on average (not marginal) costs of all NHS hospitals in England o Where a provider lacks data on a particular episode and cannot identify the procedure or diagnosis

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