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Paying for Efficiency: Incentivising same-day discharge in the English NHS

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Publication details

JournalJournal of health economics
DateAccepted/In press - 13 Aug 2019
DateE-pub ahead of print (current) - 21 Aug 2019
Early online date21/08/19
Original languageEnglish


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.

Bibliographical note

© Authors, 2019.

    Research areas

  • Pay for Performance; prospective payment systems; activity based funding; hospital incentives; DRGs; synthetic control method; policy evaluation

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