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

James Michael Gaughan; Nils Gutacker; Katja Grasic; Noemi Kreif; Luigi Siciliani; Andrew David Street

doi:10.1016/j.jhealeco.2019.102226

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

James Michael Gaughan, Nils Gutacker, Katja Grasic, Noemi Kreif, Luigi Siciliani, Andrew David Street

Research output: Contribution to journal › Article › peer-review

Abstract

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.

Original language	English
Journal	Journal of health economics
Early online date	21 Aug 2019
DOIs	https://doi.org/10.1016/j.jhealeco.2019.102226
Publication status	E-pub ahead of print - 21 Aug 2019

Bibliographical note

Keywords

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

Access to Document

10.1016/j.jhealeco.2019.102226Licence: CC BY

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© Authors, 2019.
Accepted author manuscript, 1.13 MBLicence: CC BY
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Other version, 2.39 MBLicence: CC BY

Cite this

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title = "Paying for Efficiency: Incentivising same-day discharge in the English NHS",

abstract = "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.",

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