What is it about?
In England, hospitals are paid for their activity using the HRG tariff which is a national average of hospital costs for each HRG. It would appear that the ability of hospitals to correctly allocate costs, and the intrinsic high variability in costs within each HRG leads to the calculation of a national average of highly dubious statistical validity.
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Why is it important?
The HRG tariff is part of the purchaser/provider split and as a fundamental policy issue is largely shrouded from open criticism. For medical conditions the HRG s rely mainly on diagnosis, and as any doctor will tell you, diagnosis is an extremely poor measure of acuity and costs.
Perspectives
In the UK, as elsewhere in the world, analysis of fundamental government policies is not encouraged by the government. No one was ever funded to do an independent critique of the HRG tariff, and consultations run by the Department of Health always concluded that the NHS thought the HRG tariff was 'wonderful', although private discussion with NHS managers was not quite so constructive! Part of a long series of articles investigating multiple layers of flaws in the HRG tariff, see http://www.hcaf.biz/2010/Publications_Full.pdf
Dr Rodney P Jones
Healthcare Analysis & Forecasting
Read the Original
This page is a summary of: Limitations of the HRG tariff: gross errors, British Journal of Healthcare Management, December 2011, Mark Allen Group,
DOI: 10.12968/bjhc.2011.17.12.608.
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