![]() ![]() ![]() Higher costs were due to more specialised and costly facilities, higher staffing levels, better quality of care, but also excess capacity and low inpatient volumes. While cardiac hospitals’ costs were not significantly different from general hospitals’, orthopaedic and surgical hospitals had 20% higher inpatient costs. In the US, the Medicare Payment Advisory Commission showed that the costs of specialist hospitals were no lower than the costs of general hospitals. Footnote 1 Specialisation is an organisational form which is supposed to generate the benefits of the ‘focused factory’, i.e., greater efficiency, quality, and responsiveness but not necessarily lower costs. Some health care systems feature hospitals that specialise in a single specialty, such as cardiology, ophthalmology, or orthopaedics. In England, hospitals are paid extra if their patients receive specialised care. An example is the PPS of the Lombardy region in Italy, which applies a tariff top-up to all hospitals with ‘high specialisation’ units. In some countries, the PPS provides greater compensation to allow for the costs of specialist care. In the French PPS, for instance, prices differ for public and private hospitals. In contrast, other PPSs do consider organisational characteristics. Under the German PPS, for example, tariffs do not depend on the hospital’s ownership status or membership to the national insurance programme. In its purest form, a PPS reimburses hospitals only on the basis of the volume and type of patients treated, without taking organisational characteristics into account. This generates incentives for hospitals to contain costs. It is built on a patient classification system that categorises patients into resource homogeneous groups, with each hospital receiving a fixed pre-determined tariff for every patient falling into a given group. The prospective payment system (PPS) is commonly used to reimburse hospitals across Organisation for Economic Co-operation and Development (OECD) countries. ![]()
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