Limitations of the HRG tariff: excess bed days

Abstract

Every year hospitals submit an analysis of their costs for a variety of health resource groups (HRGs). These are called ‘reference costs’ and the Department of Health (DH) uses these reference costs to devise the national HRG tariff. Local reference costs are first adjusted for the local cost of labour and buildings via the market forces factor, and the adjusted costs are then averaged to give the national price for each HRG.