NHS trusts are aware that reference cost variability sends messages about efficiency and that resource allocation will, in the future, be driven by such messages. This will mean that more money will be available to hospitals that can demonstrate efficiency in cost terms.
Relative performance evaluation (RPE) is a form of benchmarking that operates through ranking institutions in comparative league tables. RPE has been introduced to benchmark UK hospital costs via an approach known as ‘the national reference cost exercise’ (NRCE). The resulting index (NRCI) ranks trusts on their relative cost efficiency, therefore pegging NHS trusts against each other.
This research paper aims to identify, explore and elucidate the factors that contribute to cost variability within the NRCE.
