Tariff

In a healthcare context, a tariff is a pre-determined price or a schedule of prices that a healthcare payer agrees to pay for a specific service or procedure. In the English NHS, the NHS Payments Scheme is used. This payment mechanism is used to standardise costs and manage a healthcare system’s budget.
Tariffs can be structured in various ways, often linking payment to the patient’s diagnosis or the services they receive. A common example is payment by results (PbR), where a hospital receives a fixed payment for a patient’s care based on their diagnosis-related group. This system incentivises efficiency, as the provider receives a set price regardless of the specific resources used to treat that patient.

Tariffs are a key tool used by governments and insurance companies to regulate the market, influence provider behavior, and ensure a consistent approach to reimbursement.