2. Pathways, Currencies and Tariffs

The model used to develop the price of care was a Time Driven Activity Based Cost model based on granular elements of care. These elements of care could be described in terms of a total cost and marginal cost and then combined into bundles of Currencies. The Currency describe the package of care delivered and each Currency has two prices known as Tariffs:
  • A Primary Tariff – the cost of delivering that care on its own
  • An Additional Tariff – the cost of delivering that care alongside another, more expensive Currency.

This approach was specifically endorsed by PWC in an overarching review of PbR development sites in 2008 as recommended best practice in designing tariffs. It has since been recommended as an approach to future PbR development by Monitor.