NHS costing for contracting rules

Abstract

Cost‐based pricing is intended to guide health purchasers to more ‘efficient’ providers. In the first year of the NHS internal market, prices were unreliable indicators of comparative efficiency. In 1993, the NHS Management Executive issued minimum costing standards (rules). The author examines the costing and pricing of 1994/95 contracts and concludes that costing and pricing has become more consistent and reliable, but its future role needs to be reviewed.