How much should be paid for specialised treatment?

► We assess cost implications of specialised care and isolate hospitals' influence on costs. ► A quasi-experimental approach suggests OLS and GLM are the most accurate models. ► For nineteen types of specialised care, patients do not have higher costs than others allocated to the same HRG. ► Hospitals might be paid a surcharge for providing eight types of specialised care where costs are significantly higher. ► Substantial variation in average costs among hospitals is due neither to specialised care nor to patients' characteristics.