HRGs

HRGs, or Healthcare Resource Groups, are a classification system used by the National Health Service in the United Kingdom to group hospital care episodes according to the resources required to treat them. The system underpins the Payment by Results framework, in which hospitals are reimbursed based on the HRG assigned to each episode rather than length of stay alone. By aggregating similar clinical cases into resource-use categories, HRGs aim to standardize tariffs and promote efficiency and accountability in hospital funding.

HRGs are generated from data on a patient’s clinical picture and the resources used during an admission. Key inputs include the primary diagnosis, secondary diagnoses, procedures performed, patient age and sex, admission type, and comorbidity. Coding relies on ICD-10 for diagnoses and OPCS-4 for procedures in England. Each HRG carries a relative cost weight that reflects typical resource consumption for that group, and this weight informs the national or local tariff used to reimburse the hospital.

The HRG framework has evolved through multiple generations to reflect changes in clinical practice and coding. Notable updates have refined grouping logic, new procedures, and adjustments for complexity and severity. Ongoing revisions aim to improve accuracy, fair compensation, and alignment with contemporary clinical coding standards.

In practice, HRGs support budgeting, performance benchmarking, and policy monitoring within the NHS. Critics point to potential incentives for upcoding or coding variability, and ongoing work seeks to strengthen risk adjustment and data quality. While HRGs are closely associated with the NHS PbR system, similar concepts exist in other countries under DRG-based models, illustrating a broader approach to hospital payment and resource management.