Their average size is relatively small (Panel D), and the number of small hospitals is high, despite their relatively lower efficiency and fewer innovative practices (Gobillon and Milcent, 2013 and 2016). According to OECD evidence, the average costs of some surgical acts are 23% higher than in other European countries (Koechlin et al., As in many other OECD countries (OECD, 2016c) and in line with OECD recommendations (OECD, 2000), a diagnosis-related group (DRG) payment scheme was phased in during 2004-08, replacing the previous system of global grants and daily allowances. It is complemented by volume-based payments, such as fees for emergency services or the use of innovative treatments, and add-on payments, such as investments for teaching, research and innovation, the maintenance of emergency units, prevention and treating risky and low-income patients.