Comment / Costing success built from the inside

Monitor published its review of last year’s pilot patient-level cost collection in typically understated fashion. It went largely unnoticed in the wider media – perhaps unsurprising in a headline-driven and financial crisis obsessed sector.

But this is a landmark event that the service has been working towards for some years. Further improvements to local costing processes and greater consistency across different providers are definitely needed. But once these improvements are made, the data source should provide a major tool to support service transformation and efficiency improvement.

 A key priority for Monitor and NHS England, of course, is getting better and richer data to inform their pricing role. But the report also recognises the wider value in getting better data and consistency – both in supporting local decision-making and underpinning benchmarking as organisations look to drive value.

In many ways this is the starting point not the destination. The data provides a ‘platform on which to move forward’, the report says, and is ‘at a relatively early stage in the process of national alignment’. But we should not ignore the work that has already been undertaken to get the service to this position.

Perhaps one of the big achievements has been to harness the support of the NHS finance profession in taking improvements in costing forward.

This feels like something the service fully supports – rather than something that is being done to meet a central requirement. For evidence of this, consider that this collection exercise was voluntary and launched in a busy period for costing practitioners (reference costs, local system development and the national education
and training collection), yet 66 acute bodies still took part.

This broad support has arguably been most notable in the development of the clinical costing standards, which have been developed by the HFMA since 2010. When the Department of Health originally asked the association to take on the standards, it was because of a shared view that the standards should be led by the profession. And, in the association’s view, this has proved the right decision.

The standards have been developed in full knowledge of how costing works in the NHS – and the limitations in terms of systems. But it has also brought practitioners together – in HFMA costing group meetings and broader events. The upshot has been to raise the profile of costing and the costing community and to support the sharing of experience.

So it is good to see that Monitor values this. In highlighting possible changes in approach for 2014/15 collection (the current 2013/14 collection is already under way), there are frequent references to working with the HFMA to improve both compliance with the standards and ensure the standards provide the right level of detail to promote consistency across different providers.

There’s a lot to do. But keeping the engagement of the finance profession has to make sense. The NHS may not be leading the world in the development of patient-level costing – Germany perhaps makes a good case for this accolade. But the standards and the detailed focus on the issue in the last few years, combined with the added driving force of Monitor’s more recent involvement, definitely puts it among the front runners.

So no room for complacency. Organisations should learn the lessons highlighted in Monitor’s review and push on, accelerating the pace of change where possible. The HFMA believes that greater compliance with the clinical costing standards in this year’s collection will support greater consistency in outputs.

There are also clear opportunities to make more progress in mental health and community services for example. But we also shouldn’t overlook the significant work undertaken to date and make a note of how we got here.