Comment / Good work – but still more to do

There must be few in NHS finance who have not noticed the increased profile of NHS costing in recent years. The HFMA has played a major part in this. Its annual costing conference was introduced in 2011 to provide an event for cost practitioners, giving them an opportunity to meet colleagues and share ideas and best practice. More than 130 turned up to last month’s third event, amply demonstrating the need for such a networking opportunity.

Whether costing has become the glamour section of the finance department – as HFMA president Tony Whitfield mused in his opening address to the conference – is up for debate. But there was a real buzz in the room and this was reflected in the presentations that described significant developments in costing, both locally and on the national stage.

The conference is just one part of the HFMA’s push to raise the profile of costing. It has coincided with the association taking over development of the Clinical costing standards – setting out standards for costing at the patient level. Not only do we believe that better costing and use of cost data will help drive improvements in service quality and value, but we are providing practitioners with the support to make that happen.

The HFMA has not done this alone. The Department of Health, where the standards were originally drafted, was keen to see the initiative led by the finance community and fully supports the standards’ accelerated development and costing in general.

Monitor’s interest has also undeniably pushed costing further into the limelight. Together with NHS England, the regulator now has responsibility for price-setting in the NHS. It set out its broad pricing vision in a new discussion paper in May. It has said it repeatedly: robust cost data will be vital for accurate prices, whatever approach is adopted for price setting.

There is also a much greater sense that costing is joined-up – perhaps most obviously demonstrated by the production of a single Approved costing guidance publication by Monitor, incorporating the Department’s reference cost collection guidance, the HFMA’s Clinical costing standards and Monitor’s guidance on the first national (voluntary) patient-level cost collection later this year. And while reconciliations may still be needed between patient-level cost reports and reference cost returns, there are clear moves to align the processes (testing the submission of reference costs by cost pool group and first steps towards netting off costs of non-patient care activity rather than income, for example).

So, much has been achieved. But there are massive amounts still to do. We need to continue to invest time in improving costing – the right systems, the right staff, including the right number of staff, and the right support for costing and recognition of its importance from the board down. Work in progress, patient acuity, education and training – technical challenges must be addressed.

The costing journey will only truly begin once all providers have data accurate enough to underpin big decisions. Some are starting to do this; others have a way to go. But at that point, we will have good foundations for sound pricing, and a rich resource to understand variation and drive quality and pathway redesign.

And while costing’s profile may have been raised in the finance community, it still needs work in the wider NHS. There are great examples emerging of good clinical engagement. But to get the full value from costing – in terms of clinical input to improve allocation methodologies and understanding costing reports – we need this engagement to be more wide spread. Let’s keep up the good work.

John Graham is chairman of HFMA Costing Practitioner Groups