Costing: rising interest

NHS Improvement has again underlined the importance of improving costing, insisting patient-level cost data has a major role in the transformation of the health service and in the move to integrated care systems (ICSs). And it has repeated that there are growing numbers of would-be users of new patient-cost data waiting for the programme to deliver more detailed, granular data.

Speaking to the HFMA Costing for Value Institute’s annual costing conference in April, NHS Improvement director of strategy Ben Dyson (pictured below) described the move to patient-level costing as ‘vital to the future of the NHS’. He made no apologies for the ‘grand’ language, insisting it really was seen in these terms by the oversight body.

‘There are continuing constraints on NHS funding and continuing challenges of an ageing population and increasing numbers of people living longer with increasing numbers of complex health conditions,’ he said.

‘So it is more vital than ever that we understand the relationship between the needs of different patient groups, the activities and care we deliver and the outcomes and how that all relates to the cost base. This triangulation is right at the heart of the Costing Transformation Programme (CTP). Without patient-level costings, we can’t build up that rich picture in individual organisations and across health economies.’

He said patient-level costing could play a major role in the move to greater system working through integrated care systems. This required organisations to come together to make decisions about the resources they are using across the system and the outcomes they are achieving. ‘ICSs really can’t do this if they haven’t got really good cost data in organisations and across sectoral boundaries,’ he said, adding that patient cost data combined with outcomes data could be the glue that unifies organisations in systems.

Colin Dingwall (pictured below),  CTP programme director, told the conference that the rollout of the programme was about half way through – with a first mandatory submission of patient-level cost data from all types of organisation in England in 2021. (Acute trusts will face their first mandatory submission in 2019 and NHS Improvement will consider making it mandatory for community, mental health and ambulance services.)

Some 67 providers last year took part in a voluntary submission, mostly from the acute sector. And Mr Dingwall said there were others who ‘fell at the last hurdle’. Some 140 providers have signed up for the same again this year, including more than 100 acutes, half of the country’s mental health trusts, most of the ambulance trusts and a small number of community providers.

In fact, there will be five collections – including collections for acute, mental health, community and ambulance services, and a pilot collection for education and training. NHS Improvement will attempt to reconcile the outputs of the acute collection with the reference costs collection.

‘And if we can persuade users of reference costs data that this is a credible source for that reference cost data, we’ll move to a single PLICS-based collection next year,’  said Mr Dingwall. ‘We can’t guarantee this, but it is our aspiration to reduce some of the burden on [costing practitioners].’

Mission statement

Mr Dingwall suggested NHS Improvement was determined to get data back out to trusts quicker this year to enable them to make earlier decisions about resubmissions. And there are plans to further develop the online data portal and create a series of case studies on how costing data can be put to use in understanding and identifying variation and driving improvement.

He added that while the acute standards were nominally in their final format, NHS Improvement still wanted to hear about aspects that could be improved.

He also announced two pilot programmes that are being taken forward as part of the wider CTP. First, NHS Improvement is working with NHS Digital and NHS England on how cost and outcome data could be linked across the system. ‘We are aware there is a range of different outcome sources and we want to give this a push,’ he said.

In the second pilot, the oversight body is working closely with the Nottinghamshire ICS to ‘develop a model for costing that links costs across different care settings’. Many think this is the ultimate benefit of patient-level costing – enabling the costs and interactions across whole patient journeys to be seen alongside outcome data. This would provide much greater information around the impacts of moving services into community settings or providing more proactive care.

‘If we can do something like this and address some of the information governance challenges as well, we could add a huge amount of value,’ said Mr Dingwall.

He said that within three to five years the NHS could have a ‘single standard benchmarkable cost dataset’ and be able to provide a population view of care, including costs, linked across care settings. Linking costs data to outcomes would help organisations and systems to focus on the delivery of value. Decision-making would be supported by better data and tariffs and pricing would also be based on better source data.

Mr Dyson and Mr Dingwall referred to the growing interest in patient-level cost data from other initiatives looking to support improvement, sharing of best practice and elimination of unwarranted variation. Currently, reference cost data underpins the Getting it right first time (GIRFT), NHS RightCare and Model Hospital initiatives (see box). The better accuracy and consistency of patient cost data based on a detailed national methodology – combined with the ability to drill down into the make-up of costs at individual patient and aggregate level – is expected to enhance the value of these centrally led programmes.

GIRFT agenda

Consultant physician Martin Allen is the respiratory lead for GIRFT, and he confirmed the programme has high hopes for new patient-level cost data. The programme uses peer review against national standards and benchmarks to identify unwarranted variation within provider organisations. It started with orthopaedic surgery in 2012, but now covers more than 30 workstreams.

Dr Allen said there was substantial clinical variation across the service, even where national guidelines – for example, from the National Institute for Health and Care Excellence – set out the most clinically and cost-effective approaches. Patient-level cost data would help clinicians to understand the financial implications of unwarranted variation – helping to identify more opportunities for improvement and making the case for change more convincing. He said the goal had to be to ‘spread this across the whole care pathway’.

He cited an example from the orthopaedics work of clinicians using uncemented hip joints costing £5,300 each rather than a £650 cemented implant, despite there being no difference in the outcomes for the over 65s. Change in practice would deliver the same outcomes and save an estimated £4.4m. With reductions in costs of loan equipment, length of stay, readmissions and infection rates, he said the programme had already pulled out about £50m of orthopaedic spend in its work to date – and there had been parallel improvements in the costs of litigation.

Dr Allen said the peer review approach – clinicians talking to clinicians – marked the GIRFT work out from other improvement initiatives. But in general he said that engagement was key and that in many cases all you needed to do was show a clinician variation. There was also agreement from all the speakers that language was important.

‘Understandably if you talk about making savings, people can get defensive,’ said Mr Dyson. ‘But if you talk about using resources in a different way to create better outcomes for patients, people think in a different way.’ And he added that finance teams had a big role to play in this translation exercise.