News / Call for costing consistency

Far greater consistency in trusts’ approaches to costing is needed to make the data more useful nationally and locally, according to a report on a costing audit as part of the Department of Health’s payment by results data assurance framework.

Howard Davis, associate director of consultancy CHKS, which delivers the framework on behalf of the Department, set out the key messages from the audit in the June issue of Healthcare Finance. The report, Improving the quality of costing in the NHS, was published in mid-June.

Just one in 10 (12%) of the  sample of 50 English acute trusts were found to have good-quality costing information across all services. One in three had a reference costs submission that was materially incorrect and half had poor costing in one or more of the three areas covered –  admitted patient care; non-admitted patient care with national tariff; or other services.

The findings highlight issues in  the production of cost information, clinical engagement and board assurance. The report contains a 10-point checklist for organisations to address these areas and improve  practices.

It concluded: ‘The level of inaccuracy identified in our audits, both trust-wide and within individual areas, raises questions on how cost information collected from local organisations should be used nationally.’

Errors not material at trust level still reflected incorrect unit costs, ‘which would lead to an incorrect tariff if included in the overall calculation’, it said. 

‘We’ve seen big improvements in costing guidance in recent years, but there is still inconsistency in how this guidance is applied,’ said Mr Davis. ‘There are some key areas where more general definitions could be tightened – such as in the classification of day cases and outpatient procedures.

‘And costing leads told us that mandating the costing standards, allocation methodologies and how the general ledger is mapped into costing systems would lead to much greater consistency.’