What does good look like for costing in the NHS?

Catherine Mitchell

01 September 2021


The NHS in England has invested substantially in costing to implement the national Costing Transformation Programme. The reality is that while NHS trusts are putting a lot of money into supporting the programme, local health systems are not reaping the benefits. 

Costing teams spend the majority of their time on the annual National cost collection. As a result, they have little time to support clinical teams to use the cost data to improve value. Published cost data is fed back to local health systems too late to be of use, and not in a way that supports systems to deliver improvements in patient care and efficiencies.

The current review of the frequency of the National cost collection by NHS England and NHS Improvement makes this a good time for HFMA members to set out what they think good looks like for costing. Their view is that the potential for costing is massive, but unlocking the potential requires a fundamental reset of the approach to costing in England. While more frequent cost collections may be of benefit in future, this approach should not be adopted until the following ten tests are met:

1. Cost data is regularly used in decision-making to drive improvements in value in the NHS.

2. Costing supports the future information requirements of the NHS.

3. Cost data from the national cost collection is fed back in a timely manner to local health economies in a way that supports them to improve value.

4. There are a set of national costing standards to ensure a consistent approach to patient-level costing. The standards are proportionate, achievable, and easy to understand.

5. There is a single version of cost data that can be used both locally and nationally.

6. Local leaders ensure that there are robust data governance processes in place for the non-financial data required for costing.

7. The role of cost accountants includes creating cost data and supporting their local health services to use the data to improve value.

8. Local and national costing teams are adequately resourced with staff who have the right skills, knowledge and experience.

9. Decisions made about changes to the national costing approach are transparent.

10. The development of the national costing approach is done in close partnership with local teams.

The briefing provides more detail about each of the ten tests.

For information about your organisation becoming a member of the HFMA’s Healthcare Costing for Value Institute, email stephanie.brown@hfma.org.uk.

What does good look like for costing in the NHS?

September 2021 (PDF 192KB)

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