Reference Costs 2006-07
Afternoon Workshop
Richard Russell, DH
Ali Connell, DH
PbR – Finance and Costing Team
Contents
• Purpose of Reference Costs
• Organisational Roles and Responsibilities
• Key changes since 2005-06
– HRG4
– FCE and Spells
– Unbundling
– Data Definitions
– Collection System
• Known areas of difficulty
• Timetable
• Resources
• Patient Level Costing
Purpose of Reference Costs
• Annual national benchmark exercise of
average unit costs from providers in England
• Also serves to inform
– Payment by Results: Tariff Development
– Programme Budgeting
– Efficiency measures
– Organisational Performance Management
• So whilst some changes are to inform an
improved benchmark we also need to take
account of its other uses
Roles and Responsibilities (1)
• DH, Policy and Strategy, PbR, Operations
– Responsible for developing reference costs guidance,
costing manual, collection system
– Secretariat for the National Costing Development Group
who are responsible for quality of costing in the NHS
– Responsible for producing, national schedules and RCIs
• Information Centre for Health and Social Care
(IC)
– DH commission trim points, OPCS/ICD10 to HRG
mapping, HRG grouper
Roles and Responsibilities (2)
• Connecting for Health (CfH)
– Data Dictionary
– Coding Guidance
•
Strategic Health Authorities
– Coordinating the exercise locally and answers
queries from Trusts and PCTs (with support from
DH as required)
•
Your own Finance Department
– First source of advice on reference costs
Reference Costs 2006-07
Communications
•
•
•
•
•
SHA Reference Costs Leads
IC Roadshows
FAQs
Website
Mailbox
– (Diagram – next slide)
What does the query relate to?
What organisation?
Where should I send?
(Including specific subject header)
PbR technical guidance
NHS Trusts
PbR development / policy
PCT
FT
SHA
(If SHA cannot answer)
DH
pbrcomms@dh.gsi.gov.uk
Reference Costs
collection guidance
Reference Costs data
returns/results
Costing manual
NHS Trusts
SHA
PCT
FT
(If SHA cannot answer)
DH
pbrdatacollection@dh.gsi.gov.uk
If query is a mixture of PbR
and Reference Costs
questions then should go to
pbrcomms@dh.gsi.gov.uk
Key changes since 2005-06
HRG4
• HRG4 (note no word “version” or “vn” or “v”)
– Designed by clinicians
– Increased number of lines from approx 560 to over
1200
– Setting independent (APC, Outpatients, A&E, Adult
Critical Care, Paediatric Critical Care, Neonatal Critical
Care)
– Apply equally to Admitted Patient Care and
Outpatients i.e. Outpatients grouped by HRG
Key changes since 2005-06
FCE and Spells (1)
• Providers are paid on a Spells basis and
need to measure their costs on the same
basis
• HRG4 is designed to be Iso-Resource at
Spell level, not FCE level
• So the future of Reference Costs is Spells
level costs by HRG
• For year on year comparability need a
collection of both FCE and Spell costs
Key changes since 2005-06
FCE and Spells (2)
• DH issued guidance on how to get from FCE
costs to Spell based costs
• Point to note:
– FCE collection – count FCE’s that are part of a
Spell that finishes in the 2006-07 financial year
– Spell level collection, group Spells that finish in
the year
• HRG4 Grouper assigns each FCE record the
relevant FCE HRG and subsequent Spell
HRG on same output file
Key changes since 2005-06
Unbundling
• For reference cost purposes this means services
separately identified (by HRG4 Grouper) from FCE:
–Chemotherapy
–High Cost Drugs
–Diagnostic Imaging (Radiology)
–Interventianal Radiology
–Renal Dialysis
–Radiotherapy
–Specialist Palliative Care
–Rehabilitation Services
• At a Spell level grouper also separately identifies these
activities and does not group them within the main Spell
Key changes since 2005-06
Collection System
• Incorrect Trimpoints used will now ‘fail’
loading process - Vital to use correct
ones
• Workbook structures have been made
more consistent with Guidance
• Software providers
• Mid May – Live testing week
Key changes since 2005-06
Data Definitions and Collection
structures
• The reference cost guidance now links to the data dictionary
wherever possible
• Biggest change is Outpatients, it is now a “pre-booked
appointment at a clinic” i.e. setting independent – NB possibly
big impact for PCTs?
• Other key changes are:
– Outpatients by Staff Type
– Observation wards/assessment units clarification
– Critical Care counting, Periods and ACP
– Renal – now HRG4
– Digital Hearing Aids
– Mental Health – Mental Health Specialist Teams
(Child/Adult/Elderly)
– Pre-processing of data - Annex 1
– Accounts reconciliation in reconciliation statement
Known areas of difficulty (1)
• With the new definition PCTs are now doing
Outpatients, but generally do not using
OPCS/ICD10 coding
• A number of organisations have not collected
OPCS 4.3 since the start of the year (1 April 2006)
• Collection files are larger due to HRG4
introduction
• Data Collection issues for some of the areas of
unbundling
Known areas of difficulty (2)
• Updated definitions in line with data dictionary
and PbR requirements may require more local
solutions than normal
• PAS systems not able to fully utilise all HRG
groups at this time
• PCT’s post reconfiguration need to include
activity and costs relating to pre configuration
organisations
Timetable
Tools……
• Ref Costs Final guidance available – 16th Feb (DH)
• Costing Manual updates – March
• Final Collection Files - March
• ICD10/OPCS to HRG code to HRG mapping available
Feb (IC)
• Toolkit documentation available March (IC)
• Grouper available end April (IC)
• Trim Points available early May (IC)
Deadlines…..
• First submission to DH – 29th June, Noon
• Final submission to DH – 31st July, Noon
• RCIs produced before end 2007 (DH)
Resources and useful links
• Reference
Cost Guidance: www.dh.gov.uk/refcosts
• NHS Costing Manual: www.dh.gov.uk/refcosts
• HRG4 Toolkit: www.ic.nhs.uk/casemix
• HRG4 Documentation: www.ic.nhs.uk/casemix
• OPCS/ICD10 to HRG Mapping (code to group in excel):
www.ic.nhs.uk/casemix
• SHA leads contacts
(details In pack and at www.dh.gov.uk/refcosts)
• Reference Cost Discussion Forum
(this is a users resource and whilst promoted by DH it is not used
by the DH as a way of receiving queries – the route for queries is
via SHA Reference Cost Leads)
The Future of Costing
• Response to Lawlor Review
• National Costing Development
Group Support
• Patient Level Costing
Patient Level Costing (PLC) 1
• Historically reference costs tend to be
calculated by finance, on a top down basis,
with little clinical validation
– one hospital provided 1526 Diabetic Adult Face to
Face Contacts for a total cost of £1,678 (avg of
£1.10 each)
– another provided 16 Intermediate Pain
Procedures for a total cost of 80 pence - 5 pence
each
• As reference costs have been used to
calculate tariff then this undermines the
credibility of the tariff
Patient Level Costing (PLC) 2
• PLC is a change in costing methodology to a
bottom up approach.
• Will allow for improved clinical engagement as
discuss actual patients rather than averages
• Will allow for better understanding of costs as will
be able to compare cost buckets rather than just
average costs
• Will better support tariff development as allows
for greater level of detail to be collected
• Will support any future classification changes as
simply sum up patient costs into whatever
classification the organisation is using
Patient Level Costing (PLC) 3
• There are already 5 sites implementing PLC
• Up to a years implementation time and then
a further year to properly bed in
• Makes better use of the existing investment
in place to support PbR implementation
Will be supported by
• Updated costing definitions and standards
will be written by NHS experts
• Process of peer review of quality of costing
data in providers
The short term
• PLC is a forward looking medium
to long term solution.
• There is plenty that can be done
now:
– Service level costing
– Clinical validation of costing results
– Benchmarking groups
– Other ideas?
WRAP UP
• Large scale change for 2006-07 to support HRG4 tariff
and costing development
– FCEs and Spells
– Unbundling
– OPCS4.3
• Organisations need to start planning for the reference
cost collection now
• Any Questions?