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Consultation on
mandating patient-level
costs for acute activity
October 2017
We support providers to give patients
safe, high quality, compassionate care
within local health systems that are
financially sustainable.
1 | Consultation on mandating patient-level costs for acute activity
Contents
About this document ...................................................................... 2
Scope of the consultation ............................................................... 3
What are we proposing? ................................................................ 6
Frequency of patient-level cost data collection ............................ 15
How we developed our proposal .................................................. 18
Annex 1: Glossary........................................................................ 21
Annex 2: Trusts covered by the proposal ..................................... 22
2 | Consultation on mandating patient-level costs for acute activity
About this document
1. This consultation document proposes changes to the requirements on NHS
foundation trusts and NHS trusts
1
to record and report the costs of acute
activity
2
at a patient level. The changes would apply from the 2018/19 financial
year, with the first mandated collection in 2019. This document should be read
alongside our impact assessment.
3
2. Since 1 April 2016, Monitor and the NHS Trust Development Authority have
operated as a single organisation known as NHS Improvement. This document
is issued in accordance with a duty to consult imposed on Monitor by Section
69(7) of the Health and Social Care Act 2012. In this document ‘NHS
Improvement’ means Monitor, unless the context requires otherwise.
3. The document covers:
• what we propose to change
• options reviewed
• how we engaged with the sector.
4. It should be read with the annexes and the supporting documents, especially
the impact assessment.
The document has been set up as a PDF form to allow you to enter your feedback
directly into the document. Questions are highlighted in boxes.
You can also provide your feedback through an online survey
4
.
To use the PDF form, you will need to use Acrobat Reader. If this is not already
installed, you can download it for free from: https://get.adobe.com/uk/reader/
See Responding to this consultation for more details.
1
See Annex 2 for the current list of relevant trusts.
2
Acute activity comprises admitted patient care (elective, non-elective and day case), outpatients
(attendances and procedures) and emergency medicine.
3
https://improvement.nhs.uk/resources/mandating-patient-level-costing/
4
www.research.net/r/AcuteCostingMandation
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3 | Consultation on mandating patient-level costs for acute activity
Scope of the consultation
5. This is a statutory consultation on the following proposal:
• For the financial year 2018/19 onwards, it will be mandatory for NHS trusts
and NHS foundation trusts to record and report patient-level costs for acute
activity in line with the Healthcare Costing Standards for England (the
Standards).
• To support the transition from reference costs to patient-level costs, we
propose dual running of reference cost and patient-level cost collections for
up to two years (2018/19 and 2019/20).
6. In this consultation, we also ask for feedback on eventually collecting patient-
level cost data on a quarterly rather than annual basis.
7. For acute activity
5
we propose patient-level costs would be mandated from the
financial year 2018/19 (and submitted in 2019). Other activity (such as
community, mental health and ambulance services) would continue to be
collected using reference costs. We plan to roll out patient-level costing to
these services, subject to assessment and consultation for these sectors.
8. Collecting patient-level cost data is key to improving patient outcomes and
efficiency and achieving the vision in the Five Year Forward View (5YFV). We
described the role of costing in supporting these wider objectives in our 2016
report, Patient-level costing: case for change.
6
The plan for the transition to
costing at a patient level was set out in Improving the costing of NHS services:
proposals for 2015 to 2021.
7
9. Many acute trusts are already running a patient-level information and costing
system (PLICS) in anticipation of the formal move: currently 84% have
implemented PLICS. The remaining 16% are implementing or planning to
implement PLICS. These systems calculate costs at an individual patient level,
identifying the resources consumed by an individual patient.
5
Acute activity comprises admitted patient care (elective, non-elective and day case), outpatients
(attendances and procedures) and emergency medicine.
6
https://improvement.nhs.uk/resources/plics-case-change/
7
https://www.gov.uk/government/consultations/improving-the-costing-of-nhs-services-proposals-for-
2015-to-2021
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4 | Consultation on mandating patient-level costs for acute activity
10. Many trusts with PLICS have participated in voluntary collections of patient-
level cost data over the last few years, in addition to submitting reference costs.
These collections include:
• a smaller-scope ‘legacy’ version of patient-level costs up to the financial year
2015/16 (submission summer 2016)
• initial submission of costing transformation programme (CTP) patient-level
cost data by six trusts, using 2015/16 financial data (collected in summer
2016)
• Up to 70 acute trusts have voluntarily collected 2016/17 cost data using CTP
patient-level costs – this data is being submitted at the moment.
11. Our impact assessment
8
indicates that mandating recording and submission of
patient-level cost data using the Standards would have significant benefits for
trusts, commissioners and other users of the data:
• It would enable trusts to compare their data with peers’, both for patient
pathways and costs. This allows trusts to identify and investigate
unwarranted variation, and identify the financial impact of changes to
pathways.
• The improved granularity of patient-level cost data will support engagement
with clinicians. This in turn will improve the accuracy of underlying data and
enable clinicians to improve patient pathways.
• Better cost data will improve currency design and the national tariff. Better
data will improve the tariff’s accuracy and ensure that the cost of providing
services is more accurately reflected in the tariff calculation.
12. This consultation invites you to feed back on the proposal to make patient-level
costs mandatory for acute activity from 2018/19. We plan to publish our
response to the issues you raise and expect to make a final decision on the
proposal by January 2018. We will publish our decision on our website.
13. If you want to keep up to date with this work, please see our costing
newsletters
9
and the mandation page
10
on our website.
8
https://improvement.nhs.uk/resources/mandating-patient-level-costing/
9
https://improvement.nhs.uk/news-alerts/?keywords=costing&articletype=bulletin-
newsletter&after=&before
10
https://improvement.nhs.uk/resources/costing-mandation-project/
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5 | Consultation on mandating patient-level costs for acute activity
Responding to this consultation
14. The proposal for the mandatory submission of patient-level costs for acute
activity from 2018/19 is subject to a statutory impact assessment and
consultation process, as required by Section 69 of the Health and Social Care
Act 2012 (the 2012 Act). These processes offer stakeholders the opportunity to
be informed of the likely impact of the proposals and tell NHS Improvement
what they think about them.
15. The consultation period begins on 3 October 2017 and ends on 14
November 2017.
16. We welcome feedback on the proposals and will consider your responses
before making a final decision to mandate patient-level costs for acute activity.
17. You can submit your feedback in two ways:
• completing the online survey: www.research.net/r/AcuteCostingMandation
• answering the questions in this PDF, starting with the information
about you requested below, then saving the document and sending it to
costing@improvement.nhs.uk
18. Both surveys contain the same questions.
19. Please contact costing@improvement.nhs.uk if you need any more information.
Questions 1-4 of 14
1. Name
2. Role
3. Organisation
4. Organisation type
(If other)
Please select from list
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6 | Consultation on mandating patient-level costs for acute activity
What are we proposing?
Mandation
We propose that, for the financial year 2018/19 onwards, it will be mandatory
for NHS trusts and NHS foundation trusts to record and report costs at a
patient level for acute activity in line with the Healthcare Costing Standards for
England.
20. We are aware of the burden this will place on trusts, and streamlining cost
collections is a key part of the business case for moving to patient-level costs.
While we will move to a single collection as early as possible, we have costed
the transition assuming a two-year period of dual running of reference costs
and patient-level costs. Work has begun separately to plan for the transition,
and this assumption should not constrain an earlier move to a single collection,
if that is possible.
21. Trusts currently submitting reference costs using the datasets below would be
required to record and report costs at a patient level.
11
The methods and basis
for costing would follow the rules set out in the Standards published as part of
the Approved Costing Guidance,
12
and data would be submitted to NHS
Improvement after the end of the financial year. The activity datasets that
should be reported at patient level are:
• admitted patient care (APC) finished consultant episodes (FCEs), including
regular day and night attenders, and patients not discharged before or on 31
March
• non-admitted patient care (NAPC) attendances, also known as outpatients
(OP), including ward attenders
• accident and emergency (A&E) attendances (all types).
22. This data should be recorded and reported by the relevant NHS trusts and NHS
foundation trusts (currently those noted in Annex 2) from the financial year
2018/19 and collected after the end of the financial year – currently planned for
11
The proposal does not include independent sector providers. We are currently working with this
sector on extending patient-level costing.
12
https://improvement.nhs.uk/resources/approved-costing-guidance/
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7 | Consultation on mandating patient-level costs for acute activity
summer 2019. Other trusts submitting reference costs, including ‘acute’ activity,
will not be required to submit patient-level cost data at this time. We will publish
details on our website of the plan for extending mandation of patient-level costs
to other relevant providers shortly. In the meantime, if you require further
information, please contact our costing team on costing@improvement.nhs.uk
23. Currently cost data is collected on an average basis as part of reference costs,
and the methods for calculating costs
13
have been on a comply-or-explain
14
basis rather than required. This has led to issues and differences in how costs
are calculated, reducing the benefits for users from benchmarking their costs
and pathways. Inconsistencies and poor methods of apportionment caused
about half the inaccurate costing audit results over the last three years.
24. The result is that this data, using average costs and differing methods of
apportionment, cannot easily be linked to an individual patient and can often
hide errors in how resources are allocated. Because of this, it does not promote
engagement with clinicians to identify and improve patient pathways. In
addition, costing processes vary across organisations, meaning there is no
consistency in costing processes or methodologies, affecting the usefulness of
data for comparison, both between trusts and within organisations.
25. Our assessment indicates that, based on trusts that have already implemented
patient-level costing, more accurate costing will bring a range of benefits,
including the following:
• Supporting the provision of care in the best environment for patients,
as envisaged in the 5YFV. Patient-level costs would allow providers and
commissioners to use anonymised activity to identify patient pathways
across providers. This could support plans for integrated care across
providers and contribute to a more joined-up and preventive approach
across NHS and other service providers.
• Improving comparison between peers – internally and with other
providers. Legacy patient-level cost data has allowed participating trusts to
identify unwarranted clinical variations and improve patient pathways.
Improving the consistency of data by mandating standards across all acute
13
Previously the Healthcare Financial Management Association Costing Standards, recently the
Healthcare Standards for England.
14
A regulatory approach used in the UK and other countries in corporate governance and financial
supervision. Rather than setting out binding laws, regulators set out a code, which listed companies
may either comply with, or if they do not comply, explain publicly why they do not.
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8 | Consultation on mandating patient-level costs for acute activity
providers and collecting data at a national level will allow identification of
cost variations across providers.
• Leading to better engagement with clinicians. Because patient-level cost
data is at a patient level and can be regularly produced, providers can share
patient pathway and cost data with clinicians and staff outside finance
departments. This not only enables clinicians to validate activity and cost
data, but allows them to identify ways to improve clinical pathways. Trusts
already using patient-level costing found this to be a significant help.
• Allowing providers and sustainability and transformation partnerships
to assess the impact of changes in service provision. Many providers
already use patient-level data to model the impact on cost and pathway of
changes to service provision. For example, a group of providers is looking at
how to provide services across a variety of sites, allowing the creation of
centres of excellence while maintaining quick access to emergency services.
• Providing more accurate data for agreeing local prices and local
variations to national prices. In the past, prices have often been based on
a provider’s, or the average, reference costs. However, detailed costs at a
patient level, which have been validated by clinicians and commissioners,
would give a more accurate basis for discussing prices.
26. We have estimated the costs of implementing and running PLICS as part of our
impact assessment.
15
Discussions with trusts that have already implemented
PLICS suggest that the costs of implementing and running the systems are
recouped by the additional savings and better use of resources that they help
achieve. Examples of such savings include:
16
• Identifying and improving the patient pathway for transurethral resection of
the prostate (TURP). This reduced the average length of stay by an average
of one day per patient, freeing beds for other procedures.
• Establishing a formal pathway for patients being treated for epileptic seizure
and headache, treating them in an ambulatory care unit instead of the
emergency department (ED). This not only reduced the cost of treating these
patients but, more importantly, also freed ED resources.
• Using patient-level costs and National Joint Registry data to identify and
reduce the type of prosthesis used for the same operation. This has already
15
https://improvement.nhs.uk/resources/mandating-patient-level-costing/
16
The impact assessment includes more details of how providers achieved these savings.
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9 | Consultation on mandating patient-level costs for acute activity
saved £172,000, increasing to an expected £250,000 annually from 2018/19
onwards.
• Allowing a trust to identify and correct coding issues that affected the depth
and accuracy of recording and coding activity for cerebral palsy patients. As
well as improving recording of these patients, this generated an additional
£58,000 of income for the last three months of 2016/17 – an annual increase
in income of £232,000.
• Patient-level cost data identified that in one trust kidney transplants from live
donors were being incorrectly recorded as non-electives, while transplants
from deceased donors were recorded as electives. Improving this allowed
the trust to improve the accuracy of charging, increasing income by £67,000.
27. By mandating the methods and approaches for costing according to the
Standards we can ensure consistent costing, which will support benchmarking
of costs and pathways.
How would patient-level cost recording and reporting be made
mandatory?
28. The standard conditions of the NHS provider licence
17
contain provisions
relating to pricing, including requirements on recording and reporting
information about costs – see conditions P1 and P2. The licence applies to
NHS foundation trusts; NHS trusts are required to comply with equivalent
conditions, including the requirements relating to pricing and costs.
29. The conditions require trusts to:
• record cost information in accordance with cost allocation methodologies
published by NHS Improvement in its Approved Costing Guidance (condition
P1)
• provide such information, documents and reports relating to costs as NHS
Improvement may require for its pricing functions (condition P2).
30. These requirements apply if the relevant providers are notified in writing – we
notify providers by publishing the relevant requirements in our costing
guidance.
17
https://www.gov.uk/government/publications/the-nhs-provider-licence
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10 | Consultation on mandating patient-level costs for acute activity
31. The proposal to mandate patient-level cost recording and reporting would be
implemented by including the applicable requirements, methodology and
standards in guidance published by NHS Improvement in advance of the
financial year 2018/19 (likely to be January 2018).
32. This would mean that trusts would have duties to record and report costs in
accordance with the Standards. Failure to comply with those duties would be a
breach of the relevant conditions, which might result in regulatory action by
NHS Improvement, including, in appropriate cases, use of its statutory
enforcement powers.
Issues and risks of the proposal
33. This proposal is a significant change in how costs are recorded and reported
across trusts. Implementing patient-level costs raises several issues. Table 1
summarises these and sets out the mitigation or rationale for our decision.
Table 1: Obstacles to implementing patient-level costs
Issue
Mitigation or rationale
Dual running of patient-
level costs and
reference costs will
place a significant
burden on trust staff.
Currently there are two reference cost collections and
one patient-level cost collection. We are aware this will
temporarily increase the burden. As part of mandating
patient-level costs, we have made some changes to
future years’ collections.
Our impact assessment has identified additional costs to
trusts when implementing patient-level costs. To reduce
this burden we will be making changes to future
collections. For the financial year 2017/18 (submitted in
2018) we propose:
no separate national collection of education and
training (E&T) information – though trusts will be
expected to still collect cost E&T but not submit it
we will pilot an E&T collection as part of patient-level
costing with a sample of trusts
based on the pilot’s outcome, we will collect E&T as
part of patient-level cost data for 2018/19 (submitted
in 2019).
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11 | Consultation on mandating patient-level costs for acute activity
Issue
Mitigation or rationale
The new Standards are
very detailed and some
trusts are concerned
they do not currently
have all the expected
information to fully
implement the new
approaches.
The Standards will be published at the end of January
each year, two months before the start of the financial
year for which they apply.
Trusts have the opportunity to comment on early drafts
and will be notified of any changes well in advance of
publication.
Trusts are invited to be involved in the voluntary
submission for 2018/19,
18
and we are continuing to work
with all trusts to implement the new standards and
costing approaches.
If trusts have better methods for costing this data they
can share them with our costing team. If accepted as a
superior method, the trust may continue to use it and
document it as such.
For trusts unable to comply with the Standards, we will
provide a transition path showing the information and
standard compliance required at each stage of the
implementation process.
The move to costing at
a patient level may
have a significant
impact on the tariff and
therefore the financial
viability of services and
trusts.
We will be using data from the voluntary patient-level
cost collections for 2016/17 and 2017/18 to support
development of the next national tariff (which would apply
from 2019/20). We are working closely with the national
tariff team to ensure that any significant variations
between patient-level cost and reference cost data are
reviewed and addressed.
The accuracy of
underlying data is poor,
and providers do not
have resources to
improve or replace the
systems used to collect
activity.
We believe that patient-level costing will improve the
accuracy of data collected by providers, especially
activity. Because the data is at a patient level, the activity
and associated patient pathway can be verified with
clinicians, improving the accuracy of the data being
recorded. This would enable improvements in capture
and recording of activity to be identified, leading to
improvements in pathways.
18
Please contact costing@improvement.nhs.uk if you are interested in finding out more.
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12 | Consultation on mandating patient-level costs for acute activity
Questions 5-6 of 14
5. To what extent do you agree with mandating recording and reporting of patient-
level cost data for acute activity, in line with the Healthcare Standards for England,
from 2018/19?
Strongly
agree
Agree
Neither agree
or disagree
Disagree
Strongly
disagree
6. What is the reason for your answer?
Dual running of reference cost and patient-level cost
collections
To support the transition from reference costs to patient-level costs, we
propose two years’ dual running of reference cost and patient-level cost
collections (2018/19 and 2019/20).
34. We investigated implementing patient-level costs in 2018/19 and ceasing
collection of reference costs at the same time (the last collection would have
been 2017/18). Following feedback from other users of reference costs, we
believe it will not be possible to move so rapidly without creating unacceptable
risks, including:
• no fallback position if quality of patient-level cost submissions is found to be
poor – this would affect the production of the national tariff, agreement of
local prices, etc
• there would have been only one year of collecting E&T costs at a patient
level; this would not allow sufficient time to verify the accuracy of this data
• the current patient-level cost collection cannot calculate unbundled costs – a
process to collect and validate these costs would need to be in place to
support the tariff process.
We therefore propose dual running for up to two years to reduce the risk around the
move to patient-level cost data. This dual running would:
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13 | Consultation on mandating patient-level costs for acute activity
• provide time for trusts and NHS Improvement to review and agree any
variations in cost between reference costs and patient-level costs
• ensure a smooth transition for local prices and variations, which are usually
based on reference costs
• allow implementation of an external review process to provide assurance on
the accuracy of data submitted.
Issues and risks of the proposal
35. There are a number of risks and issues with this proposal. We have included
these, and the mitigation or rationale for our decision, in Table 2.
Table 2: Dual collection issues
Issue
Mitigation or rationale
As noted above, the
burden of
continuing with
reference costs will
be considerable for
acute providers.
We are identifying how we can reduce the burden as far as
possible but still collect information required by users,
including trusts and commissioners, until patient-level costs
becomes embedded and we are able to stop collecting
reference costs.
As noted previously, we will not require NHS organisations to
submit E&T data. Instead we will pilot a new methodology
which will be in place as part of the mandation of patient-level
costs for the financial year 2018/19.
Why would we
continue to collect
reference costs
when they would
not be used for
setting the national
tariff?
The national tariff is frequently accused of being inaccurate
because reference costs, on which it is based, are
inaccurate.
Detailed data quality assurance will be put in place to ensure
that patient-level cost data is sufficiently accurate to set a
tariff. Until then, we want to be able to use reference costs if
there are issues with the accuracy of patient-level cost data.
We will use data from voluntary patient-level cost
submissions to support the next tariff and test/validate
assumptions.
Reference costs are also currently used for other purposes,
including:
• calculating Model Hospital and other operational
efficiency metrics
• setting and agreeing local prices and variations
• identifying providers requiring financial planning
support from regulators.
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14 | Consultation on mandating patient-level costs for acute activity
Questions 7-9 of 14
7. Do you agree with the proposal for dual running of reference costs for 2018/19
and 2019/20?
Yes
No
If you disagree, why do you disagree?
8. Is there an alternative? Please provide details of what you propose.
9. Do you have any comments on our assessment of the likely costs?
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15 | Consultation on mandating patient-level costs for acute activity
Frequency of patient-level
cost data collection
36. Though we are not currently recommending collection of patient-level cost data
more frequently than annually, we would like to use this opportunity to invite
comments from trusts and other users of reference cost data.
37. Currently, costing data is collected annually. In trusts, financial data is produced
more frequently, often quarterly. Producing and collecting cost data on a more
regular basis would, initially, increase the burden on trusts. However, this would
be spread over the year and we believe the overall increase would be limited.
38. According to the 2015/16 reference cost survey, 79% of trusts that currently
have patient-level information and cost systems (PLICS) produce data at least
quarterly (see Figure 1). This figure increased to 89% in the survey we
undertook as part of the impact assessment.
Figure 1: Production of patient-level cost data (from reference costs survey
2015/16)
1%
16%
62%
10% 10%
0%
10%
20%
30%
40%
50%
60%
70%
Every two weeks Every month Every quarter Twice a year Annually
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16 | Consultation on mandating patient-level costs for acute activity
39. We believe collecting patient-level cost data more frequently would benefit
trusts and other users. For trusts these benefits include:
• identifying issues with costing during the year rather than after the year-end,
allowing correction and more accurate costs to be submitted
• supporting the financial management process as cost and activity
information is available more frequently; this data will enable trusts to identify
and address issues on a more timely basis.
40. For other users, we believe:
• it would further the work of, for example, the Model Hospital and Group
Advising on Pricing Improvement (GAPI) as metrics could be run more
frequently, allowing them to support providers in a more timely manner
• it may reduce information collected by NHS Improvement – for instance,
data on costs and activity could reduce the information trusts must collect as
part of quarterly reporting, and it would help in agreeing financial targets and
cost improvement plans.
Issues and risks of the proposal
41. As with our other proposals, we have identified issues and risks. Table 3
summarises these and explains the mitigation or rationale for the proposal.
Table 3: Frequency of collection issues
Issue
Mitigation or rationale
Moving to quarterly collection
would increase the burden on
providers’ costing and finance
staff and reduce the time
available to investigate and
review patient-level costing
within trusts.
The burden would increase initially, but much of
the validation and investigation that happens at
the year-end would be spread throughout the
year.
We also believe that:
more frequent collection of cost data would
link better with trusts’ internal reporting
arrangements and therefore better support
internal financial monitoring
the data can be used to support
commissioning and reduce time spent
investigating queries
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17 | Consultation on mandating patient-level costs for acute activity
Issue
Mitigation or rationale
it will help identify cost saving plans – and
costs that differ from expectations – more
quickly.
What would quarterly data be
used for?
We could regularly publish data validation reports
and outlier information, to help trusts improve the
accuracy of their data during the year.
It could also be used to assess the impact of
casemix changes during the year.
Questions 10-14 of 14
10. Do you agree patient-level costing returns should, in time, be submitted
quarterly?
Strongly
agree
Agree
Neither agree
or disagree
Disagree
Strongly
disagree
11. What is the reason for your answer?
12. If you agree, when would it be realistic to make this a requirement?
2020/21
2021/22
2022/23
Later
13. Please give details of any other risks or issues you feel need to be addressed to
support the move towards quarterly collection of patient-level costing data.
14. Do you have any other views or comments to make on the proposals?
This is the last question in this document.
Please save your file and send it to costing@improvement.nhs.uk
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18 | Consultation on mandating patient-level costs for acute activity
How we developed our
proposal
History
42. Cost data is recorded and reported by NHS trusts and NHS foundation trusts
under NHS Improvement (Monitor) requirements for the provider licence. This
information has a variety of users – for example:
• trusts and commissioners use reference costs to manage their costs, agree
local contracts and plan future services
• NHS Improvement uses reference cost as the basis for pricing, including the
national tariff
• cost data supports a wide variety of cross-sectoral work to improve clinical
outcomes and efficiency, including the work on operational productivity led
by Lord Carter and benchmarking trusts to identify unwarranted cost
variation.
43. The processes for submitting reference costs – and their accuracy – vary
considerably between trusts. Between 2013 and 2015, audits commissioned by
NHS Improvement found that over 50% of acute submissions were materially
inaccurate. More recent audits suggest the quality of reference costs submitted
by acute trusts has improved, and reference costs remain a key source of data
used both within trusts and externally.
44. We published several documents to support our plans: Patient-level costing:
case for change
19
and Improving the costing of NHS services: proposals for
2015 to 2021.
20
The latter introduced the costing transformation programme
(CTP). By 2020 the CTP aims to address inconsistency and improve costing
across the NHS.
19
https://improvement.nhs.uk/resources/plics-case-change/
20
https://www.gov.uk/government/consultations/improving-the-costing-of-nhs-services-proposals-for-
2015-to-2021
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19 | Consultation on mandating patient-level costs for acute activity
45. In preparation for a proposed move to patient-level costs, many trusts have
already been involved in piloting patient-level costing through voluntary
collections.
46. Mandating patient-level costs and ceasing to collect reference cost data are
likely to have a significant impact on trusts. Therefore we are required by the
2012 Act to undertake an impact assessment of the changes, looking at the
costs and benefits of various options. The next section summarises the impact
assessment.
21
Impact assessment
47. Initially we identified eight options for mandating patient-level costs (see impact
assessment document for more information), and investigated three in detail:
• Option 1 (business as usual): reference costs remain the mandated costing
return, but we continue with a voluntary patient-level cost submission; the
Standards remain on a comply-or-explain basis
• Option 2: mandating patient-level costs for acute activity from 2018/19, with
a two-year dual running of reference costs; mandating standards for costing
for both patient-level costs and reference costs from 2018/19
• Option 3: as Option 2 above, but moving to quarterly submission of patient-
level costs from 2020/21.
48. As part of the impact assessment we interacted with trusts by:
• collecting and reviewing business cases from six trusts currently or recently
implementing PLICS
• holding on-site meetings with 11 trusts at different stages of their patient-
level costing journeys to discuss the risk, benefits and costs of implementing
patient-level costs
• collecting and verifying examples of improvements linked to use of patient-
level cost data
• running a survey on the risks, benefits and costs of mandating patient-level
costs in which 69 trusts took part
21
https://improvement.nhs.uk/resources/mandating-patient-level-costing/
Save
20 | Consultation on mandating patient-level costs for acute activity
• meeting eight other key users of reference cost data to understand the
impact of the proposed change on their work and identifying the risks and
benefits of various options.
49. We used our findings to assess the best option and identify its potential
benefits. Feedback from trusts already using patient-level costs suggested
significant benefits, especially from identifying unwarranted clinical variation,
enabling them not only to improve the patient pathway but make better use of
resources.
50. We used data collected through reference cost surveys and from trusts to
calculate the average cost of running PLICS by type of provider – see Table 4.
Over 10 years, a trust’s estimated average cost would be £222,190 per year.
Table 4: Summary of expected cost of Option 2 by type of trust
Year
Specialist
Large and
teaching
Other
Total
2017/18
£3,575,300
£18,174,180
£15,632,493
£37,381,973
2018/19
£3,545,349
£20,586,418
£19,176,706
£43,308,474
2019/20
£3,521,100
£21,555,250
£20,035,899
£45,112,249
2020/21
£2,314,175
£16,019,251
£14,704,177
£33,037,603
2021/22
£2,302,433
£16,078,343
£14,795,385
£33,176,162
2022/23
£2,189,488
£13,367,874
£12,327,452
£27,884,814
2023/24
£2,249,402
£13,678,678
£12,622,592
£28,550,672
2024/25
£2,406,591
£13,655,198
£12,896,583
£28,958,373
2025/26
£2,359,790
£14,351,659
£13,238,159
£29,949,608
2026/27
£2,530,688
£14,311,190
£13,526,669
£30,368,548
Total
£26,994,318
£161,778,041
£148,956,117
£337,728,476
Number of
trusts in
grouping
17
66
69
152
51. As well as generating the benefits noted above, we believe there would be
additional cost savings from reducing time spent investigating contract queries
as information would be of better quality. And future use of automatic data
collection should improve both the time taken and accuracy of much of the
activity data currently collected manually or estimated.
52. More information on the detailed assumptions and benefits can be found in the
impact assessment.
22
22
https://improvement.nhs.uk/resources/mandating-patient-level-costing/
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21 | Annex 1: Glossary
Annex 1: Glossary
Term
Description
2012 Act
The Health and Social Care Act 2012.
A&E attendances
Attendances in all types of emergency department at
trusts.
Admitted patient care
(APC) attendances
Dataset for elective and non-elective admissions,
including regular day/night attenders and day-case
activity.
Approved Costing
Guidance (ACG)
Describes the process of producing and collecting
costs, both patient-level and average (reference)
costs:
https://improvement.nhs.uk/uploads/documents/ACG
.The_essentials.pdf
Costing transformation
programme (CTP)
Aims to improve the quality and use of costing
information in the NHS, with patient-level costing and
a single, national annual cost collection.
Healthcare Costing
Standards for England (the
Standards)
The approved approaches and methodologies for
calculating costs, published in the Approved Costing
Guidance:
https://improvement.nhs.uk/uploads/documents/Heal
thcare_costing_standards__for_England_ACUTE_v2
.pdf
Non-admitted patient care
(NAPC) attendances
Dataset for outpatients (OP), including ward
attenders; also includes outpatient procedures.
Patient-level information
and costing system
(PLICS)
The system used to record and report costs at a
patient level.
Reference costs
The average unit cost to the NHS of providing
secondary healthcare to NHS patients.
22 | Annex 2: Trusts covered by the proposal
Annex 2: Trusts covered by
the proposal
Org
code
Organisation name
Org
code
Organisation name
REM
Aintree University Hospital
NHS Foundation Trust
RBZ
Northern Devon Healthcare
NHS Trust
RCF
Airedale NHS Foundation Trust
RJL
Northern Lincolnshire and
Goole NHS Foundation Trust
RBS
Alder Hey Children's NHS
Foundation Trust
RTF
Northumbria Healthcare NHS
Foundation Trust
RTK
Ashford and St Peter's
Hospitals NHS Foundation
Trust
RX1
Nottingham University
Hospitals NHS Trust
RF4
Barking, Havering and
Redbridge University Hospitals
NHS Trust
RTH
Oxford University Hospitals
NHS Foundation Trust
RFF
Barnsley Hospital NHS
Foundation Trust
RGM
Papworth Hospital NHS
Foundation Trust
R1H
Barts Health NHS Trust
RW6
Pennine Acute Hospitals NHS
Trust
RDD
Basildon and Thurrock
University Hospitals NHS
Foundation Trust
RK9
Plymouth Hospitals NHS Trust
RC1
Bedford Hospital NHS Trust
RD3
Poole Hospital NHS
Foundation Trust
RQ3
Birmingham Women’s and
Children's Hospital NHS
Foundation Trust
RHU
Portsmouth Hospitals NHS
Trust
23 | Annex 2: Trusts covered by the proposal
RXL
Blackpool Teaching Hospitals
NHS Foundation Trust
RPC
Queen Victoria Hospital NHS
Foundation Trust
RMC
Bolton NHS Foundation Trust
RHW
Royal Berkshire NHS
Foundation Trust
RAE
Bradford Teaching Hospitals
NHS Foundation Trust
RT3
Royal Brompton & Harefield
NHS Foundation Trust
RXH
Brighton and Sussex University
Hospitals NHS Trust
REF
Royal Cornwall Hospitals NHS
Trust
RXQ
Buckinghamshire Healthcare
NHS Trust
RH8
Royal Devon and Exeter NHS
Foundation Trust
RJF
Burton Hospitals NHS
Foundation Trust
RAL
Royal Free London NHS
Foundation Trust
RWY
Calderdale and Huddersfield
NHS Foundation Trust
RQ6
Royal Liverpool and
Broadgreen University
Hospitals NHS Trust
RGT
Cambridge University
Hospitals NHS Foundation
Trust
RAN
Royal National Orthopaedic
Hospital NHS Trust
RW3
Central Manchester University
Hospitals NHS Foundation
Trust
RA2
Royal Surrey County Hospital
NHS Foundation Trust
RQM
Chelsea and Westminster
Hospital NHS Foundation Trust
RD1
Royal United Hospitals Bath
NHS Foundation Trust
RFS
Chesterfield Royal Hospital
NHS Foundation Trust
RM3
Salford Royal NHS Foundation
Trust
RLN
City Hospitals Sunderland NHS
Foundation Trust
RNZ
Salisbury NHS Foundation
Trust
RDE
Colchester Hospital University
NHS Foundation Trust
RXK
Sandwell and West
Birmingham Hospitals NHS
Trust
24 | Annex 2: Trusts covered by the proposal
RJR
Countess Of Chester Hospital
NHS Foundation Trust
RCU
Sheffield Children's NHS
Foundation Trust
RXP
County Durham and Darlington
NHS Foundation Trust
RHQ
Sheffield Teaching Hospitals
NHS Foundation Trust
RJ6
Croydon Health Services NHS
Trust
RK5
Sherwood Forest Hospitals
NHS Foundation Trust
RN7
Dartford and Gravesham NHS
Trust
RXW
Shrewsbury and Telford
Hospital NHS Trust
RTG
Derby Teaching Hospitals NHS
Foundation Trust
RTR
South Tees Hospitals NHS
Foundation Trust
RP5
Doncaster and Bassetlaw
Hospitals NHS Foundation
Trust
RE9
South Tyneside NHS
Foundation Trust
RBD
Dorset County Hospital NHS
Foundation Trust
RJC
South Warwickshire NHS
Foundation Trust
RWH
East and North Hertfordshire
NHS Trust
RAJ
Southend University Hospital
NHS Foundation Trust
RJN
East Cheshire NHS Trust
RVY
Southport and Ormskirk
Hospital NHS Trust
RVV
East Kent Hospitals University
NHS Foundation Trust
RJ7
St George's University
Hospitals NHS Foundation
Trust
RXR
East Lancashire Hospitals
NHS Trust
RBN
St Helens and Knowsley
Hospital Services NHS Trust
RXC
East Sussex Healthcare NHS
Trust
RWJ
Stockport NHS Foundation
Trust
RVR
Epsom and St Helier University
Hospitals NHS Trust
RTP
Surrey and Sussex Healthcare
NHS Trust
RDU
Frimley Health NHS
Foundation Trust
RMP
Tameside and Glossop
Integrated Care NHS
Foundation Trust
25 | Annex 2: Trusts covered by the proposal
RR7
Gateshead Health NHS
Foundation Trust
RBA
Taunton and Somerset NHS
Foundation Trust
RLT
George Eliot Hospital NHS
Trust
RBV
The Christie NHS Foundation
Trust
RTE
Gloucestershire Hospitals NHS
Foundation Trust
REN
The Clatterbridge Cancer
Centre NHS Foundation Trust
RP4
Great Ormond Street Hospital
for Children NHS Foundation
Trust
RNA
The Dudley Group NHS
Foundation Trust
RN3
Great Western Hospitals NHS
Foundation Trust
RAS
The Hillingdon Hospitals NHS
Foundation Trust
RJ1
Guy's and St Thomas' NHS
Foundation Trust
RTD
The Newcastle Upon Tyne
Hospitals NHS Foundation
Trust
RN5
Hampshire Hospitals NHS
Foundation Trust
RQW
The Princess Alexandra
Hospital NHS Trust
RCD
Harrogate and District NHS
Foundation Trust
RCX
The Queen Elizabeth Hospital,
King's Lynn, NHS Foundation
Trust
RR1
Heart Of England NHS
Foundation Trust
RL1
The Robert Jones and Agnes
Hunt Orthopaedic Hospital
NHS Foundation Trust
RQX
Homerton University Hospital
NHS Foundation Trust
RFR
The Rotherham NHS
Foundation Trust
RWA
Hull and East Yorkshire
Hospitals NHS Trust
RDZ
The Royal Bournemouth and
Christchurch Hospitals NHS
Foundation Trust
RYJ
Imperial College Healthcare
NHS Trust
RPY
The Royal Marsden NHS
Foundation Trust
RGQ
Ipswich Hospital NHS Trust
RRJ
The Royal Orthopaedic
Hospital NHS Foundation Trust
26 | Annex 2: Trusts covered by the proposal
R1F
Isle of Wight NHS Trust
RL4
The Royal Wolverhampton
NHS Trust
RGP
James Paget University
Hospitals NHS Foundation
Trust
RET
The Walton Centre NHS
Foundation Trust
RNQ
Kettering General Hospital
NHS Foundation Trust
RKE
The Whittington Hospital NHS
Trust
RJZ
King's College Hospital NHS
Foundation Trust
RA9
Torbay and South Devon NHS
Foundation Trust
RAX
Kingston Hospital NHS
Foundation Trust
RWD
United Lincolnshire Hospitals
NHS Trust
RXN
Lancashire Teaching Hospitals
NHS Foundation Trust
RRV
University College London
Hospitals NHS Foundation
Trust
RR8
Leeds Teaching Hospitals NHS
Trust
RM2
University Hospital of South
Manchester NHS Foundation
Trust
RJ2
Lewisham and Greenwich NHS
Trust
RHM
University Hospital
Southampton NHS Foundation
Trust
RBQ
Liverpool Heart and Chest
Hospital NHS Foundation Trust
RRK
University Hospitals
Birmingham NHS Foundation
Trust
REP
Liverpool Women's NHS
Foundation Trust
RA7
University Hospitals Bristol
NHS Foundation Trust
R1K
London North West Healthcare
NHS Trust
RKB
University Hospitals Coventry
and Warwickshire NHS Trust
RC9
Luton and Dunstable University
Hospital NHS Foundation Trust
RWE
University Hospitals of
Leicester NHS Trust
RWF
Maidstone and Tunbridge
Wells NHS Trust
RTX
University Hospitals of
Morecambe Bay NHS
Foundation Trust
27 | Annex 2: Trusts covered by the proposal
RPA
Medway NHS Foundation
Trust
RJE
University Hospitals of North
Midlands NHS Trust
RBT
Mid Cheshire Hospitals NHS
Foundation Trust
RBK
Walsall Healthcare NHS Trust
RQ8
Mid Essex Hospital Services
NHS Trust
RWW
Warrington and Halton
Hospitals NHS Foundation
Trust
RXF
Mid Yorkshire Hospitals NHS
Trust
RWG
West Hertfordshire Hospitals
NHS Trust
RD8
Milton Keynes University
Hospital NHS Foundation Trust
RGR
West Suffolk NHS Foundation
Trust
RP6
Moorfields Eye Hospital NHS
Foundation Trust
RYR
Western Sussex Hospitals
NHS Foundation Trust
RM1
Norfolk and Norwich University
Hospitals NHS Foundation
Trust
RA3
Weston Area Health NHS Trust
RVJ
North Bristol NHS Trust
RBL
Wirral University Teaching
Hospital NHS Foundation Trust
RNL
North Cumbria University
Hospitals NHS Trust
RWP
Worcestershire Acute
Hospitals NHS Trust
RAP
North Middlesex University
Hospital NHS Trust
RRF
Wrightington, Wigan and Leigh
NHS Foundation Trust
RVW
North Tees and Hartlepool
NHS Foundation Trust
RLQ
Wye Valley NHS Trust
RGN
North West Anglia NHS
Foundation Trust
RA4
Yeovil District Hospital NHS
Foundation Trust
RNS
Northampton General Hospital
NHS Trust
RCB
York Teaching Hospital NHS
Foundation Trust
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Consultation On Mandating Patient-level Costing (UK National Health Service)

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