Health Service Focus

06.06.16

NHS Improvement: Better healthcare costing equals better decision-making

Richard Ford, costing director at NHS Improvement, explains why good quality costing needs to be a priority for the NHS. 

NHS Improvement’s latest analysis of NHS trust’s performance shows the sector as a whole reported a deficit of £2.45bn for 2015-16; and that almost 90% of acute providers ended the year in the red. This predictably led to a torrent of “NHS in meltdown” themed media headlines; and a heightened feeling within the services that our challenges are insurmountable. But, it’s not all doom and gloom. 

At NHS Improvement, we’ve seen numerous examples of excellent practice across the country, to overcome these challenges. Provider’s, such as Alder Hey Children’s NHS FT, and Nottingham University Hospitals NHS Trusts who are improving the quality of care for patients while also making smarter use of their skills, time and resources. Key to this has been the use of patient-level costing information to prompt discussions between clinicians and operational managers on changing the way patient care is delivered.  

Good quality costing information has a vital role to play in the operational and financial sustainability of the NHS because it helps organisation’s make better decisions. At NHS Improvement we are working with healthcare providers to increase the use of patient-level costing, and to improve the consistency of costing information. We are developing patient-level costing standards, which are available in draft now, and introducing a single national cost collection. 

But creating good quality costing data is only half of the story. Our work with trusts shows that although patient-level costing can produce valuable data, improvements in care delivery only occur where there is organisation-wide commitment to using that information.   

An organisation’s Board needs to provide clear direction that quality costing information is an important resource. There needs to be ongoing interest in what the costing information is telling you. This can mean dedicating time to ensure information produced is be used to inform conversations about improving patient care and ensuring that costing is embedded within the performance reporting cycle.    

Clinicians and operational managers responsible for the delivery of care are only able to act on cost information if they understand what it is showing and how it relates to patient care. Studies show that involving clinicians early-on in producing cost information has been shown to deliver more successful cost improvement.  Informatics and IT also need to be an integral part of the team to ensure data is available as well as all support staff, such as ward clerks and receptionists, to ensure that data is complete and reliable. 

Costing experts, with appropriate seniority and training, need to advise clinicians and operational managers as well as being the main point of technical costing expertise.  It is a complex skill set, and as the demand for good quality data increases across the organisation, it will be important to consider the size and skill mix of the core costing team. 

Of course, developing a costing culture across an organisation takes time and therefore carries costs. But when patient-level costing is used to support and drive the design of clinical pathways and reduce unwarranted variation, then the process can pay for itself.  

Good quality costing needs to be a priority for the NHS. We need to know that we are making the best use of our resources if we are going to be able to protect the delivery of quality care into the future. 

For further information on NHS Improvement‘s work on costing visit: improvement.nhs.uk

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