Comment / A change of direction on costing?

Are we about to see a change of tack on patient-level costing? That is certainly one possible conclusion from a current reading of the room.

For a number of years now, costing practitioners – channelling their collective voice through the HFMA and its Healthcare Costing for Value Institute – have been calling for a change of approach. In short, the association and practitioners have argued that the mandated standards and guidance require costs to be collected in too much detail. For services where the overall value is not material, this can mean time spent on a level of granularity that will simply not be used to inform management decisions.

They also point out that there are key differences between the way costs are required to be reported centrally, as part of the National Cost Collection (NCC), and how they are reported locally to inform decision making – trusts’ ‘business as usual’ cost reports. Without simplification and greater alignment, the fear is that costing practitioners will simply spend all their time feeding the central data beast, rather than actually using cost data locally to support operational improvement.

There have been changes in central requirements and guidance – but nothing that provides the scale of change that practitioners have been calling for.

So what is new? Ok, well not much officially. But there are some small signs that the message is being heard and taken more seriously.

First there is the survey that was conducted by the national costing team last year as part of its exploration of a possible move to more frequent cost collection. Responses to that survey echoed the comments already raised by the HFMA. The standards need to be simplified; a sensible level is required for materiality; and the national collection should be aligned with trusts’ BAU.

Practitioners want these changes even if the focus remains on a single NCC. But they would be absolutely fundamental to any increase in collection frequency. The message hasn’t changed. But NHS England and NHS Improvement have now heard it from the horse’s mouth and they have logged those concerns.

Perhaps the single biggest indicator that changes could be on the way came in comments from NHS England and NHS Improvement chief financial officer Julian Kelly to the December issue of Healthcare Finance. Mr Kelly reaffirmed his interest in exploring how costing data could be collected more frequently – and fed back to the service more promptly.

The current data collected was ‘extraordinary’, but the lag in publication detracted from its usefulness. However, he said that more regular collection could mean focusing on data that was ‘good enough’ and ensuring it was standardised so that collection can be more automated. ‘We’ve not solved that yet, but it is still my ambition,’ he said.

‘Good enough’ more than hints at practitioners’ concerns over materiality. And surely automation could translate into greater alignment between the NCC and trusts’ BAU.

A further sign that change could be close at hand comes with this week’s announcement that the Costing Transformation Programme – the programme to get all parts of the NHS collecting and submitting costs at a patient level – will now be concluded by the end of 2023. Community trusts join other trusts this year in being mandated to submit patient-level costs from this year. But there are additional changes to do with the expansion of scope still to be implemented.

This brings forward the original completion for the CTP and this is seen as an essential building block for any move to more frequent collection.

There is major support for patient-level costing among costing practitioners. They don’t need to be sold the potential value of the detailed data to support service improvement and the delivery of greater value. They also acknowledge the value of more frequent submissions, as long as they are accompanied by similarly timely data publications fed back to the service. But they maintain that the way data is collected needs to change.

Signals and hints are welcome. But practitioners would prefer to see a consensus developed on a practical way to proceed. A single approach to costing and cost collection that supports local decision making, while meeting central requirements. Then, with everyone on the same page, the service can focus on the efficient delivery of cost data and getting it to work to support local services.

HFMA Healthcare Costing for Value Institute briefings:

What does good look like for costing in the NHS?

Information governance for costing at a system level