Local costing models could hold key to NCC change

NHS England deputy chief financial officer Peter Ridley (pictured) told the HFMA summer conference in July that the national body was reviewing its approach to patient-level costing (PLICS) following concerns about differences between how costs were reported locally and NCC requirements. The aim was to minimise the burden on costing teams and ensure costing was focused on delivering value at a local a system level.

‘Our approach in the future needs to drive local decision making and drive the data you need locally,’ he said. And he added that, while the centre still wanted and needed costing data from the whole service, this had to be ‘secondary to actually giving you the data you need locally’.

As part of NHS England’s costing transformation programme (CTP), the whole NHS has moved to collecting costs at the patient level over the last seven years, with community trusts the last organisations to join the mandatory programme this year. With the effective completion of the move from reference costs to PLICS, NHS England believes there may now be opportunities to simplify the costing methodology and align the national approach more with local costing models.

However, it wants to gain a better understanding of how trusts are collecting and reporting costs locally and identify opportunities to streamline the national process. As a first step in a transforming PLICS programme, it is asking all trusts to complete its understanding local PLICS survey.

Senior costing manager at NHS England Donna Pannell stressed this was a genuine opportunity for trusts to influence the future approach to costing in the NHS, with nothing off the table. ‘This is really a chance for trusts to help us,’ she said. ‘The more responses we get, the more we can understand what people are doing locally and the differences from the national process. That will give us the evidence base to make a case for change.’

The survey is simple and should take less than 45 minutes to complete. Trusts are asked to complete two tabs of an Excel spreadsheet: one indicating if the organisation has specific data fields available to support cost allocation; the other listing the cost pools, buckets or groups used to collect and report costs locally.

‘We’ve heard comments about the resources and activities [prescribed in national guidance] not mapping to what trusts actually use in practice,’ said Daniel Clark, NHS England’s cost collections manager. ‘So the first part of the programme is about listening to what trusts actually use and where the similarities and differences are.’

He added that feedback suggested it took some trusts four months to convert their local cost data into a format that could be submitted for the NCC. ‘What we want to understand is where the time lags are,’ he said. ‘Where are the problems that we need to look into and what should we focus our attention on solving that would reduce some of the burden?’

There is a wide range of differences across the NHS between local costing models and how costs are reported. Aligning the NCC with local costing models would inevitably mean changes for many trusts. However, NHS England is hoping to understand where there is already consistency in local approaches.

Trusts that have already responded to the survey have listed between 20 and 160 different cost pools. NHS England is providing updates on responses received to date. An initial analysis showed trusts typically reporting costs across some 28 different cost pools, mixing resource groups (such as nurses and medical staffing) with activities (such as critical care, theatres and wards). The analysis suggests that medical staffing, nursing care, clinical support and clinical services account for nearly half of all costs with overheads adding a further 13% of the total.

NHS England has set no specific timescale for reform. However, it believes that if any proposed approach is supported across the NHS, then change can happen quickly. It is keen to hear back from all NHS providers, including large and small organisations across all sectors, acute, community, mental health and ambulance.

The understanding local PLICS survey can be accessed on the Open Learning Platform (login required) and access has now been extended until 14 October.

For more details about the initiative, contact [email protected]