Feature / The next big thing

If you read this magazine or have been paying any attention to Monitor’s consultation process on costing and pricing, you will be aware of the existence of the MAQ score or MAQS. Although the materiality and quality score has been around for more than three years, to date only  handfuls of organisations have undertaken the self-assessment to derive a score for the quality of their costing process. But current events mean that the MAQS could be about to hit the big time.

The MAQS was first released in 2009 by the Department of Health as part of its first published clinical costing standards, which provide guidance on deriving costs at the patient level. But its profile really started to grow last year when the HFMA took over responsibility for the development of the standards.

While still needing work, the association’s Acute Costing Practitioner Group – set up to oversee the development of the standards – saw huge potential for the tool in providing assurance for finance directors and boards over the quality of the costing processes. It was also seen as a way of ensuring and assessing improvements and even of helping to target resources on aspects of the costing process that would produce the biggest improvement.

But the transfer of responsibility for pricing from the Department of Health to Monitor and the NHS Commissioning Board has raised the prospect of a different role for the MAQS.

Monitor is considering recommendations from PricewaterhouseCoopers to mandate the use of MAQS for a sample of providers who would be required to submit patient-level cost data to inform the setting of future tariff prices. There has also been discussion – although no formal recommendation – that organisations wanting to be part of the sample group might need to achieve a set threshold on the MAQS.

Whatever Monitor decides about its approach to costing and pricing, it seems a safe bet that the MAQS will feature in some way in the future. And even without a formal interest from the regulator, the association believes MAQS assessment will be an essential lever to drive improvement in costing locally as part of plans to improve services and productivity.

As such, finance directors and costing practitioners need to get much more familiar with how it works and how to read the results.

Work on MAQS to date has focused on the acute sector – in the main reflecting the fact that acute organisations tend to be much more advanced in their implementation of patient costing – and the process is detailed in standard 9 of the Acute health clinical costing standards 2012/13. However, work is under way to develop the MAQS for mental health organisations  as well.

The scoring process involves completing a MAQS template, which can be downloaded, along with copies of the standards themselves, from ​here. The process is easy to follow (see box overleaf) but broadly awards a score for the costs produced in each cost pool group, taking account of the amount of resources in each cost type, the accuracy of the allocation method used and the number of patient records passing into the costing system (effectively an assessment of how many records can be matched at the patient level).

Allocation methods for each cost type are rated as baseline, bronze, silver and gold with respective weightings of 0.25, 0.5, 0.75 and 1. A weighted score is generated by applying these adjustments for each cost type. The matching adjustment is also important. An organisation could have gold standard allocation methodologies for allocating pathology test costs to patients, but if only 20% of tests can be matched to specific patients, then clearly the quality of the patient costs produced will be significantly reduced.

Benefits of MAQS

There is growing awareness of the benefits of calculating and reporting the MAQS within an organisation. First, it can provide an awareness of data quality issues and their impact on the quality of costing. It can also provide a way of demonstrating that cost information has improved over time. For example, if systems are put in place to capture prosthetics information at patient level and to then integrate this information into a costing system, this will increase the score calculated for a potentially significant area of spend, resulting in an improved overall MAQS score.

Royal Devon and Exeter NHS Foundation Trust has used the MAQS as a planning tool.  According to the trust’s head of financial development, Alan Welch, the scoring template has helped to direct the organisation’s effort so it can improve its patient-level costing.

‘Driving up the quality of our costing will help us engage in the debate around future tariff setting, but there is another important internal aspect to this for us. As our financial reporting and costing information grows more important in helping us address the financial challenge, the MAQS potentially has real value within the trust to demonstrate the quality – and weaknesses – of the financial information we are asking our clinical team and senior management to use in their decision-making.’

Developing the MAQS

According to Department of Health information collected as part of the reference costs submission, 25 organisations have already undertaken a MAQS assessment. And anecdotal evidence suggests good scores are coming out in the range of 55%-65%. Given the potential use of the MAQS, and the importance of improved costing in general, much greater experience of undertaking and using the MAQS must be developed in the NHS.

With this in mind, the HFMA is encouraging organisations to complete their own MAQ score.  This will help guide the development process and feed into work that aims to test the MAQS is robust enough for the purposes being envisaged. The HFMA Acute Costing Practitioner Group is also reviewing the

MAQS with a view to publishing a revised template in the 2013/14 standards. In particular this review is considering several issues highlighted to date:

• The impact of the matching percentage on the overall score
• Application of the matching percentage to areas using patient resource information only
• Ensuring that for each cost type, the requirement to achieve each level of costing is clearly defined and understood by users
• Ensuring that the template is as easy to use as possible
• Ensuring the overall scores of bronze, silver and gold are set at the correct levels.

The standards are designed to be used by all organisations. But the gold standard is intended to be a stretch target. The association believes gold standard should be achievable and provide an indication of best practice in the NHS. It also recognises there could be lessons from international experience about what standards exist for allocation methods and might be achievable in future.

An international symposium, being undertaken by the HFMA in conjunction with Imperial College as part of a broader research project will help to inform thinking on MAQS and the gold standard.

It will, of course, be up to individual organisations to assess the cost and benefit of aiming for gold for each cost type, and this will need to be part of the internal review and decision-making process.

Although the template may change from April, the HFMA is still keen for organisations to calculate their MAQS. It is also keen to hear organisations’ feedback – how they found the scoring process and what they scored.

Experience so far suggests organisations will derive a valuable insight into their own costing processes – how they currently perform and how they could improve – as well as getting vital practice in on a process that looks set to have a much bigger role in future.