Feature / PLC goes local

The benefits of patient-level costing don’t need to be confined to the acute sector. As Steve Brown reports, NHS Islington’s community services has taken the plunge

To date, patient-level costing has been confined to the acute sector. Driven by a national tariff and service line reporting, the need to understand costs at a more granular level that is meaningful to clinicians, about 100 acute trusts are pursuing patient costing.

The same drivers exist for community services. Here too is a need to engage clinicians in cost structures, so that opportunities can be identified to improve services and productivity.

The problem for community services is data  – or lack of it. Assigning costs to patients – creating a patient-level bill – means counting and coding to levels that have so far been beyond most primary care trust provider arms.

Reference costs for community services have long been dismissed as meaningless. While the costing information may have been okay, the problem has been in counting the activity. Even if patient contacts are counted, without detailed understanding of the contact and care delivered, the units being costed give poor information for decision making.

Better IT means there has been an improvement in data recording and patient level costing is now within the grasp of the community sector. NHS Islington is one PCT to make good progress. Ian Tritschler, its associate director of business development & ICT, says the implementation of the RiO patient administration system was the key. ‘We replaced our legacy software and spreadsheets with Cost Master PLC and Report Master from PSCAL,’ he says. ‘We then undertook a review of our reference costs. Once we were sure of our reference costs we moved into patient level costing, taking the activity feeds from RiO, staffing data from ESR and the finance ledger feed from Agresso. We now have 26 of our 32 service lines live with PLC.’

Real time data collection has been crucial. Clinicians use a laptop and 3G mobile link to record details about clinics and home visits. Despite being in the heart of the capital, there have been issues with 3G reception and the speed of the RiO system. But in general the move has gone well. Clinicians see the time needed to provide the extra data is more than compensated for by the information produced.

As with experiences in the acute sector, Mr Tritschler says clinicians have responded well. ‘They like it,’ he says. ‘They understand the benefits and the fact that it can help them describe to commissioners what they do.’

The provider arm began its programme in April 2009 and has brought virtually all its services onto the RiO system in the past year. Mr Tritschler says there have been benefits in planning and operational management. ‘We now obtain much more accurate costs to a high level of detail,’ he says. ‘We can look at costs by grade of staff or even by individual clinician; we can cost visit times, travel times and much more.

‘Senior management can also compare services with broadly similar staffing structures and start to question why costs may be so different across services. The detail gives managers more confidence in the information and in their decisions. In short, we have more credible costs for services.’

Five-year plan

NHS Islington recently produced its five-year plan using the information it had produced for patient level costing, saving precious time.

Patient level costing will not deliver results overnight. NHS Islington knows it will take time to improve data quality and for clinicians and managers to gain more confidence in the data. But Mr Tritschler says even at this early stage that the understanding of productivity and efficiency has improved.

‘We are able to identify cost differences for patients with similar conditions and outcomes,’ he says. ‘This at least gets us asking “Why the difference?”

 ‘We also used the whole implementation exercise as a stock-take on our coding for RiO, ESR and Agresso, all  of which have been improved by the introduction of PLC,’ he adds.

During 2010/11, the PCT plans to run shadow pricing using its new cost information. It will compare this with the block payments at service line level. It will also use the data to help develop better local currencies. For instance, with improving data in long-term condition teams, it can start to build up and compare options for currencies, such as a tariff for a year of care or a treatment package.

 ‘Our commissioners want assurances that costs are being calculated accurately and we can now give them those assurances, backed up with auditable facts,’ says Mr Tritschler. ‘Our services are increasingly getting to see how their costs are made up and this has helped them to engage in some of our wider management challenges.’