Feature / Raising the standards

Last month the HFMA published revised clinical costing standards for acute hospitals, building on earlier standards published by

the Department of Health. The revisions enhance the consistency of the standards, include a simple guide and provide improved guidelines to support acute organisations in implementing patient level costing in their organisations.

All this has been done under guidance from costing practitioners. First, a survey of all costing practitioners sought to understand how the standards were being used and how they could be improved. Second, practitioners on the HFMA’s newly formed Costing Special Interest Group – informed by the survey comments – undertook the detailed redrafting work. Helen Strain, newly appointed HFMA costing lead – working part-time on secondment from University Hospitals Coventry and Warwickshire NHS Trust – performed the lead author and editing role to bring the whole project together.

Fast response

With the survey only sent out in December, it has been a rapid turnaround given the substantial involvement of practising costing accountants. But it was important that revised standards were published. As Department of Health director of NHS finance Bob Alexander and HFMA Costing Group chairman Tony Whitfield say in the document’s foreword, there has never been a more important time for robust cost information.

• Streamlined structure for each standard, including standard definition; purpose; guidelines
• Definitions and comments throughout
• New summary guide
• New combined standard for cost allocation
• Separate standards to be introduced for work in progress and fixed/variable classifications
• New terminology – cost pool groups – introduced to improve understanding
• Cost pool groups for medical staff and drug costs (including costs of stock drugs)
• 25% baseline score included in materiality and quality score

‘The NHS … needs to make unprecedented productivity improvements to meet the cost pressures of rising demand, changing demography and new technologies,’ they write. ‘Good costing information is key to day-to-day management, but it will be absolutely vital during this coming period to inform decision-making to improve both the quality and cost-effectiveness of services. Calculating costs at the most basic level – the patient – will help organisations to drill below service line reports to understand exactly how costs are built up. This will provide a detailed appreciation of why costs have arisen and where there are opportunities to improve services for patients and value for money.’

The standards, which set out a consistent approach to the costing process, are already being used according to the survey. Three-fifths of the acute respondents currently operating a patient level costing system said they had used the standards as part of their implementation. Others had retrospectively reviewed their systems against the standards. And even respondents yet to implement a patient costing system had used the standards to inform their current costing methodology.

There was also a clear call for further guidance and clarification in specific areas. The revised standards aim to deliver this. But an accompanying Clinical costing implementation guide – available for download from the HFMA’s new costing section of its website – provides further help.

Further support material is also available for download, including assistance on improving data quality and a template to help organisations score their costing performance.

As all this activity indicates, the HFMA regards supporting an improvement in costing as a key priority.

The Department of Health and the HFMA hold a shared belief that the finance profession should have the lead role in setting standards and promoting the highest quality in costing practice – and this was a key factor behind the Department asking the association to take on the revision of the standards.

Mental health priority

However, much remains to be done. There are already plans to engage with suppliers and develop a costing event in the autumn. But perhaps the biggest priority will be a detailed assessment of the specific support required for mental health organisations.

The revision work done to date has focused on the acute standards. Mental health organisations have a different starting point in moving towards patient level costing and a different context, given the current focus on introducing a currency based on clusters, submitting costs for these clusters, the financial systems in use and the quality of activity data.

Recognising this, generic improvements made to the acute standards have been incorporated into the mental health standards, previously published by the Department. However, these refreshed standards remain in draft form only. No printed copy of the standards has been produced, although the reformatted document can be downloaded from the new HFMA costing site.

Mirroring the acute standards revision process, the HFMA will engage with mental health costing practitioners to undertake a more detailed revision of the mental health standards and assess what other support is necessary.