Comment / Time to target the 'too difficult' pile

By Tony Whitfield

The NHS needs robust cost data that accurately reflects the complexity of healthcare and finance must upskill to support service redesign

For the past two years I have led the HFMA Costing Special Interest Group as it took on responsibility, previously held by the Department of Health, for developing and maintaining the clinical costing standards for the NHS. These standards, which support the production of robust patient and service user level costs using a consistent methodology, are vital as we look to meet the Nicholson challenge and develop a healthcare model that reflects modern practices and pattern of disease.

The work by the group – in fact two groups, one each for acute and mental health services – has been excellent. This was hands-on work, requiring people to give up valuable time in the office and at home, to support a key area of the finance role. Further work is needed, both to fine tune the standards and support implementation, but producing and adopting the standards is the start of a journey, not the end result.

The use of costing data will be central to finding the (initial) £20bn savings while maintaining or improving patient safety and quality. As a professional finance community we need to

ensure the data is fit for purpose and that we have

the skills to use this data to drive improvement.

At an HFMA costing event in April, at which the standards were launched, we heard from clinicians who have responded positively to the use of patient costing data in their trusts. Even armed with information about cost variations – for example, between different consultants – they spoke of the tricky subject of challenging clinical behaviour. However, robust data that clinicians believe in is the only possible starting point for such delicate discussions.

We need costing data that hand on heart we

believe in as finance professionals. That means two things. First, we can’t just cost the activities we can cost easily – the well-defined hip replacement, for example. We’ve also got to be able to accurately cost the complex elderly patient with multiple interventions. And we need to accurately cost activities that have been too long in the ‘too difficult’ pile – clinical training and research and development.

That means trusts and foundation trusts making a priority of costing, with proper resourcing and the time to develop costing and those key relationships with clinicians. We need to upskill. We need to look at how we can factor outcomes – the silent variable – into our costing work.

And skills such as target costing – long used in the commercial world to drive cost improvement – may have a significant role as we look to find ways to deliver high-quality, safe services in new ways rather than delivering them in the way we always have.

This might lead to challenges to perceived wisdom – the population sizes served by different services, for example. But we need to ensure that we have the information at hand to underpin what may be massive decisions.

We are not alone. Other health systems are reaching the same conclusion. Those in the US are looking to ‘bend the cost curve’ as part of a growing focus on value. They want to understand the costs and benefits of prevention.  And there is an increasing belief there that patient level cost data holds the key to at least slowing down their growing healthcare costs – which stand at more than 17% of GDP.

In summary, we need to create a movement around costing, building on the good work already done and take it into new places.

Tony Whitfield is chair of the HFMA’s Costing Special Interest Group