The NHS needs to start recording the actual costs of hospital treatment services rather than using averages, Monitor said yesterday.
In Costing patient care, the regulator sets out the approach it intends to use when it takes over NHS price-setting from the Department of Health next year. It wants to move away from a reliance on average unit costs – or ‘reference costs’ – to ‘more sophisticated’ methods of pricing patient care, notably Patient Level Information and Costing Systems data. These systems are increasingly used by trusts, it said.It will start by collecting PLICS data on a voluntary basis next year.
A Monitor spokesman said: ‘We recognise moving the NHS to a pricing system using PLICS data is a long-term aspiration, despite its widespread usage by many providers. Over 80% of trusts either have implemented or are planning to implement these systems.’
Responding to the publication, Dr Jennifer Dixon, director of the Nuffield Trusts said a ‘bottom up’ approach to price setting made a ‘great deal of sense’.
She cited Nuffield Trust research showing that more than four out of five clinical procedures were at least 10% either above or below their official tariff prices.
Dixon added: ‘The research also backed up other studies demonstrating that payment systems based on actual costs can be a powerful tool wherever they are in place, such as Germany, not just at the system level but also within hospitals, as they encourage management and doctors to confront variation between teams and patients.
‘Hopefully this announcement will encourage those outlying trusts that are yet to implement PLICS to start investing in this proven resource.’
Monitor is inviting feedback on the costing guidance that will underpin PLICS collection. The deadline for consultation is December 11.
