Reference Costs 2006-07
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Reference Costs 2006-07 Afternoon Workshop Richard Russell, DH Ali Connell, DH PbR – Finance and Costing Team. Contents. Purpose of Reference Costs Organisational Roles and Responsibilities Key changes since 2005-06 HRG4 FCE and Spells Unbundling Data Definitions

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Reference Costs 2006-07

Afternoon Workshop

Richard Russell, DH

Ali Connell, DH

PbR – Finance and Costing Team


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Contents

Purpose of Reference Costs

Organisational Roles and Responsibilities

Key changes since 2005-06

HRG4

FCE and Spells

Unbundling

Data Definitions

Collection System

Known areas of difficulty

Timetable

Resources

Patient Level Costing


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Purpose of Reference Costs

Annual national benchmark exercise of average unit costs from providers in England

Also serves to inform

Payment by Results: Tariff Development

Programme Budgeting

Efficiency measures

Organisational Performance Management

So whilst some changes are to inform an improved benchmark we also need to take account of its other uses


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Roles and Responsibilities (1)

DH, Policy and Strategy, PbR, Operations

Responsible for developing reference costs guidance, costing manual, collection system

Secretariat for the National Costing Development Group who are responsible for quality of costing in the NHS

Responsible for producing, national schedules and RCIs

Information Centre for Health and Social Care (IC)

DH commission trim points, OPCS/ICD10 to HRG mapping, HRG grouper


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Roles and Responsibilities (2)

  • Connecting for Health (CfH)

    • Data Dictionary

    • Coding Guidance

  • Strategic Health Authorities

    • Coordinating the exercise locally and answers queries from Trusts and PCTs (with support from DH as required)

  • Your own Finance Department

    • First source of advice on reference costs


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Reference Costs 2006-07 Communications

  • SHA Reference Costs Leads

  • IC Roadshows

  • FAQs

  • Website

  • Mailbox

    • (Diagram – next slide)


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What organisation?

Where should I send?

(Including specific subject header)

PbR technical guidance

PbR development / policy

NHS Trusts

PCT

SHA

(If SHA cannot answer)

FT

DH

What does the query relate to?

pbrcomms@dh.gsi.gov.uk

Reference Costs collection guidance

Reference Costs data returns/results

Costing manual

NHS Trusts

PCT

SHA

(If SHA cannot answer)

FT

DH

pbrdatacollection@dh.gsi.gov.uk

If query is a mixture of PbR and Reference Costs questions then should go to pbrcomms@dh.gsi.gov.uk


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Key changes since 2005-06

HRG4

HRG4 (note no word “version” or “vn” or “v”)

Designed by clinicians

Increased number of lines from approx 560 to over 1200

Setting independent (APC, Outpatients, A&E, Adult Critical Care, Paediatric Critical Care, Neonatal Critical Care)

Apply equally to Admitted Patient Care and Outpatients i.e. Outpatients grouped by HRG


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Key changes since 2005-06

FCE and Spells (1)

Providers are paid on a Spells basis and need to measure their costs on the same basis

HRG4 is designed to be Iso-Resource at Spell level, not FCE level

So the future of Reference Costs is Spells level costs by HRG

For year on year comparability need a collection of both FCE and Spell costs


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Key changes since 2005-06

FCE and Spells (2)

DH issued guidance on how to get from FCE costs to Spell based costs

Point to note:

FCE collection – count FCE’s that are part of a Spell that finishes in the 2006-07 financial year

Spell level collection, group Spells that finish in the year

HRG4 Grouper assigns each FCE record the relevant FCE HRG and subsequent Spell HRG on same output file


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Key changes since 2005-06

Unbundling

For reference cost purposes this means services separately identified (by HRG4 Grouper) from FCE:

Chemotherapy

High Cost Drugs

Diagnostic Imaging (Radiology)

Interventianal Radiology

Renal Dialysis

Radiotherapy

Specialist Palliative Care

Rehabilitation Services

At a Spell level grouper also separately identifies these activities and does not group them within the main Spell


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Key changes since 2005-06

Collection System

Incorrect Trimpoints used will now ‘fail’ loading process - Vital to use correct ones

Workbook structures have been made more consistent with Guidance

Software providers

Mid May – Live testing week


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Key changes since 2005-06

Data Definitions and Collection

structures

The reference cost guidance now links to the data dictionary wherever possible

Biggest change is Outpatients, it is now a “pre-booked appointment at a clinic” i.e. setting independent – NB possibly big impact for PCTs?

Other key changes are:

Outpatients by Staff Type

Observation wards/assessment units clarification

Critical Care counting, Periods and ACP

Renal – now HRG4

Digital Hearing Aids

Mental Health – Mental Health Specialist Teams (Child/Adult/Elderly)

Pre-processing of data - Annex 1

Accounts reconciliation in reconciliation statement


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Known areas of difficulty (1)

With the new definition PCTs are now doing Outpatients, but generally do not using OPCS/ICD10 coding

A number of organisations have not collected OPCS 4.3 since the start of the year (1 April 2006)

Collection files are larger due to HRG4 introduction

Data Collection issues for some of the areas of unbundling


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Known areas of difficulty (2)

  • Updated definitions in line with data dictionary and PbR requirements may require more local solutions than normal

  • PAS systems not able to fully utilise all HRG groups at this time

  • PCT’s post reconfiguration need to include activity and costs relating to pre configuration organisations


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Timetable

Tools……

Ref Costs Final guidance available – 16th Feb (DH)

Costing Manual updates – March

Final Collection Files - March

ICD10/OPCS to HRG code to HRG mapping available Feb (IC)

Toolkit documentation available March (IC)

Grouper available end April (IC)

Trim Points available early May (IC)

Deadlines…..

First submission to DH – 29th June, Noon

Final submission to DH – 31st July, Noon

RCIs produced before end 2007 (DH)


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Resources and useful links

Reference Cost Guidance: www.dh.gov.uk/refcosts

NHS Costing Manual: www.dh.gov.uk/refcosts

HRG4 Toolkit: www.ic.nhs.uk/casemix

HRG4 Documentation: www.ic.nhs.uk/casemix

OPCS/ICD10 to HRG Mapping (code to group in excel): www.ic.nhs.uk/casemix

SHA leads contacts

(details In pack and at www.dh.gov.uk/refcosts)

Reference Cost Discussion Forum

(this is a users resource and whilst promoted by DH it is not used by the DH as a way of receiving queries – the route for queries is via SHA Reference Cost Leads)


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The Future of Costing

  • Response to Lawlor Review

  • National Costing Development Group Support

  • Patient Level Costing


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Patient Level Costing (PLC) 1

Historically reference costs tend to be calculated by finance, on a top down basis, with little clinical validation

one hospital provided 1526 Diabetic Adult Face to Face Contacts for a total cost of £1,678 (avg of £1.10 each)

another provided 16 Intermediate Pain Procedures for a total cost of 80 pence - 5 pence each

As reference costs have been used to calculate tariff then this undermines the credibility of the tariff


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Patient Level Costing (PLC) 2

PLC is a change in costing methodology to a bottom up approach.

Will allow for improved clinical engagement as discuss actual patients rather than averages

Will allow for better understanding of costs as will be able to compare cost buckets rather than just average costs

Will better support tariff development as allows for greater level of detail to be collected

Will support any future classification changes as simply sum up patient costs into whatever classification the organisation is using


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Patient Level Costing (PLC) 3

There are already 5 sites implementing PLC

Up to a years implementation time and then a further year to properly bed in

Makes better use of the existing investment in place to support PbR implementation

Will be supported by

Updated costing definitions and standards will be written by NHS experts

Process of peer review of quality of costing data in providers


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The short term

PLC is a forward looking medium to long term solution.

There is plenty that can be done now:

Service level costing

Clinical validation of costing results

Benchmarking groups

Other ideas?


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WRAP UP

Large scale change for 2006-07 to support HRG4 tariff and costing development

FCEs and Spells

Unbundling

OPCS4.3

Organisations need to start planning for the reference cost collection now

Any Questions?