[A version of this item appears in: Dementia and Elderly Care: the Latest Evidence Newsletter (RWHT), Volume 3 Issue 3, October 2012].
This Nuffield Trust report suggests many hospitals in England are unable to track costs, often due to using outdated IT systems. One NHS trust is cited as an example of how a patient-level information and costing system might be used. These information systems were introduced in the NHS in the mid-2000s, and are used internationally. Given the financial challenges faced by NHS trusts, better use of cost information at the patient level might help achieve efficiencies.
The authors of this report conclude that:
“… financial pressure coupled with the more stringent failure regime introduced by the Health and Social Care Act 2012 may encourage hospital trusts to adopt these systems. To speed up this process the NHS economic regulator, Monitor,, [could] follow the German model of only using the better cost information from hospital trusts, and deploying patient-level information and costing systems to help set prices. This would also encourage more accurate setting of the national tariff price…
However they also warn that PLICS may give hospitals a very advanced understanding of their costs, something to which commissioners would not be guaranteed access. This could create information asymmetry and have a detrimental effect on the efficiency of the market. To guard against this, policy-makers could mandate some sharing of cost information between all providers and commissioners…”
Blunt, I. and Bardsley, M. (2012). Use of patient-level costing to increase efficiency in NHS trusts. London: Nuffield Trust, 2012.
There is also an Executive Summary.