Health Service Costing
The demand for health service costing has increased since the Department of Health (DoH) introduced a 'Payment By Results' policy which grants financial rewards to NHS service providers based on their service delivery. This policy encourages service providers to improve their understanding of service delivery. There are three core components to the Payment by Results policy;
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Activity based funding. Activity based funding recognises that patients and how their treatments are managed are a key factor that drive costs in a NHS service provider.
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Work measured in context of Healthcare Resource Groups (HRG). Healthcare Resource Groups provide a means of categorising the treatment of patients in order to monitor and evaluate the consumption of resources. These are groupings of individual cases that are sufficiently clinically similar and require similar treatment resources.
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Payment made according to National Tariff. This tariff is a price tag for any individual healthcare resource group and is calculated using Reference Costs (RC) which are the average cost to the NHS of providing a defined service in a given financial year. These reference Costs are used to determine the relative efficiency of the service provider.
How TechModal can help
At TechModal we are building a dedicated team of health service cost experts. The foundation of this team draws from industrial and research experieance from the defence sector in cost modelling and data analysis. These string foundations are enhanced with health service professionals to provide a string team capable of addressing your health service cost modelling requirements.
We recognised the demand for our skills in responce to the Department of Health commencing policies such as Payment By Results which has resulted in a more commercial approach to measuring performace and determining the costs associated to providing health services. In particular we are working in the area of:
Healthcare Resource Groups (HRG)
The Department of Health believes that payment by results will encourage providers to increase the level of their activity and improve their efficiency. It should provide an incentive for commissioners to seek out lower-cost forms of care in order to reuse the money saved.
The Payment by Results policy is focusing attention on an increased understanding of service delivery, linked to financial reward. The Department of Health believes that the ability of providers to better understand their services will support future NHS practice and development, and underpin the creation of a patient-led NHS.
Payment by results has three central components.