Healthcare Costing for Value Institute
Paul Briddock, Director of Policy & Technical, Healthcare Financial Management Association
The Healthcare Financial Management Association (HFMA) has this year launched an Institute for Costing and Value in Healthcare. Costing faces big changes and the pursuit of value will need to be at the heart of everything the NHS does.
You might think there is nothing new about the NHS targeting the delivery of value. We’ve been there before with value for money and broader public sector ‘best value’ initiatives. But this time it’s different.
The NHS has faced years of difficult financial settlements, with growth well below the long-run average in a context of broader public spending cuts. Demand on the NHS is rising, driven by changes in the size and make-up of the population and the increasing prevalence of long-term conditions.
Current service models are not sustainable and we need to find new, effective and efficient ways to meet these service and financial pressures. In this context, delivering value has never been more important – that is value defined both in terms of quality and cost.
So the launch of the HFMA Healthcare Costing for Value Institute is timely.
Value provides the overarching context for the Institute in terms of how healthcare providers deliver services and how commissioners deliver value across their whole budgets, comparing spend in one programme area with another.
Understanding value is about understanding what it is we are trying to deliver – improvements in outcomes, patient experience and avoiding the need for healthcare. It can’t just be about focusing on the inputs and delivering more and more of what we are already doing. We need new models that deliver these better outcomes within budget.
We also need tools and systems that help us to understand the value delivered by new approaches and to ensure that the sought-after value is actually delivered by new patient pathways. This is what makes the Institute so important. We are all aiming for the same goals. How do we work out where to target improvement efforts? How do we assess the value of new and existing pathways? How do we implement new systems?
Costing will also be a fundamental work stream for the Institute – raising its profile among finance practitioners, clinicians and boards and supporting costing practitioners in particular. You can’t understand value unless you understand cost. You need it right alongside quality information to inform business cases and decisions and analyse results. And that means cost data has to be robust and comparable across organisations.
Sector regulator Monitor has launched a programme to transform costing, ensuring cost data is collected at the patient-level using a standard methodology to inform price setting and local decision making. The Institute will have a big role to play in helping costing practitioners and their organisations meet the demands of this transformation programme and in spreading good practice around the community.
The Institute will also be looking beyond the technical job of improving costing to support organisations in using the data. There are increasing examples of providers using cost data to highlight unwarranted variation in practice and opportunities for quality and productivity improvement.
The Institute will provide a platform to showcase these examples and give organisations an opportunity – through workshops, conferences and dedicated online forums – to share learning and ideas. This will naturally lead into the development of a value work stream, aimed more at finance directors and clinicians – who are seen as key to the success of a switch to value-based healthcare.
One thing is clear: the HFMA Healthcare Costing for Value Institute has an extensive but interesting agenda to address.