The role of Patient Costing in healthcare governance and performance measurement

In England, the Department of Health encourages the implementation of Patient Level Information and Cost Systems (PLICS), but little is known about how PLICS are used or their potential outside the individual hospital where... [ view full abstract ]

In England, the Department of Health encourages the implementation of Patient Level Information and Cost Systems (PLICS), but little is known about how PLICS are used or their potential outside the individual hospital where the PLICS is located. This paper examines the findings of a National Institute of Health Research (NIHR) project on achieving the benefits of PLICS for the whole National Health Service in England. PLICS are IT systems which combine activity, financial and operational data to cost individual episodes of patient care. In England, healthcare is commissioned from public funds by Clinical Commissioning Groups. Commissioning Groups place contracts with healthcare providers using nationally set prices based on cost in a managed public healthcare market. Patient costs can therefore play a part in both the horizontal steering of relations across networks through the commissioning and pricing mechanism and in assessing and managing performance.
A 2013 survey of NHS healthcare providers gives a broad view of the uses of patient level cost data. In depth case studies provide a richer view of the role PLICS can play in healthcare governance and in performance management. The research concentrates on four areas: cost improvement; better resource allocation; understanding clinical variation and clinician engagement. The focal case study is a hospital providing a wide range of acute care services. The hospital is also a pioneer for the care of the frail elderly: it is concerned to integrate care across hospital, community and social care and provide ‘the right care in the right place’. The paper draws on the theories of transactional relationships, relational contracts and clinician engagement to interpret the difficulties of achieving the benefits from cost accounting systems across a network of public service commissioners and providers.

Key words: patient cost systems; public governance; relational contracts; transactional relations; clinician engagement; commercial sensitivity.