Mandating patient-level costing in the ambulance sector: an impact assessment

Transcription

1 Mandating patient-level costing in the ambulance sector: an impact assessment August 2018

2 We support providers to give patients safe, high quality, compassionate care within local health systems that are financially sustainable.

3 Contents Summary... 4 Detailed impact assessment... 7 What is the problem under consideration?... 7 What we propose Analysis of options Option Business as usual How would Option 1 work in practice? Assumptions Monetised costs of this option Unmonetised costs of this option Costs excluded from analysis of Option Monetised and unmonetised benefits of this option Risks of this option Option Assumptions Monetised costs of this option Costs excluded from analysis of Option Unmonetised benefits of this option Risks of this option Contents

4 Option Assumptions Monetised costs of this option Costs excluded from analysis of Option Monetised and unmonetised benefits of this option Risks of this option Why we prefer Option Plan for monitoring and evaluation Annex 1: Monitor s statutory duties Annex 2: Initial options appraisal list Annex 3: Scope of data collection Annex 4: Difference in reference cost and patient-level cost collection Annex 5: Job-cycle stages Annex 6: Adjusting costs for inflation Annex 7: List of trusts covered by the proposal Contents

5 Since 1 April 2016, Monitor and the NHS Trust Development Authority have operated as a single integrated organisation known as NHS Improvement. This document is issued in accordance with the duty to carry out and publish an impact assessment of certain proposals, imposed on Monitor by section 69(4) of the Health and Social Care Act In this document, therefore, NHS Improvement means Monitor, unless the context requires otherwise. 3 Summary

6 Summary 1. NHS Improvement proposes to mandate NHS ambulance trusts to record and report patient-level cost 1 data for all incidents going through 999 call centres or dispatch centres 2 at the end of each financial year. Trusts would use the approaches and methods in the Healthcare costing standards for England ( the standards ). 3 We propose to do this from the 2019/20 financial year, with the first collection in 2020, and stop collecting reference cost data after 2018/ This impact assessment accompanies our consultation document and describes our calculation of the impact of our proposal on trusts. 4 The phased introduction of patient-level costs as a regulatory requirement across all types of trusts has been a key part of the costing transformation programme (CTP) since We believe that producing more detailed and accurate patient-level costs in the ambulance sector will significantly benefit ambulance trusts, the wider sector and other users of cost data. It will: enable ambulance trusts to compare patient pathways and costs with peers, helping them reduce unwarranted variation improve understanding of patient pathways between ambulance trusts and the rest of the sector, facilitating new care models produce more accurate cost data that will improve the accuracy of the national tariff and local prices, helping to strengthen efficiency incentives and improve sustainability across the service in the longer term. 3. We are aware that there is a cost associated with implementing patient-level information and costing systems (PLICS), and this document contains our estimates of this cost. However, work with the various sectors indicates that 1 For ambulance providers we are essentially collecting information at incident level currently, with a proxy used for number of patients. 2 Known as 999 activity Summary

7 the cost of implementing the systems is more than recouped by the benefits of patient-level cost data at an individual trust level. In addition, mandating patient-level costing benefits the wider system for example, by improving the accuracy of both local and national prices and enabling a sector-wide understanding of the flow of patients. 4. Since the CTP started, engagement across the ambulance sector has been exceptionally good. We thank all trusts that helped draft and hone the costing standards and gave us a valuable insight into how 999 services are provided in the sector. 5. Some trusts already have advanced costing processes. However, these are inconsistent and do not promote all the gains we believe patient-level costing will bring not only to the ambulance service but the NHS as a whole by enabling costs and activities to be tracked across trusts. In 2017/18, seven of the 10 ambulance trusts are submitting voluntary patient-level cost data, demonstrating the sector s engagement with it. By collecting this data, we will ensure: the standards and collection guidance are clear, and based on feedback from the sector we can identify where they can be improved the benefits of collecting cost data at scale and releasing the data back to the sector become apparent trusts can produce and submit the volume of data required, and NHS Digital can manage the process. 6. Calculating costs at patient level using the standards is the next step in replacing reference costs. Most ambulance trusts already have or are implementing PLICS systems, and by the end of 2018/19 we expect all trusts will have a system. 7. As we developed this document, trusts told us they supported mandating the process. However, there is a demand for more clarity about benefits, not least for trusts. The ambulance sector is unlike the acute, mental health or the community sectors: it is a true emergency service, where demand depends on factors outside the service s control and can vary by the hour, day or week. As such the service plays a key role in the emergency patient s pathway. Collecting data at a patient-level will help commissioners and trusts identify 5 Summary

8 alternative services that can reduce the demand on acute emergency departments. 8. We recommend that patient-level costs should replace reference costs without dual running. Dual running imposes a significant burden on the sector as the same teams collect and submit both sets of data. Our consultation on mandating patient-level costs for the ambulance sector found teams would struggle to submit both in the same year and would prefer to concentrate on one high quality submission. 9. Despite the early involvement of a significant portion of the sector, some risks of moving to a new cost collection remain. However, based on the four healthcare resource groups (HRGs) we propose to collect, we believe it will be possible to recreate reference cost data from patient-level costs if necessary. There are slight differences between the current reference cost HRGs and the proposed patient-level cost HRGs (see Annex 4). 10. This impact assessment relates to proposals on which we are consulting and is published alongside our consultation document. Please read this and respond, even if your organisation does not provide services covered by this proposal, we want to understand any issues other types of providers or organisations have on this proposal. For more information on the consultation process and details of how to provide feedback, see our consultation document. 11. Annex 1 explains how implementing the proposal for mandating patient-level costs for 999 activity would discharge our statutory duties. 6 Summary

9 Detailed impact assessment 13. This document contains our assessment of the impact of requiring ambulance trusts to record and report costs for all incidents going through 999 call centres or dispatch centres at a proxy patient/incident 5 level, in line with the methods and approaches in the Healthcare costing standards for England (the standards). This would be for the financial year 2019/20, collected from The assessment has been carried out in accordance with Section 69 of the Health and Social Care Act There is a consultation period for commenting on the proposal, beginning on 14 August 2018 and ending on 28 September For further details on the proposal and how to respond, see our consultation document. What is the problem under consideration? 14. Collecting patient-level information and costing data is key to helping the NHS improve patient outcomes and efficiency and achieve the vision in the Five Year Forward View (5YFV). The role of costing in supporting these wider objectives was described in our 2015 report, Patient-level costing: case for change. 6 The plan for the transition to patient-level costing was described in Improving the costing of NHS services: proposals for 2015 to Currently, ambulance trusts submit reference costs to fulfil NHS Improvement s (Monitor s) requirements for the trust licence. Only information on activity and costs for four currencies related to the provision of 999 services are collected, and they record the average unit cost to the trust of providing one of the currencies. This information is used by organisations that include: 5 Not all patients seen by ambulance are recorded and not all costs can be linked to a patient (eg hoax calls or people leaving a location without being seen). PLICS or patient-level costing is used for consistency across sectors to Detailed impact assessment

10 ambulance trusts and commissioners to manage their costs, agree local contracts and plan future services regulators including NHS Improvement (to understand the sector s costs) and the National Audit Office as part of the work on the sector s performance those carrying out cross-sectoral work to improve clinical outcomes and efficiency, including the review of operational productivity led by Lord Carter, and benchmarking between trusts to identify unwarranted cost and job-cycle variation. 16. The processes for submitting reference costs and their accuracy vary considerably between ambulance trusts. Though there have been no audits of reference cost submissions, the findings from NHS Improvement s Ambulance Technical Focus Group, set up to support the move to patient-level costing, found large variances in how trusts collect and cost 999 activities. 17. As reference costs are produced annually and collected on an average basis, they do not allow trusts to identify clinical or job-cycle 8 variation either within a trust or across the sector. This lack of granularity makes it difficult to identify where improvements can be made to provide a better service to patients. 18. This impact assessment therefore assesses the costs, benefits and risks associated with mandating submission of patient-level cost data using the Healthcare costing standards for England for 999 activities in ambulance trusts. This would be collected from the financial year 2019/20, with the first collection in the summer of Collecting patient-level cost information in the acute sector was mandated for 2018/19, and we are planning to extend this to mental health in 2019/20 and community in 2020/21 (see Figure 1 for the planned timeline). 8 Annex 5 job cycle information. 8 Detailed impact assessment

11 Figure 1: Costing transformation programme proposed timeline for mandation of patient-level costing 19. Engagement has been good during the move to patient-level costing for the ambulance sector. All 10 ambulance trusts are members of the Technical Focus Group and have been instrumental in drafting and agreeing the costing standards. In addition: in 2016/17, three trusts were roadmap partners and one trust was an early implementer by May 2018, 70% of trusts (seven out of 10) have signed up to the voluntary submission of patient-level costs for 2017/18. We are working with the remaining trusts to engage them in the process We aim to extend the voluntary collection of ambulance patient-level cost data for 2018/19 to all trusts services are also provided by Isle of Wight NHS Trust, which is an acute provider. The trust provides 0.3% of national 999 activity. 9 Detailed impact assessment

12 What we propose 21. Since 2012, 10 NHS Improvement (Monitor) has advocated moving to patientlevel costs in preference to reference costs. Our consultation in 2014 set out a detailed plan and timetable for this move, and we received positive feedback. 11 The plan proposed: introducing a single set of standards for patient-level costing for each healthcare sector (acute, ambulance, mental health and community), enabling them to consistently cost activities moving to a single collection of patient-level costs, which would replace the two current collections of reference cost data (one with education and training (E&T) and one without). 22. By mandating a patient-level cost collection for all NHS trusts, with defined standards, we can achieve four main objectives: Objective 1: Ensure the service adopts patient-level costing. This would ultimately enable us to use patient-level costs as the basis for all cost data in the NHS and stop mandating reference costs, reducing the burden on trusts that are submitting both. Objective 2: Improve trust performance. The granularity of patient-level cost data can identify how resources are used and inform clinical outcomes/job cycles. It would support our work on operational productivity by helping to identify unwarranted variation and opportunities for cost savings that can lead to improved patient outcomes. Objective 3: Improve the quality and consistency of cost collections, enabling trusts to compare their costs. Work at acute trusts showed that, even with a limited number submitting a basic level of patient-level cost data, participating trusts identified efficiencies and improvements both internally and with external organisations. We expect the ambulance sector to benefit from more granular data. Objective 4: Improve currencies and support better national and local prices. Using patient-level cost data to calculate the prices will improve its 10 Costing patient care: Monitor s approach to costing and cost collection for price setting. e_ FINAL_0.pdf 11 to Detailed impact assessment

13 accuracy as we expect trusts to be better able to check the accuracy of data. Benchmarking use of the information should also improve accuracy. We will be able to show its accuracy through data validation checks and costing audits. Analysis of options 23. Initially we identified 10 options for mandating patient-level costs in the ambulance sector see Table These were reviewed and reduced to three main options. Table 1: Initial options review Initial option A B C D E F Summary Reference costs (RC) collected annually and CTP patient-level costs collected annually on a voluntary comply-or-explain basis RC collected annually with use of standards mandated and CTP patient-level costs remaining a voluntary annual collection CTP patient-level costs and standards mandated for annual submission from 2019/20 for ambulance NHS activity, and RC collected annually for the following two years CTP patient-level costs and standards mandated on annual basis for all NHS ambulance trusts, and RC ended in 2018/19 for ambulance activity CTP patient-level costs and standards mandated for annual submission from 2019/20 for ambulance NHS activity, moving to quarterly/monthly for 2022/23, and RC collected annually for the following two years (ending 2020/21) Standards mandated for 2018/19 for annual RC submission and CTP patient-level costs annual submission, with mandation of CTP patient-level costs from 2019/20 and RC ending 2020/21 Included in impact assessment? Yes No Yes Yes No No 12 Further detail on all options and the initial options appraisal is included in Annex Detailed impact assessment

14 G H I J Phased mandation of CTP patient-level costs and standards seven early implementers in 2019/20 and the remaining three in 2020/21, with RC collected until patient-level costing is implemented Phased mandation of CTP patient-level costs and standards seven early implementers in 2019/20 and the remaining three in 2020/21, with RC collected until patient-level costing is implemented, then moving to quarterly submission two years after CTP patient-level costs and standards mandated on annual basis for all 999 activity and RC ended in 2018/19, extending to non-999 activity in 2021/22 (estimated time for when the independent sector providers (ISPs) may come into scope) CTP patient-level costs and standards mandated on annual basis for all 999 activity and RC ended in 2018/19, extending to non-999 activity in 2021/22 (estimated time for when ISPs come into scope), then moving to quarterly in 2024/25 No No No No 24. Based on our analysis, summarised in Annex 2, we shortlisted options A, C and D for the impact assessment to consider further. Option A represents continuing the status quo, with no mandatory requirement for patient-level costs. It is included as the business-as-usual option that all other options are assessed against. It is referred to as Option 1 in this document. Option C the original BDO 13 proposal for the CTP did not propose a timetable for phasing out reference costs and no decision has been taken on the timing. We have assumed an appropriately cautious estimate with two years of dual running. This is referred to as Option 2 in this document. Option D (Preferred) Like Option C but with no dual running of reference costs. Given that the ambulance reference costs and patient-level costs only cover costs for 999 activities and four currencies, we believe it will be possible to move directly from reference costs to patient-level costs with no 13 We commissioned BDO LLP to undertake a review to develop costing, cost information and cost collection in Its report is available here: /Costing_Roadmap_-_FINAL_Engagement_Summary_ pdf 12 Detailed impact assessment

15 dual running, reducing the burden on the sector. Though the currencies will change slightly 14, feedback from other regulators and trusts indicates this is not an issue that would adversely affect recommending this option. This is referred to as Option 3 in this document. 25. For the rest of this impact assessment the three options assessed are referred to as Options 1, 2 and See Annex Detailed impact assessment

16 Option 1 Business as usual Table 2: Estimated cost of Option 1 Average annual cost per trust Total cost over 10 years 15 Option 1 35,465 3,546,454 How would Option 1 work in practice? 26. This is the business-as-usual option, with reference costs remaining the mandated costing return and patient-level costs continuing to be collected voluntarily. The standards would remain on a comply-or-explain basis. 16 Assumptions 27. We made these assumptions in costing this option: We excluded any cost of calculating education and training (E&T) costs. Feedback from trusts indicates this is negligible as little E&T training in the ambulance sector is funded by Health Education England (HEE). We are currently working with HEE on E&T data collection in the acute sector. Once that is complete we will assess, as part of the post-implementation review 17, the time and cost of any proposed changes. 15 This if the total value multiplied by GDP deflator and NPV (see Annex 6) Present value is the current value of the sum of the discounted future costs (or benefits) using a discount factor of 3.5% as recommended. 16 Comply-or-explain is a regulatory approach used in the UK and other countries in the field of corporate governance and financial supervision. Rather than setting out binding laws, regulators set out a code, which listed companies may either comply with, or if they do not comply, explain publicly why they do not. 17 See page Option 1

17 We expect all ambulance trusts to submit voluntary patient-level cost data for 2019/20 (Year 2 of this assessment). This reflects those that are already running PLICS. If patient-level costing is not mandated, we expect the number of voluntary submissions to reduce over five years from Year 2 18 onwards, as trusts focus on submitting the mandatory return. Consistent with our assumptions on the acute impact assessment, we assume the number submitting patient-level costs in the absence of mandation would fall to zero in 2023/24 as trusts focus on submitting required costing and financial information. (Some trusts might continue to collect patient-level cost data for internal use, but they would be unlikely to submit it if it was not mandatory.) We assumed the planned Agenda for Change (AfC) pay proposals are accepted. As the grade of staff responsible for costing varies across trusts, we used an average of the midpoint of the three AfC bands for costing staff. We used the AfC pay proposed in the new pay settlement until 2020/21, and then included an estimated average uplift of 6.5% over three years (equivalent to the average pay increase under the agreed AfC proposal). We included the on-cost charge in accordance with NHS Employers guidance. We used information collected during on-site visits and reference costs surveys to calculate the time trusts spend producing their current costing information and submissions. This includes: Annual cost of the IT systems (for both reference costs and patient-level costs) is based on the midpoint of suppliers costs and includes an element of supplier consultancy time. We assumed these costs will increase by 5% 19 per year due to inflation. For trusts without a PLICS system, we used information from business cases provided, but did not include the cost of any other new finance systems or hardware. 18 As with the acute review, we believe that the number of trusts submitting patient level data would drop by 25% a year. 19 Based on feedback from suppliers and consistent with acute impact assessment. 15 Option 1

18 The costs only include the estimated costs of producing the costing submissions, which we calculated using feedback from on-site meetings and the estimated time for patient-level cost submission from the standards. We have not included any costs for internal financial functions, such as producing service-line information or budgetary control purposes. The cost of voluntary patient-level cost submissions is based on information from roadmap partners and from our findings from acute trusts, amended for ambulance trusts. We excluded non-999 activities, such as patient transport services (PTS) or 111 call services. This information is deemed commercially sensitive and is not currently collected under reference costs. In addition, each contract for non-999 services will be specific to that contract and comparing costs would be difficult. We are not currently planning to include this information in our costing remit. Monetised costs of this option 28. As this is the business-as-usual option, the future costs are similar to those already incurred across the sector. They include the costs of continuing to submit reference costs and the costs of voluntary patient-level costs (which we assume would fall in time if we did not mandate, as fewer trusts would choose to submit). 29. For detailed analysis of monetised costs see Table 3. Unmonetised costs of this option 30. In addition to the financial costs of the business-as-usual option, there are unmonetised performance costs of not mandating patient-level costs (essentially the unrealised performance benefits of patient-level costs described in Option 2). The business-as-usual option means cost data will continue to be collected at an average level for the four 999-only HRGs, so we would expect limited options for cost savings and lack of ability to make detailed cost comparison. This could also mean that costing would continue to be seen as a finance-only exercise. 16 Option 1

19 31. Without mandating standards, trusts would continue to account inconsistently for costs and activity, which would continue to undermine the accuracy of this data and make it difficult to compare costs. 32. This is especially important as there is currently no national ambulance dataset. This means that when a trust receives a request from regulators on activity and/or costs, they must calculate the information in line with the request. By mandating how activities and costs are reported, this data could be used by other regulators, secure in the knowledge that all trusts are using the same counting and costing methods for 999 activities. 33. In addition, reference costs are collected at an average and do not break down activities into the various parts of the job cycle 20. This reduces the benefit of any benchmarking as items such as travel time cannot be identified. Costs excluded from analysis of Option We excluded several costs from this and other options: Regardless of the cost collection process, we would need a programme to assure the accuracy of data submitted. The current costing assurance programme focuses on reference costs in acute and mental health services but would be extended to cover ambulance activity. Specifically, for this option, if patient-level costing was not mandated, we have not assumed a reduction in the cost of NHS Improvement s costing team. Though much of the team s work is currently focused on patient-level costs, it undertakes other work and manages the reference cost collection and submission. Therefore, we have not assumed any specific reduction in the cost of the team. Monetised and unmonetised benefits of this option 35. We assumed this option would have no specific additional benefits. The new standards which would remain on a comply-or-explain basis and the costing assurance programme are likely to drive some improvement in the accuracy of costing. This could in turn, lead to some efficiency savings. Trusts 20 See Annex Option 1

20 could, for example, see some internal benefit to costs and patient pathways from the voluntary patient-level cost data. 36. However, as neither patient-level costs nor the standards would be mandated, we believe the issues with consistency in costing would continue and detract from the benefits of the Model Hospital. Feedback on reference costs from other data users (see Annex 5) indicates that providing more accurate and granular data will reduce the need for data cleansing and allow policy-makers better insights into the sector. 37. We have assumed this option would bring no significant unmonetised benefits. Academics and think-tanks use reference costs to study the sector, and they may benefit from a continued time series. However, in discussions with other organisations using reference costs (see Annex 5) we found that, although the data is widely used, they have concerns about its accuracy and consistency. Therefore, other users generally supported the move to patient-level costs, as they believe it will produce more accurate and granular information, enabling them to generate better insights. Risks of this option 38. As this option involves collecting cost data only at average currency level, we expect there would be limited engagement in costing outside of finance functions. Also, with the introduction of patient-level costs in the acute sector, the opportunity to link ambulance to acute activity would be lost. Without this, opportunities such as identifying clinical variations for patients admitted via ambulance would not exist, and the opportunity to identify new pathways may not be realised. 39. The lack of consistency (as the standards are not being mandated) would also lead to differences in how trusts account for costs and activity. This would continue to undermine the accuracy of costing data. 40. There is a risk that not mandating patient-level costs would damage NHS Improvement s credibility, undermining our approach to costing. We have stated in several publications that mandating patient-level costs is part of our strategy to support the 5YFV. As noted, 70% of ambulance trusts have signed up to the voluntary submission in 2017/18, and we are hoping to extend this to 100% in 2018/ Option 1

21 Table 3: Summary of Option 1 costs Year Collection year Financial year Cost of RC submission Voluntary patientlevel costs submission Total 2017/ / / / / / / / / /27 317, , , , , , , , , ,621 3,796, , , ,776 56, ,071 Total cost 570, , , , , , , , , ,621 4,373,187 GDP deflator (see annex 6) Deflated cost 570, , , , , , , , , ,179 4,069,762 Discount factor 3.5% PV of Option 1 570, , , , , , , , , ,298 3,546, Option 1

22 Option 2 CTP patient-level costs and standards mandated for annual submission from 2019/20 for ambulance NHS activity, and reference costs collected annually for up to two years Table 4: Estimated cost of Option 2 Average annual cost per trust Total cost over 10 years 21 Option 2 40,602 4,060, Under this option, ambulance trusts would have to submit patient-level cost data, complying with the standards, annually from the 2019/20 financial year (submitted in 2020). There would be dual running of reference costs for up to two years 2019/20 and 2020/ Though there are only four 999 HRGs, there are some slight differences between the versions 22. Therefore, this option includes up to two years dual running while we verify that reference costs can be reproduced from patientlevel cost data. 43. As noted, we have excluded: a. E&T from the cost of collection while we work with HEE to assess the impact on the ambulance sector b. the cost of any internal financial functions, such as producing serviceline reports or budgetary management functions and have only estimated the costs of calculating and providing the reference cost submission. This addresses the differences in how each trust records the time spent on costing and budgetary control related functions other than producing the mandated cost return. 21 See Annex See Annex Option 2

23 Assumptions 44. We used the same assumptions made for costing Option 1, plus the following: We assumed all trusts will have PLICS and be ready to comply with the standards for the 2019/20 submission. As this is part of the trust licence, any non-compliance could lead to enforcement action. By 2018/19, only trusts that have not yet purchased PLICS will have capital costs. We used business case information from other trusts to calculate the average cost of implementing a system for the three trusts without a system. Based on findings from the acute sector and roadmap partners, we used the expected syllabus 23 as the guide for time spent implementing a PLICS system. Monetised costs of this option 45. We estimated that the cost of this option would vary depending on several issues, including allowing for each trust s progress towards implementing patient-level costs those that must purchase and implement a PLICS system will have additional costs, but this will only apply for 2018/ For more details see Table 5. Costs excluded from analysis of Option We have not included costs for major updates to trusts financial systems as a cost of implementing PLICS. This was identified as a concern in the survey of acute trusts (see Annex 4) but work with the ambulance sector does not indicate this is a significant issue for it. However, we have included an estimated cost for IT-related hardware based on information provided by some trusts. Unmonetised benefits of this option 48. At this stage, patient-level costing has not been fully implemented and used in the ambulance sector, and there are no detailed examples of benefits 23 On the PLICS open learning platform ( 21 Option 2

24 realised. However, findings from on-site work and discussion with other regulators indicate there are benefits, including the following, which will be available to the ambulance sector: more granular information, which will enable trusts to review aspects of the job cycle for unwarranted variation by patient this, in turn, will allow better benchmarking, both internally and across the sector, to identify innovative ways of providing services linking more accurate costs to incidents and identifying data quality and systems issues linking the vast amount of data held by ambulance trusts at a level that can be verified and reviewed in detail more detailed information on job cycle, which can be used to improve procedures clearer and more consistent apportionment of overheads and better understanding of cost drivers across the trust. 49. Though for commercial reasons this proposal does not include collecting information on non-999 activities, many trusts believe that a consistent method of costing would benefit all activities and provide a better base for future commercial bids for other activities. 50. Another benefit of this option is that more frequent collections of patient-level costs (i.e. quarterly) could be implemented at a later point if it was deemed useful. 51. Because patient-level costing is at an incident level, errors in pathways and costing should be easier for trusts to identify and correct before submission. Most trusts producing voluntary patient-level cost data identified errors in costing as part of their regular work with clinicians to verify information and cost data quarterly. We will support this by making patient-level cost data available via the Model Hospital (at a suitably aggregated level), allowing trusts to identify unusual variations against other trusts to improve the 22 Option 2

25 accuracy of costs. Improving the underlying data will improve local pricing as well as identifying improvements in job cycles 52. The phased approach, whereby we mandate by type of trust, has been discussed and agreed with the technical focus groups. This approach will allow learning to be carried across all sectors and enable us to better support sectors where costing is not as advanced as others 53. By mandating patient-level costs across the sector, we believe that all trusts will be able to use job-cycle information (excluding travel costs and times) to identify areas where improvements can be made. If all trusts calculated and submitted data in the same way, the benefits of benchmarking and understanding patient activity and costs will support other initiatives. 54. This consistency is important as many of the benefits depend on identifying savings opportunities from accurate benchmarking between and within trusts. Mandation will ensure that all trusts adopt and comply with the new costing standards. These improvements will support other uses of the data, including making this data the source for planning and agreeing local prices and for national cost and activity collections. Risks of this option 55. There are some specific risks for this option, including: Data sensitivity concerns have been raised about how the public perceives the collection and use of patient data. Though patient-level cost data will be pseudo-anonymised, public perception and understanding will be a risk that will need to be overcome through clear communication and a privacy impact assessment. Concerns have previously been raised about collecting and using patient data. Data breaches raised concerns about use and control of such data. By mandating patient-level costs, arrangements for collecting and transferring data will need to comply with Information Standard requirements. 24 We will continue to work closely with our information governance team. Patients will always have the right to opt out of allowing 24 Information Standards (including data collections and extractions) are an agreed set of rules, a consistent method or process for capturing, processing, managing and sharing data and information. 23 Option 2

26 their information to be used for anything other than providing their healthcare. Where trusts and commissioners use reference costs for agreeing local prices, the move to patient-level costs may bring some uncertainty in future. Trusts will need to work with commissioners to review the impact of the granularity where contracts are primarily activity-based. They may need interim arrangements to ensure the data s accuracy is verified. This may take additional time for each organisation, but we believe that in future the costs, and therefore prices, will better reflect patient pathways. We also hope that queries will reduce as better-quality information becomes available to commissioners and trusts. While it will be mandatory to submit patient-level costs using the standards, there is a risk relating to compliance. It is unlikely that trusts will not submit patient-level cost data (currently only 30% of trusts do not have a system and 70% of ambulance trusts plan to submit the voluntary patient-level cost submission, two years before the first mandatory submission). There is, however, a risk that not all trusts will be able to fully comply with the standards. As with the acute sector, we will work with trusts to identify risks to consistent submission and provide support. This may include a transition pathway for trusts struggling with mandating the process. We will also use benchmarking and analytics to identify concerns, and can use enforcement action where necessary, as submitting mandated cost information is a condition of the trust licence. 24 Option 2

27 Table 5: Summary of Option 2 costs Collection year Total Financial year 2017/ / / / / / / / / /27 RC costs 317, , , ,333 1,227,164 Cost of RC submission Voluntary patientlevel costs Mandated patientlevel costs Patient-level cost submissions 317, , , , ,227, , , , , , , , , , , ,914 2,947, , , , , , , , , , ,914 3,677,867 Total 570, , , , , , , , , ,914 4,905,032 GDP deflator (see annex 6) , , , , , , , , , ,049 4,597,032 Discount factor - 3.5% PV of Option 2 570, , , , , , , , , ,684 4,060, Option 2

28 Option 3 Preferred option: Mandate annual submission of patient-level costs for all incidents going through 999 call centres or dispatch centres from 2019/20, with standards for costing mandated for both patient-level costs and reference costs from 2019/20. No dual running of reference costs Table 6: Estimated cost of Option 3 Average annual cost per trust Total cost over 10 years 25 Option 3 35,524 3,552, Under this option, ambulance trusts would have to submit patient-level cost data, complying with the standards, annually from the 2019/20 financial year (submitted in 2020). There would be no dual running of reference costs, with collection of this data ceasing from 2018/ Given that ambulance activity only covers four HRGs and there is no national tariff, we believe little would be gained from continuing to collect reference costs from the sector. This would reduce the small burden of producing two sets of costs, helping trusts to concentrate on producing patient-level costs as the source of cost data as soon as possible. It would also enable trusts to focus on the accuracy and consistency of this data. 59. As noted, we have excluded E&T from the cost of collection while we work with HEE to assess the impact on the ambulance sector. Assumptions 60. We used the same assumptions for this option as for Option 2, except we assumed all ambulance trusts would take part in the voluntary collection of patient-level cost data in 2018/ See Annex Option 3

29 Monetised costs of this option 61. As this option is essentially the same as Option 2, excluding dual running, the monetised costs are the same. 62. For more details see Table 7. Costs excluded from analysis of Option As this option is essentially the same as Option 2, excluding dual running, the same costs have been excluded. There may be some additional costs to trusts if their current contract arrangements rely on reference cost currencies and information such as this would no longer be collected nationally. However, information in the reference costs currencies could be produced by trusts in the reference cost format. Monetised and unmonetised benefits of this option 64. In addition to the benefits noted in Option 2, the removal of dual running of reference costs would remove the burden on trusts of producing the reference cost return. It would also allow them time to embed this in their internal costing processes and start using the same basis for costing non-999 services if required (not included in costs). Risks of this option 65. In addition to the risks noted in Option 2, the lack of dual running could be an issue if: the patient-level cost data was found to be inaccurate, affecting use by regulators trusts and commissioners that use reference costs to set local prices for 999 activity do not have a process for using patient-level cost data to set local prices using the new currencies. 66. We have liaised with ambulance trusts and other regulators about the proposal to cease reference costs in 2018/19. The response has been favourable. 27 Option 3

30 Table 7: Summary of Option 3 costs Collection year Total Financial year 2017/ / / / / / / / / /27 RC costs 317, , ,047 Cost of RC submission Voluntary patientlevel costs Mandated patientlevel costs Patient-level cost submissions 317, , , , , , , , , , , , , ,914 2,947, , , , , , , , , , ,914 3,677,867 Total 570, , , , , , , , , ,914 4,328,914 GDP deflator (see annex 6) , , , , , , , , , ,049 4,043,778 Discount factor 3.5% PV of Option 3 570, , , , , , , , , ,684 3,552, Option 3

31 Why we prefer Option We believe that Option 3 provides the best value for trusts. Option 1 does not meet our aims of improving the accuracy and consistency of costing and is unlikely to bring sustained benefits. Option 2 achieves the same benefits as Option 3, but we think that dual running with reference costs would impose an unnecessary burden on the sector. 68. In the future, we may consider whether collecting data quarterly would help. The acute consultation 26 found that, although trusts were in favour, patientlevel costs needed to be embedded in all sectors before the frequency of collection was reviewed and an approach agreed to deal with year-end accounting issues. 69. We recommend Option 3 because of these benefits for the sector: consistently collected data to help trusts manage their costs quick identification of variation in activity, pathways and cost against other trusts it would help meet other cross-nhs efficiency objectives, such as NHS Improvement s operational productivity work, as more consistent data would enable it to provide more accurate and timely information to support trusts in managing their costs more accurate activity and financial data for trusts; services and clinicians would validate the data, so issues could be identified and corrected this could help improve internal forecasting and financial management f the commissioning process and patient-level cost data could eventually reduce the data requested by commissioners and regulators Why we prefer Option 3

32 70. Though Option 2 would bring similar benefit, Option 3 would reduce the burden on ambulance trusts small finance teams and allow trusts to focus on patient-level costs as the primary source of costing data. 71. Our cost analysis indicates that, over 10 years, Option 3 would be less expensive than the other options. Because Option 3 embeds costing in a trust, much work collecting and verifying costs would be completed as part of the internal finance and activity process in ambulance trusts. We also believe that many trusts will use the same methods for costing non-999 activity and use this as the basis for bidding for commercial contracts, even though currently we do not collect this information. Figure 2: Total cost of all options by year, expressed in terms of present value 72. The costs diverge over the period of the review: Option 1 is initially cheaper in 2018/19. However, the cost would remain static during the period under review. Experience from other countries and services indicates that where something is not mandated, less importance is attached to producing and validating it. Therefore, we expect that, without an expectation to mandate, trusts would focus on submitting reference costs and other day-to-day demands rather than patient-level costs. 30 Why we prefer Option 3

33 The costs of Option 2 would increase compared to Option 1 in the first two years, due to dual running and mandation of both reference costs and patient-level costs. By 2022/23, we expect that the costs of Option 2 will be the same as Option 3. Without dual running, Option 3 would be less expensive in the first two years than Option 2, with similar costs afterwards. However, as noted, removing dual running would allow the sector to focus on implementing patient-level costs while not increasing the burden on ambulance trusts small finance departments 73. The proposal to move straight to patient-level costs with no dual running has been discussed with other data users (including the operational productivity and finance directorates at NHS Improvement, the Ambulance Technical Focus Group and other regulators). They support the proposal not to have dual running as they agree this will reduce the burden on trusts and support the successful implementation of patient-level costs. 31 Why we prefer Option 3

34 Plan for monitoring and evaluation 74. It is important we evaluate the impact (both costs and benefits) of patient-level costing once it is implemented, especially as we plan to extend it to other sectors mental health in 2019/20 and community health services in 2020/21. We will verify the findings from implementing patient-level costing in ambulance trusts and the assumptions in this impact assessment. We will then use the results to support and assess implementation of patient-level costing across the remaining sectors. 75. We will introduce methods to evaluate the impact and will use our findings to support the impact assessment for other sectors. We will: survey the 2017/18 early implementer sites in January 2019; this will: validate the staff and system resources needed for the voluntary patientlevel costs and reference cost submissions identify any new issues work with the costing early implementation team to update the assumptions used, taking account of the survey findings and any changes in the process for the 2018/19 submission review the outcome of the pricing engagement team s project to publish innovative uses of patient-level cost data across various sectors; we will assess whether the benefits to trusts outweigh costs review the findings from the early implementer s roadmap partner implementation by mental health and ambulance trusts. 76. We will use all this work to validate or update the assumptions in this impact assessment to ensure they remain reasonable. We will also use it as part of our planned impact assessment work for extending patient-level costing to other sectors. 32 Plan for monitoring and evaluation

35 Annex 1: Monitor s statutory duties 77. This annex explains how the discharge of Monitor s 27 general duties would be secured by implementing the proposals relating to patient-level costs, as required by Section 69(5) of the Health and Social Care Act Monitor s general duties are those set out in sections 62 and 66 of the Act, which it must discharge when exercising Monitor functions, including its pricing functions. These general duties require Monitor to have regard to certain matters when exercising those functions or acting with a view to achieving objectives. 78. The 2012 Act also provides that Monitor should state why the duties would not be secured by the exercise of Monitor s statutory functions under the Competition Act 1998 and Part 4 of the Enterprise Act Our view is that the exercise of those functions relating to competition would not enable NHS Improvement to implement detailed changes to the requirements on NHS trusts and NHS foundation trusts as to how they record and report the cost of NHS ambulance services, so as to deliver the benefits involved in patient-level costing (either for the National Tariff Payment System or for the individual trusts concerned) and so would not secure the discharge of Monitor s general duties in relation to the arrangements for the costing of NHS services. 79. This table below sets out each of the duties and explains: how implementing the proposals would secure the discharge of that duty where appropriate, how NHS Improvement has complied with the duty in developing and making these proposals. 80. In addition to the 2012 Act general duties, the table also explains certain other duties that apply to the exercise of Monitor s functions, including the publicsector equality duty. 27 This reference to regulatory action by NHS Improvement refers to the use of the powers of either Monitor or the NHS Trust Development Authority, depending on the trust in question. 33 Annex 1: Monitor s statutory duties

36 Section and subject Requirement How addressed Section 62(1)(a) Economy, efficiency and effectiveness Monitor s main duty in exercising its functions is to protect and promote the interests of people who use healthcare services by promoting provision of healthcare services which (a) is economic, efficient and effective, and (b) maintains or improves the quality of the services. In carrying out this duty, Monitor must have regard to the likely future demand for healthcare services. Introducing patient-level costing using consistent methods for calculating costs will enable ambulance trusts to benchmark the various aspects of the job cycle to identify improvements in response times. Future links with clinical outcome data will allow ambulance trusts to work with other providers to identify where service provision for patients can be improved. It will also improve the accuracy and granularity of the costing data available to trusts and commissioners when agreeing local tariffs. This will improve the setting of prices, enabling them to better reflect efficient costs. Understanding the cost of patient care will help trusts to improve the efficiency of their services. In relation to the future demand for healthcare services, patient-level costs will help trusts understand their costs and the impact of any proposed changes. It can also support trusts to better understand the services delivered across geographical areas and different trusts. Understanding patient pathways and costs across all types of providers will support service reconfiguration by eventually providing more granular and consistent information across all sectors. 34 Annex 1: Monitor s statutory duties

37 Section and subject Requirement How addressed Sections 62) (1)(b), 66(1) and (2)(a) Safety and quality Monitor s main duty in exercising its pricing functions is to protect and promote the interests of people who use healthcare services by promoting provision of healthcare services which is (a) economic, efficient and effective, and (b) maintains or improves the quality of the services. In carrying out this duty, Monitor must have regard to the likely future demand for healthcare services. Monitor must have regard, in particular, to the need to maintain the safety of people who use healthcare services. Monitor must have regard to the desirability of securing continuous improvement in the quality of NHS healthcare services and in the efficiency of their provision (so far as they are consistent with the need to maintain safety of people who use healthcare services). As noted above, patient-level costing will allow trusts to identify and address job cycle variation. The expected benefits for the ambulance sector include being able to identify and compare different aspects of the job cycle and, once linked to emergency data, being able to work with other providers to improve access to other NHS services. Plans to link patient-level cost data to clinical outcomes across all sectors, including ambulance, will enable trusts and commissioners to: identify where patient pathways can be improved ensure resources are used to maximum benefit support discussion on innovative delivery of services. Patient-level costs provide greater granularity and consistency in costing and pathway information. This will lead to a tariff that better reflects actual costs, which in turn will support financial sustainability of trusts. More granular information will enable trusts to make better-informed decisions on service provision, patient care and by linking to outcome data will support continuous improvement. 35 Annex 1: Monitor s statutory duties

38 Section and subject Requirement How addressed Section 62(3) Competition Monitor must exercise its functions with a view to preventing anti-competitive behaviour in the provision of NHS healthcare services that is against the interests of people who use such services. We consider that the proposals would not facilitate anticompetitive behaviour. This proposal only covers 999 activity that is only provided by designated NHS ambulance providers. Section 62(4), (5) and (6) and 66(2)(e) Integration and co-operation Monitor must exercise its functions with a view to enabling NHS healthcare services to be provided in an integrated way and enabling the integration of NHS and social care or other health-related services where it considers that this would: improve the quality of services or the efficiency of their provision reduce inequalities with respect to access or outcomes. Monitor must, in carrying out its duties relating to integration above, have regard to the way in which NHS England and clinical commissioning groups (CCGs) carry out their duties to promote integration. Monitor must (so far as they are consistent with the need to maintain safety of people who use healthcare services) have regard to the desirability of persons who provide NHS healthcare services cooperating with each other to improve the quality of those services. By providing consistent information across organisations and across the job cycle, patient-level costs will support the delivery of services across trusts as the method of costing will be consistent regardless of the trust and should also support innovation in the provision of services, regardless of the setting. Patient-level costing across all sectors, including ambulance, will support the delivery of care across the new care models, including accountable care organisations (ACOs) and sustainability and transformation partnerships (STPs). 36 Annex 1: Monitor s statutory duties

39 Section and subject Requirement How addressed Section 62(7) Patient and public involvement Section 62(8) Clinical and public health advice Section 62(9) Comprehensive health service and NHS England s mandate Monitor must secure that patients and other members of the public are involved to an appropriate degree in decisions that Monitor makes about the exercise of its functions. Monitor must obtain appropriate professional clinical and public health advice to enable it to discharge its functions effectively. Monitor must exercise its functions in a manner consistent with the Secretary of State s duty to promote a comprehensive health service. For pricing impact assessments only, in exercising its pricing functions, Monitor must have regard to the objectives and requirements for the time being specified in NHS England s annual mandate. We consider that the proposals do not require patient or public involvement. Mandating patient-level costs will improve the calculation of local prices. Being able to link to clinical outcomes will enable providers, commissioners and regulators to show how future service redesign will provide a better service to patients. We consider that the proposals do not require clinical or public health advice. We have worked with clinicians and NHS Improvement s medical teams in agreeing costing principles and standards, including Get It Right First Time (GIRFT) and NHS England, which will be using this data to support ambulance trusts. The patient-level cost proposals are consistent with the discharge by the Secretary of State of his duty to continue the promotion of a comprehensive health service. In particular, the proposals: cover the whole range of NHS services (specifically the ambulance sector for this impact assessment) are specifically designed to support a comprehensive and efficient NHS that provides quality services to patients by ensuring more accurate and cost-reflective prices, and by helping trusts to understand their costs and remove unwarranted clinical variation, will help promote a financially sustainable health service. 37 Annex 1: Monitor s statutory duties

40 Section and subject Requirement How addressed The provision of more accurate data at a patient level, which will be linked to outcome, will support trusts to identify improvements in pathways. It will identify where improvements to services can be made locally and ensure national decisions are made on the most accurate data available. Section 66(2)(b) to (d) Duties of commissioners Section 62(10) Monitor must (so far as it is consistent with the need to maintain safety of people who use healthcare services) have regard to the need for NHS commissioners to: ensure that the provision of access to NHS services operates fairly ensure that people who require NHS healthcare services are provided with access to them make the best use of resources when doing so. Monitor must not exercise its functions for the purpose of causing a variation in the proportion of NHS healthcare services that is provided by persons of a particular description if that description is by reference to whether the persons in question are in the public or (as the case may be) private sector. We anticipate that the collection of patient-level cost data will provide more accurate information for pricing. This will: improve the underlying data used for the national tariff to set national prices provide better and more transparent local information on costs that are the basis for local prices agreed by commissioners and trusts support trusts and commissioners when looking to implement and fund new methods of service delivery. The national tariff is based on costing data submitted by NHS trusts currently reference costs. Moving to the collection of data at a patient level consistent with the standards will: improve the accuracy of data used for agreeing local prices enable provides to benchmark variations in job cycles, allowing improvements in these. Future links to clinical outcomes will support service redesign by identifying where patients could have been more appropriately treated. 38 Annex 1: Monitor s statutory duties

41 Section and subject Requirement How addressed In line with the current cost arrangements (reference costs), the proposal would not include collection of cost data from independent sector trusts as 999 services are only provided by NHS providers. We have not included any non-999 activity undertaken by ambulance providers such as 111 GP services or patient transport, as these are not currently collected within reference costs and these activities are awarded under commercial contracts. We continue to work with the sector to investigate possible extension of collection their costs. Section 66(2)(b) to (d) Duties of commissioners Section 66(2)(g) Education and training Monitor must (so far as it is consistent with the need to maintain safety of people who use healthcare services) have regard to the need for NHS commissioners to: ensure that the provision of access to NHS services operates fairly ensure that people who require NHS healthcare services are provided with access to them make the best use of resources when doing so. Monitor must (so far as it is consistent with the need to maintain safety of people who use healthcare services) have regard to the need for high standards in the education and training of healthcare professionals who provide NHS health care services. We anticipate that the collection of patient-level cost data will provide more accurate information for pricing. This will: improve the underlying data used to set local prices support trusts and commissioners when looking to implement and fund new methods of service delivery. The proposals do not include any specific changes to actively promote education and training. As with reference costs collections, we will also collect education and training data as part of the patient-level cost data collection. 39 Annex 1: Monitor s statutory duties

42 Section and subject Requirement How addressed Other general statutory duties Section 116(13) of the 2012 Act NHS England s mandate Section 1 of the Health Act 1999 NHS Constitution When exercising its pricing functions Monitor must have regard to the objectives and requirements in the government s mandate to NHS England. Monitor must have regard to the principles, values, rights and commitments of the NHS Constitution. The proposals support objectives in the 2017/18 mandate. For example: Objective 1: Through better commissioning, improve local and national health outcomes, and reduce health inequalities [.] Objective 2: To help create the safest, highest quality health and care service see above for how we consider the proposals help to maintain or improve the quality of healthcare services. Objective 3: To balance the NHS budget and improve efficiency and productivity [..]. We consider that the proposals support the seven key principles that guide the NHS in all it does, including: supporting access regardless of ability to pay enabling clinicians to identify and aspire to the highest standards and excellence putting the patient at the heart of information both clinically and financially supporting accountability by ensuring consistency of costing and recording of patient pathways. By facilitating a better understanding of the costs of treatment and helping trusts to remove unwarranted clinical variations and making other improvements, they will also assist NHS bodies in delivering services in accordance with the rights of patients set out in the 40 Annex 1: Monitor s statutory duties

43 Section and subject Requirement How addressed Constitution, such as the rights relating to access to health services and the quality of care. Section 149 of the Equality Act 2010 Public sector equality duty Both Monitor and the NHS Trust Development Authority, the constituent bodies of NHS Improvement, have a duty under the Equality Act 2010 (the public sector equality duty) to have regard to equality issues as set out in the Act when developing policy proposals. Protected characteristics under the Equality Act include age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex and sexual orientation. Our view is that the proposals will not have any differential impact on any group of patients with protected characteristics, when compared with other patients. The benefits brought by patient-level costs will assist all types of patients who receive ambulance NHS services, including those with protected characteristics. 41 Annex 1: Monitor s statutory duties

44 Annex 2: Initial options appraisal list No Description 2018/19 onwards Benefits Disadvantages Decision for impact assessment A Reference costs (RC) collected annually and CTP patient-level costs collected annually on a voluntary comply-or-explain basis 1. What we have now no further investment required for those without CTP patient-level costs 1. Does not provide information to support ACS/ICS 2. Seen as costing-only exercise 3. Only provides average costs Included Needs to be included in impact assessment as no-change option B RC collected annually with use of standards mandated and CTP patient-level costs remaining a voluntary annual collection 1. What we have now 2. Mandation of standards (including costing approaches and methodologies) will improve consistency of data submitted for RC 1. Does not provide information to support ACS/ICS 2. Seen as costing-only exercise 3. Only provides average costs Excluded as does not provide sufficient clinical or granular data C CTP patient-level costs and standards mandated for annual submission from 2019/20 for ambulance NHS activity, and RC collected annually for the following two years 1. Mandation of standards (including costing approaches and methodologies) will improve consistency of data submitted for RC 2. Reduce the burden on trusts by removing reference costs collection 1. No fall-back position if issues found with quality of patient-level cost submissions Include in impact assessment as this is best possible outcome 42 Annex 2: Initial options appraisal list

45 No Description 2018/19 onwards Benefits Disadvantages Decision for impact assessment D CTP patient-level costs and standards mandated on annual basis for all NHS ambulance trusts, and RC ended in 2018/19 for ambulance activity 1. Longer-term implementation would enable all trusts to ensure quality of patient-level cost data while having RC available as fallback position 2. Would promote consistency with both RC and patient-level costs submitted using agreed standards 3. Allow time for NHS Improvement and NHS Digital to address and improve any submission/collection issues 4. This is nearest to BDO report from 2013 which was basis for initial consultation for move to patient-level costs 1. Would be burden on trusts as would need to run both systems for two-plus years. 2. Burden on NHS Improvement in collecting and validating both patient-level costs and RC accuracy especially if not using RC for tariff in future years 3. Dilute importance of patientlevel costs with RC still running Included as this only relates to 999 activity, we can recreate RC from patient-level cost data E CTP patient-level costs and standards mandated for annual submission from 2019/20 for ambulance NHS activity, moving to quarterly/monthly for 2022/23, and RC collected annually for the following two years (ending 2020/21) 1. Longer-term implementation would enable all trusts to ensure quality of patient-level cost data while having RC available as fallback position 2. Would promote consistency with both RC and patient-level costs using agreed standards 3. Allow time for NHS Improvement and NHS Digital to 1. Would be burden on Trusts as would need to run both systems for 2 plus years. 2. Burden on NHSI in collecting and validating both patient-level costs and RC accuracy especially if not using RC for tariff in future years 3. Dilute importance of patientlevel costs with RC still running Excluded based on feedback from acute sector. To be considered in the future 43 Annex 2: Initial options appraisal list

46 No Description 2018/19 onwards Benefits Disadvantages Decision for impact assessment address and improve any submission/collection issues 4. This is nearest to BDO report from 2013 which was basis for initial consultation for move to patient-level costs F Standards mandated for 2018/19 for annual RC submission and CTP patient-level costs annual submission, with mandation of CTP patient-level costs from 2019/20 and RC ending 2020/21 1. Longer-term implementation would enable all trusts to ensure quality of patient-level cost data while having RC available as fallback position 2. Would promote consistency with both RC and patient-level costs submitted in 2018/19 using agreed standards 3. Allow time for NHS Improvement and NHS Digital to address and improve any submission/collection issues 1. Would be burden on trusts as would need to run both systems for two-plus years. 2. Burden on NHS Improvement in collecting and validating both patient-level costs and RC accuracy especially if not using RC for tariff in future years 3. Dilute importance of patientlevel costs with RC still running Excluded as splitting standards from patient-level cost mandation is seen as undermining improvement aim. 44 Annex 2: Initial options appraisal list

47 No Description 2018/19 onwards Benefits Disadvantages Decision for impact assessment G Phased mandation of CTP patient-level costs and standards seven early implementers in 2019/20 and the remaining three in 2020/21, with RC collected until patient-level costing is implemented 1. Longer-term implementation would enable all trusts to ensure quality of patient-level cost data while having RC available as fallback position 2. Would allow NHS Improvement to provide targeted support to trusts requiring more time/support to move to CTP patient-level costs 3. Allow time for NHS Improvement and NHS Digital to address and improve any submission/collection issues 4. Gives more time for other data users to update systems, etc to be able to use data while having back-up of RC if issues found 5. Would allow all trusts to be audited once with full follow-up to ensure data is of sufficient standard 1. There would be a burden over two to three years of producing both RC and patient-level cost data 2. Impact on NHS Improvement and NHS Digital staff of running two collection processes and verification costs 3. Will need to assess impact of more regular submissions on both trusts and data users 4. This is a new option never flagged before, and splitting sector would be seen as an issue for other data users (especially Carter/Model Hospital, etc) 5. This would be hard to manage and there would be issues around how the phasing would work and who would be on what phase Excluded felt too confusing to manage and undermines moving sector as a whole. 45 Annex 2: Initial options appraisal list

48 No Description 2018/19 onwards Benefits Disadvantages Decision for impact assessment H Phased mandation of CTP patient-level costs and standards seven early implementers in 2019/20 and the remaining three in 2020/21, with RC collected until patient-level costing is implemented, then moving to quarterly submission two years after 1. Longer-term implementation would enable all trusts to ensure quality of patient-level cost data while having RC available as fallback position 2. Would allow NHS Improvement to provide targeted support to trusts requiring more time/support to move to CTP patient-level costs 3. Allow time for NHS Improvement and NHS Digital to address and improve any submission/collection issues 4. Gives more time for other data users to update systems, etc to be able to use data while having back-up of RC if issues found 5. Signposting the timetable for ambulance NHS trusts allowing them to move towards more regular patient-level cost submission with detailed timetable at a trust level 6. Would allow all trusts to be audited once with full follow-up to ensure data is of sufficient standard 1. There would be a burden over two to three years of producing both RC and patient-level cost data 2. Impact on NHS Improvement and NHS Digital staff of running two collection processes and verification costs 3. Will need to assess impact of more regular submissions on both trusts and data users 4. This is a new option never flagged before, and splitting sector would be seen as an issue for other users of data (especially Carter/Model Hospital, etc) 5. This would be hard to manage and there would be issues around how the phasing would work and who would be on what phase Excluded felt too confusing to manage and undermines moving sector as a whole. However, hold as possible and include aspects in impact assessment 46 Annex 2: Initial options appraisal list

49 No Description 2018/19 onwards Benefits Disadvantages Decision for impact assessment I CTP patient-level costs and standards mandated on annual basis for all 999 activity and RC ended in 2018/19, extending to non- 999 activity in 2021/22 (estimated time for when the independent sector providers (ISPs) may come into scope) 1. Reduce burden for trusts as RC not required for ambulance activity from 2018/19 onwards 2. This was the original option put forward in BDO for acute sector report which was published in response to 5YFV 3. As only covers 999 activity, the costs can be reconciled back to RC fairly easily 1. No fall-back position if issues found with quality of patient-level costs submissions 2. Non-999 areas are subject to competitive tendering; therefore there will be competition issues plus sector may cite commercial sensitivity if non-nhs trusts are not required to submit and publish same information 3. This is a new option never flagged before, and splitting sector would be seen as an issue for other data users (especially Carter/Model Hospital, etc) 4. This would have to be at the same time as independent sector and this is currently under discussion internally and externally 5. Need to work with NHS Digital to assess additional resource, etc required and resources at trusts to collect, cost and submit the level of data, plus dealing with year-end updates. Exclude - due to commercial sensitivity issues. However, included in future direction of travel in consultation document to start collecting information. 47 Annex 2: Initial options appraisal list

50 No Description 2018/19 onwards Benefits Disadvantages Decision for impact assessment J CTP patient-level costs and standards mandated on annual basis for all 999 activity and RC ended in 2018/19, extending to non- 999 activity in 2021/22 (estimated time for when ISPs come into scope), then moving to quarterly in 2024/25 1. Reduce burden for trusts as RC not required for ambulance activity from 2018/19 onwards 2. This was the original option put forward in BDO for acute sector report, which was published in response to 5YFV 3. As only covers 999 activity, the costs can be reconciled back to RC fairly easily 1. No fall-back position if issues found with quality of patient-level costs submissions 2. Non-999 areas are subject to competitive tendering; therefore there will be competition issues plus sector may cite commercial sensitivity if non-nhs trusts are not required to submit and publish same information 3. This is a new option never flagged before, and splitting sector would be seen as an issue for other data users (especially Carter/Model Hospital, etc) 4. This would have to be at the same time as independent sector and this is currently under discussion internally and externally 5. Need to work with NHS Digital to assess additional resource, etc required and resources at trusts to collect, cost and submit the level of data, plus dealing with year-end updates Exclude move to more regular collection was temporarily ruled out in acute sector. Would consider all moving at same time once patientlevel costs embedded 48 Annex 2: Initial options appraisal list

51 Annex 3: Scope of data collection 81. The mandation would cover the costing of activity going through 999 call centres or dispatch centres. The definition of an activity would be: an incident for the purposes of this collection is a discrete event where one or more response units are dispatched, or clinical advice is given over the phone. This includes: activity completed by third party trusts hazardous area response teams (HART) medical emergency response incident teams (MERIT) healthcare professional responses air ambulance responses (staff only). 82. Other patient-facing services are out of scope of the collection, such as: GP out-of-hours patient transport service (PTS) Other operating income relating to commercial services (eg first aid training, sporting events, etc) is to be netted off as an estimate of cost as part of the reconciliation process to establish the total amount of trust costs. This is a change from the roadmap partner collection last year, to align the reconciliation part of the patient-level cost collection with reference costs. 49 Annex 3: Scope of data collection

52 Annex 4: Difference in reference cost and patientlevel cost collection 84. There are some differences between the currencies to be used for reference costs and those being used for patient-level costs. HRG Reference cost Patient-level costs Calls Hear and treat or refer See and treat or refer Number of emergency and urgent calls presented to switchboard and answered. This includes 999 calls, calls from other healthcare professionals requesting urgent transport for patients, calls transferred or referred from other services (such as other emergency services, 111, NHS Direct, other third parties). Number of patients, following emergency or urgent calls, whose issue was resolved by providing clinical advice by telephone or referral to a third party. An ambulance trust healthcare professional does not arrive on scene. Number of incidents, following emergency or urgent calls, resolved with the patient being treated and discharged from ambulance responsibility on scene. The patient is not taken anywhere. Not collected for patient-level costs the cost of calls should be absorbed into the cost of the associated incident Same as reference costs Same as reference costs 50 Annex 4: Difference in reference cost and patient-level cost collection

53 HRG Reference cost Patient-level costs See and treat and convey Other scenario The activity measure is the number of incidents, following emergency or urgent calls, where at least one patient is conveyed by ambulance to an alternative healthcare trust (ie A&E, walk-in centre, etc). This includes incidents despatched by third party trusts (such as 111 service) Not recorded in reference costs Same Assigned where there are no patients, such as hoax calls, those passed to GPs, etc. 51 Annex 4: Difference in reference cost and patient-level cost collection

54 Annex 5: Job-cycle stages 85. The job cycle consists of one to three call stages, and one to six physical response stages, as listed below. Call and physical response stages can occur at the same time, but physical response stages never overlap for the same response unit. Call stages (Stage 1): Stage 1.1: Call handling (answering and finding out location call stages T0 to T2 for most computer-aided dispatch (CAD) systems) Stage 1.2: Triage (call stages T3 to T6 for most CAD systems) Stage 1.3: Telephone clinical advice (provided by EOC clinicians) Physical response stages (stages 2 to 6): Stage 2.1: Mobilisation Stage 2.2: Travel to scene Stage 3: On scene Stage 4: Travel to treatment location Stage 5: Handover Stage 6: Handover to clear. 86. The start and end points of these stages are recorded on the CAD system. Duration may be recorded or may need to be calculated. 52 Annex 5: Job-cycle stages

55 Annex 6: Adjusting costs for inflation 1. The cost information in the tables on pages 19, 25 and 28 are based on the base year of 2018/19. The costs have then been adjusted to reflect the expected increase in the contract costs over the period due to additional cost of IT systems and staffing costs. This adjustment is additional to inflation and gives the nominal value of expected costs over 10 years. In this annex, these cost figures have been adjusted by forecasts of the GDP deflator, using 2017/18 as the base year. This removes the effect of general inflation and allows costs occurring in different years to be compared. 2. The costs for the annex table should be multiplied by the column in yellow in the attached spreadsheet. The green book gives the following example of how to display this. 3. The sum (called GDP deflater in the table), has then been multiplied to give the Present Vale (PV). This is the GDP deflated value discounted future costs (or benefits) using a discount factor of 3.5% as recommended. 53 Annex 6: Adjusting costs for inflation