Reference costs 2016/17: highlights, analysis and introduction to the data
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1 Reference s 2016/17: highlights, analysis and introduction to the data November 2017
2 We support providers to give patients safe, high quality, compassionate care within local health systems that are financially sustainable.
3 Contents Foreword... 2 Headlines and analysis... 4 Headlines... 4 Acute services... 5 Mental health... 6 Community health services... 8 Ambulance services... 9 Introduction to the data National schedules of reference s Reference s index Reconciliation statement Database of source data Glossary Reference s 2016/17: highlights, analysis and introduction to the data
4 Foreword This document supports the publication of the latest reference s. These give the most comprehensive picture available of how NHS providers in England (81 NHS trusts and 153 NHS foundation trusts) spent 66.2 billion delivering healthcare to patients in 2016/17. Reference s are the average unit to the NHS of providing defined services to NHS patients in England in a given financial year. They have been collected annually since These 2016/17 reference s are produced under the arrangements put in place following the Health and Social Care Act 2012, which transferred responsibility for the National Tariff Payment System in England from the Department of Health to NHS Improvement (the operational name for the organisation that since 1 April 2016 has brought together Monitor and the NHS Trust Development Authority) and NHS England. The reference s collection is the nationally mandated collection of data from NHS trusts and NHS foundation trusts for delivering services in the NHS. It is a rich data source and has many uses, from informing local price setting to public accountability to Parliament. The quality of the data that informs the collection is, therefore, extremely important. It is NHS providers responsibility to improve their internal ing processes and systems to help them better understand the of delivering services, leading in turn to submission of improved data. National bodies have a responsibility to ensure the s collected are fit for purpose, and to support this by producing comprehensive and clear guidance. 1 Royal Surrey County Hospital NHS Foundation Trust s data is excluded from the figures as the data failed a mandatory requirement of the collection. This is to avoid artificially inflating/deflating the average of particular currencies, and impact on the overall quality of the dataset. NHS Improvement and Royal Surrey will now work together to agree a plan to support improvement in ing ahead of the next submission. 2 Reference s 2016/17: highlights, analysis and introduction to the data
5 We want to move towards a single national collection at a patient level. Details on progress and our medium- to long-term ambitions can be found here: For acute activity, patient-level (often referred to as PLICS) and reference collections will run in parallel in 2018 as a joint process. There will be a single set of guidance and submission templates, and outputs will be reconciled for the first time. The collections that acute trusts will undertake in 2018 (2017/18 return) are a PLICS return, if they choose to be involved in the early implementer programme, and a business-as-usual reference return net of education and training income. If the submissions reconcile successfully and the new system works to stakeholders satisfaction, from 2019 we expect there to be a single national collection for acute services, based on patient-level s. This will be used to derive the data needed by current users of reference s. For non-acute services only a reference s submission will be required for 2017/18 data, although providers will be invited to participate in pilot collections to submit a PLICS return. The integrated reference s submission (including education and training) will not be required next year. However, education and training s will continue to be important. We are developing new standards for ing education and training, and reviewing how it works alongside patient-level ing. We will pilot the new standards in 2018 with a view to integrating them into PLICS in This document covers: headlines and analysis from the 2016/17 reference collection introduction to the data published alongside this document. If the information you are looking for is not available in this publication or on our webpages, please contact ing@improvement.nhs.uk. Our shared ambition is for ing data that supports the delivery of high quality care for patients and better value for the NHS. Department of Health NHS England NHS Improvement 3 Reference s 2016/17: highlights, analysis and introduction to the data
6 Headlines and analysis Headlines The reference s collected for 2016/17: 2 cover 66.1 billion of NHS expenditure, an increase of 1.9 billion (2.9%) from the 64.2 billion collected in 2015/16 represent 62% of 107 billion total NHS revenue expenditure 3 comprise core admitted patient care (APC) s of 26.9 billion in 2016/17, mental health s of 7.1 billion, community s of 5.6 billion and ambulance s of 1.9 billion. Table 1 shows the breakdown of the total reference s by department for the last five years. Changes in total s over the period could be due to changes in the scope of the collection, changes in activity or changes to the of delivering services. Table 1: Total s split by department, over time ( billion) Total by department 2012/13 ( bn) 2013/14 ( bn) 2014/15 ( bn) 2015/16 ( bn) Day case Elective inpatient /17 ( bn) Non-elective inpatient Sub-total core APC Other acute services Outpatient attendance Outpatient procedure Accident and emergency (A&E) Sub-total all acute services Figures exclude HRG UZ01Z data invalid for grouping Reference s 2016/17: highlights, analysis and introduction to the data
7 Total by department 2012/13 ( bn) 2013/14 ( bn) 2014/15 ( bn) 2015/16 ( bn) Mental health Community health services Ambulances /17 ( bn) Total Acute services Acute services are made up of APC services and non-admitted services provided in outpatient and accident and emergency departments. Average unit s 2014/15 to 2016/17, by point of delivery, are shown in Table 2. Table 2: s 5 by point of delivery, 2014/15 to 2016/17 Point of delivery 2014/ / /17 Day case Elective inpatient (excluding excess bed days) 3,573 3,749 3,684 Non-elective inpatient (excluding excess bed days) 1,565 1,609 1,590 Excess bed day Outpatient attendance A&E attendance Mental health data includes s for adult IAPT (Improving Access to Psychological Therapies). 5 The unit s of day case, elective inpatient and non-elective inpatient are per finished consultant episode (FCE). An FCE is the time a patient spends in the care of one consultant. Where two or more consultants in the episode provide care, one consultant takes overriding responsibility and only one FCE is recorded. The unit of an excess bed day is per day. The unit for outpatient and A&E attendance is per attendance. 6 Each HRG has a maximum expected length of stay (the upper trim point) and any stay in hospital beyond this upper trim point is referred to as an excess bed day. 5 Reference s 2016/17: highlights, analysis and introduction to the data
8 Mental health The total value of mental health services in 2016/17 was 7.1 billion. Of this, 4.5 billion (63%) was ed against mental health care clusters. The remaining 2.6 billion (37%) related to other mental health services, which are collected based on different units of activity, 7 most often a care contact or single attendance. Table 3 indicates the unit s and total s for mental health care clusters between 2014/15 and 2016/17. The of initial assessment is per patient assessed and may cover multiple attendances, though the assessment is usually expected to be completed in two contacts. The of cluster days is not per contact; instead, it is the total of a cluster period divided by the number of days spent in the cluster. 8 Table 3: Summary statistics for mental health care clusters between 2014/15 and 2016/ / / /17 Service area Total Total Total Initial assessment ( per assessment) Cluster days ( per cluster day) , , , ,056, ,156, ,215,921 Total 4,233,013 4,350,106 4,463,150 7 A detailed breakdown of the units of currency can be found in the organisation-level source data 4 zip file. 8 Example of the cluster day calculation: Total of the cluster Days in the cluster Cost per cluster day 1,000,000 59, Reference s 2016/17: highlights, analysis and introduction to the data
9 Other mental health services The remainder of mental health services are collected using different activity measures, and cover areas such as drug and alcohol services and secure mental health services. Table 4 summarises the unit and total s of each of these service areas. Table 4: and total s by contact for non-cluster mental health services between 2014/15 and 2016/ / / /17 Service area Total Total Total Child and adolescent mental health services Drug and alcohol services Mental health specialist teams (excluding adult IAPT) 9 Secure mental health services Specialist mental health services , , , , , , , , , , ,011 n/a , , , ,859 Total 2,126,686 2,167,764 2,318,488 9 In 2015/16 we collected Improving Access to Psychological Therapies (IAPT) s for adults by cluster for the first time. In previous years, this was captured by contact and was delivered as part of the mental health specialist teams. The figures in Table 4 exclude IAPT for each of the three years reported, for consistent comparison to be made. 10 In 2016/17 the methodology for collecting some secure services data was changed to a combination of pathway and cluster; it is no longer viable to compare unit s across years. 7 Reference s 2016/17: highlights, analysis and introduction to the data
10 Community health services The total value of community health services in 2016/17 was 5.6 billion. These services are primarily collected using care contact 11 as the unit of activity; however, there are exceptions to this, such as some audiology services, elements of intermediate care and wheelchair services. Table 5 indicates the unit and total s for community health services. Table 5: Costs by area for community health services between 2014/15 and 2016/ / / /17 Service area Total Total Total Allied health professionals , , ,201 Audiology , , ,219 Community rehabilitation teams Day care facilities regular attendances Health visiting and midwifery 92 69, , , , , , ,060, ,053, ,057,022 Intermediate care , , ,279 Medical and dental , , ,366 Nursing 44 2,021, ,081, ,147,981 Wheelchair services , , ,790 Total 5,281,128 5,403,574 5,603, A detailed breakdown of the units of currency can be found in the organisation-level source data 4 zip file. 8 Reference s 2016/17: highlights, analysis and introduction to the data
11 Ambulance services The total of ambulance services in 2016/17 was 1.9 billion, of which 1.3 billion (68%) was reported against the see and treat and convey currency. Ambulance services are split into four currencies, with units of activity as follows: Currency Calls Hear and treat or refer See and treat or refer See and treat and convey of activity Per call Per patient Per incident Per incident Table 6 shows the unit and total s for ambulance services between 2014/15 and 2016/17. Table 6: Costs by currency for ambulance services between 2014/15 and 2016/ / / /17 Total Total Total Calls 7 62, , ,786 Hear and treat or refer See and treat or refer See and treat and convey 35 20, , , , , , ,190, ,221, ,306,086 Total 1,680,838 1,741,504 1,852,109 9 Reference s 2016/17: highlights, analysis and introduction to the data
12 Introduction to the data The 2016/17 reference s data is presented in four ways: the national schedules of reference s the reference index the reconciliation statement a database of source data. All the data is available to download from the NHS Improvement website. National schedules of reference s The national schedules of reference s (NSRC) show the national average unit for each service submitted by the 234 NHS providers in 2016/17. There are two schedules: NSRC01 the main schedule, showing data for the whole range of services provided by provider, including admitted patient care on an FCE basis NSRC02 showing the data for subcontracted services. The schedules show: activity, measured by the number of attendances, bed days, episodes, tests, or other unit of activity appropriate to the service the national average (mean) unit, ie total divided by total activity the lower and upper quartile 12 unit s (see Box 1 overleaf) the number of data submissions, ie the number of providers reporting s against each service. 12 Quartiles are the values that divide a list of ordered numbers into quarters. 10 Reference s 2016/17: highlights, analysis and introduction to the data
13 Box 1: s In very rare circumstances it is possible for the national average mean unit to be less than or more than the lower and upper quartiles. In the following example, Provider B has a high proportion of the total activity and therefore the mean ( 529) lies outside the lower and upper quartiles ( 600). Activity Total Provider A Provider B ,600 Mean ,700 Quartile Lower quartile Median Upper quartile The s included in the schedules are the average of the actual reported s. We have not removed unavoidable differences due to geographic location, which are reflected in the market forces factor (MFF) index. To ensure a like-for-like comparison of activity and s, the main schedule shows separately the s of bed days for elective and non-elective inpatients that fall inside and outside nationally set lengths of stay, known as trim points. 13 Costs that fall inside the trim point are known as inlier s. Costs that fall outside the trim point are known as excess bed day s. Within the schedules, we have used unit s and activity reported by the NHS to estimate: the total of each activity (by healthcare resource group (HRG), etc) across all settings the total of all activity in each setting (inpatients, day cases, outpatients, etc). As in previous years, we continue to exclude HRG UZ01Z (data invalid for grouping) from the schedules. 13 The trim point is defined as the upper quartile length of stay for the HRG plus 1.5 times the interquartile range of length of stay. HRG /15 Reference Costs Grouper trim points are published at 11 Reference s 2016/17: highlights, analysis and introduction to the data
14 Reference s index The reference index (RCI) is a measure of the relative difference between NHS providers. It shows the actual of a provider s casemix compared with the same casemix delivered at national average. A provider with s equal to the national average will score 100. Providers with higher s will score above 100 and providers with lower s will score below 100. For example, a score of 110 suggests that s are 10% above the average, while a score of 90 suggests s are 10% below the average. Whereas the schedule provides detailed information on the national average for each treatment or procedure, the RCI provides a comparison of s at the aggregate level for each provider. Figure 1 presents the 2016/17 RCI distribution compared with that from the previous two years. Figure 1: RCI distribution over time 60% % % 30% 20% 10% 0% 75 or less or more -10% 12 Reference s 2016/17: highlights, analysis and introduction to the data
15 Reconciliation statement The data from the reconciliation statement is also published. The reconciliation statement is an integral part of the reference s return and shows the adjustments made to get from providers audited financial accounts to their total reference s. Adjustments are made to derive the total reference s, such as accounting for services outside the scope of reference collection, income received for private patients, research and development (R&D) and education and training (E&T). 14 Publishing the reconciliation statement allows a comparison between providers to understand how they have derived their total reference s, and shows how the adjustments are made. The published data includes: data from the reconciliation statement, showing the adjustments made to get from providers audited operating expenses to their total reference s details of the value and volume of high drugs and devices details of the answers provided on the self-assessment checklist. Database of source data Alongside this document we have published a technical document, Reference s 2016/17: a guide to using the data, and three zip files containing the raw data submitted by trusts and the supporting information required to use the data. Information about what is in the zip files can be found in Chapter 3 of the technical document. 14 The rationale for netting income on the reconciliation statement is due to the assumption that income received for private patients, R&D and E&T is equivalent to the s incurred for those services. 13 Reference s 2016/17: highlights, analysis and introduction to the data
16 Glossary Admitted patient care (APC) Adjusted treatment (ATC) Casemix Complications and comorbidities Core healthcare resource group (HRG) Cost driver An overarching term covering the following classifications of patients who have been admitted to a hospital: ordinary elective admissions; ordinary non-elective admissions; day cases; regular day admissions; regular night admissions. An annual productivity measure produced using the reference collection and from the published accounts of NHS providers. The ATC metric produces the potential savings if trusts reduced their s to the average for each department and service code combination. A system whereby the complexity (mix) of the care provided to patients (cases) is reflected in an aggregate secondary healthcare classification. Casemix-adjusted payment means that providers are not just paid for the number of patients they treat in each specialty, but also for the complexity or severity of the mix of patients they treat. Many HRGs differentiate between care provided to patients with and without complications and comorbidities. Comorbidities are conditions that exist in conjunction with another disease, eg diabetes or asthma. Complications may arise during a period of healthcare delivery. An HRG that represents a care event (eg finished consultant episode, outpatient attendance or A&E attendance). Activity that influences the of a service, eg length of stay or theatre minutes. 14 Reference s 2016/17: highlights, analysis and introduction to the data
17 Costing Transformation Programme (CTP) Currency Data quality Direct s Excess bed days Finished consultant episode (FCE) Healthcare resource group (HRG) Hospital Episode Statistics (HES) ICD-10 Indirect s NHS Improvement s programme that aims to move from reference s collection to patient-level ing collection. The CTP will be a gradual process, stretching over six financial years. A unit of healthcare activity such as HRG, spell, episode or attendance. The degree of completeness, consistency, timeliness and accuracy that makes data appropriate for a specific use. Costs that directly relate to the delivery of patient care. Examples include medical and nursing staff s. Days that are beyond the trim point for a given HRG. A completed episode of patient treatment under the care of one consultant. Standard groupings of clinically similar diagnosis and procedure codes that use similar levels of resources. A national source of patient non-identifiable data. International Classification of Diseases and Related Health Problems. An internationally defined classification of disease, managed by the World Health Organization (WHO) and currently in its 10th edition. Costs that are indirectly related to the delivery of patient care. They are not directly determined by the number of patients or patient mix but s can be allocated on an activity basis to service s. 15 Reference s 2016/17: highlights, analysis and introduction to the data
18 Market forces factor (MFF) Materiality and quality score (MAQS) National tariff Overhead s Patient-level ing Patient-level information and ing systems (PLICS) An index used to estimate providers unavoidable differences of providing healthcare, due to geographical location. A measure devised by the Healthcare Financial Management Association of the materiality and quality of an organisation s ing process. Since 1 April 2014 the term national tariff has referred to the legal framework within which Monitor (now part of NHS Improvement) and NHS England discharge their responsibilities in relation to the NHS payment system. This includes nationally set prices and the methodology for setting them, as well as the rules for variations to national prices (including local modifications) and local price setting. See also payment by results. Costs that are not driven by the level of patient activity and which have to be apportioned to service s as there is no clear activity-based allocation method. For example, the chief executive s salary. Costs that are calculated by tracing the actual resource use of individual patients. IT systems which combine activity, financial and operational data to individual episodes of patient care. This is a 'bottom-up' approach to ing, where an organisation records individual interactions and events that are connected with a patient's care from the time of admission until the time of discharge. The direct and indirect s of the resources used during those interactions are allocated to the patient, much like a bill someone would receive at the end of a hotel stay. 16 Reference s 2016/17: highlights, analysis and introduction to the data
19 Payment by results Quantum Service line reporting (SLR) Spell Trim point Unbundled healthcare resource group (HRG) The previous term used for the payment system in England, within which there was a national tariff that referred to the nationally set prices paid for each currency. The Department of Health publication, A simple guide to Payment by Results, 15 provides a useful introduction. See also national tariff. The total monetary amount available at a trust to be allocated within reference s. A method for reporting and income by service lines to improve management s understanding of the contribution of each service line to performance. The period from date of admission to date of discharge for one patient in one hospital. A spell may consist of more than one FCE. A defined length of stay for each HRG. Technically defined as the upper quartile length of stay for the HRG plus 1.5 times the inter-quartile range of length of stay. An unbundled HRG represents an additional element of care. An unbundled HRG will always be associated with a core HRG that represents the care event, and will always be produced in addition to a core HRG. The unit is the incurred by an organisation to produce, store and sell one unit of a particular product. s include all fixed s and all variable s involved in production Reference s 2016/17: highlights, analysis and introduction to the data
20 Contact us: NHS Improvement Wellington House Waterloo Road London SE1 8UG improvement.nhs.uk Follow us on This publication can be made available in a number of other formats on request. NHS Improvement 2017 Publication code: CG 39/17
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