Healthcare costing standards for England: glossary
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1 Healthcare costing standards for England: glossary January 2017
2 Delivering better healthcare by inspiring and supporting everyone we work with, and challenging ourselves and others to help improve outcomes for all.
3 Costing glossary Activity Term Activity feeds Activity group Aggregated costs Algebraic (support costs) Allocation Allocation statistics Apportionment Audit trail Auxiliary feeds Available time Benchmarking Definition A measurable amount of work performed using resources to deliver elements of patient care. Data sources specified in Standard IR1: Identifying information for costing. They are the minimum required submission for PLICS collection. A set of activities with shared characteristics. Some costs may be reported in the ledger separated out, but for patient-level costing they need to be allocated whole. Such costs need to be aggregated when creating the cost ledger. Standard CP2: Clearly identifiable costs gives more detail on where this is appropriate. Using a formula to perform reciprocal allocation method between services/departments/resources using allocation statistics. The process of sending costs to their next destination for example, to a defined cost object. A coefficient used to split support costs. Costs may be split across departments, specialties or other groups that use resources which absorb support costs, and are likely to be updated annually rather than for each costing period. The process of distributing costs from a high level pool of costs to a specific department or patient, based on a predetermined percentage. A record of where data comes from and how it has been transformed between all reports, data feeds and ledgers. This makes costing outputs transparent. The patient-level activity feeds that will be matched to the master feeds for example, pharmacy feed. Time when ambulance crews and their vehicles are ready but not responding to an incident, ie time between jobs. The practice of comparing performance internally and externally based on key performance indicators of financial and/or care practice. 3 Costing glossary
4 Cancer Drugs Fund (CDF) Care programme approach (CPA) meeting Classification of costs Clinical engagement Commercial activities Community activity Community first responders (CFRs) Community mental health team (CMHT) Computer-aided dispatch (CAD) Managed by NHS England to provide an extra 200 million for cancer drugs on top of the 1.3 billion that the NHS spends annually. Accredited cancer specialists, supported by their organisation s clinical cancer lead, can apply to the fund to procure chemotherapy drugs not routinely available on the NHS. See NHS England s website for more details. CPA meetings are held to review a patient s care plan. They must be held at least annually and the patient or their representative must be present. This can refer to classifying costs as either patient-facing or support, or to classifying costs into one of the five cost groups specified in Standard CP2. This standard contains more information on both types of classification, although the standards focus on the costing process not classification of costs. Involving clinicians in developing costing methods and practices. Clinicians are the organisation s public face. They may remain in the same post for many years and have considerable NHS experience, which gives them a wealth of knowledge about the system s strengths and weaknesses. Their decisions and actions bear directly on the use of the organisation's resources. For more information on clinical engagement, see the Department of Health s guide to effective clinical and financial engagement. Any activity a provider undertakes on another organisation s behalf (eg pathology provision), or for internal customers such as staff (eg car parking), to generate a commercial return outside its directly commissioned healthcare contracts. Standalone community services that do not require the patient to have been a recent inpatient. Volunteers trained to deal with specific emergencies and treat patients until an ambulance arrives. A group of healthcare professionals that assesses and provides care to patients in a non-admitted care setting. They can also visit and review patients admitted to a ward or similar inpatient care setting. The system that assists dispatchers, crews and call handlers to respond to an incident, and which logs information from a response including job-cycle timestamps. 4 Costing glossary
5 Consultant episode Contracted out activity Contribution Cost allocation method Cost driver Cost group Cost ledger Cost object Costing principles Costing software The time a patient spends in the continuous care of one consultant using the hospital site or care home bed(s) of one healthcare provider or, in the case of shared care, in the care of two or more consultants. Where care is provided by two or more consultants within the same episode, one will take overriding responsibility for the patient and only one consultant episode is recorded. Additional consultants contributing to a patient s care are defined as shared-care consultants. A consultant episode includes episodes for which a GP is acting as a consultant. A type of provider-to-provider activity. The term covers any activity by an outside provider on the trust s behalf and paid for by the trust. The value within income after patient-facing costs have been covered, ie the contribution to support costs. The process of distributing costs from a high level pool of costs to a specific department or patient, based on a predetermined method. Any factor that causes activities and costs to vary, such as length of stay in hospital. A collection of costs for a cohort of activities. Provides a complete record of financial transactions indicating the cost incurred by an organisation. Information reported in the cost ledger will be based on entries made in general ledger and ensures the costs are in the right starting place to begin costing. The final destination for costs originating in the general ledger, defined by the records that a provider maintains, such as care records. For example, a patient cost object in acute care may be an episode of care, which has a clear start and end date and well-understood interventions taking place in between. There will also be cost objects for nonpatient services (such as education and training, research and development) and commercial items such as car-parking costs. Eight costing principles inform the standards and are designed to improve the accuracy, consistency and relevance of costing: clarity, causality, transparency, consistency, accuracy, materiality, engagement and totality. They are described in the costing principles section of the standards. Specific software, bought or developed in-house, which is the engine for processing (and often reporting) your patientlevel costs. This is just one part of your costing system. 5 Costing glossary
6 Costing system Cumulative year-todate data loading Data feeds Departmental support costs Direct access service Disaggregated costs Electronic patient report form (EPRF) Electronic staff records (ESR) Emergency operations centre (EOC) Escort Expenditure External audit An assemblage of processes that may be manual, automated or a mix of the two. It will gather and process data to produce outputs including the data feeds and the cost ledger. Extracting data from the patient-level feeds and loading it into the costing system by replacing the old data with an updated year-to-date dataset every month. The advantage over in-month data loading is that late entries and adjustments to previous entries are included. The disadvantage is that a large amount of data is involved, requiring more processing power and/or time. A set of data generated from a system of records (feeder systems) held by an organisation, which is imported into the costing system. Costs incurred in running the department that are not directly related to patient care. A service to which patients are referred directly from primary and community care for both diagnostic assessment and treatment. Some costs may be reported in the general ledger at a level that is not granular enough for patient-level costing, combining multiple costs that should be recorded separately for costing. These costs need to be disaggregated when creating the cost ledger, using an appropriate method. Standard CP2: Producing the cost ledger contains more information on disaggregating costs. See patient report form. A paperless version that makes patient information easier to store and look up. System containing staff payroll data. Where call takers, dispatchers and clinicians receive emergency calls from patients and co-ordinate responses to them. A staff member who accompanies a patient in a mental healthcare setting from one place to another for the patient s safety. Money spent on resources, including support resources, as reported in the general ledger output. Standard CP1: The role of general ledger in costing and CP2: Clearly identifiable costs explain how expenditure should be extracted from the general ledger and prepared for the costing system. Carried out by auditors independent of the organisation being audited. It provides a professional opinion on the truthfulness of the organisation s financial statements. 6 Costing glossary
7 False-positive matches Feeder systems Fiscal period Fleet Fully absorbed costs General ledger Global rota system (GRS) Group activity Healthcare professional Hazardous area response team (HART) Hear and treat Hear-and-treat professional Hidden activity Cases where activity data has been matched incorrectly to a patient episode, attendance or contact. Information systems used by various hospital departments to keep track of activity carried out while treating patients. They may also capture details of resources consumed during treatment. The period used for calculating financial statements. All vehicles used to provide care directly to patients. In the standards, fleet costing covers the running and maintenance of these vehicles including cleaning and repairs. Costs from a cost centre, specialty or other organisational unit that include not only the patient-facing element relating to the expenditure incurred but the apportioned support-cost element from support functions such as estates, human resources and finance. Main accounting record for financial transactions carried out by an organisation during a specific financial period. It includes transactions for assets, liabilities, accounts payable, accounts receivable and other information used for preparing financial statements. System containing rota data for ambulance staff. A session where more than one patient is given therapy or reviewed by healthcare professionals. At least one healthcare professional will be present at the session. An individual who is formally trained to provide care to patients. A team of paramedics and other emergency medicine practitioners trained and equipped to operate in hazardous areas such as disaster zones or those contaminated by hazardous chemicals or radiation. Ambulance payment currency. When a call is treated over the phone by a hear-and-treat professional. A clinician or other healthcare professional who gives clinical advice to patients or on-scene paramedics over the phone. Any activity performed within the trust, which is not visible to the costing system. 7 Costing glossary
8 Hierarchical allocation method Holding resource Hospital episode statistics (HES) Incident Incident response unit (IRU) Income ledger Incomplete patient event In-month data loading Internal audit A method of allocating corporate support services costs to other corporate support services in one direction: for example, finance department costs can be allocated to IT, but IT department costs cannot be allocated to finance even if finance consumes IT resources. The standards specify that a reciprocal allocation method should be used instead because it more accurately represents the interactions between support services, so ultimately allows more accurate support costing at the patient level. A collection of costs relating to an area not yet defined by the national standards for example, research and development, community services. A data warehouse containing details of all admissions, outpatient appointments and A&E attendances at NHS hospitals in England. For more information see the HES subsection of NHS Digital s website. All activity related to an instance in which the ambulance service dispatches a physical response to treat one or more patients. Part of the hazardous area response team that can respond to chemical, biological, radiological and nuclear incidents. Provides a complete record of financial transactions indicating the amount of income an organisation has generated. Information reported in income ledger will be based on entries made in the general ledger. Any patient event where the patient has not been discharged at the end of the reporting period, or whose care started in a previous reporting period, or where diagnostics or other events take place before or after the end of the reporting period. Extracting the most recent month's data from the activity feeds and loading it into the costing system each month. The advantage over cumulative year-to-date data loading is that smaller volumes of data are involved and less processing power and/or time is required. The disadvantage is that late entries or adjustments to the previous month's figures are not picked up and included in the costing system. Takes place within an organisation and is reported to its audit committee and/or directors. It helps to design the organisation s systems and develop specific risk management policies. 8 Costing glossary
9 Local activity Local resources Master feeds Matching Matching rules Materiality Materiality threshold Mobile data terminal (MDT) Multidisciplinary team (MDT) meetings National activity group National resource group Negative costs Netting off A measurable amount of work performed using resources, such as delivery of ward nursing, community nursing, a pathology test, surgery or therapies. A collection of costs used to deliver activities, such as staffing, supplies, systems and facilities. The cost ledger is mapped to a prescriptive list of resources provided by NHS Improvement. The core patient-level activity feeds to which auxiliary feeds will be matched. For example, admitted patient care (APC), accident and emergency department attendances (A&E) and non-admitted patient care (NAPC). Ensuring the relevant auxiliary data feeds can be attached to the correct patient encounter. Govern how auxiliary patient-level feeds should be matched to the correct patient encounter. The rules are in a hierarchy, with some methods of matching preferred to others to minimise false-positive matches. The principle of focusing on interventions that will have the greatest material (usually meaning monetary) impact first. It also applies when considering whether a piece of work is worth doing. If the anticipated added value of the work (eg collecting more detailed costing information on a procedure) is less than its cost, that work should not be a priority. States that you do not have to implement a costing method or process in the standards if the costs that will be covered by implementing it represent less than 0.05% of your organisation s total costs. An on-board computer used by ambulance crews to display and record information about jobs. Not to be confused with a multidisciplinary team (MDT). Where care providers with varied expertise come together to review the care plan of either one or more than one patient. The patient may or may not be present at the meeting. A set of activities with shared characteristics used for collection purposes. A set of resources with shared characteristics used for collection purposes. Cases where the balance of a cost or set of costs in the ledger appears to be less than zero. This can occur for reasons that include miscoding, cases where the value of a journal exceeds the value in the cost centre, and inaccurate timings of accrual release. These are detailed in Standard CP2: Producing the cost ledger. Using income to cancel out all or part of a cost before that cost is entered into the costing system. 9 Costing glossary
10 Never scenario Non face-to-face contact Observation Operational engagement Organisational support costs Other activities Outreach activity Overstated A condition that voids any match made between data feeds when trying to associate resource use or activity with a patient episode. You should come up with several never scenarios to avoid incorrect matches. Care providers can provide a list of scenarios that will never occur in a clinical context, eg a specialty prescribing a drug that is never involved in a patient's care pathway within that specialty. Time spent by care providers while reviewing and giving advice to a patient when the patient is not physically present: for example, having a phone conversation or a web chat with a patient while the patient is at home. Carried out by healthcare professionals in a mental healthcare setting to ensure that a patient is well and not harming either themselves or other patients. Involving operational staff and clinicians in developing costing methods and practices. For more information see the Department of Health s guide to effective clinical and financial engagement. Support costs incurred at the level of the whole organisation. Activities performed by a provider that do not relate to the care of its own patients. These include care provided to direct access patients and commercial activities. For patients recently discharged from admitted patient care, who are being seen as part of a follow-up. Reported with a value greater than the real value. Patient administration system (PAS) Patient care pathway A central repository that stores patient-related information such as demographic data and details of how inpatients and outpatients came into contact with the hospital. The patient's journey from initial contact to the end of treatment. There are standardised pathways for various health conditions, although any individual patient s pathway is likely to vary from the standard. For examples and more detail, see the National Institute for Health and Care Excellence (NICE) website. Patient-facing costs Those that relate directly to delivering patient care and are driven by patient activity; they should have a clear activitybased allocation method, and will be both pay and non-pay. Patient report form (PRF) Completed by ambulance crew members and containing information about each patient treated. 10 Costing glossary
11 Patient unit costs Patient-level activity (acute and mental health) Patient-level activity (ambulance) Patient-level costing Patient-level costs Patient-level information costing system (PLICS) Payment currency Post-closure adjustments Private patients Providers of NHS services The costs of single episodes, attendances, contacts or spells of care delivered to individual patients. Reference costs are calculated by finding average unit costs for different currencies across all relevant patient episodes, attendances, contacts or spells. Unit costs are further defined in the Department of Health s reference cost collection guidance. Calculated by matching activity to a patient episode, attendance or contact. Some types of activity are not directly matched to a patient but are still reported at the patient level using weightings based on headcount and/or acuity and time usage. Calculated by distributing activity from incidents across the patients involved. Some types of activity are not directly matched to a patient but are still reported at the patient level using weightings based on headcount and/or time usage. The practice of allocating costs to individual patients by recording and/or calculating the support resources and patient-facing resources consumed to deliver activities related to patient care. Calculated by tracing individual patients actual resource use. The output of the patient-level information and costing system (PLICS). Systems that combine activity, financial and operational data to cost individual episodes of patient care. Refers to the units of healthcare for which a payment is made and can take a variety of forms. Changes made to board or governing body reports after the generation and closure of the trial balance on which the costing outputs are based. Patients who are responsible for paying the fees for their care, either directly (self-pay) or covered by private medical insurance. Since the source of income is different from other types of patients, they need to be identified and flagged as private patients. Legal entities, or subsets of legal entities, which provide healthcare under NHS service agreements, operating on one or more sites within and outside hospitals. They include NHS trusts and foundation trusts providing acute, ambulance, community and mental health services to treat patients and service users. They also include GP practices, local authorities with social care responsibilities, and non-nhs providers. Providers are defined in more technical detail in the NHS Data Dictionary. 11 Costing glossary
12 Provider-toprovider (P2P) activity Psychiatric intensive care unit (PICU) Quantum of expenditure Quantum of income Rapid response vehicle (RRV) Reciprocal allocation method Reciprocal charging arrangements Reconcile Reconciliation Reconciliation item Reference costs An arrangement to provide discrete elements of patient care to another provider. The activity is not directly commissioned by commissioners. Provides care to patients who require immediate or more than usual care due to high risk of self-harm or harm to others. PICUs usually have higher staffing levels and may have an array of specialised care providers. The total expenditure measured and allocated for the costing exercise. The total income measured and allocated for the costing exercise. A smaller vehicle (car, bicycle, motorcycle) equipped with life-saving equipment used by a solo paramedic to get through traffic and see a patient as fast as possible. A method of allocating costs that takes into account how corporate support services provide services to one another: for example, part of the cost of the finance department is allocated to IT and part of the cost of the IT department is allocated to finance. The method and its benefits are explained in Standard CP2: Clearly identifiable costs. Agreements with foreign states allowing the NHS to charge their governments for care provided to overseas patients. To match output from the costing system with the sources of its data as well as with totals from other financial statements. This matching takes into account adjustments and exclusions made during the costing process. The process of making sure that two or more sets of records agree. In costing, the cost ledger and income ledger must reconcile to the general ledger, as well as to the trust board reports. For more guidance on reconciliation see NHS Improvement s NHS foundation trusts manual for accounts and DH s manual for accounts for NHS trusts. A unit of cost or income not recorded as part of the costing process which may help explain differences between the cost and income ledgers and the general ledger. A building block of the national tariff, the system that covers most NHS-funded healthcare in England. All providers submit their costs and activity for each service in accordance with guidance from NHS Improvement (formerly from DH). Prices are then set for NHS-funded services in England based on the national average of costs across all providers. 12 Costing glossary
13 Refresh Relative weight value unit (RVU) Repeated distribution Resources Response unit See and treat See, treat, and convey Service user Service-level agreement (SLA) The practice of replacing data loaded into the costing system month-on-month with a fresh extract from the patient-level feeds. This ensures that late entries and adjustments to entries, made after the month during which they occurred, are included in the costing system. For example, an activity in June, which is entered into the patient-level feed in August due to an administrative error, would be missed by an in-month data load at the end of June. A refresh after August would pick it up and add it to the list of activities in June within the costing system. Developed to assign costs at the patient level, where a patient-level feed is not available to identify the precise cost of activities performed. RVUs can also be used where supporting allocation information is required for the patientlevel feeds. RVUs can be used while allocating patient-facing or support costs. A means of allocating support costs across patient-facing resources using allocation factors (essentially weightings). These factors are based on the amount of interim support resources consumed in delivering each relevant patientfacing resource as well as other relevant support resources. The methodology is detailed with a worked example in Standard CP2: Clearly identifiable costs. Components used to deliver activities, such as staffing, supplies, systems and facilities. The cost ledger is mapped to a prescriptive list of resources provided by NHS Improvement. One staffed vehicle or other unit (eg community first responder) that can be physically dispatched to an incident. Ambulance payment currency. When one or more responses are dispatched, arrive at the scene and treat a patient or patient without conveying them elsewhere. Ambulance payment currency. When one or more responses are dispatched, arrive at the scene, treat and prepare one or more patients for transport and convey them to a hospital or other treatment location. People receiving care from a mental health provider are usually referred to as service users or clients by healthcare professionals. However, as the costing standards are for costing practitioners and their aim is to improve quality of patient-level costing in an organisation, they refer to anyone accessing mental health services as a patient. Made between two organisations and identifying the expected level of service that one provides to the other. 13 Costing glossary
14 Service-line reporting (SLR) Serious untoward incident (SUI) Staff pay timing issues Stakeholder Standalone feeds Statistic allocation table Support costs Support resources Third manning Traceable Traceable costs Travel time Understated A method for reporting cost and income by service lines to improve understanding of each line s contribution to performance. SLR measures a trust s profitability by each of its service lines, rather than at an aggregated level for the whole trust. For further information see NHS Improvement s introduction to SLR. An incident involving patient(s), member(s) of staff and/or the public, who suffer serious injury or unexpected death (or the risk of serious injury/death) while on the provider s premises. In some cases the dates on which staff are paid and the way their pay is split over time can lead to problems recording their costs in the costing system. For instance, differences in the number of days in a month can lead to varying hourly costs when staff are paid the same amount each calendar month. For more detail see Standard CP1: Understand the general ledger. All individuals and groups likely to be affected by a proposed change. Patient-level activity feeds not matched to any episode of care but reported at service-line level in the organisation s reporting process: for example, the cancer MDT feed. Statistics used in apportionments that are not derived from data feeds, and are likely to be updated annually rather than for each costing period, eg floor area. Do not directly relate to delivering patient care but to running the organisation. Examples include board costs, HR, finance and estates. They need to be apportioned to patient activity using information such as staff numbers and floor area. Relate to the running of the department or organisation, not directly to patient care. See also resources. The practice of carrying a third member of staff on a twoperson ambulance as part of that staff member's training. Possible to follow back to the original source including any transformations or adjustments. Those directly and causally related to activities performed, resources used or other cost objects. When these are used to record actual per-patient or per-unit costs in parallel with weighting-based costing methods eg relative weight values they can result in negative costs. The time taken by a healthcare professional to make a journey from their workplace to meet a patient. Reported with a value smaller than the real value. 14 Costing glossary
15 Unmatched activities Volume of service Weighting (supports) Activities that have not been successfully allocated to the patient episode, attendance or contact for which they occurred. The number of patients treated and activities performed. As the population increases and ages, volume of service is expected to increase. Using data on relative use of resources from one service/department/resource by others to calculate what proportion of costs to allocate to which cost centres and patient-facing resources. The method is similar in principle to that used to calculate relative weight units and allocate resources such as nursing costs to patients based on duration of ward stay and acuity. See also allocation statistic. 15 Costing glossary
16 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 10/17
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