Patient Level Costing - not just for geeks

When you work in health information, there is a terrible tendency to get into some bad habits. It’s a sector which is much too easily satisfied. We get data that’s 95% complete and we say ‘hey, that’s not bad.’ At 99% we’re ecstatic.

That’s why it’s been such an eye-opener to work on Patient Level Costing. This is because when it comes to completeness, finance staff only know one acceptable figure – 100%. If there's a discrepancy, then it needs to be small and we have to be able to account for it, to explain it in its entirety.

There’s something refreshing about this uncompromising demand for the highest standards of rigour. It’s made it a lot of fun to spend a lot of time over the last three years in this field.

As it happens, the fundamental principles of Patient Level Costing are an intriguing challenge in themselves. The problem is that you’re trying to reconcile the irreconcilable.

The clinicians who are involved with a particular case take a patient-centric view of what they do. They see that the patient had an X-ray of a leg and then an operation to pin a badly broken bone. He had an anaesthetic during the operation, an antibiotic to combat possible infections and an analgesic to combat the pain. He received nursing care, medical care and an intervention by a surgical team. Consumables were consumed in the operation, a bed was provided, the patient was served food (which may even have been passable).

Unfortunately, the hospital’s General Ledger simply doesn’t recognise any of these categories. There will be entries for drug costs and anaesthetics, there will be entries for staff pay, there will be entries for food and consumables and laundry and cleaning and maintenance. None of these will give anything like a coherent account of what happened to our patient. It’s rather like the first diagram below: two cogs that don’t mesh and turn in opposite directions.

Patient Level Costing therefore has to bring in a third cog, a Costing Engine, to mesh with the other two and make them work together. Such a costing engine has to include complex logical processes to convert the Ledger view of the hospital world into the patient-centric, clinician view. In other words, it takes the values in the ledger and finds a way to translate them into costs and income values that can be assigned to individual patient records.

Now that sounds like an exciting thing for geeks and no-one else. In reality, though, it’s a lot more significant than it sounds. Because carry it off and what you’ve done is to provide a common vocabulary for communication between Management and Clinicians. Currently Management sees that Trauma and Orthopaedics is overspent (that’s just an example, but isn’t it sad that it tends so often to be Trauma and Orthopaedics?). With Patient Level Costing, suddenly the hospital can identify the specific patients where the overspend occurred.

Suddenly the Clinicians can investigate the source of the problem. Is it a mistake not to give an antibiotic as a prophylactic before certain operations – does it lead to significantly higher costs, on average, later? Is it a mistake to use a particular medication to treat a condition which might be dealt with more quickly and cheaply using another, even though it is itself more expensive? Once the costs have been associated with individual patients, it becomes possible to answer those questions.

Which means that the problems can be addressed by the only people who can actually make a difference – clinicians.

So Patient Level Costing isn’t just for geeks. It’s for all of us who’d like to see care made more efficient – and more effective. And that’s basically all of us.

Mental Health may show the way to Healthcare sanity

Although I’ve been active in healthcare information, mostly in Britain, for a quarter of a century, it’s only in the last couple of years that I’ve had much to do with Mental Health.

To my shame, I have to admit that I was surprised by what a pleasure it’s been. I was expecting something far less enjoyable. As in most countries, Mental Health has tended to be the poor cousin when it comes to healthcare information systems, if not the poor cousin of healthcare generally. In recent times, however, that has been changing rapidly.

Healthcare in Britain has been the subject of an apparently unending succession of organisational reforms, by governments of all hues. The latest wave is under way right now and promises to be particularly painful. In passing, let me say that it’s incomprehensible to me why governments think that by constantly reorganising the way healthcare’s managed, they are helping it be more efficient, more effective or less expensive.

One initiative a few years ago was the introduction of Foundation Trust status for hospitals. This gives them far greater autonomy, in the way they manage not just their work but also their finances. A large number of Mental Health hospitals applied for and were granted that status. One of the results was that they suddenly needed to become far better equipped in information systems to support decisions by their managers, including clinical managers.

This came on top of a brave and highly effective reform that they had themselves driven through over 25 years, as they moved away from being a strongly hospital-based service to delivering far more care in the community. This was particularly difficult to achieve as Mrs Thatcher’s government in the early eighties, at the start of the process, only saw care in the community as a way of saving money. At the time I lived in Hastings where a local Mental Health hospital had recently thrown out a lot of its former inmates. I remember groups of sad individuals moping around as they experienced the joys of being cared for in the community by being left on street corners.

Since then, however, there has been serious investment in Mental Health. Today, therefore, there is real care in the community, allowing people to live at home, with their families and friends and even jobs, rather than being shut up in hospitals out of sight. The possibility of inpatient care is available to those who really need it, either for extended periods or for a briefer time until they are well enough to return to the community. All this has added up to a dramatic improvement in the quality of Mental Healthcare over the time that I have been working with the NHS.

But the final aspect that completes this picture is the way that Mental Healthcare, instead of being little more than an also-ran in healthcare generally, is beginning to emerge as a model. This is because a lot of healthcare, of the kind that used to be provided by acute (short-stay) hospitals is becoming long-term chronic care. Diabetes, cancer, certain types of heart disease, obesity, infections like HIV among many other conditions, are not treated by spectacular actions at a specific point in time – say a massive and complex operation – but by careful management over long periods, with regular interventions by many different types of staff (doctors, nurses, therapists, counsellors) who have to work together as a team.

That is precisely the way that Mental Health functions. Treatments can take months, years or even an entire lifetime. They involve many different types of professionals working in different contexts – in a hospital, in an outpatient clinic, in a peripheral clinic or health centre, in the patient’s home – and having to coordinate their activity. Why, the concept of the multi-disciplinary team meeting, now increasingly widespread across different types of hospitals, is central to the way Mental Healthcare is delivered.

So suddenly it may be Mental Health that can teach the rest of Healthcare a thing or two.

All these things make the Mental Health sector vibrant and exciting. Long may it remain so – and survive the ravages of next wave of cuts.