Authors' objectives: Traditionally, the cost object in health care has been either a service line (e.g. orthopaedics) or a clinical intervention (e.g. hip replacement). In the mid-2000s, the Department of Health recommended that in the future the patient should be the cost object, to enable a better analysis of cost drivers in health care, resulting in patient-level information and costing systems (PLICSs). Monitor (the economic regulator for health care) proposes that PLICS data will now form the basis for mandatory prices for health-care services across all care settings. Our main aim was to investigate the use of PLICSs.

Authors' recommendations: Both PLICSs and SLR identify and interrogate service line profitability. Although trusts currently cross-subsidise to support loss-making areas under the tariff, they are actively considering disinvesting in unprofitable service lines. Financial pressure within the NHS, along with its current competitive, business-oriented ethos, induces trusts to act in their own interests rather than those of the whole health economy. However, many policy commentators suggest that care integration is needed to improve patient care and reduce costs. Although the Health and Social Care Act 2012 (Great Britain. Health and Social Care Act 2012. London: The Stationery Office; 2012) requires both competition and the collaboration needed to achieve care integration, the two are not always compatible. We conclude that competitive forces are dominant in driving the current uses of PLICSs. Future research should interrogate the use of PLICSs in New Care Models – Vanguard Sites (NHS England. New Care Models – Vanguard Sites. NHS England; 2015) and initiatives to deliver the 'Five Year Forward View' (Monitor and NHS England. Reforming the Payment System for NHS Services: Supporting the Five Year Forward View. London: Monitor; 2015).

Project Status: Completed

URL for project: http://www.nets.nihr.ac.uk/projects/hsdr/11101604

Year Published: 2016

URL for published report: http://www.journalslibrary.nihr.ac.uk/hsdr/hsdr04310/#/abstract

English language abstract: An English language summary is available

Publication Type: Not Assigned

Country: England, United Kingdom

Organisation Name: NIHR Health Services and Delivery Research programme

Contact Address: NIHR Journals Library, National Institute for Health and Care Research, Evaluation, Trials and Studies Coordinating Centre, Alpha House, University of Southampton Science Park, Southampton SO16 7NS, UK

Contact Name: journals.library@nihr.ac.uk

Contact Email: journals.library@nihr.ac.uk

Copyright: Queen's Printer and Controller of HMSO