You know how much your case mix will earn but do you know how much it will cost? Ardentia’s PLICS can show you.

It’s About Building Bridges

The decisions that really determine a hospital’s financial performance are taken by clinicians. The choice of a treatment, a drug, a prosthesis: these are the choices – taken by those who deliver care not by financial managers – that make the difference between a hospital running at a profit or a loss.

The riddle Trusts must solve, especially as they move to Foundation Trust status, is how to ensure they are financially well managed while still providing the highest level of care. Trusts need to manage both clinical activity and financial performance at the same time.

Fortunately, there is a bridge that links clinicians and financial managers – the patient.

Keeping financial ledger information – controlled by the Finance department – down to individual patient level – the responsibility of the clinician – creates the link between these parties. And ensures the objectives of good hospital management, financial control and care quality optimisation are met.

Ardentia’s Patient Level Costing solution bridges the gap between manager and clinician for you. It bridges the gap between quality care and finance. It bridges the gap between management by guesswork and effective evidence based management.

It’s About Patients and Not Just About Costing

Handling finance data appropriately is obviously essential, but it isn’t sufficient. It has to be combined with a good understanding of clinical information.

That’s why Ardentia started work on Patient Level Costing. Using our experience of delivering patient activity applications, our Patient Level Costing solution is sufficiently sensitive to clinical concerns to bridge the gap between clinicians and managers.

Ardentia has built an application that combines three key characteristics:

• Actual Patient Costs – its reports are built on actual costs allocated down to patient level, so that any results they contain can be traced back to their underlying cause in real patient care
• Embrace Existing Systems – its approach is based on making the most and not jettisoning the great volume of work already carried out in hospitals to generate reference costs
• Comprehensive Approach – ensuring that as well as reports specifically based on patient level costs, the application also generates service-line reports that, in particular, meet the requirements of Monitor

Patient Level Costing was developed alongside a group of three Trusts, ensuring the functions it provides met real needs within the NHS. That’s why Patient Level Costing provides the functions and reports to allow the analysis of profit and loss at patient level; providing a basis for meaningful dialogue between clinicians and managers.

These are the tools that will drive real change, real improvement in health care delivery. Care that is effective as well as cost-effective: Ardentia’s Patient Level Costing application is designed to ensure that Trusts have the information to reach this key objective.

How Does it Work?

Data from a general ledger, in the form of cost and income values stored against cost centre and account code combinations, are read into the PLC system.

In the process referred to in the system as ‘Allocation’, a series of allocation keys are applied to the values to allocate them across cost buckets defined by site (where appropriate), service line, point of delivery and cost pool.

At the same time, activity data is being scanned to calculate apportionment weights that will be used to map costs from the cost buckets to patient records, a process referred to as ‘Apportionment’. Some of those weights will also be used as the basis for keys in the allocation process.

Before apportionment, any cost or income values that can be are directly assigned to patient records. These will include tariff values calculated under Payment by Results or the cost of any items the hospital’s systems can link to specific patient records: costs of prostheses, perhaps, or of high-cost medications. Any values directly assigned in this way are netted off against the values held in the corresponding cost buckets.

The application then apportions all the remaining values in the cost buckets to the patient records. At this stage, all cost and income values from the ledger are associated with patients, either by assignment or by apportionment.

Reports are available both against cost buckets and from the patient level information. Patient level data will, in particular, be aggregated to categories based around HRGs to give reference costs, and to service lines to support Service Line Reporting. At every stage of the process, specific reports show the reconciliation between allocated or apportioned values and the starting figures in the ledger, to ensure that all data have been correctly processed.