Scottish National Tariff
Published: 29 October 2013
Scottish National Tariff 2013/2014
The Scottish National Tariff is a list of standard average prices created by distributing published costs information from the Costs Book (NHS Scotland costs data) across inpatient and day case hospital admissions data (NHS Scotland acute hospital activity).
The Tariff was developed to help set service level agreements between NHS boards thus enabling them to charge one another for patients who live in one NHS board but receive treatment in another; referred to as Cross Boundary Flow Activity.
The Costs Book allows Scottish health expenditure to be identified by location, specialty and type of admission. Most hospital specialties contain admissions ranging from very complex to very straight forward, for example the cost of treating a patient admitted to an orthopaedic specialty will differ depending on the reason and severity of the admission and the type of treatment carried out. For this reason it is neither practical nor feasible to use average costs within a specialty to charge for Cross Boundary Flow Activity. The Scottish National Tariffs reflect the varying complexity of hospital activity (known as case mix complexity) through the use of Healthcare Resource Groups (HRGs) - standard groups of clinically similar treatments that use common levels of healthcare resource. As HRGs group together admissions based on patient operative procedures and diagnoses, they provide clinically meaningful groups of patient activity which are similar from a resource perspective, thus allowing organisations to understand their activity in terms of the types of patients they care for and the treatments they undertake.
Although we use common HRG codes for activity, Scotland does not have the level of detailed HRG costing that exists in England. Scottish health costs are collected and published at specialty level only, and we therefore need a mechanism for estimating costs at the more specific HRG level. By using English NHS Reference Costs we can assume that the resource differential between any two procedures or conditions in Scotland is the same as in England. For example if a hip replacement costs around 4 times as much as an arthroscopy in England, then it is assumed that this is also the case in Scotland. This resource differential is reflected via a set of English 'Relative Cost Weights' which are applied to Scottish data to allow HRGs to be weighted accordingly in terms of their cost relative to each other.
The tariff was last fully calculated in 2011/12. The 2012/13 and 2013/14 tariff outputs have been calculated using the estimated HRG costs from 2011/12, uplifted by 1% in each year, rather than performing a full calculation, allowing the NHS Costing Group time to focus on development of a Patient Level Information and Costing System (PLICS). The 1% uplift for 2013/14 reflects the estimated increase in pay and prices for NHS Boards based on their funding uplift and anticipated efficiency savings.
The remit of the NHS Costing Group is to:
- Provide long term strategic direction on all NHS Scotland costing related work, recommending a common costing methodology.
- Improve understanding of costs to support a number of projects or initiatives
- Facilitate improved coordination of costing related work across NHS Scotland
Key Features of the Tariff
The Scottish National Tariffs are based on the cost of patient 'spells of care within the same specialty' which often involve several rather than individual episodes of care. This methodology was adopted to address inconsistencies caused by differences in recording practice between Boards, mainly around the recording of patients transferring between critical care significant facilities.
- The Scottish Government Efficiency and Productivity Programme is currently focusing on improving the quality of costing data in order to improve accuracy of data and consistency across NHS Boards. The Scottish Government is also piloting a patient level costing information system and exploring options to replace the current tariff with one based on this new system.
- The tariff applies to cross-boundary flows for acute (hospital) sector inpatients and day cases.
- Activity is valued using a combined rate for elective inpatients and day cases and a separate rate for non-elective inpatients.
- Activities excluded from the Scottish tariff include certain specialised services such as those funded by the National Services Division (NSD), and some high cost low volume activity (e.g. defibrillator pacemaker implants).
Although the methodology used is based on the English approach, there are important differences to be aware of, which make direct comparisons between Scottish and English Tariffs inappropriate. In summary, these are:
- The Scottish National Tariff applies to spells of care while a patient is being treated within a single specialty rather than to continuous spells as in England.
- English Tariffs are calculated for 'truncated' activity for all HRGs (i.e. any outlying lengths of stay beyond a 'trim-point' incur an additional cost based on daily rates). This methodology has not been fully adopted in Scotland. However,'excess' bed days associated with exceptionally long lengths of stay within critical care significant facilities have been identified and are compensated for by current tariff methodology.
- The Scottish National Tariff does not apply a reduced tariff for certain short-stay emergency admissions.
- The Scottish National Tariff does not factor in a tariff top-up for specialist/children's services.
- The Scottish National Tariff directly reflects the reported costs of providing healthcare whereas the English tariff is adjusted to provide remuneration in support of Department of Health policy.
- English costs are truncated costs. Direct comparison of the Scottish National Tariff with English costs will provide misleading inferences about the relative cost of treatment and any such analysis should be treated with caution.
The Scottish National Tariffs developed for 2013/14, can be obtained using the link below:
2013-14 Scottish Tariff [230KB]