NHS: Costs of Operations

Baroness Walmsley Excerpts

Monday 9th November 2015 Lords Chamber

[Lord Prior of Brampton]

My Lords, hospitals do know their costs; they know their reference costs and their HRGs. Increasingly, we will want to get patient-level costing into all our hospitals, as is already the case in some hospitals. If you know the actual cost by patient, the hospital management can have a much better discussion with hospital clinicians. Patient-level costing is important going forward in hospitals. For GPs, we have a calculated payment, as my noble friend will know: currently £75.77 per capita on the list, adjusted for various matters. A capitated figure for GPs is probably better than a much more detailed breakdown of costs.

[Baroness Walmsley (LD)]

Do the figures for hospitals discriminate between those that have to service expensive PFI contracts and those that do not? If so, and if the former are more expensive than the latter, is the department funding them appropriately to enable them to pay those costs?

[Lord Prior of Brampton]

The noble Baroness makes an important point. We have what we call a “market forces factor”, which is applied to the tariff to make adjustments for unavoidable differences in costs—for instance, providing care in London compared to providing it in a cheaper place. The way we measure the cost of capital is not entirely satisfactory, though, and if an individual trust has a very expensive PFI, that is not properly compensated for by the market forces factor. We should spend some more time looking at that issue.