Costing supply first

Hi all

We are attempting to reform Costing in healthcare in the U.K. as it has not delivered benefit for a number of reasons. Whilst profit is not the goal, ultimately all health services have to provide the best care they can with limited funds, so in a way the need to understand cost and it’s true causality is more acute than private sector organisations.

The main issue is that costing has been largely demand focussed which ultimately healthcare has little or no control over. This leaves costing information currently with no way to be actioned.

Little to no attention has been placed on the supply side. With 85% of the cost of healthcare being people, staffing supply, when they work, balancing this against demand hasn’t even been considered or if it has at its most basic level.

When you begin understanding supply and demand at the hour level it all starts to make a lot more sense, causality can be seen, and the numbers become irrefutable.

Understanding the capacity and ultimately patient facing utilisation starts to become apparent, and provides a measure for understanding. It’s not a personal target or a stick to beat prior with, but a way to identify to management and support: How can we all help the front line staff spend more time doing what you enjoy, treating and helping patients.

Costing unfortunately has been oversimplified and driven by software limitations, not reality, due to a relative monopolistic situation, with a drive to cut costs. Hospitals are one of the most complex and diverse organisations on the planet, but costing properly becomes easier not harder when done well and the moulins of datapoints can be used to drive the model.

Luckily we are working with some forward thinking hospitals to hopefully prove the benefit in the approach with real world savings without reducing quality of care.

i hope I’m not barking up the wrong tree but it feels like the most logical approach I can think of and feels like the best way to reflect the reality of the situation and give information that can be acted upon, data quality permitting (unfortunately!)

Any comments or advice relevant, whether dismissing the approach or providing real world examples of this approach would be greatly appreciated

Thanks for reading