The financial burden of reverse shoulder arthroplasty for proximal humerus fractures

Aims The purpose of this study was to evaluate the cost of reverse shoulder arthroplasty (RSA) for patients with a proximal humerus fracture, using time-driven activity based costing (TDABC), and to compare treatment costs with reimbursement under the Healthcare Resource Groups (HRGs). Methods TDABC analysis based on the principles outlined by Kaplan and a clinical pathway that has previously been validated for this institution was used. Staffing cost, consumables, implants, and overheads were updated to reflect 2019/2020 costs. This was compared with the HRG reimbursements. Results The mean cost of a RSA is £7,007.46 (£6,130.67 to £8,824.67). Implants and staffing costs were the primary cost drivers, with implants (£2,824.80) making up 40% of the costs. Staffing costs made up £1,367.78 (19%) of overall costs. The total tariff, accounting for market force factors and high comorbidities, reimburses £4,629. If maximum cost and minimum reimbursement is applied the losses to the trust are £4,828.67. Conclusion RSA may be an effective and appropriate surgical option in the treatment of proximal humerus fractures; however, a cost analysis at our centre has demonstrated the financial burden of this surgery. Given its increasing use in trauma, there is a need to work towards generating an HRG that adequately reimburses providers. Cite this article: Bone Jt Open 2020;1-12:731–736.

Surginote: Improving the Accuracy and Quality of Operation Note-Keeping

Payment by results (PbR), introduced by the Department of Health in 2004, is the current system that determines how a surgical department receives revenue. This is related to the type and number of procedures recorded in that department. This is done in three stages: > Terming: the surgeon documents the surgical procedure. > Classifying: this is performed by clinical coders, who translate each procedure into code. Each procedure has been assigned an Office of Population, Censuses and Surveys Classification of Surgical Operations and Procedures (4th revision) code (OPCS-4). > Grouping: the OPCS codes are used to derive healthcare resource groups (HRGs). This is a measure of care based on diagnosis and complexity of treatment. This provides the final payment.

The Payment by Results (PbR) national tariff severely penalises efficiency and early hospital discharge

The system of Payment by Results (PbR) was instituted in 2005 to reimburse secondary care for its activity. One of the features of PbR is the short stay tariff (SST), in which only 20-50% of the national tariff is paid if patients have a length of stay (LoS) of less than 2 days in hospital for certain Healthcare Resource Groups (HRGs) – or conditions. We analysed the admissions under Acute Medicine at Bradford Teaching Hospitals over a period of one year and identified the HRGs to which the SST applied. We used the 2007 PbR national tariff to calculate the additional income that would have been generated if these patients were kept in hospital for at least 2 days in order to avoid SST. We calculated an extra theoretical income of approximately £5 million if all these patients had a length of stay (LoS) more than 2 days to avoid the SST. Sixteen additional beds (assuming 85% occupancy) would have been required at a cost of around £1million per year to accommodate these patients. We show that the current PbR system is flawed and penalises hospitals with a higher turnover of patients.

Payment by results for fractured neck of femur in two NHS Secondary Care Trusts

The NHS is in the midst of widespread financial and personnel restructuring. A cost-efficient organisation with effective Secondary Care Trust payment structure was envisaged in the government paper Delivering the NHS Plan. Payment by results (PbR) was introduced into the NHS in 2004 in an effort to finance Trusts fairly and reward work volume. PbR is a cost-per-case fixed national payment system based on Healthcare Resource Groups (HRG). A reduction in waiting times, increased productivity and better use of capacity are expected benefits. An improvement in data collection is anticipated. Similar payment structures are used in Europe, the US and Australia. PbR aims to create an individual tariff for each hospital patient episode. Primary Care Trusts (PCTs) will pay this tariff for the treatment of each individual patient in their resident population.

Payment by volume (not results)

Payment by results, a system for paying healthcare trusts, is intended as a fair and consistent basis for hospital funding. It relies on a national tariff structured around a case-mix measure known as healthcare resource groups. It is often argued that if payment by results works as planned, the National Health Service will become more efficient and productive. However, the use of a case-mix measure, the healthcare resource group, which derives from the diagnostic related (or diagnosis-related) group, has attendant problems. These include the risk that the payment structure will be inaccurate, unfair and liable to cause the financial destabilisation of trusts. There is also the risk that healthcare institutions will falsify patient classifications (‘up-coding’) to ensure higher remuneration. It has been argued that payment by results may be particularly unsuited to psychiatry. The ability of healthcare resource groups to accurately predict resource use in psychiatry is doubtful. In conclusion, mental health trusts will need to adapt to payment by results but there will inevitably be losers.