CORDIS - EU research results

The use of key figures in the hospital

Final Activity Report Summary - USE OF KEY FIGURES (The use of key figures in the hospital)

To manage increasing health care costs more effectively, several countries in the European Union have introduced or are currently introducing new funding systems based on the Diagnosis Related Group (DRG) system. These new systems are not only used for external evaluation and funding, but hospitals use them internally as management tools. In the UK such a system, called Payment by Results (PbR), has been introduced at the start of this research project in 2007. To support effective internal management based on the UK-DRGs, called Healthcare Resource Groups (HRGs), the Department of Health recommends trusts to use specific management accounting tools: patient-level costing systems and balanced score cards. Patient-level costing replacing traditional top-down cost approaches is the basis to calculate more accurate prices and a more meaningful information for clinicians as based on the patient rather than a department. Balanced score cards allow to analyse cost information combined with clinical information and thus contribute to integrate managerial and clinical perspectives.

While there are hopes that the introduction of these new tools will allow more effective management in terms of both quality and costs at national and hospital levels, clinicians and health care experts point out the dangers of management tools based on the DRG-system, which may have unwanted effects such as the selection of patients and the decrease in quality of care.

This research seeks to shed light on the effects of these management accounting tools on health care practice in NHS trusts. To this end three case studies have been carried out in selected NHS trusts. Data collection was based on semi-directed interviews with managers, nurses and doctors, observation of meetings and analysis of documents.

Results show that a meaningful integration of these management accounting tools within health care practice is not given. NHS staff acknowledged the potential of these tools to provide more accurate costs, and hence to be the basis for more accurate prices and investment decisions. Clinicians underlined the crucial role of management accounting tools in building up inter-professional teams and in coordinating care in complex and distributed care teams. Providing for a common language among professionals these tools may contribute to an integrated management of cost and quality. Yet there are considerable concerns that these tools can have unwanted effects on health care practice. As there is little communication between clinical bodies and the department of health concerning the tool-design, the development and design of tools seems to be decoupled from operational concerns in particular those of the clinical profession.

Suggestions from the clinical professional bodies to be included in the tool design are often ignored. Also clinicians point out that the use of these tools is linked to an increasing selection of patients, such as performing surgery only for those above a certain threshold of success. Patients not being selected may then go to private practice if they want the surgery to be carried out. This may be prohibitive for certain income classes and thus undermine the principle of equal access to care. Clinicians experienced this as an ethical dilemma.