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C:\AndySept2005\PbR\Quant_analysis\EHP conference PbR AS_MM 170807.doc; 17 August 2007

The impact of the reform of hospital funding in England

Andrew Street* and Marisa Miraldo Centre for Health Economics, University of York, UK YO10 5DD

* corresponding author: ads6@york.ac.uk

Paper presented at: Evaluating Health Policy: New Evidence from Administrative Data

Thursday 20th September 2007 University of York Not for citation without authors’ permission

Abstract The English NHS is currently reforming hospital financing. The previous funding system, based on block contracts, is being replaced by activity based financing, an arrangement called Payment by Results (PbR). The reform has been phased in, with some treatments being subject to the new financing arrangements in advance of others. We exploit this phased introduction to analyse the impact of the reform on reported costs, activity rates, day case activity and waiting times. We find that Payment by Results has neither reduced costs nor variations in costs across providers, and is not responsible for activity growth. However it appears to have had some impact on shifting activity to day case settings and to have complemented the target setting regime which led to a reduction in waiting times.

Key words: activity based financing, waiting times, DRGs Acknowledgements We thank Steve Martin and Peter Sivey for data extraction, and Jan-Erik Askildsen, Susan Devlin, Alan Glanz, Maria Goddard, Eileen Robertson and Chris Watson for comments on an earlier draft. This project was funded by the Department of Health as part of a programme of policy research at the Centre for Health Economics, University of York. The views expressed are those of the authors.

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The impact of the reform of hospital funding in England 1 Introduction The National Health Service in England is emulating the USA, Australia and many countries in Europe by introducing Activity Based Funding (ABF). Labelled “Payment by Results” (PbR), the policy rewards hospitals for volumes of work adjusted for differences in casemix, with hospitals receiving a fixed payment – the national tariff – for each type of patient treated (Department of Health, 2002b). The key differences to previous contracting arrangements are that prices are fixed nationally, hospital revenue is related to activity, and activity ceilings have been relaxed. These new financial arrangements are intended to provide stronger incentives for NHS hospitals to increase activity, reduce waiting times and lower costs (Department of Health, 2002b). PbR links hospital income and activity much more closely than previously has been the case; hospitals now receive extra funds for each additional patient they treat. The intention is that this will encourage hospitals to find ways to cut costs and reduce length of stay in order to find capacity to accommodate more patients. Activity should increase and waiting times fall in those hospitals where the tariff is higher than their marginal costs. Those hospitals with costs above the tariff have an incentive to reduce their costs. In this paper, we investigate the impact of the reform on key indicators where PbR is expected to have had an effect, namely reported costs, activity, day case rates and waiting times. We first outline the key features of the funding reform, by describing the organisational structure of the NHS, the revenue function of a typical provider before and after the reform, and the incentives that PbR introduces to improve technical efficiency. Section three describes the methodological approach and results are reported in section four. Concluding remarks are offered in section five. 2 Changing contractual arrangements Prior to the introduction of Payment by Results, hospitals received most of the revenue on a “block contract” basis from Primary Care Trusts (PCTs), the bodies responsible for commissioning care on behalf of their resident populations. With subscript 1 indicating the period prior to PbR, the revenue 1R of a provider k can be summarised as follows:

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1 , 1... , 1...k sjk sjk sjkJ SR C p Q j J s S= ≡ × = =∑ ∑ (1) During this period contracts between a PCT (j) and the provider (k) stipulated a total contract value (Csjk), specified at specialty level (s). Total hospital revenue amounted to the sum of its contracts across specialties and PCTs. For each specialty-level contract, the PCT would decide how much of its budget to devote to each specialty contract and negotiate with the provider how much activity (Qsjk) would be made available. Thus the specialty-level price (psjk) was arrived at as the by-product of negotiations about contract value and the volume of activity for each specialty. These block contracts allowed for tight control of global expenditure but provided little incentive for hospitals to exceed their contracted levels of activity or reduce their costs. PbR changes these incentives. Under PbR, indicated as subscript 2, the hospital revenue function takes the form:

2 , 1...k i ijkJ IR p Q i I = × = ∑ ∑ (2) where i represents a Healthcare Resource Group (HRG). This formulation reflects two ways in which PbR has changed contractual relationships. First, the “unit of activity” is described more accurately. Instead of block contracts specifying volumes of activity by specialty (Qs e.g. a patient treated in trauma & orthopaedics), PbR specifies activity by type of treatment (Qi e.g. a patient having a hip replacement ), with S<I.

Second, specialty-level prices psjk arrived at locally have been replaced by a national tariff ip for each HRG. Tariffs are set on the basis of costs reported on a mandatory basis by all NHS hospitals. Since 1998, every NHS hospital has been required to provide information to the Department of Health on its cost and volume of activity by HRG separately for three broad admission types (non-elective patients, elective inpatients and elective day cases). This information is published annually as the National Schedule of Reference Costs (NHS Executive, 1997). For non-elective patients, the tariff NE

itp in year t for HRG i is based on average reference costs, such that:

2NEit i itp cδ −= (3)

where 2itc − is the average non-elective inpatient reference cost for HRG i two year’s previously; and δi is an “inflationary factor” for HRG i. The inflationary factor is designed to take account of the two-year time delay between the date of the reference cost submissions and of the publication of the prices. As some cost increasing

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developments, such as National Service Frameworks and guidance from the National Institute of Clinical Excellence, impact treatments differently this adjustment is specific to each HRG (Department of Health, 2005). For elective treatments, the price is based on the national average reference cost for inpatient care for each HRG, ie , and the average reference cost for day cases, id ,weighting these two averages according to the proportion of activity nationally that is undertaken in inpatient and day case settings. The formula for calculating the elective tariff EL

itp is:

2 2(1 )ELit i it itp e dδ ρ ρ− − = + −

where 2ite − is the average elective inpatient reference cost for HRG i two year’s previously; 2itd − is the average elective day case reference costs for HRG i and ρ is the proportion of elective activity undertaken on an inpatient basis. There is a further adjustment ktγ to take account of local market conditions, which may impact on the price of labour and other inputs. This is supposed to allow for costs in providing treatment that are beyond the control of the hospital. This adjustment means that, for some hospitals, the actual unit payment may differ from the national price, so the price paid is kt itpγ .

Under PbR, as with all activity based financing schemes, price is the key instrument available to the regulator to signal what activities are most desirable and to incentivise efficient behaviour. In England the main goal of this funding system has been to further technical efficiency, so that services of a given quality are provided at lowest cost and that inputs are fully utilised. There are three types of impacts on technical efficiency that the government desires from this pricing structure. First, there are incentives for hospitals to increase activity and reduce waiting times if their marginal costs are below the tariff i.e. where

ik iMC p< . Marginal costs for each HRG are unknown (perhaps even to the hospitals themselves) but the government appears to assume that they are close to average costs

ik ikMC AC≈ . As the tariff is based on average national costs, the expectation is that around 50% of hospitals will be in the situation where ik ik iMC AC p≈ < . Second, hospitals where ik iMC p> have an incentive to reduce their costs to the tariff. Third, the elective tariff is designed to encourage a shift of activity from an inpatient to a day case setting.

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PbR is subject to a two-dimensional phased introduction. First, some hospitals are subject to a different timetable than others. The government is allowing hospitals that satisfy various performance criteria to assume greater autonomy over their operations and financial affairs. Most importantly as far as PbR is concerned, these “foundation” hospitals are able to negotiate all of their contracts under national tariffs rather than local prices (Audit Commission, 2004). An evaluation of the differential impact of PbR across hospitals has found little significant effect on the volume and mix of activity, small reductions in length of stay for elective patients, no effect on the proportion of patients admitted within a target waiting times, and small but positive effects on mortality rates (Farrar et al., 2006). The second dimension to the phased introduction arises because the national tariff is being applied to progressively more treatments. From 2003/4, the tariff applied to only 15 HRGs (out of 565), and only for activity above or below contracted volumes (Department of Health, 2002a) (Table 1). These HRGs had already been deemed important for the delivery of national targets, and PbR further reinforced this political focus (Department of Health, 2002b). From 2004/5, the payment arrangements were extended to a further 33 HRGs. From 2005/6, the policy began to be phased in over four years for the remaining elective HRGs, with local prices being replaced by national tariffs in a series of 25% adjustments (Department of Health, 2003). We exploit the phased introduction of PbR across HRGs in our analysis. 3 Methods We investigate the impact of PbR on costs, as reported in the Reference Cost database (http://www.dh.gov.uk/en/Policyandguidance/Organisationpolicy/Financeandplanning/NHSreferencecosts/index.htm, accessed 18/04/2007), and activity rates, day case rates and waiting times, information about which is extracted from the Hospital Episode Statistics, a patient-level database containing details of every patient treated in NHS hospitals http://www.hesonline.org.uk/Ease/servlet/ContentServer?siteID=1937&categoryID=87, accessed 18/04/2007). Our analysis differs from that performed as part of the national evaluation of PbR (Farrar et al., 2006) in three respects. First, we exploit a longer data series (1999/2000-2005/06 rather than 2001/02-2004/05) which allows greater consideration of underlying trends and of more recent developments. Second, we use different data sources and definitions, particularly on costs and waiting times. Third, we apply different analytical methods, by constructing various indices to summarise and compare the aggregate effects of PbR.

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Each HRG is allocated to one of three groups, g=1…3, according to when they were exposed to PbR: the first 15 HRGs (g=1, i=1…15), the second 33 (g=2, i=16…48) and the remainder (g=3, i=49…578). For each HRG, subdivided by admission type, the Reference Cost data reports the mean and interquartile range (showing the range for 50% of hospitals) in costs as reported by every NHS hospital in England. The Department of Health originally hoped that mandatory publication of reference costs would lead to a reduction in costs and in the variation in costs across hospitals (NHS Executive, 1997) and, later, that PbR would reinforce these reductions (Department of Health, 2002b). To explore whether this happened, we compare costs over time for each of the three groups of HRG by admission type, by calculating the activity weighted average of the costs reported for each HRG within the same group. As an example, for day case patients in the first 15 HRGs, the weighted mean cost is:

15 151

1 1

ˆg t it it it

i id Q d Q=

= =

=∑ ∑ . The activity-

weighted 25th and 75th quartiles for the three HRG groups are calculated similarly. Growth in activity from a baseline (=100) of 2002/03 for each of these groups is compared by calculating two indices of activity growth, calculated for both elective and non-elective activity. The first index is based on a straightforward count of activity in each HRG. For the first 15 HRGs, the index IR takes the form:

15

11 15

2002 / 031

100it

R ig t

ii

QI

Q=

=

=

= ×∑

∑where itQ is the amount of activity in HRG i at time t.

The second index weights activity in each HRG according to its relative value, in a similar fashion to the approach taken in producing a cost-weighted activity index to measure the productivity of the NHS as a whole (Castelli et al., 2007) . Again for the first group of HRGs, the index value IW is calculated as:

152005

11 15

2002 / 03 20051

100it i

W ig t

i ii

Q vI

Q v=

=

=

= ×∑

∑Where 2005iv is the relative value of HRG i. The relative value is calculated by dividing the 2005 tariff price for each HRG by the average tariff in that year across all

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HRGs: 2005 2005 2005ˆ/i iv p p= . The 2005 tariffs are reported for version 3.5 HRGs so the relative values are mapped to version 3.1 HRGs for years prior to 2003/04. IW will take a higher value than IR in later years if there is a shift in the mix of activity within groups toward HRGs that attract a higher tariff. The proportion of day case activity is calculated as straightforward ratio of daycase to total elective activity for each of the three groups of HRG. Thus for the first 15 HRGs, the proportion of day case (DC) activity at time t is

)(15

1

15

11 ∑∑

=== +=

i

ELit

DCit

i

DCittg QQQDC . The proportion for each year is compared to a

baseline of 2002/03.

Trends in waiting times for each group are measured as 2002 / 03

ˆ 100ˆgt

g

ww × where ˆ gtw is

the average waiting time in days for group g at time t, with changes compared to a baseline of 2002/03.

4 Impact of PbR 4.1 Impact on reported costs Figures 1a-1c show summarise reference costs for each group of HRGs by admission type from 1999/2000 to 2005/06. For each figure, three sets of seven vertical lines show the weighted mean and interquartile range (IQR) in reference costs for the first 15 HRGs, the second 33 HRGs and the remaining HRGs that were not subject to PbR.

There are three notable features in these series. First, reported reference costs have been rising over time and there is no evidence that the rate of increase had been slower for those HRGs that have been subject to PbR. Second, contrary to government expectations (NHS Executive, 1997), the interquartile range has increased rather than narrowed over time. This increased variation is evident for all admission types and irrespective of whether or not the HRGs were subject to PbR. This implies that the high cost providers have allowed their costs to increase at a faster rate than for the sector as a whole, while the opposite is the case for low cost providers. Third, figure 1c shows that the distribution of non-elective reference costs across providers is highly skewed, with mean weighted costs close to the 75th quartile for the

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two groups of HRGs that have been exposed to PbR. This partly reflects the small proportion (4-14%) of activity undertaken on a non-elective basis for these HRGs (Table 2).

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4.2 Impact on activity The upper half of table 2 shows the number of patients treated, measured as Finished Consultant Episodes, for each group of HRGs. Both raw and price-weighted numbers of FCEs are presented, for both elective and non-elective activity. Growth rates, from a baseline of 2002/03, are presented for elective activity in figures 2a and 2b and for non-elective activity in figures 2c and 2d. The indices IR and IW are closely related, suggesting no discernible shift in the mix of activities within each set of HRGs. The following points are notable from these series. First, in general, activity in the first 15 HRGs has been increasing year-on-year since 1998/99 and at a faster rate than for the other groups of HRGs. The introduction of PbR does not appear to be associated with an increase in the underlying trend and, in fact, for elective activity the trend appears to have flattened since 2004/05. Second, the growth in elective activity for the second group of HRGs increased at a faster rate than the trend between 2004/05 and 2005/06, corresponding to the period when PbR applied to these HRGs. However, it would be unwise to attribute this growth to PbR because there was a similar increase in the rate of activity for HRGs that were not subject to PbR. This would suggest that PbR is not responsible for the increase in activity rates.

Third, no deviation from the underlying trend for any of the three groups of HRGs is detectable when considering non-elective activity. Again, this would suggest that PbR has had no effect on non-elective activity – as would be expected given the low proportion of non-elective activity in the HRGs that have been subject to PbR. 4.3 Impact on day case rates The elective tariff is structured to give clear incentives for providers to shift elective activity to a day case setting. The change in day case activity as a proportion of total elective activity is shown for each group of HRGs in figure 3 from a baseline of 2002/03. For the first 15 HRGs, there has long been a strong underlying trend toward undertaking activity on a day case basis which, if anything, has slowed since the introduction of PbR. The slowdown may be because the proportion is now close to optimal for these HRGs some of which (e.g. hip replacements) are clearly not appropriate for day case treatment.

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For the second group of 33 HRGs, there was a flat trend prior to the PBR, and the payment reform is associated with an increase in activity undertaken on a day case basis, with a steep increase from 2003/4 to 2004/5 when these HRGs were first subject to PbR. The argument for attributing this change to PbR is given support by the declining trend toward day case activity observed for those HRGs that have not been subject to the national tariff. 4.4 Impact on waiting times The final rows of Table 2 show the average waiting time for each group of HRGs over time. Trends in waiting times from the 2002/3 baseline are shown in Figure 4a while average waiting times are show in Figure 4b. There appears to be a change in waiting times that coincides with the introduction of PbR. For the first 15 HRGs, there has been a consistent downward trend in waiting times since 1999/2000, but there was a marked acceleration of the trend concurrent with the application of the national tariff to these HRGs. The average waiting time for this group of procedures was 175 days in 2002/03, but this had fallen to 102 days in 2005/06, a reduction of 73 days. There was also a sharp fall in waiting times following the application of PbR to the second group of HRGs. For this group, waiting times fell by 22 days between 2003/04 and 2005/06. However, PbR was not the sole – and probably not the primary - cause of these reductions. From 2000 the English Department of Health began to set maximum waiting times, initially promising that no-one should wait more than 18 months for treatment, with this maximum wait being reduced over time (final row, Table 2). More stringent targets coincided with the phasing in of PbR and the impact of the target would have been greater for the first 15 HRGs because these exhibited high waiting times. Indeed, the first 15 HRGs (and, to a lesser extent, the second 33 HRGs) were chosen for early exposure to PbR precisely because waiting times for these treatments were excessive (Department of Health, 2002b, Department of Health, 2003). Consequently, because there was substantial scope for improvement, greater waiting time reductions would have been expected for these groups of HRGs, irrespective of whether or not financial incentives applied. It is not possible to disentangle the impact of PbR from the waiting time target, because of their contemporaneous phasing and similarly differential focus. However, the target regime is probably more important that PbR in explaining the reductions, because these were the key performance indicator against which hospital managers were judged (Bevan and Hood, 2006). Although the separate impact of PbR cannot be isolated, it complemented the target-setting regime with the financial incentives targeted at where the problems lay, rather than being applied in a neutral fashion across HRGs.

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5 Discussion Our analysis suggests that PbR has reduced neither average costs nor variations in costs, and nor has it contributed to activity growth. But there is evidence that it has helped accelerate a shift toward undertaking activity on a day case basis for the second group of HRGs and that PbR complemented the target-setting policy with respect to waiting times. If anything, these effects may underestimate the “true” PbR effect because we have not separately identified the impact of “foundation” hospitals. These hospitals were reimbursed for all of their activity on the basis of national tariffs, and any positive influence that this might have had is mixed within the “other HRG” group. That said, however, the comparative analysis of foundation hospitals with other NHS hospitals was unable to identify substantial effects of PbR (Farrar et al., 2006). Waiting times fell dramatically over the period analysed despite there being no above trend increases in activity and only modest increases in the proportion of activity undertaken on a day case basis. This suggests that the primary strategy to reduce waiting times was not by increasing throughput of patients generally. This strategy appears to have been adopted in other countries that have introduced activity based financing arrangements, where activity increases have been more in evidence (Biørn et al., 2003, Mikkola et al., 2002, Kjerstad, 2003, McNair and Duckett, 2002). But in England general increases in activity were not a stated objective of PbR. Rather, the hope was to “increase efficiency in the provision of existing levels of activity” and only “where needed, to encourage expansion of activity” (Miraldo et al., 2006). Indeed, because funding to PCTs is capped, these commissioning bodies might well have resisted activity increases. Despite fears that PCTs would be able to exercise little control over hospitals that decided to increase activity (Mannion et al., 2006), the evidence here suggests that PCTs may have been successful in limiting activity increases. A key strategy may have been to ensure that that there was no increase in referrals by general practitioners in response to the lower “price” of shorter waiting times. This would have allowed the stock of patients waiting for treatment to be reduced without increases in the flow of patients onto the list. The other major strategy to reduce waiting times has been to divert activity from existing NHS hospitals to (NHS and independent) treatment centres, which have been newly established specifically for this purpose. HES records that more than 80,000 patients were treated in these settings in 2005/6. Treatment centres were established close to hospitals that were believed to be operating a close to full capacity – with long waiting times being cited in evidence. But while their presence may have relieved pressure on NHS hospitals, concerns have been raised that too much

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additional capacity has been created. For instance, ophthalmologists have questioned if too many cataract operations are now being performed (http://news.bbc.co.uk/1/hi/health/6683975.stm). Treatment centres may also have contributed to the observed increase in average costs reported by NHS hospitals. This would arise if NHS hospitals have been unable to reduce their fixed costs in proportion to the reduction in activity as it is diverted elsewhere. However, the main reasons why costs have increased appear to have nothing to do with treatment centres or PbR. Rather rising costs are financed by large year-on-year funding increases made available to the NHS since 2000 (HM Treasury and Department of Health, 2000). This funding increase has financed capital investment and higher labour costs as wages have increased, more staff have been recruited and limits have been placed on hours worked (Singh, 2004, Williams and Buchan, 2006). The increase in costs has occurred at a faster rate than increases in activity – so the average cost of a unit of activity has risen over time (Dawson et al., 2005). The observed increase in the variation in reported costs is contrary to expectations. Some commentators have argued that the national tariffs encourage providers to become “average” rather than to improve their performance (Llewellyn and Northcott, 2005). The argument is that, on the one hand, PbR should encourage high cost hospitals to reduce their costs but, on the other hand, less desirably, low cost hospitals may allow their costs to inflate - so long as their costs remain below the industry average. Such inflation may be due to such hospitals increasing capacity or making investments that fail to generate sufficient revenue to cover the investment cost. However, our evidence does not suggest that costs across the hospital sector are regressing to the mean, but that cost differentials are accentuating. This does not appear to be due to PbR, however, so other explanations must be sought. In summary, then, we have found that Payment by Results has neither reduced costs nor variations in costs across providers, and is not responsible for activity growth. However it appears to have had some impact on shifting activity to day case settings, which is consistent with the incentives embodied in the calculation of the elective tariff. PbR has also contributed to the reduction in waiting times, which appears to be due to the policy of targeting financial incentives directly at treatments for which waiting times were a problem in way which complements the setting of targets for maximum waiting times.

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References AUDIT COMMISSION (2004) Introducing Payment by Results: getting the balance

right for the NHS and taxpayers, London, Audit Commission. BEVAN, G. & HOOD, C. (2006) What's measured is what matters: targets and

gaming in the English public health care system. Public Administration, 84,517-538.

BIØRN, E., HAGEN, T. P., IVERSEN, T. & MAGNUSSEN, J. (2003) The effect of activity-based financing on hospital efficiency: A panel data analysis of DEA efficiency scores 1992-2000. Health Care Management Science, 6, 271-283.

CASTELLI, A., DAWSON, D., GRAVELLE, H., JACOBS, R., KIND, P., LOVERIDGE, P., MARTIN, S., O'MAHONY, M., STEVENS, P., STOKES, L., STREET, A. & WEALE, M. (2007) A new approach to measuring health system output and productivity. National Institute Economic Review, 200,105-117.

DAWSON, D., GRAVELLE, H., O'MAHONY, M., STREET, A., WEALE, M., CASTELLI, A., JACOBS, R., KIND, P., LOVERIDGE, P., MARTIN, S., STEVENS, P. & STOKES, L. (2005) Developing new approaches to measuring NHS outputs and productivity, Final Report, York, Centre for Health Economic research paper 6.

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DEPARTMENT OF HEALTH (2003) Payment by results: consultation - preparing for 2005, London, Department of Health.

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FARRAR, S., YI, D., SCOTT, A., SUTTON, M., SUSSEX, J., CHALKLEY, M. & YUEN, P. (2006) National Evaluation of Payment by Results. Interim report: quantitative and qualitative analysis, Aberdeen, Health Economics Research Unit, University of Aberdeen.

HM TREASURY AND DEPARTMENT OF HEALTH (2000) A modern NHS: fairness for families and communities, London, Treasury/Department of Health.

KJERSTAD, E. M. (2003) Prospective funding of general hospitals in Norway - incentives for higher production? International Journal of Health Care Finance and Economics, 3, 231-251.

LLEWELLYN, S. & NORTHCOTT, D. (2005) The average hospital. Accounting, Organizations and Society, 30, 555-583.

MANNION, R., MARINI, G. & STREET, A. (2006) Demand management and administrative costs under payment by results. Health Policy Matters, 12, 1-8.

MCNAIR, P. & DUCKETT, S. (2002) Funding Victoria's public hospitals: the casemix policy of 2000-2001. Australian Health Review, 25, 72-98.

MIKKOLA, H., KESKIMÄKI, I. & HÄKKINEN, U. (2002) DRG-related prices applied in a public health care system - can Finland learn from Norway and Sweden? Health Policy, 59, 37-51.

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MIRALDO, M., GODDARD, M. & SMITH, P. (2006) The incentive effects of Payment by Results, York: University of York, Centre for Health Economics research paper19.

NHS EXECUTIVE (1997) The New NHS: modern, dependable. Leeds, NHS Executive.

SINGH, D. (2004) Quarter of hospitals not ready to comply with working time directive. British Medical Journal, 328, 1034.

WILLIAMS, S. & BUCHAN, J. (2006) Assessing the New NHS Consultant Contract - A something for something deal?, London, The King's Fund.

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Table 1 The First 15 and Second 33 HRGs subject to PbR

HRG Code HRG description First 15 HRGs B02 Phakoemulsification Cataract Extraction with Lens Implant B03 Other Cataract Extraction with Lens Implant E03 Cardiac Valve Procedures E04 Coronary Bypass E15 Percutaneous Transluminal Coronary Angioplasty (PTCA) H01 Bilateral Px Hip Replacement H02 Primary Hip Replacement H03 Bilateral Primary Knee Replacement H04 Primary Knee Replacement H10 Arthroscopies J02 Major Breast Surgery including Plastic Procedures >49 or w cc J03 Major Breast Surgery including Plastic Procedures <50 w/o cc J04 Intermediate Breast Surgery >49 or w cc J05 Intermediate Breast Surgery <50 w/o cc Q11 Varicose Vein Procedures

Second 33 HRGs E13 Cardiac Catheterisation with Complications E14 Cardiac Catheterisation without Complications E16 Other Percutaneous Cardiac Procedures F71 Abdominal Hernia Procedures >69 or w cc F72 Abdominal Hernia Procedures <70 w/o cc F73 Inguinal Umbilical or Femoral Hernia Repairs >69 or w cc F74 Inguinal Umbilical or Femoral Hernia Repairs <70 w/o cc F75 Herniotomy Procedures G11 Biliary Tract - Complex Procedures G12 Biliary Tract - Very Major Procedures G13 Biliary Tract - Major Procedures >69 or w cc G14 Biliary Tract - Major Procedures <70 w/o cc H09 Anterior Cruciate Ligament Reconstruct H11 Foot Procedures - Category 1 H12 Foot Procedures - Category 2 H13 Hand Procedures - Category 1 H14 Hand Procedures - Category 2 H15 Hand Procedures - Category 3 H16 Soft Tissue or Other Bone Procedures - Category 1 >69 or w cc H17 Soft Tissue or Other Bone Procedures - Category 1 <70 w/o cc H18 Soft Tissue or Other Bone Procedures - Category 2 >69 or w cc H19 Soft Tissue or Other Bone Procedures - Category 2 <70 w/o cc H20 Muscle, Tendon or Ligament Procedures - Category 1 H21 Muscle, Tendon or Ligament Procedures - Category 2 H22 Minor Procedures to the Musculoskeletal System L27 Prostate Transurethral Resection Procedure >69 or w cc L28 Prostate Transurethral Resection Procedure <70 w/o cc L29 Prost/Blad Nk Inter Endo Px (Male & Fem) L30 Prostate or Bladder Neck Minor Endoscopic Procedure (Male and Female) M01 Lower Genital Tract Minor Procedures M02 Lower Genital Tract Intermediate Procedures M03 Lower Genital Tract Major Procedures M04 Lower Genital Tract Complex Major Procedures

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Table 2: Activity, day case rates and waiting times

1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06

Unweighted elective activityFirst 15 493,082 526,685 539,643 590,772 642,582 649,163 643,270 Second 33 605,615 613,498 596,160 625,693 652,029 646,330 687,697 Others 4,478,826 4,433,759 4,349,453 4,444,238 4,519,440 4,494,818 4,762,618

Weighted elective activityFirst 15 486,212 513,399 532,922 589,982 642,827 660,233 663,445 Second 33 346,482 353,355 350,197 371,515 392,675 389,792 415,893 Others 1,930,476 1,892,960 1,857,219 1,918,818 1,956,047 1,959,333 2,096,880

Unweighted non-elective activityFirst 15 25,497 27,571 29,066 31,440 34,685 38,864 42,798 Second 33 86,651 88,731 90,300 91,767 94,768 100,382 106,893 Others 6,501,142 6,575,906 6,682,719 6,887,032 7,372,091 7,777,208 8,180,230

Weighted non-elective activityFirst 15 49,043 54,002 55,889 59,575 64,789 72,286 79,130 Second 33 75,249 77,614 79,633 81,190 85,776 91,937 99,902 Others 3,699,046 3,723,831 3,817,297 4,029,427 4,313,651 4,563,301 4,855,303

Non-elective rates (%)First 15 4.9% 5.0% 5.1% 5.1% 5.1% 5.6% 6.2%Second 33 12.5% 12.6% 13.2% 12.8% 12.7% 13.4% 13.5%Others 59.2% 59.7% 60.6% 60.8% 62.0% 63.4% 63.2%

Day case rates (%)First 15 52.5% 55.4% 56.5% 57.8% 58.7% 58.9% 58.4%Second 33 54.0% 54.6% 54.2% 54.4% 54.3% 56.3% 57.2%Others 61.2% 61.8% 60.7% 60.3% 59.3% 59.7% 59.8%

Average waiting times (days)First 15 182 181 177 175 157 119 102Second 33 116 119 123 127 123 111 101Others 64 65 68 71 71 68 68

Maximum waiting time target (months)All patients 18 18 15 12 9 6 6

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Figure 1: Reference costs

1a Day Case Reference Costs

0

200

400

600

800

1,000

1,20019

99/00

2000

/0120

01/02

2002

/0320

03/04

2004

/0520

05/06

1999

/0020

00/01

2001

/0220

02/03

2003

/0420

04/05

2005

/06

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1b Elective Reference Costs

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First 15 Second 33 Other

18

1c Non Elective Reference Costs

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First 15 HRGs Second 33 HRGs Other

19

Figure 2: Change in activity 2a Unweighted elective and day case activity

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First 15Second 33Others

2b Weighted elective and day case activity

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First 15Second 33Others

2c Unweighted non-elective activity

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2d Weighted non-elective activity

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20

Figure 3: Change in day case rates

Change in day case rates

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10619

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21

Figure 4: Change in waiting times

4a Change in waiting times

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First 15Second 33Others

4b Waiting times (days)

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First 15Second 33Others