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Simon Jarman, EY - Integrating Cost Data into Performance Management
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Simon Jarman, EY - Integrating Cost Data into Performance Management


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Simon Jarman, Manager, EY delivered the presentation at the 2014 Hospital Patient Costing Conference. …

Simon Jarman, Manager, EY delivered the presentation at the 2014 Hospital Patient Costing Conference.

The Hospital Patient Costing Conference 2014 examines the development and implementation of patient costing methodologies to reflect Activity Based Funding allocations.

For more information about the event, please visit:

Published in: Health & Medicine

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  • 1. Integrating Cost Data into Performance Management Simon Jarman
  • 2. Page 2 Thunderbirds are GO for ABF!
  • 3. Page 3 But… does an ‘efficient price’ really deliver efficiency? I think its worthwhile revisiting that premise. Will an Activity Based Funding framework and a National Efficient Price in and of itself make our hospitals more efficient?
  • 4. Page 4 No Kevin, it won’t.
  • 5. Page 5 Clinical engagement! ►  Clinicians decide how long patients spend in hospital, when they are discharged, and what pathology or imaging tests or drugs they consume. Clinicians are primarily responsible for the cost of patient care. ►  They must be engaged with reliable and accurate data in order to change behaviour that will minimise waste in the delivery of care to patients. ►  ABF provides a framework within which greater efficiency can be achieved – but provides no guidance as to how to engage clinicians to achieve it.
  • 6. Page 6 Engaging Clinicians with cost data in an ongoing and meaningful way is not easy!
  • 7. Page 7 Guidance does exist as to how to engage clinicians within an ABF framework! ►  Templates already exist that show us how to engage clinicians with cost data within an ABF framework to drive more efficient and effective care. ►  These templates are known as Service Line Management and were developed in the UK by Monitor, which was the regulator of Foundation Trusts. ► providers/service-line-management
  • 8. Page 8 What is Service Line Management? ►  SLM sees specialist areas within health services managed as distinct operational units with clear paths for decision making and accountability. Service lines are measured on a range of performance metrics (e.g., workforce, quality), however crucially, performance is also measured against financial contribution targets. ►  This means that service lines must understand and be accountable for the activity, cost and revenue associated with the services they provide.
  • 9. Page 9 What is Service Line Management? (Cont.) ►  Service lines take ownership of their performance and organise their services in a way which benefits patients and drives efficiencies. ►  Incentives/penalties are linked to achieving SLM targets (e.g., re-investment in service, bonuses, league table of performance – no one wants to be bottom of the class!) ►  Service lines are clinician led – with a single point of accountability. ►  CEO and Board level backing required.
  • 10. Page 10 SLM in a Performance Management Context SLM Targets KPIs Finance KPIs Quality KPIs Activity KPIs Workforce KPIs Urology Specialty Ø  Clinican Led Ø  Performance targets set annually Ø  Contribution targets key Ø  Incentives and penalties linked to targets
  • 11. Page 11 Service Line Reporting ►  The first step to achieving the necessary level of detail for SLM is the move to Service Line Reporting. ►  SLR refers to a toolkit of reports that support SLM by producing data about the performance of service lines in consistent, standardised formats that encourage insightful performance discussions and informed decision making. ►  SLR is a key enabler of SLM and the starting point. ►  Lets have a look at some of the toolkit reports…
  • 12. Page 12 SLR Tookit 1: The Portfolio Matrix
  • 13. Page 13 SLR Tookit 2: The EBITDA Table
  • 14. Page 14 SLR Tookit 3: Variance Analysis
  • 15. Page 15 SLR Tookit 3: Patient Level Analysis
  • 16. Page 16 Service Line Reporting ►  To produce the toolkit, revenue must be allocated to the patient level. ►  Eg: ABF revenues; specified grants; privately billed revenue (bed day fees, imaging, path, pharmacy, medical, outpatient mbs). ►  Can be modelled, but systems do exist that will enable you to achieve this!
  • 17. Page 17 Conclusion ►  Clinical engagement is the key to driving more efficient and effective patient care. ►  ABF provides a funding context within which to achieve this, but no guidance. ►  SLM is an effective approach to engaging clinicians within ABF. ►  Setting financial contribution targets as part of a wider performance framework provides incentives for clinicians to understand the cost of care and identify efficiencies.
  • 18. Page 18 Conclusion ►  Service Line Reporting is a key enabler of Service Line Management. ►  Revenue must be allocated to the patient level. ►  Fortunately, templates exist to show us how to achieve SLM. ►  CEO and Board level support is key to success. Jurisdictional support is also beneficial.
  • 19. Page 19 Thank You
  • 20. Add the EY Boilerplate text in this text box. You can always find the latest EY Boilerplate text here.