HRG Costing Project

We were commissioned by an acute provider to examine the activity behind their Top 50 Healthcare Resource Groups (HRGs) and provide a bottom-up costing of each HRG. By comparing this costing to the income received through NHS contracts, a rough profit or loss for each HRG could be calculated. This would then inform decisions about service development and areas for cost improvement.

The information was presented using “cost driver trees”, a graphical presentation of the income and costs of each HRG. We found this most useful when discussing the issues with clinicians and other non-finance colleagues. See an example cost driver tree here.

The cost driver trees follow the patient pathway for each HRG through costing each of the following areas:

2008/09 Forecast Activity

2008/09 Forecast Income

Avg Income per Spell

(spells)

(£)

(£)

Phase 1:
Maternity

8,124

9,829,422

1,210

Orthopaedics

1,888

7,125,001

3,774

Phase 2:
General Surgery

10,330

11,418,908

1,105

Care of the Elderly

2,514

9,128,717

3,631

Gynaecology

2,118

2,981,799

1,408

Phase 3:
Cardiology

4,068

7,140,538

1,755

Urology

2,356

2,108,302

895

Maxillo-facial Day Cases

2,674

2,682,064

1,003

Cataract Day Cases

1,768

1,621,277

917

Other Medicine

266

1,119,833

4,210

Clinical Haematology

912

1,073,589

1,177

TOTAL:

37,018

56,229,449

1,519

Total, all Admitted Patient Care

62,272

96,817,821

1,555

OVERALL COVERAGE:

59%

58%