Scottish National Tariff
The Scottish National Tariff Project was set up in November 2005 as a collaborative project between ISD and the Scottish Government Health Directorates. The aim of the project is to develop a list of national average estimated Healthcare Resource Group (HRG) costs, used to support NHS Boards in agreeing cross-boundary financial flows for acute inpatients and day cases (i.e. where patients resident in one Health Board area are treated in another Health Board area). The objectives of the project are to:
- create a set of standard prices for most procedures to simplify the process for service level agreements between Boards
- create a system that is transparent and fair, and takes into account both volume and case-mix complexity
- create an incentive for efficiency by encouraging benchmarking among Boards, and
- improve the accuracy of financial data by ensuring better recording of both cost and activity data.
Methodology
Scottish National Tariffs are designed to reflect differences in casemix complexity. This is achieved by using Healthcare Resource Groups (HRGs) - standard groupings of clinically similar treatments, which use common levels of healthcare resource. The aim of using casemix-based costs is to better reflect the differing levels of complexity within health service provision. The 2011/2012 Scottish National Tariffs have been calculated using HRG version 4 codes.
The Scottish National Tariff is directly related to the Scottish Health Service Costs (Costs Book) and is a representation of the national average costs, from the Cost Book, distributed over Scottish activity data.
In Scotland, we do not have the level of detailed HRG costing that exists in England. Costs are collected and published at specialty level only, and we therefore need a mechanism for estimating costs at the more specific HRG level. This is achieved using the English NHS Reference Costs.
In essence, a set of 'Relative Cost Weights' is applied to the Scottish cost basis. The principal assumption here is that the resource differential between any two procedures or conditions in Scotland is the same as in England. For example if a hip replacement costs around 4 times as much as an arthroscopy in England, then it is assumed that this is also the case in Scotland.
The Scottish National Tariffs are based on the cost of patient 'spells within a specialty' rather than episodes of care. This methodology was adopted to address differences in recording practice between Boards, mainly around the recording of patients transferring between critical care significant facilities.
Key Features of the Tariff
- The Scottish Government Efficiency and Productivity Programme is currently focusing on, and making significant progress on, improving the quality of costing data in order to improve accuracy of data and consistency across NHS Boards. The Scottish Government is also piloting a patient level costing information system and exploring options to replace the current tariff with one based on this new system.
- The tariff applies to cross-boundary flows for acute (hospital) sector inpatients and day cases.
- Activity is valued using a combined rate for elective inpatients and day cases and a separate rate for non-elective inpatients.
- Activities excluded from the Scottish tariff include certain specialised services such as those funded by the National Services Division (NSD), and some high cost low volume activity (e.g. defibrillator pacemaker implants).
Although the methodology used is based on the English approach, there are important differences to be aware of, which make direct comparisons between Scottish and English Tariffs inappropriate. In summary, these are:
- The Scottish National Tariff applies to spells of care while a patient is being treated within a single specialty rather than to continuous spells as in England.
- English Tariffs are calculated for 'truncated' activity for all HRGs (i.e. any outlying lengths of stay beyond a 'trim-point' incur an additional cost based on daily rates). This methodology has not been fully adopted in Scotland. However, 'excess' bed days associated with exceptionally long lengths of stay within critical care significant facilities have been identified and are compensated for by current tariff methodology.
- The Scottish National Tariff does not apply a reduced tariff for certain short-stay emergency admissions.
- The Scottish National Tariff does not factor in a tariff top-up for specialist/children's services.
- The Scottish National Tariff directly reflects the reported costs of providing healthcare whereas the English tariff is adjusted to provide remuneration in support of Department of Health policy.
- English costs are truncated costs. Direct comparison of the Scottish National Tariff with English costs will provide misleading inferences about the relative cost of treatment and any such analysis should be treated with caution.
The Scottish National Tariffs developed for 2011-12 can be obtained using the link below:
2011-12 Scottish Tariff 
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