Costs

Scottish Health Service Costs, year ended 31st March 2006 (aka Costs Book)

Summary:

The Costs Book provides a detailed analysis of where resources are spent in NHS Scotland with a focus on hospital and community services. The information is mainly derived from financial and activity data compiled by the NHS Boards.

For 2005/06, the NHSS was primarily organised into 15 health boards and 8 special health boards along with the Mental Welfare Commission and the Mental Health Tribunal.  The net operating cost of these bodies recorded in their annual accounts amounted to £8.4 billion.  The Costs Book detailed reports are structured to analyse around 90% of this total, presenting information on the boards that provide hospital and community care directly to patients.  This reflects health care expenditure within the 15 health board areas and at two of the special boards, namely the State Hospital and Golden Jubilee National Hospital - amounting to £7.46 billion. 


Changes for 2005/06

There are no changes to the data collection for 2006.  However, there is a change to the allocation of funds to operating divisions to cover the Additional Cost of Teaching (ACT). 

There are also no changes to the web pages other than to update the summary statistics and the accompanying text.  One new report (R100T) is published:

• R100T - a trend version of the Executive Summary table (R100) showing Scotland and Board data for the last 5 years.  
• ACT is now split into direct and indirect with only the direct element being deducted as income from board operating costs.  This should result in a more accurate comparison between costs at teaching and non-teaching hospitals.
  

Principal Findings for 2005/06

• Operating costs of the 17 NHS Boards analysed in the Costs Book have risen from £6.97 billion in 2004/05 to £7.46 billion in 2005/06, up 7.1%. 
• NHSS is a major employer with more than 110,000 whole time equivalent (wte) staff working in the hospital and community sectors.  The pay bill for these sectors in 2005/06 was over £3.5 billion, an increase of 9% from the previous year, and accounting for 67% of the running costs of these services.  Part of this increase is due to increasing numbers of staff in post across NHSS.
• Over £1.1 billion was spent on prescription drugs - which amounts to 15.3% of the total spend on the three sectors - and is the equivalent of over £220 for every person in Scotland.
• Hospital expenditures
  

  -	£85 million on cleaning, an increase of almost £6.5 million from 2005
  -	£63.7 million on heat and light, an increase of 56%
  -	£1.1 million a year to run each operating theatre for 27 hours per week
  -	£165 million on 3 million attendances for x-rays and scans

• Hospital costs (average per patient)
  

  - Attendance at A&E department	£86
  - Attendance at an outpatient clinic	£105
  - Attendance for MRI scan	£150
  - Attendance for day surgery	£583
  - Admission as a surgical inpatient	£2,560
  - Admission to intensive care	£7,968

• Community services
  

  -	£959 million spent on community care, up £71 million from last year
  -	Including £32.7 million on child health and £6.7 million on home dialysis
  -	21,000 staff (wtes) working in the service
  -	Over 4 million visits by district nurses and community midwives

• Family health services     

  -	£701 million on primary medical services (an increase of 11.5%) provided by almost 3,700 GPs and their staff in local health care centres
  -	£238 million on NHS dental care provided by over 1900 general dental practitioners
  -	£46 million on High street Ophthalmic services
  -	£1 billion on pharmaceutical services provided at 1,171 pharmacies supplying £891 million worth of prescription drugs

   

Data Quality Assurance

• The financial return for the Costs Book is unaudited although data submitted is reconciled to annual accounts to ensure consistency.  Costing guidance is given in Costing Manual issued by SEHD, guidance on activity statistics and definitions from ISD.
• A data capture software system (CBDCS) is issued to each board and gives the operating divisions the ability to validate their data and compare to the previous year prior to submission.
• A review of data submission for previous year, highlighting outlier unit costs, is issued to each board ahead of current year collection.
• ISD works with the boards on a detailed programme of validation and comparison checks to ensure data quality:
  Stage 1 - analyses data completion and validation and identifies unusual year-on-year shifts
  Stage 2 - throughout the data collection and DQ phase, boards are given access to draft Costs Book reports allowing peer comparisons.  The reports are updated weekly to show latest data.  Estimates are used (2005 data) where current data is unavailable.
  Stage 3 - a draft Costs Book is issued to DoFs in mid-October for review and final data amendments and sign-off.
  

Data Quality Issues

• NHS Shetland - data from the operating division was not received until very late in the project so ISD was unable to apply the same level of data quality assurance as other boards.  The analysis of service expenditure on local residents (SFR 13.0) has not been completed.  An estimated return has been produced by ISD and this has been signed off by the Director of Finance at Shetland.
• NHS Lothian - was also late in submitting data from its operating divisions.  Although ISD has worked closely with Lothian in resolving data issues, the level of data quality assurance could not be applied to the same level of detail as other boards and some issues were not fully investigated.
• NHS Argyll & Clyde was unable to provide activity statistics for community services and some laboratory services.
• Nurse-Led Outpatient Clinics - this return (SFR 5.7N) was introduced in 2005 but has also been flagged as still being developmental for 2006.  Cost per attendance figures show wide variation across the boards.

Main Contacts:

Brian Reid
Project Leader
Tel: 0131 275 6707
Email: brian.reid@isd.csa.scot.nhs.uk

Gillian Pirie
Project Manager
Tel: 0131 275 6683
Email: gillian.pirie@isd.csa.scot.nhs.uk

Elaine Learmonth
Project Support Officer
Tel: 0131 275 6505
Email: elaine.learmonth@isd.csa.scot.nhs.uk

Amanda Taylor
Information analyst
Tel: 0131 275 6224
Email: Amanda.taylor@isd.csa.scot.nhs.uk

Preview access to this publication was given to:  
SE - Finance
SE - ASD
NHS Boards - CEOs and Directors of Finance

Chronology of this publication:
Last Published:  30th November 2005
Date of first publication:  Paper publications since 1960s.  Web publications since 2000
Next Due: November 2007

Main contact: Costs Team

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