{"id":24969,"date":"2014-06-02T07:37:58","date_gmt":"2014-06-02T06:37:58","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=24969"},"modified":"2014-06-02T07:37:58","modified_gmt":"2014-06-02T06:37:58","slug":"the-ft-gets-it-wrong-ago-accounting-for-the-nhs-is-not-as-simple-as-they-think","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2014\/06\/02\/the-ft-gets-it-wrong-ago-accounting-for-the-nhs-is-not-as-simple-as-they-think\/","title":{"rendered":"The FT gets it wrong ago: accounting for the NHS is not as simple as they think"},"content":{"rendered":"

The FT is shocked today. It is reporting that<\/a>:<\/p>\n

\n

Taxpayers pay up to five times more for\u00a0National Health Service\u00a0operations in some hospitals than others, according to a Financial Times analysis that may fuel the healthcare\u00a0funding\u00a0debate.<\/p>\n

The differences are so great that the NHS could save about \u00a3100m a year \u2014 equivalent to approximately 4,000 nursing salaries \u2014 across just three operations if it were to raise the performance of less efficient hospitals to the level of the top 25 per cent, according to an analysis of official data.<\/p><\/blockquote>\n

I would have thought that after the Piketty fiasco someone at the FT would have decided that it might be in their best interests to be a little more circumspect about their ability \u00a0with numbers, but that is not apparently the case.<\/p>\n

The FT \u00a0says it has excluded the top \u00a0and bottom 5% of numbers from their samples to allow for differences in 'cost allocations' \u00a0but then says that the vast majority of cost difference depends upon how long people stay in hospital after treatment. \u00a0I am dubious in both cases.<\/p>\n

First, \u00a0as an accountant I know only too well that there is no true cost of almost anything. \u00a0That is particularly true in a complex organisation like a hospital. \u00a0Everything in such cases comes down to the decisions made on how to allocate costs to activities. \u00a0You could load costs onto the operating theatre. \u00a0You could, just as easily, load costs onto bed occupancy. And you \u00a0could, alternatively, decide that patient throughput was \u00a0your cost allocation driver \u00a0and in that case A & E and \u00a0outpatient clinics would suddenly become very expensive. That's all because \u00a0the variable costs of undertaking any activity in a hospital, \u00a0whilst not insignificant, \u00a0are \u00a0always going to be \u00a0only a part of the total, \u00a0with that total being dominated in many cases by the cost of running the infrastructure of the hospital.<\/p>\n

What is that infrastructure? \u00a0Let's start with the heavy burden of administration that marketisation has imposed upon the NHS. \u00a0And let's not ignore the costs of PFI: \u00a0much of the variation noted here could come down precisely to that one issue. \u00a0The cost variation could also depend almost entirely upon the decision that the government has made to allocate funds to the hospital, or not. \u00a0Well funded hospitals have higher costs \u00a0because they will spend the money that they are given to deliver potentially better outcomes \u00a0but that is not noted in this survey.<\/p>\n

Nor is \u00a0something else of considerable significance: \u00a0where these operations take place will have an\u00a0impact upon their cost. \u00a0In wealthy areas it is easy to discharge patients into the community because care is available. \u00a0In other areas that is not possible. \u00a0And some areas do, of course, have \u00a0what are called ' skewed elderly' \u00a0populations. \u00a0Think of seaside towns with large retirement populations. \u00a0In those places people \u00a0cannot be discharged as quickly as they are \u00a0in locations where the average age of the person having the operation is lower.<\/p>\n

Maybe \u00a0the FT took all these factors into account, but there is no indication of it in this report. What it looks like is \u00a0another case of FT tabloid style \u00a0journalism when the first number that fell off a spreadsheet \u00a0is taken as a fact without considering any of the context that might explain it. If this \u00a0paper wants to be taken seriously it has to be better than that.<\/p>\n","protected":false},"excerpt":{"rendered":"

The FT is shocked today. It is reporting that: Taxpayers pay up to five times more for\u00a0National Health Service\u00a0operations in some hospitals than others, according
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,128],"tags":[],"class_list":["post-24969","post","type-post","status-publish","format-standard","hentry","category-economics","category-nhs"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/24969","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=24969"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/24969\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=24969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=24969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=24969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}