The UK National Health Service (NHS) is funded by a direct taxation system. Under this model, tax payment covers access to all basic health care finance so that consumers are able to use health services at zero prices at the point of delivery. As a result, the unit cost of hospital and medical care are not captured individually for patients in the NHS.
However, implementation of a range of performance measures by the UK government to assess efficiency of the NHS have given rise to several national sources of cost data. These can be used to derive the direct cost of many goods and services in the NHS.
The main source of cost data for services provided in the community can be obtained from publication of the ‘Unit Costs of Health & Social Care’, prepared by the Personal Social Services Research Unit (PSSRU). The volumes present unit costs for a range of activities undertaken in the community and more recently for some hospital activities. Volumes are published on an annual basis.
The main source of cost data for services provided in secondary care can be obtained from publication of the ‘NHS Reference cost schedule’, prepared by the Department of Health. The concept of the Reference Costs was introduced by the UK government in 1998 (NHSE 1998b) and was intended to summarise the efficiency of the hospital sector and, when aggregated over all the providers used by a Health Authority, to assess the efficiency of the Health Authority itself. Reference costs are based on costed Healthcare Resource Groups (HRGs). In their most basic form HRGs are groups of ICD-10 diagnoses and OPCS procedures that have similar resource implications. HRGs are currently used as a means of determining fair and equitable reimbursement for care services delivered by providers.
Information on hospital costs and other services can also be obtained from volumes of ‘Unit Costs of Health & Social Care'. This provide details of unit cost, average length of stay and activity levels of a wide range of hospital services and describes how and on what NHS expenditure is used. However, such information has only become available in more recent years.
Therapies in the CPRD are uniquely identified on the basis of Gemscript codes which are used within the VISION software. Drug terminology can be linked to a wide range of standard drug terminologies including Read 2, Clinical Terms Version 3, the NHS Dictionary of Medicines and Devices (dm+d) and regional drug terminologies such as the Irish Pharmaceutical Union codes.
Groups of therapies in the CPRD can be identified by their British National Formulary (BNF) Chapter, Section and Paragraphs.
There are 4 potential sources of drug cost data that can be incorporated in CPRD data. These are listed below with the associated strengths and limitations.
The costs of generic products are published in the NHS Electronic Drug Tariff for England & Wales, Scotland and Northern Ireland Drug Tariff respectively. The Drug Tariff for England and Wales is compiled on behalf of the Department of Health by the NHS Business Services Authority, NHS Prescription Services. The drug tariff provides useful information to health professionals, pharmacists, Primary care trusts and suppliers.
The basic net price of a product, by pack size, can be obtained from the British National Formulary (BNF). Prices are calculated from the net cost used in pricing NHS prescriptions dispensed. Unless an original pack is available prices are based on the largest pack size of the preparation in use in community pharmacies.
The NHS Information Centre's Prescription Cost Analysis (PCA) publication reports on the number of prescriptions that are dispensed in England by community pharmacists, appliance contractors and dispensing doctors.
The majority of prescriptions dispensed are written by GPs but prescriptions written by dentists and prescriptions written in hospital or at a Community Health Trust are also included, provided they were dispensed by a community pharmacist. PCA gives a breakdown of average net ingredient cost (NIC) and actual cost (AC) by the therapeutic groupings used in the British National Formulary -BNF Chapter, Section and Paragraph and Sub-Paragraph.
The Dictionary of Medicines and Devices (dm+d) is a database which contains information about medicines and devices used in the UK. The NHS Business Services Authority (NHSBSA) maintains the dm+d. As prescribing information from the dm+d are incorporated into CPRD data in the coming months it will be possible to link to cost data through this route.