Patient Level Information and Costing Systems (PLICS): Current practice and future potential for the NHS health economy

PLICS are increasingly used in NHS acute hospitals. The prime objective in implementing PLICS is to better understand cost drivers. Such understanding is fundamental to day-to-day management and enhancing the quality and cost-effectiveness of NHS services (DH, 2011). However, PLICS also illuminates the patient pathway and offers the ability to undertake a sophisticated analysis of individual pathways both within Trusts (from referral to discharge) and across organizational boundaries. PLICSs have largely been used to improve efficiency within NHS trusts but this study investigates the potential for the whole health economy.

The study examines the use of PLICS to achieve:

(a) Cost improvement through enhanced technical efficiency;

(b) Better allocative efficiency of resources within healthcare economies (first, within and between Trusts, second, between primary and secondary/tertiary care and, third, along care pathways and year of care);

(c) Understanding of clinical variation in resource use and the relationships between cost and quality;

(d) Greater clinical engagement through more clinical ownership of costs and information systems

The three year study uses surveys and case studies. The surveys cover all NHS healthcare providers and commissioners in England. The four case study sites include Salford Royal Foundation Trust (a forerunner in the implementation of PLICS) and South Warwickshire Hospitals Foundation Trust (renowned for transforming frailty pathways for elderly people).

Overall the study aims to add to the current evidence base through providing:

(a) Lessons for the future use of PLICS as a costing/pricing model based on a full analysis of the advantages and disadvantages of successive NHS financial management initiatives;

(b) An actionable report for Trusts and commissioners on how to use PLICS to understand their economic and financial drivers to achieve the best cost effective care and assess the financial impact of different care pathways;

(c) Actionable recommendations on the potential of PLICS for the NHS health economy, including how tariff flexibilities and provider costs can be integrated to generate cash savings for redeployment across services and settings.

Patient level information costing systems (PLICS) are important in understanding how to manage healthcare resources efficiently. Many hospitals in England have such systems. The three year project uses surveys and case studies to examine how PLICS can be used to facilitate not only more cost-effective treatment in hospitals, but also in treating patients in more approriate settings through enhanced community or primary care services.

Early survey findings suggest that while PLICS has the potential to be useful not just for the individual hospital operating the system but across the NHS, many hospitals do not make the information available because it is regarded as 'commercially sensitive'.

The project interrelates generally with CMPO work on healthcare competition (Propper et al) and continues Sheila Ellwood's established work on healthcare financial management.