How does the Model Hospital treat acute trusts with a large proportion of community work?

The source cost data for the analysis is the published reference costs for 2014/15. Reference cost data do not cover community activity to the same extent that they cover acute activity – on average around 70% of community trusts’ expenditure is covered by reference costs, compared to 85% of acute trusts’ expenditure on average. This means the estimate of your trust’s clinical output, derived from reference Costs, may slightly underestimate the true value of the services you deliver on behalf on the NHS.

We do however take this into account when calculating the productivity measures shown within Lord Carter’s final report and within the Test Headline Metrics section of the Model Hospital Portal. An adjustment is made which excludes a proportion of each trust’s staff costs from the productivity calculation, based on the proportion of that trust’s expenditure covered by Reference Cost data.

Providing a high proportion of community activity as well as acute may impact your relative performance in some areas. This is because of the different ‘cost profile’ for community activity, which tends to be staffing resource heavy, with less spend on non-pay (medicines etc.) compared to acute activity where we would expect a lower proportion of spend to be on pay with a higher proportion on non-pay. Trusts with a high proportion of community-based activity often appear to have higher than average total staff costs, and lower than average non-pay costs. This can be compounded by being a smaller trust, as smaller trusts also tend to have higher than average staff costs and lower than average non pay costs.

We would recommend that you compare yourselves to other providers of community services to help investigate the extent to which this explanation applies to your trust or whether your trust still appears to be an outlier, in order to best assess and investigate efficiency opportunities.

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