In 2013 the Department of Health released its policy paper on hospital financing entitled Money Follows the Patient. A fundamental building block for the proposed
financing model is patient level costing. This paper outlines the process of using
patient level costing, identifies the opportunities and considers the challenges
associated with it in the Irish hospital setting.
The proposed structure will require hospitals to collect data on activity and costs (patient level costing) which will be collated at national level (National Information and Pricing Office) for use in setting national DRG prices by hospitals (ratified by the Minster). The newly formed Health Care Commissioning Agency will then pay hospitals based on activity using the DRG prices.
There are considerable challenges associated with implementing patient level costing including deficits in information and communication technologies and coding and financial expertise. In addition, clinical input into the costing process would need to be greater than in the traditional costing process. However, there are long term benefits associated with patient level costing, including improved transparency, fairness and value for money. These can potentially help to achieve the Government¿s Health Strategy. The benefits need to be promoted and a commitment to invest in overcoming the challenges is now required.