Cost-based pricing in the NHS internal market : accounting choices and the achievement of economic efficiency

Since 1988, quasi-markets have been introduced into many areas of social policy in the UK, the NHS internal market is one example. Markets operate by price signals. The NHS Internal Market, if it is to operate efficiently, requires purchasers and providers to respond to price signals. The research hypothesis is - cost accounting methods can be developed to enable healthcare contracts to be priced on a cost-basis in a manner which will facilitate the achievement of economic efficiency in the NHS internal market. Surveys of hospitals in 1991 and 1994 established the cost methods adopted in deriving the prices for healthcare contracts in the first year of the market and three years on. An in-depth view of the costing for pricing process was gained through case studies. Hospitals had inadequate cost information on which to price healthcare contracts at the inception of the internal market: prices did not reflect the relative performance of healthcare providers sufficiently closely to enable the market's espoused efficiency aims to be achieved. Price variations were often due to differing costing approaches rather than efficiency. Furthermore, price comparisons were often meaningless because of inadequate definition of the services (products). In April 1993, the NHS Executive issued guidance on costing for contracting to all NHS providers in an attempt to improve the validity of price comparisons between alternative providers. The case studies and the 1994 survey show that although price comparison has improved, considerable problems remain. Consistency is not assured, and the problem of adequate product definition is still to be solved. Moreover, the case studies clearly highlight the mismatch of rigid, full-cost pricing rules with both the financial management considerations at local level and the emerging internal market(s). Incentives exist to cost-shift, and healthcare prices can easily be manipulated. In the search for a new health policy paradigm to replace traditional bureaucratic provision, cost-based pricing cannot be used to ensure a more efficient allocation of healthcare resources.

Stakeholder performance measurement:general approaches and methods of economic evaluation

This paper begins by suggesting that when considering Corporate Social Responsibility (CSR), even CSR as justified in terms of the business case, stakeholders are of great importance to corporations. In the UK the Company Law Review (DTI, 2002) has suggested that it is appropriate for UK companies to be managed upon the basis of an enlightened shareholder approach. Within this approach the importance of stakeholders, other than shareholders, is recognised as being instrumental in succeeding in providing shareholder value. Given the importance of these other stakeholders it is then important that corporate management measure and manage stakeholder performance. In order to do this there are two general approaches that could be adopted and these are the use of monetary values to reflect stakeholder value or cost and non-monetary values. In order to consider these approaches further this paper considered the possible use of these approaches for two stakeholder groups: namely employees and the environment. It concludes that there are ethical and practical difficulties with calculating economic values for stakeholder resources and so prefers a multi-dimensional approach to stakeholder performance measurement that does not use economic valuation.

Has DRG payment influenced the technical efficiency and productivity of diagnostic technologies in Portuguese public hospitals? An empirical analysis using parametric and non‐parametric methods

The use of Diagnosis Related Groups (DRG) as a mechanism for hospital financing is a currently debated topic in Portugal. The DRG system was scheduled to be initiated by the Health Ministry of Portugal on January 1, 1990 as an instrument for the allocation of public hospital budgets funded by the National Health Service (NHS), and as a method of payment for other third party payers (e.g., Public Employees (ADSE), private insurers, etc.). Based on experience from other countries such as the United States, it was expected that implementation of this system would result in more efficient hospital resource utilisation and a more equitable distribution of hospital budgets. However, in order to minimise the potentially adverse financial impact on hospitals, the Portuguese Health Ministry decided to gradually phase in the use of the DRG system for budget allocation by using blended hospitalspecific and national DRG casemix rates. Since implementation in 1990, the percentage of each hospitals budget based on hospital specific costs was to decrease, while the percentage based on DRG casemix was to increase. This was scheduled to continue until 1995 when the plan called for allocating yearly budgets on a 50% national and 50% hospitalspecific cost basis. While all other nonNHS third party payers are currently paying based on DRGs, the adoption of DRG casemix as a National Health Service budget setting tool has been slower than anticipated. There is now some argument in both the political and academic communities as to the appropriateness of DRGs as a budget setting criterion as well as to their impact on hospital efficiency in Portugal. This paper uses a twostage procedure to assess the impact of actual DRG payment on the productivity (through its components, i.e., technological change and technical efficiency change) of diagnostic technology in Portuguese hospitals during the years 1992–1994, using both parametric and nonparametric frontier models. We find evidence that the DRG payment system does appear to have had a positive impact on productivity and technical efficiency of some commonly employed diagnostic technologies in Portugal during this time span.

Low-cost interrogation of optical fibre Bragg grating sensors

Through the application of novel signal processing techniques we are able to measure physical measurands with both high accuracy and low noise susceptibility. The first interrogation scheme is based upon a CCD spectrometer. We compare different algorithms for resolving the Bragg wavelength from a low resolution discrete representation of the reflected spectrum, and present optimal processing methods for providing a high integrity measurement from the reflection image. Our second sensing scheme uses a novel network of sensors to measure the distributive strain response of a mechanical system. Using neural network processing methods we demonstrate the measurement capabilities of a scalable low-cost fibre Bragg grating sensor network. This network has been shown to be comparable with the performance of existing fibre Bragg grating sensing techniques, at a greatly reduced implementation cost.

An Exploration of parametric software cost estimating models for Jackson Systems Development

Most parametric software cost estimation models used today evolved in the late 70's and early 80's. At that time, the dominant software development techniques being used were the early 'structured methods'. Since then, several new systems development paradigms and methods have emerged, one being Jackson Systems Development (JSD). As current cost estimating methods do not take account of these developments, their non-universality means they cannot provide adequate estimates of effort and hence cost. In order to address these shortcomings two new estimation methods have been developed for JSD projects. One of these methods JSD-FPA, is a top-down estimating method, based on the existing MKII function point method. The other method, JSD-COCOMO, is a sizing technique which sizes a project, in terms of lines of code, from the process structure diagrams and thus provides an input to the traditional COCOMO method.The JSD-FPA method allows JSD projects in both the real-time and scientific application areas to be costed, as well as the commercial information systems applications to which FPA is usually applied. The method is based upon a three-dimensional view of a system specification as opposed to the largely data-oriented view traditionally used by FPA. The method uses counts of various attributes of a JSD specification to develop a metric which provides an indication of the size of the system to be developed. This size metric is then transformed into an estimate of effort by calculating past project productivity and utilising this figure to predict the effort and hence cost of a future project. The effort estimates produced were validated by comparing them against the effort figures for six actual projects.The JSD-COCOMO method uses counts of the levels in a process structure chart as the input to an empirically derived model which transforms them into an estimate of delivered source code instructions.

Applying quantitative methods in the assessment of outcomes of pharmacotherapy of psoriasis

Healthcare providers and policy makers are faced with an ever-increasing number of medical publications. Searching for relevant information and keeping up to date with new research findings remains a constant challenge. It has been widely acknowledged that narrative reviews of the literature are susceptible to several types of bias and a systematic approach may protect against these biases. The aim of this thesis was to apply quantitative methods in the assessment of outcomes of topical therapies for psoriasis. In particular, to systematically examine the comparative efficacy, tolerability and cost-effectiveness of topical calcipotriol in the treatment of mild-to-moderate psoriasis. Over the years, a wide range of techniques have been used to evaluate the severity of psoriasis and the outcomes from treatment. This lack of standardisation complicates the direct comparison of results and ultimately the pooling of outcomes from different clinical trials. There is a clear requirement for more comprehensive tools for measuring drug efficacy and disease severity in psoriasis. Ideally, the outcome measures need to be simple, relevant, practical, and widely applicable, and the instruments should be reliable, valid and responsive. The results of the meta-analysis reported herein show that calcipotriol is an effective antipsoriatic agent. In the short-tenn, the pooled data found calcipotriol to be more effective than calcitriol, tacalcitol, coal tar and short-contact dithranol. Only potent corticosteroids appeared to have comparable efficacy, with less short-term side-effects. Potent corticosteroids also added to the antipsoriatic effect of calcipotriol, and appeared to suppress the occurrence of calcipotriol-induced irritation. There was insufficient evidence to support any large effects in favour of improvements in efficacy when calcipotriol is used in combination with systemic therapies in patients with severe psoriasis. However, there was a total absence of long-term morbidity data on the effectiveness of any of the interventions studied. Decision analysis showed that, from the perspective of the NHS as payer, the relatively small differences in efficacy between calcipotriol and short-contact dithranol lead to large differences in the direct cost of treating patients with mildto-moderate plaque psoriasis. Further research is needed to examine the clinical and economic issues affecting patients under treatment for psoriasis in the UK. In particular, the maintenance value and cost/benefit ratio for the various treatment strategies, and the assessment of patient's preferences has not yet been adequately addressed for this chronic recurring disease.

The choice of the model in inventory control and the cost of sophistication

This thesis is concerned with the inventory control of items that can be considered independent of one another. The decisions when to order and in what quantity, are the controllable or independent variables in cost expressions which are minimised. The four systems considered are referred to as (Q, R), (nQ,R,T), (M,T) and (M,R,T). Wiith ((Q,R) a fixed quantity Q is ordered each time the order cover (i.e. stock in hand plus on order ) equals or falls below R, the re-order level. With the other three systems reviews are made only at intervals of T. With (nQ,R,T) an order for nQ is placed if on review the inventory cover is less than or equal to R, where n, which is an integer, is chosen at the time so that the new order cover just exceeds R. In (M, T) each order increases the order cover to M. Fnally in (M, R, T) when on review, order cover does not exceed R, enough is ordered to increase it to M. The (Q, R) system is examined at several levels of complexity, so that the theoretical savings in inventory costs obtained with more exact models could be compared with the increases in computational costs. Since the exact model was preferable for the (Q,R) system only exact models were derived for theoretical systems for the other three. Several methods of optimization were tried, but most were found inappropriate for the exact models because of non-convergence. However one method did work for each of the exact models. Demand is considered continuous, and with one exception, the distribution assumed is the normal distribution truncated so that demand is never less than zero. Shortages are assumed to result in backorders, not lost sales. However, the shortage cost is a function of three items, one of which, the backorder cost, may be either a linear, quadratic or an exponential function of the length of time of a backorder, with or without period of grace. Lead times are assumed constant or gamma distributed. Lastly, the actual supply quantity is allowed to be distributed. All the sets of equations were programmed for a KDF 9 computer and the computed performances of the four inventory control procedures are compared under each assurnption.

A rationale for the optimisation by computer methods of the efficient use of metals and materials

The aim of the research project was to gain d complete and accurate accounting of the needs and deficiencies of materials selection and design data, with particular attention given to the feasibility of a computerised materials selection system that would include application analysis, property data and screening techniques. The project also investigates and integrates the three major aspects of materials resources, materials selection and materials recycling. Consideration of the materials resource base suggests that, though our discovery potential has increased, geologic availability is the ultimate determinant and several metals may well become scarce at the same time, thus compounding the problem of substitution. With around 2- to 20- million units of engineering materials data, the use of a computer is the only logical answer for scientific selection of materials. The system developed at Aston is used for data storage, mathematical computation and output. The system enables programs to be run in batch and interactive (on-line) mode. The program with modification can also handle such variables as quantity of mineral resources, energy cost of materials and depletion and utilisation rates of strateqic materials. The work also carries out an in-depth study of copper recycling in the U.K. and concludes that, somewhere in the region of 2 million tonnes of copper is missing from the recycling cycle. It also sets out guidelines on product design and conservation policies from the recyclability point of view.

Measurement of productivity and cost of the direct labour organisation within highways maintenance departments

The objective of this thesis is to investigate, through an empirical study, the different functions of the highways maintenance departments and to suggest methods by means of which road maintenance work could be carried out in a more efficient way by utilising its resources of men, material and plant to the utmost advantage. This is particularly important under the present circumstances of national financial difficulties which have resulted in continuous cuts in public expenditure. In order to achieve this objective, the researcher carried out a survey among several Highways Authorities by means of questionnaire and interview. The information so collected was analysed in order to understand the actual, practical situation within highways manintenance departments, and highlight any existing problems, and try to answer the question of how they could become more efficient. According to the results obtained by the questionnaire and the interview, and the analysis of these results, the researcher concludes that it is the management system where least has been done, and where problems exist and are most complex. The management of highways maintenance departments argue that the reasons for their problems include both financial and organisational difficulties, apart from the political aspect and nature of the activities undertaken. The researcher believes that this ought to necessitate improving the management's analytical tools and techniques in order to achieve the most effective way of performing each activity. To this end the researcher recommends several related procedures to be adopted by the management of the highways maintenance departments. These recommendations, arising from the study, involve the technical, practical and human aspects. These are essential factors of which management should be aware - and certainly should not neglect - in order to achieve its objectives of improved productivity in the highways maintenance departments.

An investigation into the steady state performance of several methods of series compensating electricity transmission lines

There are several methods of providing series compensation for transmission lines using power electronic switches. Four methods of series compensation have been examined in this thesis, the thyristor controlled series capacitor, a voltage sourced inverter series compensator using a capacitor as the series element, a current sourced inverter series compensator and a voltage sourced inverter using an inductor as the series element. All the compensators examined will provide a continuously variable series voltage which is controlled by the switching of the electronic switches. Two of the circuits will offer both capacitive and inductive compensation, the thyristor controlled series capacitor and the current sourced inverter series compensator. The other two will produce either capacitive or inductive series compensation. The thyristor controlled series capacitor offers the widest range of series compensation. However, there is a band of unavailable compensation between 0 and 1 pu capacitive compensation. Compared to the other compensators examined the harmonic content of the compensating voltage is quite high. An algebraic analysis showed that there is more than one state the thyristor controlled series capacitor can operate in. This state has the undesirable effect of introducing large losses. The voltage sourced inverter series compensator using a capacitor as the series element will provide only capacitive compensation. It uses two capacitors which increase the cost of the compensator significantly above the other three. This circuit has the advantage of very low harmonic distortion. The current sourced inverter series compensator will provide both capacitive and inductive series compensation. The harmonic content of the compensating voltage is second only to the voltage sourced inverter series compensator using a capacitor as the series element. The voltage sourced inverter series compensator using an inductor as the series element will only provide inductive compensation, and it is the least expensive compensator examined. Unfortunately, the harmonics introduced by this circuit are considerable.

The application of parallel processing methods to vibrational analysis

The trend in modal extraction algorithms is to use all the available frequency response functions data to obtain a global estimate of the natural frequencies, damping ratio and mode shapes. Improvements in transducer and signal processing technology allow the simultaneous measurement of many hundreds of channels of response data. The quantity of data available and the complexity of the extraction algorithms make considerable demands on the available computer power and require a powerful computer or dedicated workstation to perform satisfactorily. An alternative to waiting for faster sequential processors is to implement the algorithm in parallel, for example on a network of Transputers. Parallel architectures are a cost effective means of increasing computational power, and a larger number of response channels would simply require more processors. This thesis considers how two typical modal extraction algorithms, the Rational Fraction Polynomial method and the Ibrahim Time Domain method, may be implemented on a network of transputers. The Rational Fraction Polynomial Method is a well known and robust frequency domain 'curve fitting' algorithm. The Ibrahim Time Domain method is an efficient algorithm that 'curve fits' in the time domain. This thesis reviews the algorithms, considers the problems involved in a parallel implementation, and shows how they were implemented on a real Transputer network.

An inter-laboratory validation of methods of lipid peroxidation measurement in UVA-treated human plasma samples

Lipid peroxidation products like malondialdehyde, 4-hydroxynonenal and F(2)-isoprostanes are widely used as markers of oxidative stress in vitro and in vivo. This study reports the results of a multi-laboratory validation study by COST Action B35 to assess inter-laboratory and intra-laboratory variation in the measurement of lipid peroxidation. Human plasma samples were exposed to UVA irradiation at different doses (0, 15 J, 20 J), encoded and shipped to 15 laboratories, where analyses of malondialdehyde, 4-hydroxynonenal and isoprostanes were conducted. The results demonstrate a low within-day-variation and a good correlation of results observed on two different days. However, high coefficients of variation were observed between the laboratories. Malondialdehyde determined by HPLC was found to be the most sensitive and reproducible lipid peroxidation product in plasma upon UVA treatment. It is concluded that measurement of malondialdehyde by HPLC has good analytical validity for inter-laboratory studies on lipid peroxidation in human EDTA-plasma samples, although it is acknowledged that this may not translate to biological validity.

A fuzzy levelised energy cost method for renewable energy technology assessment

Renewable energy project development is highly complex and success is by no means guaranteed. Decisions are often made with approximate or uncertain information yet the current methods employed by decision-makers do not necessarily accommodate this. Levelised energy costs (LEC) are one such commonly applied measure utilised within the energy industry to assess the viability of potential projects and inform policy. The research proposes a method for achieving this by enhancing the traditional discounting LEC measure with fuzzy set theory. Furthermore, the research develops the fuzzy LEC (F-LEC) methodology to incorporate the cost of financing a project from debt and equity sources. Applied to an example bioenergy project, the research demonstrates the benefit of incorporating fuzziness for project viability, optimal capital structure and key variable sensitivity analysis decision-making. The proposed method contributes by incorporating uncertain and approximate information to the widely utilised LEC measure and by being applicable to a wide range of energy project viability decisions. © 2013 Elsevier Ltd. All rights reserved.

The UK MPharm (1) - are we over reliant on traditional teaching methods?

Introduction-The design of the UK MPharm curriculum is driven by the Royal Pharmaceutical Society of Great Britain (RPSGB) accreditation process and the EU directive (85/432/EEC).[1] Although the RPSGB is informed about teaching activity in UK Schools of Pharmacy (SOPs), there is no database which aggregates information to provide the whole picture of pharmacy education within the UK. The aim of the teaching, learning and assessment study [2] was to document and map current programmes in the 16 established SOPs. Recent developments in programme delivery have resulted in a focus on deep learning (for example, through problem based learning approaches) and on being more student centred and less didactic through lectures. The specific objectives of this part of the study were (a) to quantify the content and modes of delivery of material as described in course documentation and (b) having categorised the range of teaching methods, ask students to rate how important they perceived each one for their own learning (using a three point Likert scale: very important, fairly important or not important). Material and methods-The study design compared three datasets: (1) quantitative course document review, (2) qualitative staff interview and (3) quantitative student self completion survey. All 16 SOPs provided a set of their undergraduate course documentation for the year 2003/4. The documentation variables were entered into Excel tables. A self-completion questionnaire was administered to all year four undergraduates, using a pragmatic mixture of methods, (n=1847) in 15 SOPs within Great Britain. The survey data were analysed (n=741) using SPSS, excluding non-UK students who may have undertaken part of their studies within a non-UK university. Results and discussion-Interviews showed that individual teachers and course module leaders determine the choice of teaching methods used. Content review of the documentary evidence showed that 51% of the taught element of the course was delivered using lectures, 31% using practicals (includes computer aided learning) and 18% small group or interactive teaching. There was high uniformity across the schools for the first three years; variation in the final year was due to the project. The average number of hours per year across 15 schools (data for one school were not available) was: year 1: 408 hours; year 2: 401 hours; year 3: 387 hours; year 4: 401 hours. The survey showed that students perceived lectures to be the most important method of teaching after dispensing or clinical practicals. Taking the very important rating only: 94% (n=694) dispensing or clinical practicals; 75% (n=558) lectures; 52% (n=386) workshops, 50% (n=369) tutorials, 43% (n=318) directed study. Scientific laboratory practices were rated very important by only 31% (n=227). The study shows that teaching of pharmacy to undergraduates in the UK is still essentially didactic through a high proportion of formal lectures and with high levels of staff-student contact. Schools consider lectures still to be the most cost effective means of delivering the core syllabus to large cohorts of students. However, this does limit the scope for any optionality within teaching, the scope for small group work is reduced as is the opportunity to develop multi-professional learning or practice placements. Although novel teaching and learning techniques such as e-learning have expanded considerably over the past decade, schools of pharmacy have concentrated on lectures as the best way of coping with the huge expansion in student numbers. References [1] Council Directive. Concerning the coordination of provisions laid down by law, regulation or administrative action in respect of certain activities in the field of pharmacy. Official Journal of the European Communities 1985;85/432/EEC. [2] Wilson K, Jesson J, Langley C, Clarke L, Hatfield K. MPharm Programmes: Where are we now? Report commissioned by the Pharmacy Practice Research Trust., 2005.

A model to assess the cost effectiveness of statins in achieving the UK National Service Framework target cholesterol levels

Background: Coronary heart disease (CHD) is a public health priority in the UK. The National Service Framework (NSF) has set standards for the prevention, diagnosis and treatment of CHD, which include the use of cholesterol-lowering agents aimed at achieving targets of blood total cholesterol (TC) < 5.0 mmol/L and low density lipoprotein-cholesterol (LDL-C) < 3.0 mmol/L. In order to achieve these targets cost effectively, prescribers need to make an informed choice from the range of statins available. Aim: To estimate the average and relative cost effectiveness of atorvastatin, fluvastatin, pravastatin and simvastatin in achieving the NSF LDL-C and TC targets. Design: Model-based economic evaluation. Methods: An economic model was constructed to estimate the number of patients achieving the NSF targets for LDL-C and TC at each dose of statin, and to calculate the average drug cost and incremental drug cost per patient achieving the target levels. The population baseline LDL-C and TC, and drug efficacy and drug costs were taken from previously published data. Estimates of the distribution of patients receiving each dose of statin were derived from the UK national DIN-LINK database. Results: The estimated annual drug cost per 1000 patients treated with atorvastatin was £289 000, with simvastatin £315 000, with pravastatin £333 000 and with fluvastatin £167 000. The percentages of patients achieving target are 74.4%, 46.4%, 28.4% and 13.2% for atorvastatin, simvastatin, pravastatin and fluvastatin, respectively. Incremental drug cost per extra patient treated to LDL-C and TC targets compared with fluvastafin were £198 and £226 for atorvastatin, £443 and £567 for simvastatin and £1089 and £2298 for pravastatin, using 2002 drug costs. Conclusions: As a result of its superior efficacy, atorvastatin generates a favourable cost-effectiveness profile as measured by drug cost per patient treated to LDL-C and TC targets. For a given drug budget, more patients would achieve NSF LDL-C and TC targets with atorvastatin than with any of the other statins examined.