Letters New commissioning formula

Use of national tariff makes formula inaccurate

BMJ 2012; 344 doi: https://doi.org/10.1136/bmj.d8175 (Published 04 January 2012) Cite this as: BMJ 2012;344:d8175
  1. Daniel Peake, GP trainee1,
  2. Rebekah Parry, GP trainee1,
  3. Naveed Mustfa, respiratory medicine consultant1,
  4. Imran Hussain, respiratory medicine consultant1
  1. 1City General, University Hospital of North Staffordshire, Stoke-on-Trent, Staffordshire ST4 6QG, UK
  1. danpeake{at}hotmail.com

Dixon and colleagues use socioeconomic indicators to adjust the requirement for healthcare in different areas and populations in a rationing formula that more accurately calculates the costs of regional healthcare to improve resource allocation.1 However, their use of the national tariff, an unproved estimate, rather than actual costs reduces the accuracy of their formula.

We recently calculated the actual costs of inpatient management of 24 patients with respiratory infections admitted to a large university hospital using the real cost of their investigation, treatment, and hospital accommodation. This was compared with the revenue the hospital received from primary care trusts, which was (and still is) determined by a system of coding that allocates resources to a corresponding national tariff. There was a disparity between our calculated actual cost of admission and the national tariff estimate, the coded value underestimating the actual cost by tens of thousands of pounds. Our calculated cost is also probably less than the true cost to the hospital, so the burden to secondary care would have been greater.

Therefore, although Dixon and colleagues have addressed several flaws in calculating the cost of healthcare delivery, including inaccurate estimated costs (national tariffs) renders their formula meaningless. Until the importance of the true cost of healthcare is recognised, attempts at healthcare economics will fail repeatedly. Surely we need to get the basics right before the numbers add up?


Cite this as: BMJ 2012;344:d8175


  • Competing interests: None declared.


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