Specialist treatment tends to be more expensive than a routine, everyday procedure and so it should receive uplift to the tariff. That is a simple and compelling argument. But how much more expensive is it? Have specialist providers been sheltering behind complexity as an excuse for inefficiency?
The obvious solution is to somehow classify procedures as specialist and general; and then investigate the difference in cost. But our clients wanted to know whether this would work.
The first discovery is that spells may be complex for all sorts of different reasons: specialist procedures; rare procedures; multiple diagnoses. So any simple classification of specialism is going to include complex patients in the general category.
The obvious response is to build up a complex classification that takes all of the different factors into account. But a second discovery is that much of the additional cost comes from a very few, distinctive, very complex, very expensive cases. So any complex classification is likely to generate tiny cohorts with average costs that vary wildly from year to year, depending on the specific spells included.
Our report demonstrates that a simple evaluation of the additional costs of complexity is likely to significantly underestimate the costs, unless sufficient allowance is made for those extremely complex spells which do not readily fit into such averages.