Cost of hospital bed occupancy (FOI)

​Request

Can you please tell me what the cost is of having someone in a hospital bed per day?

Please explain how you arrive at the figure with a complete breakdown of staff / heat / light / food and so on.

Can you please explain if this figure is adjusted depending on the percentage of bed occupancy and, if not, why not?

Response

Considerations

The Health and Community Services (HCS) Person Level Information and Costing System (PLICS) for 2017 can answer this question. 2018 and 2019 have not yet been produced.

The question can be answered in its entirety, but the question wording may lead to a misleading answer due to the context, so the answer should never be provided in isolation.

The following are further points to consider as context for the answer that follows:

• occupied and unoccupied beds:

• unit costs take account of occupied beds but not unoccupied beds, which is essence are an overhead on the cost of occupied beds

• therefore, as occupancy falls, unit costs of occupied beds will rise

• cost per Occupied Minute:

• the PLICS system uses a “cost per occupied minute” rather than rounding this to a bed day or counting occupancy at midnight (another common approach)

• the way of calculating this in PLICS is more accurate because it differentiates between a brief 30 minute day case and an occupant in a bed for a full day and night. It also allows for a bed being occupied by multiple patients on the same day where there are multiple admissions and discharges within the day

• ward to ward differences:

• different wards have very different occupancy levels and staffing levels, so patients have very different unit costs. An average for HCS as a whole could therefore be misleading

• however, it is impossible to accurately identify an average cost per ward because some costs are allocated to patients regardless of the ward (eg their lead consultant responsible for their care), and a patient may stay on multiple wards during a single stay (eg intensive care and a general ward)

• ward costs are not the full cost for the patient:

• the cost of the ward occupancy itself is combined with the cost of the treatment the patient receives, though these can be separated

• the costs of medical staff, theatre procedures, drugs, scans, blood tests, physiotherapy and other treatments are in addition to the occupancy costs of the ward (nursing staff, a ward clerk, some minor consumables and overheads for dozens of things such as heat, light, corporate administration and so on)

For example, general medicine costs were £18.9m in total for 2017, whereas the ward element was £10.8m.

2017 Bed Day Unit Costs at HCS

Overall Costs

The overall expenditure of HCS in 2017 was £235m, and the cost of all the patients admitted as inpatients or day-cases was £90m. Of this £90m, the ward element was £47m, so just over half of the cost of these patients.

Costs per Occupied Bed Minute and Notional Bed Day

There were 171m occupied bed minutes, so the average cost of the ward element for HCS as a whole was 27p per occupied bed minute (52p for the full costs of these patients).

Each partial day could be rounded up to a notional full bed day and if this is done the recalculated cost per occupied notional bed day is £332 for the ward element and £640 for the full cost. However, this is not accurate because it treats any kind of partial days as one full day and it double counts the same bed being occupied twice in one day.

Cost Variation by Ward

The ward element can differ depending on which ward it is as shown below.

Note that this only shows approximately £35m of the £47m ward costs because the remainder is not allocated to a ward it is allocated directly to the patient and cannot be shown on a per minute basis, such as physiotherapy on the ward, or a weighted cost for intensive care which takes account of acuity – the table is therefore designed to show the variation but not to be a total unit cost.

Cost Variation by Ward

Overhead Elements

Broadly, overheads are approximately £8m of the £47m total ward costs (17%).

These originate from over 1,500 lines of expenditure, and a breakdown of these areas would be misleading to a recipient because they would be named after the budget area against which the expenditure is recorded (eg electricity is coded against Estates Management and Administrative).

A small selection of costs within the £8m as an example: electricity £310k, heating oil £186k and water £58k (please note that these are just the element of these costs allocated to wards, the total cost for these areas will be higher).

It is best practice for hospital providers to monitor their overhead expenditure as a proportion of total expenditure so that expenditure on direct patient care is maximised. As such there is always internal analysis of costs of this nature.