Highlights: Economic model & price benchmarking

The NJR trialled a new service to help NHS organisations who buy joint replacement implants to achieve better value for their money and won a Benchmarking Award

This year, the NJR has continued to work with the Department of Health to implement its Quality and Innovation, Production and Protection (QIPP) programme. As a whole, this programme aims to improve the quality of care whilst aiming to deliver £20 billion of efficiency savings by 2015. 

As reported in 2013, the NJR was involved in a pilot project run to examine the feasibility of providing an implant price benchmarking tool to NHS procurement organisations. If successful, this work stream would be expanded. 

In 2013/14, the pilot was expanded and included more than 30 NHS procurement organisations in both England and Wales. It showed that substantial savings could be made through such a service – for some Trusts and Health Boards, there was the potential to amass hundreds of thousands of pounds worth of savings. 

In December 2013, the NJR was awarded a prestigious Benchmarking Institute Best Practice Club Award in recognition of the excellence demonstrated in the pilot benchmarking study.

Following this success, the Department of Health announced that the Price Benchmarking programme would be rolled out nationally as a new NJR service to NHS organisations. This will take effect from 1 April 2014 as part of the NJR’s new economic model arrangement. All NHS procurement teams will have access to an online reporting tool that will enable them to compare what they pay for orthopaedic implants against other NHS providers. 

The NJR decided to change the way that it is funded in 2014/15 to reduce its cost to the NHS

In 2013/14, the NJR undertook a review of its current funding model with the aim of:

• Reducing the cost of the NJR to the NHS and independent sector who have to date borne the full operational cost of the registry and
• Devising a new economic model to ensure a fair and proportionate contribution from other key stakeholders, notably orthopaedic device suppliers

The NJR is pleased to confirm that with effect from the 1 April 2014, the cost of the NJR levy will be a new, lower rate of £15.60 (gross), £13 (net) per procedure from £20 (gross), £15.20 (net). In the first year, it is anticipated that this will represent a significant cost saving to the NHS.

The changes that have enabled this cost saving include:

• Securing a fair and proportionate contribution of the overall cost of the NJR from orthopaedic device manufacturers through chargeable, enhanced services including the NJR Supplier Feedback Service
• Changing the levy collection arrangements to remove the Supplier Administration Fee

Under these new arrangements, each provider organisation will be issued with an annual invoice directly from the Healthcare Quality Improvement Partnership (HQIP) for an NJR subscription charge based on either the number of submissions to the NJR or the number of records contained within HES or PEDW, whichever is the higher.  A minimum charge will also be included for those units carrying out low numbers of procedures.

Working to save the NHS more

Work was also commissioned to examine, in conjunction with Her Majesty’s Revenue and Customs (HMRC) to determine whether or not NHS Trusts would be able to reclaim the VAT element of the levy.  The NJR is expected to be able to inform Trusts of the outcome of that consultation in 2014.