Highlights: Economic model & price benchmarking

The NJR changed the way it is funded to reduce its cost burden to the NHS

From 1 April 2014 the NJR changed the way in which it was funded, moving from a levy raised on the sale of implants to a subscription model.  The purpose of the change was twofold:

  • To reduce the cost of the NJR to the NHS and independent sector who were bearing the full operational cost of the registry
  • To ensure a fair and proportionate contribution from other, key stakeholders, including the orthopaedic device industry

The subscription is based on the number of procedures submitted to the NJR or, if higher, the number of procedures recorded on the Hospital Episodes Statistics (HES) service in England or the Patient Episode Database Wales (PEDW) service in Wales.  The previous complete financial year’s submissions are used to calculate the subscription for the forthcoming financial year.

By invoicing NHS and independent healthcare providers directly, it was possible to remove the Supplier Administration Fee and reduce the subscription charge per procedure from £20 (gross) to £15.60.  The new and current net payment is £13.  This represents a significant cost saving.

The response to the payment of the subscription invoices has been variable:  some healthcare providers paid almost immediately, others had to be notified of late payment on a number of occasions, and, from some, there has been no financial or other response.  In some instances, Regional Clinical Coordinators were asked to speak directly to provider management.  It is thought that, in many cases, procurement systems were caught unawares and were not set up to deal with the invoice.  It is anticipated that the process will become part of regular financial administrations for 2015/16 subscriptions.

A number of revenue generating services have been developed which should enable the NJR to reduce the operational costs of the NJR.  The two key services that have been developed are Implant price-benchmarking and NJR Supplier Feedback.