Highlights: Economic model & price benchmarking

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

Last year it was reported that, from 1 April 2014, the NJR had changed the way in which it was funded, moving from a levy 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‚Äč
  • 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.

The new subscription model reduced the cost of the NJR from a levy of £20 (gross) per procedure to a subscription of £15.60 per procedure.  The current net payment is £13 which represents a significant cost saving.

It was also reported last year that there had been variable responses to the subscription invoice and, although a small number of Trusts had still failed to pay the 2014/15 subscription, the response rate for the 2015/16 subscriptions was significantly better. This is mainly due to procurement systems now being set up to deal with the invoice and the process becoming embedded in financial administration.

Using the services of a VAT consultancy, the NJR has also explored the possibility of NHS trusts being able to reclaim the VAT element of the subscription from HMRC.  This resulted in a claim being submitted by a large orthopaedic trust to HMRC as a test case.  Trusts will be informed of the outcome of the claim in due course.