Highlights: Economic model & price benchmarking

The NJR provides two services to help NHS organisations achieve transparency in implant pricing

Price Benchmarking originally started as a Department of Health (DH) initiative under the Quality, Innovation, Productivity, and Prevention (QIPP) programme.  Although funding for the pilot was provided by DH, Price Benchmarking now forms a core part of the NJR and its services. In essence, NHE England Trusts and NHS Wales Health Boards provide pricing data to the NJR from the pricing catalogues they receive from implant suppliers, and the implant and price is matched to procedures held in the NJR where the same implant has been used.  Linking the pricing information to NJR data has the following benefits:

• Price is linked to usage
• Implant combinations used in procedures are linked
• Implants are linked to surgeons
• Supports the clinical evidence of implants
• Supports analysis by patient demographics

From the resulting analysis it is possible to determine the variation in price paid for implants throughout the NHS.  

The price benchmarking service comprises two services, INFORM and EMBED.  From 2017, EMBED, previously a separate, voluntary subscription service, will be included in the NJR subscription service at no additional charge.  

An INFORM report includes information on implant usage and spend by manufacturer, implant pricing comparison against national benchmarks, estimated savings, implant costs by surgeon, manufacturer and joint by surgeon, and brand costs and use (including potential savings). As at 31 March 2017, 72 trusts and 6 health boards were providing pricing data to the NJR.

The advanced reporting service, EMBED enables procurement and healthcare management teams to drill down further into their pricing data.  It also provides surgeons with individual reports which are made available to them via NJR Clinician Feedback. Reports include:

• A surgeon’s procedures including joint, type, patient status (age and ASA grade) and implant costs
• A surgeon’s procedure details by type and joint, manufacturer, catalogue numbers, brand, and cost by component and the cost of the whole procedure
• Enhanced analytics including implant cost by patient type, surgeon-level mean implant cost, age profile, use of ceramics, cost, and clinical evidence

All reports can be categorised by joint type, stage (primary or revision), procedure type, age group, gender, ASA grade, and cost profile.

Further information about the two services, including the benefits and potential savings to be realised by using the services, is available from the Implant Procurement tab on the NJR website.

The NJR is funded by subscriptions from NHS trusts, Health Boards, and by independent sector health companies.  This model replaced the previous model of raising a levy against the cost of implants and was introduced to reduce the cost of the NJR to the NHS and ensure a fair and proportionate contribution from other key stakeholders, including the orthopaedic device industry.

The subscription model was implemented in 1 April 2014 and is now it in its fourth year.  Subscriptions are 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.

Now in its fourth year, the early issues associated with the non-payment of the subscriptions, mainly due to procurement systems not being set up to handle the invoices, have reduced significantly.  There remain, however, a very small number of trusts who have failed to respond to requests for payment and, in these cases, members of the NJR’s Regional Clinical Coordinator (RCC) network are asked to assist. 

Last year it was reported that the NJR had explored the possibility of NHS trusts being able to reclaim the VAT element of the subscription.  However, a claim submitted by a high volume orthopaedic trust as a test case was rejected by HMRC.
The current subscription rate is £15.60 per procedure (net £13).

Services

Included in the subscription are access to a number of services, including reporting services such as NJR Clinician Feedback and NJR Management Feedback.   NJR Clinician Feedback is a secure online service that enables surgeons to compare and contrast their clinical practice, including outcomes, with that of their colleagues at a local and national level.  NJR Management Feedback is aimed at Trust, Health Board, Company, and hospital management, and includes an annual report on activity and outcomes and for, NHS England trusts and NHS Wales health boards only, price benchmarking reports.  

There are two levels of price benchmarking service:  INFORM and EMBED.  INFORM has, until now, been provided as part of the NJR subscription, and EMBED was provided as an additional, voluntary subscription of £5,000 per year.  However, following a review of the economic model by the NJR Steering Committee, it has been decided that the advanced reporting service, EMBED, should also be included in the annual NJR subscription at no extra charge.  This will be made available to all NHS England trust and NHS Wales Health Boards in 2017/18.