1. Integrated Service Line Reporting
Royal Berkshire NHS Foundation Trust 11th April 2013
Integrated Service Line Reporting
Dmitry Dorsky
Albatross Financial Solutions

2. Integrated Service Line Reporting
Traditional NHS Service Line Reporting
Functional budgetary control
New integrated SLR – internal tariffs & budgets
New integrated SLR – how it works…

3. Traditional Service Line Reporting
Is generally accepted to be the production of full cost and income trading accounts at specialty or service level.
Produced using total cost absorption; summary of PLICS or other costing models
Generally produced annually, bi-annually or quarterly
Timescale: PLICS based SLR usually available two to three months after period end (one or two Trusts deliver faster with major investment)

4. Traditional Service Line Reporting
Problems:
Generally focus only on patient care costs & income
Accounts often not “closed down” for stock takes, bad debts etc...
Cost transfer regimes use weightings rather than tariffs
So profitability of one service can be affected by actions of another service
No comparison to plan
No clarity as to what drives apparent changes in performance
Uses significant resource and lengthy time to produce
External tariffs reviewed annually, so profitability can change, outside the control of service
We cannot therefore just use profitability as an indicator of improved efficiency

5. Traditional Service Line Reporting
SLR Information
Standard Budgetary Information from GL
Traditional SLR exist along side main budgetary reports thus providing managers with two versions of the truth

6. Guy’s & St Thomas’ 2010/11 – Functional Budgetary control
Financial Performance monitored against expenditure plan
Directly controlled expenditure budgets
Adjustments for under & over performance against income plan
BUT:
Indirect costs rarely charged
Income plan accounted for centrally, but variance allocated as above
Overhead costs never charged
Trading position not monitored

7. Financial performance monitored against trading position
Guy’s & St Thomas’ 2011/12 – New integrated Service Line Reporting - iSLR
Financial performance monitored against trading position
Income accounted for at Specialty Level
Directly controlled expenditure budgets
Indirect costs both volume related & standing charges
Overhead costs as fixed or standing charge
Trading position known

8. iSLR - Income Income – All Income! Patient care Education Research
Service Increment For Teaching (SIFT) – undergraduate medical & dental education
Medical & Dental Education Levy – post graduate M&D education (MADEL)
Non medical education and training (NMET)
Research
Clinical Excellence Awards
Private Patients
External contracts

9. iSLR – Direct & Indirect costs
Bad debts!
Internal services transferred on an internal tariff set for the year where activity information available
Volume & Mix variances sit with front line services
Efficiency variances sit with providing departments
Internal tariff calculation re-visited annually
Demonstrate achievement of provider savings; zero net impact statement (ZNIS)
Internal tariffs for:
Radiology
Nuclear Medicine
Wards
Theatres
Therapies
Pathology
Internal services without “activity”, based on SLA, as an availability or fixed charge
Pharmacists
Physicists
Emergency out-of-hours Operating Theatres

10. Internal tariff construction
Standard cost exercise in volume driven internally charged departments
(or should we perhaps use an external provider tariff?)
Directorate briefings on methodology
Key Points:
Based on actual Cost and Activity for first six months, or full year 2010/11.
Tariff set to recover cost
Derived by dividing relevant cost by relevant activity
Recognise that this reflects current practice, not most efficient practice

11. iSLR – Overheads & Trading position
Currently a fixed charge
Proposals for incentives to reduce demand on Overhead services in 2012/13
Space
Cleaning
Portering
Laundry
Contribution (planned Profit or Loss, Surplus or Deficit) to capital programme
Monitor all services against a bottom line plan
BUT - Income & Cost at Specialty (not patient) level
However – interactive drill down to transaction level for activity based internal charges - iSLR

12. iSLR – Timetable
Financial reporting to Trust Exec & Board by working day 10
FD review working day 9
Head of Financial Management needs to review position on working days 7 and 8
FM calculate and agree projections working days 4 to 6
FM review current month position working days 2 and 3
All SLR transactions therefore need to be posted by the end of working day 1

13. iSLR – Timetable
As all SLR transactions need to be posted by the end of working day 1
Potential Data quality issues
“Good enough” approach
Post as accrual journal for month just ended
Post “errors” to charging department
One month to resolve errors & improve data quality
Income: two month accrual

14. iSLR menu

15. Directorate or Service Line Report

16. Drill to volume based charges

17. Drill to source transaction data

18. Drill to unused time in theatres

19. iSLR – Financial forecasts
Receiving departments should project both anticipated cost and income, and share that with providing departments.
Providing departments to analyse the results of projections to their internal income, and where they hold a materially different view, initiate a discussion to reach an agreed forecast position for future monthly reporting.

20. iSLR – Impact for “Provider”departments
Now have an internal income target to fund their budget.
Can no longer just appoint to a post when it becomes vacant but…
Need to understand future anticipated demand changes to fund their ongoing budget
Provider departments need to clear “their errors” each month

21. iSLR – How does it work? – 1. Data preparation
RADIOLOGY
PATHOLOGY
THEATRE
THERAPIES
PHARMACY
WARD STAY
iSLR
DATA REPOSITORY
STANDARD TARIFFS
ORGANISATIONAL HIERARCHY AND ASSIGNMENT RULES
iSLR PROCESSOR
JOURNALS
UN-BILLABLE ACTIVITIES
REPORTER
GENERAL
LEDGER
PROVIDER DEPARTMENT
DIVISIONAL MANAGER

22. iSLR – data preparation
Working day 1 – Month 8, reporting period Month 7 :
Departments provide scheduled data download between midnight & 6.00 am each day, containing at least 100 days data (i.e. m5,6,7).
We take last months cumulative data file for iSLR (i.e. M1-6).
We remove the last months (m6) data from that file so we have M1-5 data.
We import last two months data from yesterday’s download i.e. M6 & M7.
We now have a cumulative file for the whole years data.

23. iSLR – How does it work? – 2. Extract, Transform & Load
RADIOLOGY
PATHOLOGY
THEATRE
THERAPIES
PHARMACY
WARD STAY
iSLR
DATA REPOSITORY
STANDARD TARIFFS
ORGANISATIONAL HIERARCHY AND ASSIGNMENT RULES
iSLR PROCESSOR
JOURNALS
UN-BILLABLE ACTIVITIES
REPORTER
GENERAL
LEDGER
PROVIDER DEPARTMENT
DIVISIONAL MANAGER

24. iSLR – Extract, Transform & Load
Visual Importer
A set of automated import tasks
Ability to import data from any structured data source (Excel, SQL, Oracle, csv, etc…)
Full audit trail & Error tracking
Set of reconciliation reports to valid import
Ability to schedule batch run processes

25. iSLR – How does it work? – 3. Journal Creation
RADIOLOGY
PATHOLOGY
THEATRE
THERAPIES
PHARMACY
WARD STAY
iSLR
DATA REPOSITORY
STANDARD TARIFFS
ORGANISATIONAL HIERARCHY AND ASSIGNMENT RULES
iSLR PROCESSOR
JOURNALS
UN-BILLABLE ACTIVITIES
REPORTER
GENERAL
LEDGER
PROVIDER DEPARTMENT
DIVISIONAL MANAGER

26. iSLR – Journal Creation
Journal processing
Based on user defined rules
Updated via easy to use graphical interface
Fast Processing time (minutes)
Full set of validation reports
Ability to track and analyse errors
Automatic upload into Oracle

27. iSLR – How does it work? – 4. Reporting
RADIOLOGY
PATHOLOGY
THEATRE
THERAPIES
PHARMACY
WARD STAY
iSLR
DATA REPOSITORY
STANDARD TARIFFS
ORGANISATIONAL HIERARCHY AND ASSIGNMENT RULES
iSLR PROCESSOR
JOURNALS
UN-BILLABLE ACTIVITIES
REPORTER
GENERAL
LEDGER
PROVIDER DEPARTMENT
DIVISIONAL MANAGER

28. iSLR – Reporting Reporting options:
Journals imported into General Ledger (Oracle at GSTT)
Users access financial performance reports through GL reporting (OBIEE)
For internal transactions, use Business Objects to drill to source data that drives cost
Five clicks to patient activity record
Exportable to Excel & Other formats
Available through Trust Intranet