Patient level costing in Ireland: process, challenges and opportunities

Background: In 2013, the Department of Health released their policy paper on hospital financing entitled Money Follows the Patient. A fundamental building block for the proposed financing model is patient level costing. Aim: This paper outlines the patient level costing process, identifies the opportunities and considers the challenges associated with the process in the Irish hospital setting. Methods: Methods involved a review of the existing literature which was complemented with an interview with health service staff. Results: There are considerable challenges associated with implementing patient level costing including deficits in information and communication technologies and financial expertise as well as timeliness of coding. In addition, greater clinical input into the costing process is needed compared to traditional costing processes. However, there are long-term benefits associated with patient level costing; these include empowerment of clinical staff, improved transparency and price setting and greater fairness, especially in the treatment of outliers. These can help to achieve the Government’s Health Strategy. Conclusions: The benefits of patient level costing need to be promoted and a commitment to investment in overcoming the challenges is required.