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Monitor sets out its guidance on costing to get the right price for NHS services

Monitor moved a step closer to improving the pricing of NHS-funded services yesterday by issuing guidance to providers about how to allocate the cost of their services to individual patients.

As part of its new role as sector regulator, Monitor will have joint responsibility for setting prices for NHS services, from 2014-15 onwards. The guidance is designed to help NHS-funded providers comply with the relevant pricing elements of Monitor’s new licence when it comes into force on 1 April this year.

Following stakeholder engagement last year, Monitor is asking all acute trusts to participate in the pilot collection of Patient Level Information and Costing Systems (PLICS) data. PLICS allows health care providers to understand the cost of providing patient care at the individual patient level, thereby delivering long term cost savings and patient benefits. At present pricing is based on average costs of providing similar types of NHS services.

A Monitor spokesperson said: "Many providers already use PLICS data and we encourage them to share this data with us. We have made changes to our collection in response to the feedback we received from stakeholders, which should make it easier to do this.

"The more high quality data we receive for the pilot, the more quickly we can move towards an improved pricing system that will deliver higher quality care for patients and better value for tax payers. It is also important for providers to continue to focus on improving the quality of average costs submissions as we gradually move to make greater use of PLICS data."

The pilot will enable Monitor to decide how PLICS data could be best used to inform prices, and which areas need further attention to improve data quality.

Approved Costing Guidance, consolidates and streamlines existing guidance into a coherent framework and is published alongside a Summary of Stakeholder Responses to Costing Patient Care and draft Approved Costing Guidance.

Notes to editors

  1. For media enquiries contact Emma Shepherd, Media Relations Manager, on 0207 340 2438 (
  2. Monitor is the sector regulator of NHS-funded health care services. Under the Health and Social Care Act 2012 its fundamental duty is to protect and promote the interests of people who use them. Information about Monitor's new role can be found here.
  3. Follow us on Twitter - @MonitorUpdate
  4. The pilot collection of PLICS data will run between June and mid September 2013
  5. Nine out of ten responses to the stakeholder engagement on Costing patient care: Monitor's approach to costing and cost collection for price setting agreed with Monitor's vision for costing and eight out of ten said the draft PLICS collection guidance was clear and easy to follow.
  6. Monitor is working closely with the NHS Commissioning Board to ensure that the prices paid to providers of NHS services are designed in a way that drives improvements in quality, and is also fair and transparent, rewarding efficient providers.

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