Costing the whole model

Section 7

The process of costing the whole models of care will need to be done in every local area across North West London. Each provider network will be starting from a different point, be serving a different population and will want to provide a different model of care. Because of these differences, it is impossible to cost out different models of care as a central programme; however, this section will provide the steps that providers will need to go through at a high level to cost their models of care and to understand their potential impact.

The most challenging task is to define the interventions, who will deliver them, how often and where. Costing the model of care will require understanding the costs of the members of the care team (the biggest item of cost) and then factoring in variable costs, such as consumables and overhead costs (buildings, infrastructure etc.). The steps that providers will need to take to cost their models are outlined below.

1. Calculate the costs of the whole workforce that will be providing the new model of care

In the previous section, we put together a map of the entire new team that would be providing the model of care. Because we have already gone through that step, this calculation is simply figuring out how much each of those roles will cost. The calculation is: the salary costs of each member of the team + the "on costs”, e.g., Employers’ National Insurance + any other costs that might come from shifting a current role into a future role + training costs.

 Workforce costs

Salary costs of each member of the team  "On costs"  Cost of shifting role  Training costs 



2. Calculate the setting costs of the new model to accommodate the workforce

After calculating the workforce costs, providers will need to consider the setting costs. These include things like rent, insurance and upfront investments in estates and equipment. Providers should establish how much each of these elements will cost for the given workforce, and then add up the workforce costs established above and the setting costs calculated here.

3. For each intervention, calculate the additional unit costs that will be incurred

This means understanding the costs of consumables such as dressings and other medical items; home adaptations; and any other costs that come directly from the new interventions being provided.

4. Calculate the transition costs of resource shifting from the current model to the new model

The members of the team working in a particular area may need to change. Some staff may need to be redeployed elsewhere, new staff may need to be recruited and investment in new facilities may be necessary. Further investment in information systems and management infrastructure will likely be required, too.

5. Cross-reference all of these costs against the original financial envelope for the population in question to establish the expected savings

As was shown at the beginning of this chapter, designing and costing the model of care is an iterative process. Therefore, providers will need to consider the expected costs of their model and then cross reference this back with their original financial sustainability targets in order to establish whether they will achieve their desired savings. They will then need to iterate to ensure that the new model is both impactful in terms of improving care for individuals; and sustainable financially.