Costing imaging procedures

The existing National Health Service financial system makes comprehensive costing of any service very difficult. A method of costing using modern commercial methods has been devised, classifying costs into variable, semi-variable and fixed and using the principle of overhead absorption for expenditure not readily allocated to individual procedures. It proved possible to establish a cost spectrum over the financial year 1984-85. The cheapest examinations were plain radiographs outside normal working hours, followed by plain radiographs, ultrasound, special procedures, fluoroscopy, nuclear medicine, angiography and angiographic interventional procedures in normal working hours. This differs from some published figures, particularly those in the Körner report. There was some overlap between fluoroscopic interventional and the cheaper nuclear medicine procedures, and between some of the more expensive nuclear medicine procedures and the cheaper angiographic ones. Only angiographic and the few more expensive nuclear medicine procedures exceed the cost of the inpatient day. The total cost of the imaging service to the district was about 4% of total hospital expenditure. It is shown that where more procedures are undertaken, the semi-variable and fixed (including capital) elements of the cost decrease (and vice versa) so that careful study is required to assess the value of proposed economies. The method is initially time-consuming and requires a computer system with 512 Kb of memory, but once the basic costing system is established in a department, detailed financial monitoring should become practicable. The necessity for a standard comprehensive costing procedure of this nature, based on sound cost accounting principles, appears inescapable, particularly in view of its potential application to management budgeting.