Counting hospital activity: spells or episodes?

In the new “payment by results” system of financial flows in the NHS, providers are paid for the actual activity that they undertake, instead of being commissioned through block agreements. There is concern that the new system will give rise to considerable financial upheaval for some acute providers that have relied on historical budgets and may face sizeable changes to their incomes. Activity will be based on hospital episode statistics (HES). Previously, activity has been episode based, but from 2005-6, the new system will base both its tariffs and activity on spells. Using HES data, we contrasted spell based activity and episode based activity, using myocardial infarction as an example.

Each episode of care contains information on date of birth, sex, postcode, diagnosis, and procedure. To determine the course of a patient's treatment during a spell, we linked episodes by using identifiers such as NHS number, date of birth, sex, postcode, and date of admission. We looked at inpatient spells for myocardial infarction (ICD-10 I21 and I22) between 1996-7 and 2002-3 to examine the impact of using different criteria for determining numbers of myocardial infarctions over time (figure).

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There are considerably more episodes with a primary diagnosis of myocardial infarction than there are spells. In both spells and episodes, the increase in 2002-3 may reflect recent changes in diagnostic criteria for myocardial infarction.^w1 The interpretation of a finished consultant episode does not seem to be consistent across different providers. Some patients with an initial diagnosis of myocardial infarction may go on to have a subsequent infarction within a spell, although there is no reason why that should be included as an extra episode. This may result from a stay in an emergency ward or perhaps a transfer to a coronary care unit in addition to an episode of care on a general medical ward. Measuring hospital activity by episode could result in overestimates of up to 50% for myocardial infarction. In 2.9% of spells, vague symptoms and signs were noted in the primary diagnosis of the first episode with myocardial infarction in the subsequent episode. Overestimates carry obvious implications for estimating the incidence of disease and assessing healthcare outcomes.

The new “payment by results” system will switch to a spell based tariff for all NHS trusts in 2005-6, and will be based on healthcare resource group, derived from a hierarchy of diagnoses and procedures.^w2 This should provide a more accurate method of calculating payments than using finished consultant episodes and will get around the problem of episode inflation. However, as has already been noted by other commentators, the new payments system will give rise to considerable upheaval for some acute providers who risk sizeable changes to their financial incomes.^w3 The move from episodes to spells, although potentially fairer, could exacerbate these problems.