Follow VODG Blog EditorA fair price for quality care
Imagine saving more than £6m in adult social care across an entire region at a time when the public sector faces an unprecedented squeeze on funding and the ageing population places extra demand on already stretched services. Now imagine if this saving, could also ease the pressure on protracted cost negotiations between providers and commissioners and help with the planning of future services.
This, and more, is what a group of councils in the West Midlands has achieved since 2008, by adopting an innovative costing tool, the Care Funding Calculator (CFC).
For Jon Tomlinson, Birmingham city council's director of joint commissioning learning disabilities and mental health, the tool is “a good basis for discussion with our provider market”. Commenting in a recent regional guidance on the CFC, Tomlinson said: “I feel both parties have benefited from using the CFC tool which is fair and transparent and our relationship with providers has definitely improved.”
The free negotiating tool helps commissioners - local authorities and primary care trusts – better understand care costs. It offers a structured, transparent and fair approach to calculating fees, effectively providing a solid basis for sensible negotiation. As well as providing value for money, the calculator encourages better partnership between providers and commissioners.
But how does it work and why use it?
The calculator was developed by the Improvement and Efficiency South East (IESE) on behalf of all regional improvement and efficiency partnerships (partnerships of local authorities working together at regional and sub-regional level on shared improvement and efficiency priorities) and has been rolled out across England since 2008. Initially developed for adults with a learning disability, the tool is now being used more widely for adults with mental health issues or physical disabilities, a development that speaks volumes about its flexibility.
As for how it works, the Excel spreadsheet-based system allows you work out in detail the level of staff support required to meet an individual's needs. You enter different factors affecting an individual's cost of care - location, size and facilities of the care home and the level of support required, for example – and this information is benchmarked against existing data, offering a cost breakdown as well as guidance on the reasonable overall total weekly cost of care (see box below “The Care Funding Calculator: a basic guide”).
The need for such a tool has never been greater. The current squeeze on public spending has thrown efficiency into sharp focus and the CFC not only encourages savings, but can speed up decisions on care arrangements. For local authorities, for example, it helps negotiations with care providers and, because it supports a highly individualised approach to the identification of needs and the setting of costs, it chimes with the person-centred approach. It is equally essential that local authorities commission high quality care from organisations who are committed and operate a viable business model.
Care provider and VODG member MacIntyre, for example, uses the CFC as a standard tool when agreeing an appropriate level of funding for people. Emma Killick, head of operations, explains how the organisation has embraced the system: “We believe that the CFC brings real clarity and consistency useful for unpicking the complicated variables associated with fee negotiations. It is especially useful to all parties when agreeing fees for new people, and for people who are going through some level of transition in their lives.”
- In the residential CFC model the two components of a residential care placement - accommodation costs and care costs (which are usually staff related) - are analysed.
- Accommodation costs vary according to the service user's area and the size of the unit, care costs vary according to individual need. By ascertaining the exact care needs of the individual the information can be put into the spreadsheet and an indicative price produced. The total price and the supplied breakdown of cost assumptions are then used to inform the negotiations with a provider.
In the supported living model, care costs are determined by assessing the individual's needs. It is presumed that all costs around accommodation are met by the service user’s benefits. - The amounts act as a guide and can be varied where authorities agree higher rates that will help achieve better outcome and represent good value. Non-care costs included in the tool take into account factors such as food, transport, laundry, cleaning and catering.
- The independent living version of the tool does not include hotel costs, as the service user should be paying for their own food, accommodation and so on through benefits.
- The CFC project did not set out to produce an exact figure as a guide - it is based on a wide range of assumptions, allowing for a degree of flexibility in payment relating to quality and other issues. The range of figures given by the CFC is intended as a guide for discussion and negotiation.
- Further information: Visit the iESE Website's CFC Page
The Care Funding Calculator:
A basic guide
Killick says that the tool illustrates and differentiates between the core care structures and costs and the more personalised additional support requirements and costs. In a recent case study involving two people with very different needs, Killick explains: “We supplied the completed CFC along with the final figure to provide transparency. We hope that if the support package and fee is subject to scrutiny in the future, we have a clear benchmark already in place.” Killick adds that the tool can help commissioners and providers reach mutually acceptable agreements on fees.
Livability is another VODG member that has used the CFC successfully with a number of authorities. It has used the system to work out care costs where local authorities have several service users at one service, several service users across a number of services and those with only one service user.
Having used the CFC to price the service users' packages, says Liz Mell, assistant director operations, the organisation informed the local authorities concerned that it could not make across the board percentage reductions on all fees, however, it said it could review individual packages in line with the results. Mell adds: “Through this process, not only have we achieved a negotiated reduction, we have also achieved another important thing for the future – we’ve ironed out some of the historical anomalies in fees created by various factors including different admission dates, historical fees, service design changes and differences in annual uplifts.”
The successful outcomes so far for those areas using the CFC has led some to explore the options for using similar tools in other areas of care. In the West Midlands, for example, there is new work to develop an assistive technology costing tool. IESE is in advanced development stage for a version of the tool for use in children's homes and residential special schools. The CFC is currently being web-enabled and is due to be launched by IESE in 2012.
The VODG has developed protocol to support CFC good practice, this aims to promote best and consistent use of the tool. The protocol is backed by a range of sector-wide organisations - the VODG, IEPs, National Care Forum, LGA, ADASS and the Association for Real Change (ARC)
Further information:
iESE Website's CFC Page
IEWM Website's CFC Page
Comments ...
Comment by: Matt BowsherThis is a really helpful article. Improvement and Efficiency West Midlands are very grateful for the hands on support VODG and its' members have provided to this Project; especially John Adams and Gill Boston.
Comment by: Karen LaneThe CFC is a really useful tool to help providers and commissioners have 'grown-up' conversations about the true cost of an individual care package based on the needs of the client.
At Epilepsy Society we have adopted the CFC structure for all our fees. As mentioned in the article, it has been particuarly useful for clients new to the service or those who have had a change in need. We have also resisted across the board cuts in fees by agreeing to use CFC for individual reviews. The key principles for me are that the costs and the process are transparent and that CFC gives a starting point for negotiating the fee.
Comment by: Amanda LloydGreat to hear Epilepsy Society comments, it's a relief and gratifying to know that the original ethos of the tool - that it provides for a fair and transparent understanding of needs and costs - is proving to be the case. The web-based version which is being developed at present will, we hope, make the tool even easier to use by all.
Comment by: Dr Andrew LarnerReally pleased that the CFC is supporting transparency in such an essential part of local authority service. iESE is committed to supporting the CFC and expanding its use to other services and customer groups - we would welcome feedback to help us develop this important tool.
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