How do I do an impact assessment?
An Impact Assessment should let you know the financial impact of introducing tariff to your services. The assessment will vary slightly if you are a Provider or a Commissioner. In general, the Tariff prices represent the total cost of delivering a service from the ground up, including all the hidden costs.
Commissioner View
The budget for a service may not always explicitly include all the service costs, for example there may be some parts of the service that are delivered by a wider block contract (eg pathology) or some parts of the service may simply not be costed at all (eg facilities and estates).
When you are charged a tariff for the service, the tariff will include all these extra hidden costs, so it is important to understand what they are when you do your impact assessment.
GUM services are charged under tariff at the moment so their charge can be easily arrived at from GUMAMM data.
To cost your existing service you need to list the annual cost of the following:
- GUM services with MFF applied
- all the contracts you are currently commissioning
- estimate the proportion of any block contracts due to sexual health services
- all the services sexual health are consuming but not paying for in the current sexual health budget
- any other departmental overhead you are being charged
- any PCT overhead you are being charged
- if you share contracts with other PCTs estimate the proportion due to your PCT based on activity
This should provide your As-Is spend. We will be asking you to input this figure into the Grouper.
As your providers submit data to the Grouper, the Grouper will start to estimate your annual spend, compare this to the figure above.
The Grouper will not include GUM activity from sites that are not on Tariff, so there will still be a residual GUM tariff spend predominantly coming from Providers outside London, so be aware of this as a risk. In most cases this will be very modest.
You may wish to do this analysis on a clinic by clinic basis.
You will now be in a good position to discuss budget adjustments with you finance team and providers. It may be appropriate where you currently pay for pathology under a wider block contract to discuss with your provider negotiating the supply of pathology as a deductible from tariff. Also think about discussing it with your wider commissioning network.
Provider View
The first thing to state is that the tariff does not represent your department budget. Most providers will allocate funds to departments based on a wide range of criteria, not necessarily representative of the revenue earned by that department.
Your existing service budget may or may not already include all the service costs accounted for in the tariff, for example there may be some parts of the service that are delivered by a wider block contract (eg pathology) or some parts of the service may simply not be costed at all (eg facilities and estates).
When you charge a tariff for the service, the tariff will include all these extra hidden costs, so it is important to understand what they are when you do your impact assessment.
GUM services are charged under tariff at the moment so their charge can be easily arrived at from GUMAMM data.
To cost your existing service you need to list the annual revenue and costs from the following:
- revenue from GUM services with your MFF applied
- revenue from all the sexual health contracts you are currently providing
- estimate the proportion of any block contract costs due to sexual health services
- the cost of all the services sexual health are providing but not paying for in the current sexual health budget
- the cost of any other departmental overhead you are being charged
- the cost of any wider management overheads you are being charged
This should provide your net As-Is revenue.
As you submit data to the Grouper, the Grouper will start to estimate your annual revenue, replace the total revenue figure from the above list and compare the net revenue.
You may wish to do this analysis on a clinic by clinic basis.
You should be aware that under tariff providers will carry the risk of badly coded activity, in some cases this is a substantial risk.