CG 6 Blood products

CG 6.1 Scope

CG 6.1.1 This Costing guideline outlines an approach to cost activity with regard to the consumption of Blood Products.

CG 6.1.2 This Costing guideline also provides practical steps and examples to guide staff on the patient costing process for this activity.

Blood product scope

CG 6.1.3 Blood product expenses are those that can generally be found in pathology and pharmacy departments. Expenses for blood products may not be found on the hospital general ledger, as the Jurisdiction may purchase blood products on behalf of the hospital. Blood products form a component of the cost of production and should be patient level costed.

CG 6.2 Objective

CG 6.2.1 The objective of this Costing guideline is to guide costing practitioners of the end to end steps required to ensure that all Blood Product consumption and expenses which contribute to the day to day production of final Blood Products are included in the patient costing process to determine the full cost of production.

CG 6.3 Costing guideline

Step 1: Stakeholder identification and service scale and scope

CG 6.3.1 Costing practitioners should first seek guidance from their Jurisdiction to ascertain if any local rules apply within their jurisdiction with regard to the costing of Blood Products. Some jurisdictions will hold expenses related to Blood Products centrally, while for others, this expense will devolve to the health service. These local circumstances may dictate how health services are to cost Blood Products.

CG 6.3.2 Costing practitioners should meet with the appropriate stakeholders within the health service to identify both the expense and activity related to Blood Products. Blood Products may have its own cost centre, or this expense may reside within the pathology cost centre/s of the health service (or elsewhere). The manager of Blood Products within the hospital may be found within the organisation chart, or alternatively, the Pathology or Finance Department should be able to assist with providing the contact details for these staff.

CG 6.3.3 The agenda of this meeting should include an overview of the processes involved in distributing Blood Products to patients. This meeting should seek to elicit information regarding the feeder data available to include in the costing system. Hospitals must keep information regarding the distribution of Blood Products to patients, as there are rigorous safety and quality processes required to ensure the Blood Products provided match the patient’s blood type. Where electronic feeder data is unavailable, blood product consumption will be present in the ICD10-AM coding, which forms part of the inpatient episodic dataset.

CG 6.3.4 This meeting should also seek information regarding the labour related expense that is associated with the distribution of Blood Products and the cost of the Blood Products themselves where health services are responsible for this expense.

Step 2: Align expense to the blood products service department and define overhead and direct expenses, including overhead allocation methods

CG 6.3.5 Costing practitioners should work with Blood Products stakeholders to define the expense within the Blood Products Department that relates to final products. This includes obtaining agreement on the cost centre/s to map the Blood Products Department for costing purposes in the costing software.

CG 6.3.6 Where jurisdictional Health Departments hold these expenses centrally, the expense will be required at hospital level for inclusion in the costing process. This expense will need to be added to the cost ledger before the general ledger is imported into the costing system as the cost ledger.

CG 6.3.7 Where the general ledger has consolidated expenses for Blood Products (i.e., labour and consumables) within a separate cost centre (for example, Pathology), costing practitioners should also work with the Blood Products stakeholders to define and agree on the methods and assumptions to be used (for example, staff rosters, timesheets and/or other relevant data) to transfer expense to the Blood Product related cost centre.

CG 6.3.8 Costing practitioners should then (within the patient costing system) use stakeholder insights to move expenses appropriately to the Blood Products Department.

CG 6.3.9 Costing practitioners should utilise the costing system or another medium to record:

  • the classification of Blood Products expense into the Blood Products cost department;
  • the stakeholder/s met with;
  • the date of the meeting; and
  • a date for future review of Blood Products expense alignment.

Step 3: Identify patient level activity and blood product feeder data and perform quality assurance checks

CG 6.3.10 Ideally, the Blood Products feeder system will include some or all of the following fields:

  • the patient’s unique identifier;
  • the patient unique episode identifier;
  • the Blood Product code;
  • the Blood Product description;
  • the Unit or Department the Blood Product was delivered to (e.g., Ward; Operating Theatre; Emergency Department; Non Admitted) and
  • the date of service.

CG 6.3.11 Where health services do not have separate electronic patient level feeder systems that measure Blood Product consumption at the patient level, costing practitioners may have to use the ICD10-AM procedure codes available in the patient episodic dataset to identify Blood Product consumption.

CG 6.3.12 Costing practitioners should perform quality assurance checks on the Blood Products feeder files prior to the costing process. For example, checks should be made on the date of service, and data relevance to costing period).

Step 4: Creating and mapping blood product service costing products or intermediate products

CG 6.3.13 An acceptable method for allocating Blood Product to patients includes the use of the Blood Product from the feeder system (or ICD10-AM code), which may also be combined with a Relative Value Unit (RVU).

CG 6.3.14 Depending on the data available, the products can be the code of the Blood Product or the ICD10-AM related Blood Product code.

CG 6.3.15 Where Blood Products are created in the costing system, they will also need to be mapped to the relevant Blood Products final cost centre (i.e., Blood Products).

CG 6.3.16 Consideration should also be given to blood stock that has not been used in the production process and discarded. These are costs associated with maintenance and storage of blood stock. Depending upon what data is available to the costing practitioner, the following options are listed as examples for consideration for cost allocation:

  • Data is available on discarded blood stock, an intermediate product is created and these expenses and a proportion of overhead expense are assigned to a non-patient product.
  • No data is available on discarded stock, but data is available on consumed stock. All relevant (direct and overhead) expenses for both consumed and discarded stock are allocated. In this case each intermediate product costed will include a proportion of consumed and discarded cost. Once matched to patient activity, total blood cost is confined to those consuming direct blood product costs with a proportion of discarded costs.

Step 5: Apply relative value units

CG 6.3.17 RVUs need to be assigned to Blood Products regardless of whether they are derived from local feeder system or the ICD10-AM codes to help determine the relative cost of each blood product.

CG 6.3.18 The National Blood Authority (NBA) has a price list of Blood Products. These prices can be used as RVUs in the cost allocation process, but must be mapped to the correct Blood Product available from the feeder system or the ICD10-AM code. Costing practitioners should contact their jurisdictional representative or the NBA to obtain this price list. The NBA website is: https://www.blood.gov.au/

CG 6.3.19 Other relative values may be used – for example, the jurisdiction may have its own price list. Local RVUs may also be developed, however this should be done in consultation with the Blood Products stakeholder/s within the health service (see Step 1 above).

Step 6: Create intermediate product costs in final cost centres

CG 6.3.20 Two allocation processes are performed:

  • When overhead costs are allocated to the Production Cost Centre (using an appropriate allocation statistic)
  • When the Production Cost Centre costs (overhead and direct) are allocated to the intermediate products.

Step 7: Match intermediate products and their costs to patient activity

CG 6.3.21 Intermediate products for blood products will be matched to patient activity according to defined matching criteria. For example, for inpatients, the dates between the admission and discharge date will be used to find blood product intermediate products for matching for patient activity as blood product consumption will fall between these dates.

Step 8: Report costs

CG 6.3.22 Costing practitioners should then perform the required steps to consolidate and report costs at an encounter level.

CG 6.3.23 Costing practitioners will need to ensure that Blood Product expenses are appropriately allocated between the various patient encounter settings (i.e., Inpatient, Emergency Department, Non Admitted). This is especially the case where local feeder systems are unavailable and the costing practitioner is reliant upon ICD10-AM coding to allocate these costs.

Step 9: Cost data review with blood products stakeholders

CG 6.3.24 Costing practitioners should meet with their relevant Blood Product stakeholder/s to report on the costs calculated.

CG 6.3.25 Cost data should be reviewed for, amongst other checks, cost relativity per product and resource completeness per episode to determine whether the cost data captures resources that have been provided at encounter level.


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