Uppsala County Council

Price transparency in practice

Until recently, the radiology departments at Uppsala county council in Sweden had to work hard to calculate and understand their costs and price list. The price list was based on a 20-year-old costing model, which was complicated to update and lacked transparency. It was difficult for the radiology departments at Uppsala University Hospital and Enköping Hospital to tell radiology customers which products and costs were included in the price.  

 

A lot has happened since then...

The staff and management have now worked together to create a reliable, clear and transparent costing model that is used as the basis for a new price list that everyone can rely on.

 

Dedicated project group

Before the start of the project, hospital management clearly emphasized the importance of a competent and balanced project group. This resulted in a project group with key people including operations managers, nurses, administrators, finance and production managers, IT staff, etc. The project group was supported by a steering group with representatives from the Board of Directors of the county council and the hospital management team. The operations manager, Adel Shalabi, was appointed as the strategic project manager and was given a key role in the steering group.

 

"No other county council in Sweden has developed such a thorough pricing base," says Adel Shalabi.

 

"Our project goals were to produce a new price list based on a new costing model, to implement a system for costing and simulation, to reduce the number of examination codes and to define joint codes for the radiology departments in Enköping and Uppsala," says Per Kjellberg, operating project manager.

 

"This is one of the most inspiring projects I've been involved in," says Mikael Thomasson, operations consultant. Production manager Ann Malmberg agrees: "The best project I've ever been involved in, that we will earn most from and that will actually survive."

 

Transparent costing model

The primary goal was to create a new price list based on reliable costing model. One year after the project was started, the first invoice was sent out based on the new price list. The county council then knew for sure that they had achieved their goal.

 

"The project has given us a much better financial understanding and a new way of thinking. Our cost control has been enhanced in many ways," says Per Kjellberg.

"We can now clearly see the activities we do, how much they cost and the various factors that affect the costs. The customers appreciate our transparent costing. Our communication is much better and we can now discuss the pricing list and joint efficiency gains," say Eva Telne, director of division and project owner.

 

From Excel to Prodacapo

Finance manager Ulf Ekstrand was one of those who underscored the importance of a system. "No more Excel!" he clearly stated, referring to the need to update, adjust and analyze costs in a flexible and independent system.

 

After a number of study visits to other county councils the steering group chose their own solution based on the Prodacapo system.

 

"Everyone has to understand the costing model. It's a central issue. Prodacapo's graphical presentation of the cost tracings helps us to work out the costs, trust the figures and verify with the operations managers that we have calculated correctly. The calculation overview enables us to quickly verify whether all costs have been allocated," says Ulf Ekstrand.

 

New and easy-to-use procedures

The county council also wanted to reduce the number of procedures (examination codes) and start using the same codes at the hospital in Enköping and Uppsala. As well as working with the codes, the project group also defined the products that needed to be calculated in Prodacapo.

 

The structure from Prodacapo and the support from the Prodacapo consultants made it very clear how the codes should be structured and used. This resulted in a much easier product and code structure. The new codes simplify the registration and costing of medical examinations, resulting in clearer invoices.

 

"A more detailed code registration means more detailed statistics, which in turn enables better quality monitoring," says chief physician Tomas Bjerner.

"The project has given us an invaluable connection between our finance and production, which is usually difficult to achieve."

Adel Shalabi
Project manager & Operations manager,
Uppsala county council

Building bridges

Creating such a transparent costing model has not been easy. But everyone involved agrees that it has definitely been worth the effort.

 

Adel Shalabi thinks the costing model has helped them to clarify their activities, while Ann Malmberg says the costing model is a huge help to her in her operational planning and budgeting.

 

"Mostly it has given us an invaluable connection between our finance and production, which is usually difficult to achieve," says Adel Shalabi.

 

"Our new costing model describes our activities from a financial perspective. We have commoditized and calculated the cost of our activities that were previously not defined clearly enough (e.g. rounds)," says Tomas Bjerner.

 

"The joint model for Enköping and Uppsala has benefited collaboration in the county. This project has enabled us to have strategic discussions concerning the whole county," says Eva Telne.

 

A simulation tool

The Radiology Centre previously considered carrying out x-rays at night in order to increase availability and to use the equipment more evenly.

 

"By performing simulations in Prodacapo we realized that it was entirely possible and financially viable. Prodacapo also enables us to calculate, for example, the rental cost of waiting rooms and the effect of decreasing empty waiting rooms for the benefit of other activities," says Ann Malmberg. 

Critical success factors

One of the success factors has been the very strong project management, driven by Per Kjellberg.

 

Per highlights the dedicated project group and its competence, the support from the management and the steering group, as well as the support from Prodacapo's consultant Eva Carlén. Per also emphasizes the steering group's contribution to resource allocation, efficient meetings and swift decisions.

 

"The project has taken up quite a lot of time from our daily work, but the result has been worth it!" says Adel Shalabi. "The briefings during the project process got people involved and avoided uncertainty. Involving customers at an early stage made them feel involved in the cost calculations." 

 

Tomas Bjerner highligths the importance of the common goals, the pursuit of a holistic approach, the collective responsibility and the team members not protecting their own interests.

 

"My best advice to others is to come and see what we are doing!" says Ann Malmberg.

 

Next step

Such a transparent and activity-based costing model shows that everyone involved cares about it and wants it to stay. Next step is further maintenance, and simulation of the model.

 

The county council has already moved on and has started to calculate the costs at their laboratory section.

What our customers say

"Implementing Prodacapo was a strategic decision we made to respond to the new market conditions for the healthcare sector in the Netherlands."

 

"At the early phase of the project, some of the departments were quite hesitant in participating, but as soon as we were able to present the first results of our project the doubtfulness was replaced by enthusiasm."

Niek Bossché & Paul Steinbush
Erasmus Medical Centre, The Netherlands

 

 

"Prodacapo provides us with great information and more precise patient costing data."

 

"It's also very important for us to compare and analyze on different levels and in between different departments. Prodacapo gives us better management information of for example resource consumption per patient treatment."

Reidun Martine Rømo

Ekonomichef, Helse Midt-Norge

”Using Prodacapo's TDABC methodology (Time Driven ABC) means we have got a an easy-to-use costing tool, a costing model that is easy to understand and a unified method to track the patient level costs.”

Roland Ylander
Head of patient level costing, County council of Jämtland, Sweden

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