DHSC has collected reference costs from NHS providers for every financial year since 1997.
Reference costs are used to set prices for NHS-funded services in England. They also support our commitment to data transparency for the benefit of patients and the public.
Monitor is now accountable for the reference costs collection, with the department continuing to collect reference costs on its behalf. Monitor’s strategy for costing and cost collection to inform price setting is set out in their Approve Costing Guidance.
Published reference costs
The data collected in reference costs is presented in 3 ways:
national schedules of reference costs - these show the national average unit costs derived from the average unit costs of NHS provider
reference costs index - a measure of the relative efficiency of NHS providers
database of source data - publishing the data submitted by NHS providers gives a valuable source of information for benchmarking of costs and other more detailed analysis (only source data from 2008 to 2009 is currently available)
The submission of reference costs by NHS providers is supported by detailed guidance published each year by the department. This guidance has been part of Monitor’s ‘Approved Costing Guidance’ since 2013.