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Business Case

The implementation of insulin pump therapy is likely to result in a change in costs to both the Trust and the commissioning PCT(s). There will be some costs that are covered by the current Payment by Results tariff (which the Trust receives for standard activity); however, there may be additional costs that will require the submission of a business case. It will therefore be essential to demonstrate that the additional costs likely to be incurred are covered and remunerated appropriately.

The local arrangements for approving business cases may vary from Trust to Trust but each organisation is likely to have its own template. In some Trusts, a business case may not be required at all, and an expanded Service Level Agreement between a Trust and PCT may suffice.

Therefore the business case provided in this is guide is generic in nature and should be read in conjunction with local business case guidance. The example template that NTAC provide should be amended and adapted as appropriate. It is provided in a Word document to allow users to copy and paste appropriate material.

Insulin Pump Hardware and Consumables

There are costs attached both to the original purchase of each pump, the replacement of pumps that are coming to the end of their life and to the ongoing consumables required to support patients. NTAC project implementation sites utilised the NICE diabetes insulin pump therapy costing template (see IPT Costing Model) to assess what these costs were in their health economies, and it is recommended that Trusts moving forward also use this template to understand the financial commitments that the technology and on going consumables pose to the Trust.

Trusts wishing to implement and/or develop their insulin pump therapy service should discuss these costs with their commissioning PCT(s), alongside the most appropriate option for local demand (e.g. agreeing the total number of replacement pumps that will be required in the next five years alongside the total number of new patients who will benefit from a pump during this period).

The mechanism for funding, ordering and monitoring hardware and consumables should also be agreed with commissioning PCT(s) at this stage. NTAC project implementation sites found that purchasing the hardware and consumables and then recharging these costs to the agreed PCT(s) was an effective way to manage this process. Due attention should also be given to the procurement procedures involved in purchasing the hardware and consumables.

NTAC project implementation sites found that funding for the hardware and consumables can be agreed via two routes:

Either through a service level agreement between the Trust and the commissioning PCT(s), or
Through a formal business case submitted by the Trust to the PCT for this funding.

NTAC's 'How to Develop an Implemementation Team' is an important tool to understand who would needs to be involved in the discussions surrounding the purchasing of the pump technology.

Other Costs and Income

In addition to the hardware and consumable costs, there are a number of other financial considerations that need to be modelled in order to successfully implement this technology. NICE have recently revised their commissioning and benchmarking tool for insulin pump therapy, which aims to support the effective commissioning of this technology and help users to estimate the costs associated with commissioning a cost effective service. It can be used to estimate and inform the level of service needed locally and the cost of local commissioning decisions. Some tables are pre-populated with indicative costs which are based on discussions with clinicians and commissioners that NICE have consulted. You are able to modify the assumptions and variables and tailor the local cost impact to your circumstances.

If the additional service costs are in excess of the income generated by a Trust (which are not directly recharged to PCTs) then a local business case is likely to be required. The following additional costs may be required in order to scope out the cost of delivering this service, which can be added into the NICE commissioning and benchmarking tool as appropriate:

Staffing costs - for example, additional diabetes specialist nursing resource.
Training and education costs.
Maintenance costs.
Capital charges for any additional capital investment that may be required.
Indirect costs and overheads (e.g. operational management, HR and finance etc)

The business case should identify all relevant costs of implementing insulin pump therapy locally. If the income associated with the service is calculated to be lower than the costs of implementation then the Trust may choose to either:

Approve the business case despite it not covering its costs, or
Seek further local funding from PCT(s) to cover the excess cost.

Trusts must also recognise that although there may be increased expenditure in setting up and revising current insulin pump therapy services, the benefits (including a possible reduction in hospital admissions) will have an overall positive effect on the health economy. If a long term, five year financial plan is agreed, savings could also be achieved.

Future Developments

It is hoped that in the future there will be specific tariffs under the Payment by Results regime to enable Trusts to cover the costs of an insulin pump therapy service in a more accurate way than the current tariff structure enables. However work is ongoing with the NHS Information Centre for Health and Social Care to develop coding structures that will underpin the potential new tariff in the future.

Whilst the above work is being progressed, Trusts must ensure that they use an existing Office of Population Censuses and Surveys Classification (OPCS) code when fitting a pump for the first time. The insulin pump coding document explains the OPCS code in more detail and when and how it should be used in clinical practice.

Note: Download a local copy of the NICE insulin pump therapy costing template and NICE Commissioning and Benchmarking tool from the resources on the left-hand-side of the screen. Please enable macro's to make full use of these tools. These tools currently run from the Website when using Internet Explorer 7 - users who have earlier versions of Internet Explorer should download a local copy of the files.