The NHS index of reference costs has come under attack for its use of faulty data and a 'continued lack of sophistication' in the way costs are measured.

The third set of cost 'league tables' issued by the Department of Health was billed as the 'most comprehensive coverage of service costs in the public domain of any health service' when issued on Friday. They cover 69.4 million patient episodes - a massive increase on the 20 million covered the year before.

Despite this, the information caused familiar rows over mistakes in data published and failures to balance raw costs against contributory factors such as physical estates costs.

Preston Acute Hospitals trust blamed its position as the third most expensive trust in the country on an error in the data it submitted. A spokesperson said it had mistakenly provided a figure of£125m when the figure should have been adjusted downwards to£104m which would have given it a much better ranking.

NHS Confederation policy director Nigel Edwards said the DoH did not appear to have responded to earlier calls to improve the sophistication of data as well as the quantity.

'We welcome improvements in benchmarking of this type but it needs to be very much more subtle, with deeper layers of analysis available to see how the figures were reached. I am not entirely confident that it provides a robust basis for the types of efficiency targets mentioned in the NHS plan.'

Mr Edwards expressed concern that tables encouraged the idea that 'more and cheaper is better, ' when fewer cases carried out at higher cost could sometimes reflect better care.

Overall, tables covering the average cost of a range of procedures adjusted against market forces list Birmingham Children's Hospital trust as the most expensive provider in the country, and North Hampshire Loddon Community trust as the cheapest.

Both Birmingham Children's Hospital trust and the Great Ormond Street Hospital for Children trust, which was second most expensive, blamed the complexity of non-elective surgery handled by children's hospitals for their high costs.

North Hampshire Loddon Community trust urged 'caution in reading too much into the figures', pointing out that the threshold for inclusion as a community trust meant many similar trusts were excluded from the tables, and said low operating costs were partly due to preparations for the trust to dissolve next April.

Deputy finance director Wayne Dundovic said: 'We would love to say it's just down to sound financial management, which has played a part, but there are many more factors involved.'

Weston Area Health trust, the third cheapest trust on the list, warned against putting too much emphasis on cost. Chief executive Roger Moyse said that 'because of limited resources we have always had to make each pound work that little bit harder, ' and urged the government to reward such performance. The statistics also separate out the costs of individual treatment at each trust. For coronary angioplasty, St George's Healthcare trust is the most expensive with a mean cost of£5,081, while North East Lincolnshire trust said its cost averaged£209 per procedure.

The DoH is promising further guidance and 'a more prescriptive approach' with a revised NHS Costing Manual due later this year.

The information now covers 88.40 per cent of annual expenditure on services provided by hospitals, but only 7.25 per cent of expenditure on community services. Reference costs are due to cover all NHS expenditure by April 2004.

The New NHS - reference costs.

www.doh.gov.uk/nhsexec/ refcosts. htm See comment, page 19.