Some trusts could have some explaining to do in their negotiations with the new PCTs

With the new strategic health authorities in place, and given the financial climate, this data briefing from Dr Foster Intelligence sets out their opening balances in terms of healthcare resource group spend by primary care trusts in their regions.

Figures for the third quarter of 2005-06 show that, across England, spend has gone up by 4 per cent on the previous year to£3.8bn. By SHA, increases vary from 1.2 per cent in the West Midlands to 8.2 per cent in London.

There are significantly different challenges for the two SHAs. London has seen an increase in tariff procedures of 11 per cent, while West Midlands SHA has managed to restrict procedure growth to just 2.8 per cent.

But South East Coast SHA would seem to have the biggest issue to deal with - an increase in PCT spend of 5.8 per cent based on an increase in tariff procedures of 7 per cent.

With new SHA boundaries coded back against clearing data, it is possible to produce a historical trend in spend (see second chart). Since the third quarter of 2000-01, spend on elective activity has increased by£181m and on non-elective by£377m. Across both, there has been a transfer of 0.49 per cent from elective to non-elective HRG spend.

The third chart shows the average cost of procedure in each chapter, or groups of HRGs. Clearly one would expect the average non-elective tariffs to be higher and, in all but one case (cardiac surgery is£241 cheaper as an emergency), they are. The largest difference is£2,879 for procedures within the 'vascular system' grouping.

In terms of annual changes for the third quarter of 2005-06, 'musculoskeletal' shows a large increase across both elective and non-elective work, while 'respiratory system' shows a large increase for elective but a decrease for non-elective.

For those concerned that hospitals may begin to manipulate the coding of types of work, this provides some initial guidance on where to investigate further. For now, the results do not show manipulation at this aggregated level of the new SHAs.

However, other research by Dr Foster demonstrates that some trusts could have some explaining to do in their negotiations with the new PCTs. How much leverage the new SHAs will have in taking on prestigious foundation trusts over their coding oddities - whether accidental or deliberate - remains to be seen.

Dr Marc Farr is market development manager at Dr Foster Intelligence (phone 020-7330 0472 or visit www.drfosterintelligence.co.uk).