Unit Costs of Health and Social Care 2021
Introduction to the Unit Costs of Health and Social Care publication
The first Unit Costs of Health & Social Care volume was published in 1992. It has always been funded by the Department of
Health (DOH), now the Department of Health and Social Care (DHSC), with small amounts of funding provided by the
Department for Education (DfE). We ensure our costs are of good quality by applying established cost estimation methods
and principles.
Unit costs should:
- Be consistent, across different economic analyses, to avoid inconsistency in unit costs used which could feed into
inconsistency in decisions proposed.
- Be comprehensive, in that they consider long-run marginal costs as well as obvious direct costs such as salaries.
Long-run marginal costs include the initial qualifications cost of staff and the cost of building, heating and running
the buildings in which they work. These long-run costs are often substantial. Excluding them would underestimate
the long-run cost of decisions made.
- Be clearly documented, so that it is clear what judgments have been made in constructing them, so that they can be
used in an informed way.
What are unit costs and why are they important?
Unit costs represent the total expenditure incurred to produce one unit of output. In health and social care, this could be
the cost of one hour of a nurse or GP’s time, or a face-to-face appointment with a social worker or perhaps a speech
therapist. It could also be a week in a residential care or nursing home or the cost of a day care attendance. Unit costs are
important because they support organisations’ assessments of performance and value for money. In other words, they can
help providers achieve the most efficient use of resources.
How we calculate costs
Our approach to cost estimation is grounded in economic theory and is both transparent and flexible. Our cost estimation
approach is shown below:
Cost estimation approach
- Financial implications of all service components are included
- Unit costs reflect the long-run marginal opportunity cost for that service
- A “bottom-up” approach is taken – users can substitute their own data for any component
- Sources of information are fully referenced
- Unit costs account for the fact that care staff do not spend all their time with clients
- Regional weightings are given where possible
How do we find our information?
Our Advisory Group, who we meet with annually, guides our work and provides valuable leads. The Advisory Group
consists of representatives from DHSC and DfE, economists from research units, and representatives from the Social Care
Institute for Excellence (SCIE) and the National Institute for Health and Care Excellence (NICE). We perform a literature
search for new studies and draw information from secondary sources of data, as well as working with organisations to
estimate unit costs for specific services. Occasionally we commission our own research.
Throughout the year we prepare the volume by:
- Identifying where our unit costs could be improved or updated
- Identifying gaps where new unit costs estimations are required
- Identifying data sources or research to derive new unit costs
- Responding to government priorities, new policies or practice developments
In the past, we have worked closely with Foundations, the National Body for Home Improvements who helped us to
calculate the total cost of supplying and fitting a variety of home adaptations. We also conducted a survey with the
assistance of the General Dental Council/Department of Health and Social Care and the Chief Dental Officer for England, to
identify the unit cost of dental services.
Unit Costs of Health and Social Care 2021 2
What information is included?
We begin the volume with an author-produced preface introducing the reader to the year’s work and any new additions or
changes. We also summarise this year’s new schema and identify schema which have been withdrawn due to our policy of
only publishing work which is less than ten years old.
Section I of the report covers services used by particular client groups. For many of the groups, we include the cost of
residential care and day care and we differentiate where possible between local authority and private sector providers.
Chapter 6, the children’s services chapter includes information on adoption and foster care, together with the costs of
more specialised services such as counselling and advocacy. Chapter 7 contains average costs for elective and non-elective
hospital admissions as well as outpatient attendances and other more specialised services such as inpatient and outpatient
palliative care. These have been drawn from the NHS reference costs. The costs for specialist neuro-rehabilitation services,
screening interventions for sexually transmitted infections and self-management programmes are also found in this
chapter.
Whereas our usual approach is to present the unit costs for particular services or professionals, Chapter 8 contains our
care-package costs. Here the unit of interest is the individual and the combination of services they use. Examples of care
packages are health care support received by people requiring mental health support and care packages for people at the
end of their lives.
Section I: services for
- Older people
- Those requiring mental health support
- Those with learning disability or physical support needs
- People who abuse drugs and alcohol
- Children and young adults
And
- Hospital services
- Care packages for people with a range of needs
Sections II, III and IV present the costs for professionals and teams of professionals who can provide support for all client
groups. They are divided in the volume according to whether staff are health or social care professionals and whether they
are hospital or community based.
In section V you will find other useful information such as inflation indices, NHS staff earning estimates, training costs and
care home fees. You can also find further information in our blog Unit Costs | PSSRU
Section II: community-based health care staff such as nurses, GPs and dentists
Section III: community-based social care staff e.g. social workers or home care workers
Section IV: hospital-based staff including doctors and scientific and professional staff
Section V: supporting information, such as inflation indices, NHS staff earnings, training costs
All volumes dating back to 2003 can be downloaded in PDF format from the PSSRU website.