Activity Based Funding and Emergency

1. Activity Based Funding and Emergency Statewide Emergency Network Forum October 2011 Erica Cole, ABF Model Team Finance Branch

2. Overview • ABF in Context • Classification & Counting • Role Delineation, URGs, UDGs • Costing in QH • Funding

3. ABF Context – Why? • Casemix/ABF enables us to... • relate service outputs to resources/inputs • Input costing - How many nurses can we afford with this much budget? • Output costing - How much nursing time do we need to treat a hip replacement patient? • determine targets and monitor activity levels • plan new or expanded services • develop prices we are willing to pay for a range of services (‘Efficient Price’) • facilitates clinical and financial accountability • What did we pay for? Was it appropriate? • Range of internal and external planning/ negotiation requirements • COAG reform agreements mandated use and expansion to promote transparency in funding.

4. Does it work? • Generally yes…but • Shortcomings • Focused on technical efficiency, not effectiveness (does not consider outcomes) • Risk of classifications not being sensitive enough to how hospitals operate and use resources • Potential for lack of understanding, therefore distrust • Sometimes ‘gamed’ under a misconceived idea that more activity means more $$ • Shortcomings are known and can generally be managed

5. How does it work? • Basic approach: Classify, Count, Cost, Fund • ABF cornerstones are classification systems that group patients by predetermined factors: • into clinically meaningful groups • utilize a similar amount of resources; and • usefully describes the services provided by a health care facility • Definitions based on information that is routinely collected by hospitals • Represent a manageable number of categories

6. Classification System examples we use • Acute Inpatients • DRG combines ICD10 and ACHI codes and other factors into a DRG code • Some service type designated ward/unit classes • Sub Acute • AN-SNAP based on scoring of patient functional level. • Outpatient • Clinic Specialty and type of service. • New list just released for collection next year • Emergency • Urgency Disposition Group (UDG) • combined Triage categories and Disposition outcome, moving to: • Urgency Related Groups (URG) • combined Triage categories, Disposition and Major Diagnostic Blocks • Fortunately the National Reforms have chosen the ones we largely already use, with QLD potentially having the least change of all other jurisdictions NEW

7. Queensland and National Funding • QLD has 10+ year history of casemix shadow funding • 2010 - ED had 80% fixed, 20% variable funding based on UDG • July 2011 - Live with local QLD model, top 31 sites • ED fully variable based on UDG • July 2012 - with National model, possibly more sites • No new money in National model until 2014 • Used to allocate existing SPP agreements • 45% of growth from 2014 • ED fully variable based on URG • ES possibly fully variable based on UDG • Others non-ABF • QLD will align with National but potentially different pricing and other refinements • Admitted ED funding approach still not firm • Either Admitted URG or DRG bundled • Purchasing intentions model is separate

8. LHHNs from 2012…. • New governance arrangements with LHHN • New finance arrangements • $$ received from both National and State • Balance being worked out… • Independent Hospitals Pricing Authority (IHPA) & governance: • Clinical Advisory Committee • Appointees by Minister Roxon • Jurisdictional Advisory Committee • ABF Technical Committee (funding model) • QLD – ABF Project Board • Reports to EMT

9. Overview ABF in Context Classification & Counting Role Delineation, URGs, UDGs Costing in QH Funding

10. Role Delineation Criteria • Current QLD model uses Peer Grouping • Role Delineation criteria developed for the National model • Developed with jurisdictional input • For funding purposes only • Not specifically related to QH CSCF • limited CSCF uptake in other jurisdictions • IHPA funding model still in development • Outside possibility that Hospital Peer Groups will be used instead of ED role delineation…

11. ED Classifications – Role Delineation • Scope for use – funding only • Emergency Departments • Classification/Counting: URGs (ABF Funding) • Levels 3B, 4, 5, 6 • Emergency Services • Classification/Counting: UDGs (ABF Funding) • Level 3A • “Community Service Obligation” facilities (really small) • Classification/Counting: Aggregated service counts • Not ABF - Block funded • Levels 1 & 2

12. Levels 1 & 2 – CSO facility, not ABF • Level 1 (Aggregate service counts required) • Services: Able to provide first aid and treatment prior to referral to a facility able to provide a higher level of service, if necessary. • Staffing: Access to a medical practitioner – this may be by telephone. • Location: N/A • Level 2 (Aggregate service counts required) • Services: As for level 1. Can cope with minor injuries and ailments. Resuscitation and limited stabilisation capacity prior to referral to a facility able to provide a higher level of service. • Staffing: As for level 1 (medical). Nursing staff from ward available to cover emergency presentations. Visiting medical officer (includes general practitioner) on call. • Location: Emergency service in a small hospital.

13. Level 3A – ABF Emergency Service • Level 3A (UDG counts required) • Services: As for level 2. • Staffing: As for level 2. Designated ED nursing staff available 24 hours a day and nursing unit manager. Medical staff available for recall to the hospital within 20 minutes, 24 hours a day. Specialists appropriate to the role delineation of the hospital available for consultation, plus arrangements in place for other specialties. Access to allied health professionals. Specialist psychiatric / mental health assessment personnel available for consultation. • Location: Purpose designed area, with full resuscitation facilities in separate areas such as a cubicle.

14. Level 3B & 4 – ABF Emergency Dept • Level 3B (URG patient details required) • Services: As for level 3A. • Staffing: As for level 2. Designated ED nursing staff available 24 hours a day and nursing unit manager. Medical staff available in the hospital 24 hours a day (though may have other commitments in the hospital). Specialists appropriate to the role delineation of the hospital available for consultation, plus arrangements in place for other specialties. Access to allied health professionals. Specialist psychiatric / mental health assessment personnel available for consultation. • Location: As for level 3A. • Level 4 (URG patient details required) • Services: As for level 3B. Can manage most emergencies. Participation in regional adult retrieval system (rural base hospitals). • Staffing: registered nurses with emergency nursing experience or qualifications on 24 hours a day. ED-specific medical officer(s) on site 24 hours a day. ED Medical Director. • Location: As for level 3B.

15. Level 5 & 6 – ABF Emergency Dept • Level 5 (URG patient details required) • Services: As for level 4. Has undergraduate and postgraduate teaching and a research program. • Staffing: As for level 4. Access to clinical nurse consultant or similar. Has designated ED registrars on site 24 hours a day. Sub-specialists available on rosters. • Location: As for level 4. • Level 6 (URG patient details required) • Services: As for level 5. Can manage all emergencies and provide definitive care. State-wide referral role and / or major trauma centre. • Staffing: As for level 5. • Location: As for level 5.

16. Level 6 & 5 Emergency Departments Level 6 EDs Statewide referral role Level 5 EDs Teaching & research

17. Level 3B & 4 Emergency Departments • Level 4 EDs ED specific officers • Level 3B EDs 24 hour staffing

18. Emergency Services • Level 3A ESs Medical staff on recall Some higher capability CSOs • Level 1 & 2 • The rest • CSOs

19. UDG for Emergency Services • Urgency (Triage) & Disposition • Currently used by QH & some other jurisdictions to fund

20. URG Classification • Urgency (Triage), disposition and Diagnosis • New • Refines UDG with Diagnosis grouped to Major Diagnostic Blocks • Largely follows the DRG MDCs • Recommended by EY consultants to the Commonwealth at the time of decision • Acknowledging the need to include diagnosis • Is a starting point, not necessarily the end point of the ‘ideal’ classification • Will definitely be developed and refined • Original Reference - Jelinek, G. • A casemix information system for Australian Hospital Emergency Departments. Report to the Commissioner of health of a study funded by the Health Department of Western Australia, 1992

21. URG for Emergency Departments - Admitted

22. URG for Emergency Departments – Non-admitted

23. Overview ABF in Context Classification & Counting Role Delineation, URGs, UDGs Costing in QH Funding

24. Costing in QH • Output costing provided by Clinical Costing System – TII • Implemented for top 40+ hospitals • 90% of Acute hospital activity • Patient level episodes fully costed • Managed in each District • TII combines activity and financial information to calculate costs at the patient level • Possible to track the patient journey through the system with costs along the way.

25. Combining the Costs • TII uses feeder systems to combine elements with patient activity information from HBCIS (‘Encounter matching’) • Source data from • General Ledger • Payroll • Patient Administration Systems (HBCIS) • Outpatients (several systems) • Emergency (several systems) • Theatre Management (several systems) • Pathology • Pharmacy • Radiology (several systems) • Imaging • Allied Health (several systems) • Nursing dependency (Trendcare) • Few local systems for prosthetics, cardiac catheter lab, etc • “Bottom up” patient level costing • QLD only state with significant cost information for ED

26. Ledger Expenditure FAMMIS Clinical Costing System Labour Hours and $ PAYROLL Normalised Data Extracts Demographics TALONS HBCIS Create Encounters Utilisation Match utilisation to Encounters Dept Info Systems(e.g. EDIS) FTP Server Feeder Extracts

27. Costing Methodology Overview • QH and new Nat. ABF costing standards utilised • Cost centres are mapped to Clinical Costing System Departments • Departments have products, each of which has a relative value unit (RVU) • Department costs are allocated across Department products, e.g. • Wards and clinical units have bed-day products • Pharmacies have drug and dispensing products • Patients utilise products • The sum of utilised products is the cost of treating the patient

28. Product Detail • Product costing is done via a complex distribution over a range of Cost Types and Categories by means of a relative value unit (RVU) and allocation statistics. • Cost types - Fixed/Variable, Direct/Indirect • Categories - Labour, Supplies, Equipment, Facilities, Other (37 different ones, blood from next year) • Emergency Cost Department has all Cost Categories • Capital & Cap Depreciation excluded • Contact your Clinical Costing staff for reports and more information. • Samples from clinical costing system shown 

29. Labour Costs included Diagnostic Imaging costs matched on time date stamps

30. Pathology Costs Included via encounter matching rules Dispensed Pharmacy ( not shown) also included in cost profile

31. Patient Level Costs • Sum of Patient products utilised e.g. • Medical • Nursing • Pharmacy • Pathology • Imaging • “Hotel” • Supplies • Sterilisation Services • Admin Overheads (district) • Cleaning, Energy • Etc • End to end checks (total going in = total going out) verify results.

32. Overview ABF in Context Classification & Counting Role Delineation, URGs, UDGs Costing in QH Funding

33. QH ABF & Targets • Funding linked to hospital activity targets • Targets expressed in Weighted Activity Units (WAU) • standard measure of resource usage across all classifications (DRG, ED, OP, SNAP, CC, MH). • Uses common denominator so that • WAUs can be summed and a single price applied to produce the value. • 1 WAU = base price = $4,214 • Monitoring/Reporting via DSS Panorama • What’s happening where…

34. ABF Components • ABF for direct patient -activity: • Inpatients • Acute Inpatients (DRG only) • Critical Care • Designated Mental Health (Inpatients only) • Sub and Non-Acute (Designated & General Wards) • Emergency Departments • Outpatients (Including tele-health) • Home Dialysis, HITH • Site Specific Grants • Hospital patient related activity not addressed in the model • (e.g. medical team retrieval) • Indirect/Non-patient • Clinical Education (fixed annual grant) • QLD - based on staffing levels • National - detail as yet unknown, but grant based • Research – grant funded • no change to pre-existing arrangements

35. Exclusions - not in ABF • All costs in model weights except: • Capital & Capital depreciation • Patient travel • Services not in ABF • Promotion, Prevention & Protection • Primary Health Care • Community and Outreach Based Services • Alcohol Drug and Tobacco • Sexual Health • Queensland Health Aged Care and Nursing Homes • Home and Community Care (HACC) • Specialised Mental Health facilities • Statewide Services not directly billed • Will come on line over time

36. ABF & Purchasing • ABF model provides the bottom up framework for funding. • Based on what we’ve done • Purchasing Model (is not the ABF model) • Determines what we’re going to do • Uses ABF as the vehicle • Strategic, top down approach to control overall expenditure and direction of activity • Determines what is to be purchased regarding quality

37. Budget Allocations • Districts agree overall targets with Corporate • Districts devolve targets within District • ABF Targets may be set at a number of levels and aggregated to a District total • Flexibility within Districts to manage targets amongst its sites and services • Does this mean that ED ‘gets’ all of the allocated target? • Not exactly – because all of the cost components that contribute to the activity then have to be redistributed back to those sources • ABF budget developed by the District in conjunction with overall financial budget

38. Summary Message • More focus on Diagnoses • Accurate entry into patient records required • Understand the relationship between input and outputs: • E.g. Diagnostics, drugs, labour, supplies etc • To treated patients as measured by UDGs • What are the impacts on resource usage for the ED? • Not about doing more at higher prices • Need for accuracy and fairness

39. Questions