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Garth Barnett, Senior Costing Consultant, PowerHealth Solutions delivered the presentation at the 2014 Hospital Patient Costing Conference. The Hospital Patient Costing Conference 2014 examines the development and implementation of patient costing methodologies to reflect Activity Based Funding allocations. For more information about the event, please visit: http://www.healthcareconferences.com.au/patientcostingconference
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19-20 March 2014, Sydney 4th Annual Hospital Patient Costing Conference
Pa#ent Cos#ng, ABF & Clinical Engagement
Garth Barne* Senior Cos*ng Consultant
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 2
Agenda
Lessons Learnt SA Health PPM Implementa0on
Integra#ng Pa#ent Cos#ng with Health Unit Management NALHN Experience
Sample Repor#ng
Summary & Conclusions
Q&A
H
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 3
SA Health PPM2 Implementa#on
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 4
Implementa#on Background
w Implementa#on scope § 4 metropolitan LHNs § 6 major country hospitals
w Commonwealth ABF model move away from using State funding model
w Inpa#ent/Outpa#ent/Emergency encounters § Cos0ng OP & ED encounters for the 1st 0me § See the total cost of the pa0ent § Track high users of health system
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 5
1. Centralised One instance of PPM & SAH centralised processing.
2. LHN Setups Separate LHN setups for General Ledger & Cos0ng Dataset, making it easier to engage LHNs.
3. Data Extracts SAH responsible for centralised data extracts. LHNs responsible for site specific data extracts, & reviewing setups & results.
4. Frequent Processing Annual to monthly processing of result leads to more useful & frequently reviewed informa0on, which is likely to increase the quality & comparability.
Configura#on Pre-‐Implementa0on
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 6
Key Principles & Responsibili#es Pre-‐Implementa0on
w Training Provided training to all key par0es so they are familiar with how PPM works/what is required
w Standards Agreed on uniform standards with cos0ng user group to ensure comparability for repor0ng & benchmarking, as well as same look/feel for all involved.
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 7
GL Setup – Cost Centres Pre-‐Implementa0on
SAH standard naming conven0on allows for easier tracking of pa0ent frac0ons & other GL movements:
§ Inpa0ents [Cost Centre]
§ Emergency [Cost Centre]-‐E
§ Outpa0ents [Cost Centre]-‐O § Research [Cost Centre]-‐R
§ Theatre/Surg [Cost Centre]-‐S § Teaching [Cost Centre]-‐T
§ Other [Cost Centre]-‐U
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 8
SAH standard naming conven0on for areas, including overheads & use of NHCDC alloca0on sta0s0c names
GL Setup – Areas Pre-‐Implementa0on
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 9
§ Accounts = Oracle GL L7 chart of account § Cost Output = Internal repor0ng level § Cost Output Rollup = NHCDC repor0ng level
GL Setup – Accounts Pre-‐Implementa0on
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 10
1. Data Extracts — Started discussions months prior. Can’t start earlier enough!
2. Reference Tables — Established standard SAH reference tables
3. Extract Sources — Sourced as many extracts from centralised SAH systems (IP/OP/ED pa0ent, encounter, services, transfers, diagnosis & procedure) for fewer files to load
4. Health Unit Extracts — Sourced & reviewed health unit extracts in advance
5. Transla#on — Formalised transla0on of all data extracts & elements into PPM format by documen0ng in templates
6. DRG — Use DRG field for ED URGs & OP Tier 2 to ensure easy standard & ad hoc repor0ng
Data Load Pre-‐Implementa0on
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 11
Quality Checks During Implementa0on
w Data Load Source file amounts vs GL amounts
w Service to Encounter linking results by encounter type where have source details.
w Unlinked Services
w GL cost centre & account amount summaries vs previous year.
w GL overhead alloca0ons (eg compare wards & clinics).
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 12
Quality Checks Post Implementa0on before distribu*ng informa*on to internal users
High Level Cos#ng Reasonableness Checks § Compare % encounter type expenditure per hospital vs last year ― IP, OP, ED, teaching & research
§ Review low/high cost pa0ents by DRG/Tier 2/URG ― IP cost/day, ED cost/hour, OP cost/encounter ― to iden0fy any major issues eg PFRACs changes with OP costed for the 1st 0me.
§ Compare DRG/Tier 2/URG average costs by hospital ― to iden0fy significant outliers.
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 13
Quality Checks Post Implementa0on before distribu*ng informa*on to internal users
General Ledger & Feeder Checks § Iden0fy nega0ve GL area/cost outputs combina0ons ― to cleanse GL of incorrectly allocated recharges/credits ― to avoid nega0ve costs.
§ Check key GL cost outputs v source system loads ― eg S100/PBS & non-‐PBS/S100 drugs, pathology, imaging
§ Check Service actual charges > maximum norm ― eg pathology tests > $3000.
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 14
Service Date/Time & Dura#on Checks § Match ED admihed encounter end date/0me to IP encounter start date/0me ― as oien an overlap
§ Audit ED non-‐admihed encounters > 1 day where they have no linked services ― expect they would be wai0ng for pathology test results, etc
§ Compare Theatre & Recovery > 6 hours to ward transfer records ― as may iden0fy incorrectly recorded end date/0mes.
§ Audit other service file dura0ons > norm ― eg Allied Health
Quality Checks Post Implementa0on before distribu*ng informa*on to internal users
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 15
Other Considera#ons § Ensure all inpa0ent encounters have a ward/clinic transfer record
§ Audit high cost “dummy” encounters by pa0ent number, which don’t link to legi0mate encounter ― eg discovered numerous $100K+ pa0ents who where pharmacy was providing high cost drugs to another hospital’s pa0ents)
§ Iden0fy weaknesses in the process & look ― to improve feeder data, alloca0on sta0s0cs, etc for future studies (eg lack of prosthesis feeder).
Quality Checks Post Implementa0on before distribu*ng informa*on to internal users
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 16
Integra#ng Pa#ent Cos#ng with Health Unit Management
NALHN Experience
H
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 17
Casemix Future Direc#ons
Process of integra#ng pa#ent cos#ng with NALHN opera#onal management
§ Stage 1 -‐ Execu0ve § Stage 2 -‐ Finance Workshops
§ Stage 3 -‐ Divisional Workshops
§ Integra0ng cos0ng results with regular & ad hoc Casemix ac0vity reports
§ Benchmarking ac0vity to iden0fy savings strategies & opportuni0es to improve performance
§ Use of cos0ng informa0on in business case development & service planning.
H
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 18
Casemix Future Direc#ons
Dual role of this process § Audit & improve the quality of Pa0ent Cos0ng
§ Beher educate the business to u0lise Pa0ent Cos0ng results
H
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 19
Stage 1 – Execu#ve
w Pa0ent Cos0ng needs someone in Execu0ve to champion the cause in any organisa0on.
w Buy-‐in from Execu0ve is crucial. NALHN CEO, COO & CFO all understand the value of pa0ent cos0ng to aid decision making.
w Ini0al 1 hour session with Execu0ve (including clinical directors) & follow-‐up session.
w Provide basics of pa0ent cos0ng & ABF. w Live demonstra0on of PPM with own data. w Summary benchmarking reports by ac0vity of
costs vs funding at Tier 2 & URG level. w Aim to give an apprecia0on of the easy
availability of performance informa0on.
H
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 20
Stage 2 – Finance Workshops
w Half day workshops with central and divisional finance staff.
w Provide background on the Commonwealth ABF reform, including how the ABF model works and the classifica0on system.
w Detailed the PPM cos0ng process and standard SAH setups, including alloca0on methodology & assump0ons.
w Explained how their role influenced the cos0ng process – par0cularly 2 key areas: § Pa0ent Frac0ons (PFRACs) § Mapping of ac0vi0es to the right cost centres and areas (par0cularly outpa0ent clinics).
H
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 21
Easier to review & iden*fy low/high outliers when summarising clinic ac*vi*es & costs
Stage 2 – Finance Medical PFRACs H
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 22
Stage 2 – Finance Engagement
w Engaged them as part of audit process to fine tune 2012/13 cos0ng.
w Provided an awareness of the accuracy of pa0ent level costs is dependant on the availability of feeder informa0on.
w Aim to give them an apprecia0on of the informa0on to assist in preparing business cases: § Understanding of direct costs (to Divisions) and overhead costs (to Health Unit).
§ Important for hospital planning where expanding specialised clinical services for pa0ents within their catchment area.
H
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 23
Stage 3 – Divisions Workshops
w Separate 1 hour workshops with each Division’s senior clinical management
w Also included key Execu0ve and Finance staff w 30 minutes pa0ent cos0ng theory
―describing the methodology & assump0ons behind the numbers & where they can influence the process ―ie PFRACs, ac0vity mappings to GL
w Iden0fied where each division could assist in improving pa0ent cos0ng with feeders ― eg MET (code blue) pa0ents, specialist nurses, security services (especially for mental health pa0ents), mul0-‐disciplinary teams.
H
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 24
Stage 3 – Divisions Engagement
w Provided a sample of benchmarked performance of their division v other SAH to iden0fy poten0al high & low performing areas: § Theatre 0me per DRG & principal procedure to understand throughput/prac0ce
§ Pathology/imaging cost per DRG/URG/Tier 2 § ALOS per DRG/URG
w Inten0on to use benchmarked informa0on to target efficiency improvement strategies & assist in future budget builds.
w Divisions asked to iden0fy informa0on for future review at performance mee0ngs.
H
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 25
Sample Reports
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 26
Average LOS vs SA Benchmark
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 27
Cost vs ABF Funding
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 28
Cost vs SA Benchmark
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 29
Pathology Cost vs SA Benchmark
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 30
Radiology Cost vs SA Benchmark
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 31
Theatre Time vs SA Benchmark DRG
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 32
Theatre Time vs SA Benchmark Procedure
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 33
Next Steps For high/low cost outliers, drill-‐down to cost outputs & service level informa*on to benchmark clinical prac*ces
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 34
Summary & Conclusion
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 35
Pa#ent Cos#ng Summary
w Key accountability tool ― to monitor health service costs ― not just for external cos0ng submissions
w Clinicians More useful if cos0ng informa0on is used by clinicians to improve performance
w Timely Informa0on needs to be 0mely
w Consistent Consistent methodologies promotes comparability
w Future funding ABF reforms will put more emphasis on pa0ent cos0ng as basis for future funding.
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 36
Conclusion
For pa0ent cos0ng to be useful & comparable across
Australia under an ABF framework, it is crucial that everyone
is engaged through the process.
Q&A Garth Barne*
Senior Cos*ng Consultant
19-20 March 2014, Sydney 4th Annual Hospital Patient Costing Conference
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