Professor Kathy Eagar, Australian Health Services Research Institute at the University of Wollongong, presenting on the Resource Utilisation and Classification Study and the Australian National Aged Care Classification at the Department of Health’s Stakeholder Forum on 19 November 2018.

Transcript

0:01

I will just start by acknowledging the traditional owners of this land and apologizing to those who have heard me talk about this before. We did do a major report for government in 2017 on alternate funding models and we were then engaged with the department in a series of national consultations last year. The outcome of that was a decision by government to fund this study called the Resource Utilisation Classification Study or the RUCS study. It's a major investment. The first time that anyone's been in funded to do basic research in the sector on what drives costs and what's the relationship between structural and individualised costs. I will return to that later.

0:49

This is a work in progress, Nigel Murray has made the point the policy decisions will need to be made after that when we finish our work. I just want to go back and remind you of the structure of the current system. There are three domains, Activities of Daily Living (ADL), Behaviour and Complex Health Care and people are assessed internally in homes in categories of either nil, low, medium, or high and each of them those then incurs a daily payment. If you manage to get yourself into high-high-high, the payment is 214 dollars a day

1:28

That is a big structural problem in the design. And that's one of the structural problems that we're trying to solve. The major issues being one it's additive and those three domains do not stand alone. People who've got complex healthcare, interacting with behaviour, interacting with activities of daily living problem are a different consumer with very different needs than if you've only got problems in one of those domains. Wound care which is in complex healthcare needs obviously to interact with mobility which sits in ADL's and behaviour cooperation with addressing and yet the Aged Care Finding Instrument (ACFI) design treats each of those the standalone domains. It doesn't focus on what discriminates care cost homes been weeks and weeks doing an ACFI and as our results will show, a lot of the things that are in the assessment actually, we've shown, don't drive cost and are very inefficient.

2:30

It doesn't discriminate enough between residents. A third of residents are now high, high, high and yet within that group, they’re very diverse. We actually know their time in minutes now to show how diverse they are. They're not on a modern group. There are inequitable outcomes and the more access you have to specialist’s, doctors and allied health, the better the quality of the assessments you can get which is enough to get you into a higher paying class. That's not related to need it's related to access - socio-economic and geographic.

3:01

It does create perverse incentives and some of those are around behaviour and some of them are around pain. Behaviour is not well managed as you go into a higher paying class and if behaviour is well-managed, and the same with pain, we need to neutralize incentives for perverse care and ensure that we create incentives for good practice.

3:26

We did conclude out of that work that the ACFI is no longer fit for purpose and I've got two slides to demonstrate that. This slide (slide 6) that I'm showing now is the ACFI profile by parts of Australia and you'll see that in major Metropolitan areas the red, which is people classified as high-high-high, is a thirty five percent. If you look at the very remote only about 11 percent of people are high-high-high. Nobody will reasonably believe that all the people with the most complex care needs live in major metropolitan cities. That is really an artefact of the design. The second artefact of the design is that there is a thriving consultancy in the industry in ACFI and that's because the tool lacks robustness. If it was a really robust tool, you wouldn't actually have a whole industry out there and it's a sign of some problems that the industry has grown in the way. It's grown homes that know that they do better off when they bring in specialist consultants because it's so complicated, etc, etc

4:37

So that's where we got to, making a point that what the work we're doing represents a very clear policy alternative not just for government but also for the sector. I think it's a really important part of the conversation that the sector is involved with government and consumers and conversations about what's going to work better. I do want to point out three separate but interrelated issues and inevitably in conversations people get them really confused: cost, price and funding model. They're three separate but interrelated issues the cost is in scope for us, we are looking at the cost of care, care being the important bit capital and basic accommodation services are out of scope. The funding model is in scope for us, in terms of developing a funding model and providing advice to the department about what that might look like. So that is about the classification and the assessment system, how to neutralize perverse incentives how to create incentives and good practice and what to do about adjustment costs that are higher when somebody first enters care. There are elements of a funding policy and the last element is the price. For the for a funder for this to be a sustainable system going forward and the price has to be right but so does the funding model.

5:59

Ultimately government and consumers will determine price. I'd like to think that we could at the university but as a research professor it's well beyond my paygrade to determine what the price is going to be. It is ultimately a decision for those who pay for it. But we see that what we're doing in this study is providing very clear evidence to guide decision making and making pricing explicit because I think it's about explicit policy that people can then react to. We won't determine the price but we will make it explicit the relationship between price and cost ultimately. We proposed in our original report, and we have not moved back from that, we still think there are six core elements and I will return to this as my last few slides when we open it up for a conversation.

6:51

The first is to separate assessment for funding from assessment for care planning. The intention with the ACFI is you would do one assessment which would be used for both purposes and what's happened over time is that funding needs are overriding care planning needs and a lot of care planning is inadequate in my view. We need to separate the two because of the perverse incentives in the system when you do the two together. The second is a really important message - we are not saying move assessment to external providers, we are saying move assessment by funding to external providers and increase assessment within homes so that it focuses on what drives care needs, what consumer preferences are etc and that it's used better for care planning.

7:44

So this is not like taking the resources that are currently invested in assessment in homes and put them into an external assessment agency, there needs to be better care planning that's linked to principles of consumer directed care. What are the person's strengths and preferences as well as their needs and how do you want that together into a care plan? That's based on good practice. The third element is assessment for funding services to be undertaken by external assessors only capturing those items that drive costs, not a comprehensive assessment. Not for care planning, not CDC (consumer directed care), based simply what is it? What are the major cost drivers? And how do we ensure equitable funding?

8:33

Across the country irrespective of the size of the nature of the home that you're in or where in the country you are we do believe and we've got some evidence now that there are additional care costs when somebody comes into a home. The one-off adjustment costs as you get to know the resident get to know their family, undertake those assessments, organised dental care for people or organised dietetics if that's what people need physio, etc, etc. So we're proposing a one-off additional cost when somebody comes through the door to allow that to be done. There is one exception, people admitted into residential care very late in life effectively for palliative care would not, we were not, are not proposing to include them in the one-off adjustment payment. They'd get a higher per diem per day rate, but not the one-off adjustment payment because of the short length of their timing in care.

9:33

The last two elements are important we believe and I'm going to show you the results today. That there are fixed care cost to have the door open, these are separate from hotel costs the night staff here in every home every night, independent of the needs of an individual resident on any particular night. They're there to look after individual the residents equally the staff who stand in the dining room supervising a meal and for 40 people, everybody gets one fortieth of that person, irrespective of the individual needs of the person. One of the things we've done in this study is to look at which of the costs of care are shared equally among all the resident that should be paid as a shared per diem cost and which of those are individualized and I'll show you the results of that.

10:21

The variable cost per day then should be the individualized component only based on the care needs of each individual person and the price per class. We've got 13 payment classes in the

new model that we are proposing would be standardized across Australia, the variable and the fixed costs do vary by region. In particular, I will show you the data on regional and remote. The remote services and the low occupancy small units have got very substantially higher fixed costs so the fixed cost per day might vary by region should vary by region, but the individualized cost wouldn't vary by region.

11:03

So the study we've been doing we did the design work last year we went live in March and I'm very optimistically still saying the results will be done completed by the 21st of December. We have had a Sector Reference Group - many of the people in the Sector Reference Group are in this room today and have been advising us. In addition, during the design phase we had for expert clinical panels advising us on clinical aspects of the study, particularly looking at what drives costs. So that was one group looking at functional activities of daily living, cognition and behaviour, a group looking at wounds, a group looking at end of life and how to deal with that and a group looking at technical nursing requirements.

11:50

The outline of what we've been doing we started off doing three studies it became four. Over the 18 months each of them aligned to a particular set of objectives with each of them culminating by the end of the year and I'll show you today where we're up to it at each of those.

12:08

So study one the service utilisation and classification study we went into three geographic clusters representative of Australia as a whole. They were chosen because they are representative of the country which was Far North Queensland, Hunter in New South Wales, and Melbourne City. We assessed each resident using the variables that the clinical panels agreed to and we collected time in minutes. Staff wore lanyards and on their lanyards was a barcoder and they literally bar coded time in minutes per resident per day for 30 days.

12:46

We then use the hypothetical classification tree that our clinical panels had developed with us to test the degree to which that was predicting of costs and we could, for every resident. We also had their ACFI and we could actually look at how well they're actually predicts the costs of the care that the person received. We developed a final classification tree, and we've now done that study (Study Two) to look at the structural and individualized costs of care it's in 110 different homes. 106 of them we have usable data from and we're proceeding with that 110. It's a geographic sample of a representative sample of 80 homes plus 30 of the most remote homes in the country, deliberately over sampled to look at things in regional, Australia. We looked at regional facility size, specialisation and seasonal effects. I won't present the seasonal effects today but I will show you the cost relativity's today for the other factors.

13:50

Case-mix profiling (Study Three) this study is still in progress. We are going into another 80 homes in a geographic sample across the country in this study and we have registered nurses occupational therapists and physiotherapists doing the assessments in study, round one we only had registered nurses in a stratified sample of 80 homes to model. What the impact looks like of this new approach? It's in progress, but it's delayed and that will probably be the last one to report.

14:31

Study four is new, it wasn't part of our initial design but the question arose about the frequency of reassessment. And one of the ways that we're doing work on that is that we assessed 2,000 people over March/April and we have just gone back and reassessed 50 percent of that cohort to look at how what's happened to that cohort the six months since our last assessment. So we have two time points and we have 912 of those original residents, about half. We have the data entry completed, as of the last week. A number of those residents have died from the original 1,000. And so a number of them have died, gone to hospital, etc and are not available for reassessment.

15:10

Interestingly enough though, in terms of consent, all of the consumers in Study One re-consented to be reassessed in Study Four. I think that from a consumer perspective that's a really good sign, that they both consented the first time and then consented again for the reassessment. That was to test how things have changed and we are capturing for each resident who's been to hospital who's had a fall who's been to a wellness and reablement program. Then we can look at rate of change on each of the instruments since we last assessed them to inform reassessment protocols and also because we want to substitute the NPI (Neuropsychiatric Inventory Questions) which is a behaviour tool with a new tool (the Behaviour Resource Utilisation Assessment (BRUA)) and we've managed to test that with that cohort. I will come back to that cohort and the replacement for the NPI a bit further on.

16:04

We will be producing seven reports and the slide (slide 19) shows you what they are. Report One we've completed, which is actually the classification itself. We do understand that this is a very big complex study and different readers will want to read different things so that's why they we're writing them as seven big reports rather than a tome. The second report, the assessment model will deal with both assessment and reassessment. Sorry I should just go back to report one, the classification we have termed the ‘Australian National Aged Care Classification’ recognising that this is in residential but that the concepts can allow for potential expansion later on, although clearly government might want to give it another name.

16:57

Report Two is about both assessment and reassessment, Report Three is about the structure structural and individualized costs of care, so that's a costing report. Reports Four and Five will be about funding. So modelling the impacts of the study that we've got going on will be reported in Report Four and Report Five would be about funding. Report Six will bring all of the reports together with a set of recommendations about further work and Report Seven will be the technical appendices. So they're coming out and at the moment as we speak.

17:36

I'll just start with a couple of them. Study One which is in Report One. We have both finished that study and we've written the report so here are the headlines.

What drives costs? The most important thing I'll tell you is that it's not a medical diagnosis or even a combination of diagnosis. So concepts like DRGs (Diagnosis Related Groups) out of hospitals aren't relevant for this cohort. Costs are being driven by care burden arising from end of life needs, frailty, functional decline, cognition, behaviour and technical nursing. That group that I've just listed we tested a lot of other things as well but it's those items and then daylight, nothing else is really really important in driving costs. They can of course be driven by one or more underlying diagnosis, a person may well have dementia or depression but it's actually the impact of that dementia or depression on their ability to perform activities of daily living on their cognition on their behaviour that's driving the cost of care rather than the underlying diagnosis per se. That really starts to challenge I think some assumptions. If you look at something like dementia it can be anything from very mild to profound and really the better measure of what's the need is not in the dementia it's in what is the person's capacity living with their dementia.

19:11

So the tools that are clinical panels selected really reflect that care burden due to function, care burden due to cognition and communication issues, care burdens due to behaviour harm, anxiety and distress and then technical nursing and on this slide (slide 22) is a set of tools and I will walk you through them because these are the tools that have been incorporated into the final version of the classification. I do want to make a point about capacity, when you're doing an assessment of someone you have two choices, OTs (occupational therapists), physios (physiotherapists) or nurses or know you can assess what a person is physically capable of doing and what they do do. Or you can assess what they are capable of doing, taking into account not just the person's physical function but all also their cognition, their motivation, their ability to sequence a task. Somebody who starts to get dressed and then forgets what they're doing and starts to undress halfway through the task can't dress and it's not about their physical ability. It's about their cognitive ability.

20:20

So we asked our assessors to assess capability taking into account physical ability including pain, cognitive ability mental, health issues and behaviour and we're thus capturing the functional consequences of health conditions rather than the condition itself. Of course functional consequences is what drives care staff time and that's the major cost driver. Any comments or questions on that one? Because I think we've always, it does represent a change for the sector.

21:02

Ok, the assessment and resource allocation collection process, so this is Study One. We did invite and ask consumers to opt out rather than in, we did 2,100 assessments and we had less than 40 people opt out. Some people were not available for assessment because they having opted in then did actually die go to hospital or whatever. We had quite a lot of positive feedback from consumers. The only concern they had about the assessment was that I would

have liked it to be longer because I really liked talking to those nice nurses who came in to assess them. But we didn't have any indication that this created an unreasonable burden on people and for us that was really important and further evidence of that is that all the people who consented to be in Study One have actually re-consented it to be in Study Four

21:56

We did use bar coders and standard activity categories we did this for 30 long days. Our staff were in each home and that's why we did a geographic cluster study rather than a randomized all around the country study. We couldn't have supported 30 homes scattered all around Australia. We had custom coordinators one in each of the three regions and we had full-time coordinators. It was a very big resource intensive effort for staff who had to work very hard, the homes had to do an awful lot of extra work and they needed support. We did meet with people, we gave them feedback every few days about the collection and they got a lot of live time feedback about how it was going. We're quite confident about the data collection processes notwithstanding that we had some of the usual fatigue by the end of the fourth week and all that sort of stuff.

22:46

We did cost each day of care on a full bottom up costing so we can actually draw a cost curve and say this is what it looks like for this person Monday, Tuesday, Wednesday, Thursday, oh, they went on gate leave ect. We can do that for the 2100 people that we had in that study. What we found 52 percent of all time reported was individual time and 48 percent as shared among all the residents. So in if you translate that into a cost and if you translate that into a funding model, half of the cost of having the door open are fixed based on the total number of residents. You've got rather than the unique characteristics of any individual resident and that is really evidence supporting a fixed and variable payment rate.

23:36

So some of these figures I'm now showing are new for people who've previously been at the stakeholder group (Sector Reference Group) and those who have been to the National Aged Care Alliance or other places where I've spoken and so if you do want to ask a question, please do. In terms of I will return to that though because I'll show you the cost relativity's when I talk about the other studies.

23:57

In Study One we used assessors who were all registered nurses with five years relevant experience in the aged care sector and we gave them a half a day training. They didn't know the residents and they mostly didn't know the homes, although obviously if you're in North Queensland, there's a reasonable likelihood you got some familiarity with the sector. We did regular teleconferencing with the assessors to get feedback and to ensure consistency and so we were really reinforcing this idea that they are measuring resident capacity. For example I'll show you what they said about it - this graph (slide 30) shows you the time from the very first day of how long it took them to do assessments. By far, the majority of assessments were completed in less than one hour by an a brand new assess so who'd never done it before and even by week four that time to complete had declined. Those two-hour ones which were really in the first few days and had stopped happening.

24:59

So we were happy with that in terms of moving to external assessment it proves, I think, we're very happy that this is a viable model. We asked for each assessment and I'll just explain the numbers on the graph, we did 2,000 assessments but we started this work when we'd only had 1,000 and as you might expect there's an awful lot of work going on in the background. We asked for every assessment and we're continuing to do that. How difficult it was to make, you will see that overwhelmingly assessors found it quite easy to make ratings and again that got better as they develop more experience with these tools. We also asked them how confident did they feel and that confidence was particularly about “can-do”, assessing capacity and assessors were very confident that they were capturing what a person was capable of doing.

25:59

That capacity again is not just their physical ability but their cognitive ability, their behaviour, motivation etc. So somebody who is deeply depressed that can't do things if they are too unwell to do it. Generally our conclusions were that the assessors had no difficulty distinguishing between what a person does do and what they're capable of doing. There were two sections that they found problematic. One is the Functional Independence Measure (FIM) and as a result of that we've modified that tool and I'll show you what we've done with it. Particularly, we've removed the stairs item and we've been much more explicit about capacity assessment rather than assessing what a person does do. For example, in a rehab unit and the neuropsychiatric index for mental health, this was the only section that assessors were asked to rate what a person currently does do rather than what they're capable of doing. We're all capable of misbehaving. I can prove that from my house, from my home, so we're asking in behaviour that they rate what a person does do. And the issue for them as independent assessors, meaning a person they'd never seen before, is that they found that they couldn't do that without accessing a lot of information from the homes themselves.

27:25

How do you assess that at first contact unless you're actually asking care staff or accessing records? What they found in terms of looking at independent sources of verification, not surprisingly, people who were new into the homes had really good independent sources. They had their ACAT assessments; they had GP referral letters and all sorts of things like that. People had been there for a long time, none of that stuff was current. What do we now know about external assessment is that we got, we found, that there's a very strong appetite for change. The concept of people spending weeks and weeks in homes doing ACFI assessments, there's a real sense of ‘we're just over this’. The second is that it does work and we are really happy with the idea that we can think about one person spending less than an hour and feeling confident that they can allocate the person into the right payment class.

28:24

That's really important because at the moment the system makes a significant system-level investment not just in ACFI but in the verification process down the stream. We do know that assessments need somebody, a credentialed clinician with core competencies in functional assessment, and those core groups are registered nurses, we also think OT's (occupational

therapists), physios (physiotherapists). We didn't test it with OT’s and physios in Study One but we are now doing so in Study Four

28:59

Can do assessment, we've said they can support consumer choice and what we mean by that is that can-do takes into account what a consumer wants to do as well as what they actually do do. Somebody who is too depressed or too anxious to walk down the corridor unsupervised can't do it. We do know that it's acceptable to residents, we do know that assessors need training and they need to operate as a standardized network in order to get consistency and we do know importantly, that an expert specialist clinician can apply expert clinical knowledge and be really confident that they can distinguish between can do and do do.

29:46

That makes the model viable and that was a really important question to find out because we didn't actually know the answer to that. What don't we know yet? We believe, and we're getting good feedback at the moment for Study Four, that OT's (occupational therapists) and physios (physiotherapists) are the other groups who've got those core competencies in terms of functional assessment. We went into homes in Study One and so we were largely assessing people who were already in the home which is the nature of the study. So the question about how this works in other environments is still being tested. Although clearly we would see that the logical thing, a new person in the real world comes into a home and would be assessed within the first couple of weeks in the home rather than when they were still at home or in hospital. But some of those protocols about how the system works in the real world, we still need to work through a bit more.

30:40

The next question is around cognition and behaviour and whether that can be independently assessed based on ‘can do’ or ‘do do’ at first contact, you are dependent on sources of information for that. Where behaviour is based on what a person does do or what they're at risk of doing rather than what they're capable of doing. We do have a view and we've got a lot of anecdotal evidence that there is a growing cohort who is admitted to residential aged-care for end-of-life care. They're coming from palliative care units who are now saying we only take people with a life expectancy of less than two weeks and this person might live for weeks or months. Because of the nature of our study we didn't get enough of them to really draw conclusions about but we are absolutely convinced based on a lot of information from a lot of other sources that that is a group and we do need to make provision for them and we have.

31:41

Our assessors by week four felt that they would be able to do this sort of assessment by videoconferencing into remote areas if they had an experienced staff member at the other end helping with the setup, reassurance, informed consent from consumer engaging with families etc. That's been a really big issue for remote Australia. We're trying to test that a little bit in in Study Three but we're really dipping our toe in the water rather than a thorough assessment but that would obviously make a difference. The issue is about the recruitment and structure

of the assessment workforce going forward and really needs to get caught up I think, in bigger issues and whether the government chooses to take that about assessment reform in general or treats this as a residential assessment issue only versus a bigger assessment issue.

32:34

Then reassessment, and one of the things as I've said we're doing in that in this study is reassessing people six months apart to look at the rate at which people change. I am going to spend a bit of time on the resident profiles because it's also a way of introducing you to the tools that form part of the assessment. The first comment to make is that the technical nursing requirements were really quite small as recorded by the assessors but we also have technical nursing tasks completed by staff in the staff time utilisation. I don't have that here, but you'll see that the percentages of people requiring technical nursing is quite small and smaller than we might have expected. One of the measures we've included is the American case-mix classification for skilled nursing facilities and nursing homes, the Resource Utilisation Group (RUG-ADL) classification. It has an activity of daily living scale and then we put them together and that's why it's the RUG-ADL. It's the late loss - the last four ADLs (Activities of Daily Living), people who can't do these tasks are really highly dependent. So it's been mobility, toileting, transferring from a bed to a chair for example and eating. The scale goes from 4 to 18, across the population a little bit less than 25% can do those four tasks. These are the late loss tasks 75% of people are needing help with these late loss tasks.

34:20

As I move through these I'm not going to stop and keep saying does anybody have a question but if you do please ask as we go. In terms of definitions of frailty, what are the best predictors that somebody is frail? One is that they've had a fall and the second is that they've had a lot of unexplained weight loss. But the middle group on this slide or a cohort that were identified through the consultations of a new cohort coming into care now who are morbidly obese with bariatric care requirements in a way we haven't had in previous generations. In terms of falls, 50% have had a fall in the last year. 2.5% required three physical people to help them transfer, that 25% of people who are about 50 in the total study were actually much more expensive, not surprisingly, and 7.5% of a loss more than ten percent of body weight in the last 12 months.

35:30

The Australian Modified Karnofsky Performance Scale (AKPS) is used in specialist palliative care to identify trajectories to death, a hundred is normal and zero is dead. This is a nationally standardized tool used by every specialist palliative care service in Australia and many others internationally which means that we can compare for the first time the needs of the nursing home residential aged-care profile with people actually in receipt of palliative care. This is what it looks like, so if I just get pointed back to a 50, so 50 is a person who requires considerable assistance and frequent medical care, that is often the trigger for specialist medical intervention in palliative care in the specialist sector. That's what the profile looks like in the population of all people in residential aged care not just the people who were identified as palliative or end-of-life. Nearly 45% rated at that 50 score. In this next slide we've actually combined the profile on the Karnofsky Performance Scale with the red bars being those in hospital and the light blue bars are those receiving community palliative

care. In terms of the hospital cohort and the community palliative care cohort there's about 40,000 patients. So we're very confident about what the specialist palliative care sector looks like. In those bars you will see that the red bar, that’s the hospital patients, are much much closer to death, many in the terminal phase. When I put the cumulative profile together and I'll do it on this slide here you'll see that the people receiving residential aged care have a palliative performance equivalent to those receiving community palliative care at home. This is a very frail population and not surprisingly.

37:47

The next slide is another of the tools. It's the Rockwood Frailty Score and one of the questions we had is, ‘is frailty and palliative performance the same thing’? It goes from very fit to terminally ill and it's used in a lot of geriatric medicine services. There's a lot of normative data for what the population looks like. Severely frail is a score, it's starting to be where the high needs are and that's what the population looks like, a third of people rating as severely frail. For those interested in care planning and implications of this sort of work, it's important to understand that this helps to start to identify a population who might benefit from reablement programs versus those who won't.

38:52

We were interested in whether you need to collect the Rockwood and the Karnofsky or whether we could ditch them, one or the other, because they were measuring the same thing. And so we did actually look at the relationship between the two. This is a graph that's got the Rockwood on one axis and the colours or the percentage in each, the Karnofsky Scale and what it shows is that they're related, but that's not actually the same thing. There are people who are very frail but are not being assessed as close to death and there are others who are being assessed as close to death who were not that frail. But for a lot of people the two of them go together very well but the correlations not good enough to say that they're measuring the same thing. They're actually measuring something different and we've kept both in the tool.

39:40

This is the DEMMI, the De-Morton Mobility Index, it measures physical. Bed mobility is the first domain, that is the ability to reposition in bed. If you can't reposition in bed, then you're at high risk of pressure area problem wounds, etc. Bed mobility, chair mobility (the ability to manoeuvre in and out of a chair), balance and walking. There's another domain which we didn't even include, it goes. It's a hierarchical tool if you can't do the first section you won't be able to do the rest. Maybe 25% of people couldn't do the first section, that is they can't reposition in bed. 16 is the people who can do all the items in that up to walking 50 meters unaided Etc and it's talking single digits in the percentages. This tool turned out to be the best predictor of costs and is the one that the whole classification is built on. It splits residents into those who can't mobilize at all versus those who are independent with mobility versus those who need assistance in the middle.

41:08

This is the Australian Modified Functionally Independent Measure (A-FIM). It's the American standard, it's a really good tool but it's quite detailed and we have removed the

stairs item because it's not relevant for this cohort and we have changed all the training instructions that it's based on capacity rather than what a person does do. It has two components, it has twelve items which are called the motor items but they're the physical items. It's got five item that is assessing care burden, it's called cognition, but it's not quite the right term because it's also got expression, communication, its cognition and communication. So the items in that scale are comprehension, expression, social interaction, problem-solving and memory. Two subscales, one is the communication sub scale and one is the cognition sub scale. This is what it looks like of a thousand people. 9% don't score anything on the physical items at all. That is they can't reposition at all and they can't even tell you about it, so it is really sensitive. It's much more sensitive than anything else because you've got this big scale that goes from 12 to 84 and a very very small number of people are independent. That's what it looks like on the cognitivity, a 12 sorry a 5, is a person who scores 1 on every item - that is they can't do any of those items. They can't communicate, they can't express their needs, there's no social interaction etc.

43:00

This is Braden pressure area risk. The decision that we made with our panel in relation to pressure care is that the tool should incorporate the risk of pressure area rather than the presence or absence of a pressure area. If a person is at high risk of a pressure area, that should take them into a higher paying class and whether or not they get the pressure area should not be in the funding model. The incentive is that if you get somebody who's at risk of pressure area is to keep them pressure sore free because you'll get paid at the higher rate without and obviously there's a whole lot of quality issues for the person as well. That's a very different set of financial incentives that are in the system at the moment. This is what it looks like to the items that are predicting the risk of somebody developing a pressure area. Sensory perception is the ability to feel and communicate and 35% don't have any impairment on that. Moisture - incontinence is the biggest single predictor. Probably 50% have problems with continence. The ability to get up and move around and repositions really important for pressure care, 35% can walk, this is about actual mobility with and without aids, less than 20%. That's consistent with our FIM (Functional Independence Measure) result and consistent with our DEMMI (De-Morton Mobility Index) result so we're able to do quite a lot of cross-checking of individuals and these tools. There's a level of internal consistency that we're very happy about. Nutrition - less than 20% of people being rated as excellent on nutrition, but nearly 60% being rated as adequate. Patients and residents with malnutrition are at high risk of skin breakdown. Friction and shear is how thin your skin is, how easy it is to tear. Less than 40% have got no problem, 60% have got some problem where their skin is at risk of tearing, again a sign of frailty.

45:38

The last bit of wanted to show you out of the tool this is the neuropsychiatric index (Neuropsychiatric Inventory Questionnaire) it's a tool to assess mental health and behaviour problems. It's a great tool, there are 12 screening questions and each screening question if you say yes, the person has a problem in say hallucinations or whatever, you then have to complete three other items about frequency, severity and occupational disruptiveness (how much work does this create for somebody?). We have replaced this tool in the final version of the assessment with a behaviour tool but we are recommending that this tool should become

part of routine years in homes because it's a really good needs assessment for a resident. This is what it looks like - 30% of people did not have a behaviour problem, 70% did. 40% had only one two three problems but the very sizable percentage of people had four or more problems. On that tool, if you want to have a look at that tool in some detail, you can download it quite easily. It's very accessible tool. We didn't include it in the final version, we concluded that it is a great tool to measure need and to do care planning but we don't need it in the classification. It's very difficult for an independent assessor to rate at first contact with the person they've never met. How do you assess frequency severity and occupational disruptiveness with a new person you've never met before?

47:23

We have replaced it with a five item tool, BRUA, the Behaviour Resource Utilisation Assessment, and in Study Three and in Study Four we have had actually captured both (BRUA and NPI) so that we were able to correlate the two together. So we now have a couple of thousands of residents assessed with both instruments. That's the end of my presentation on the actual profile of residents.

47:50

Does anybody have a question or a comment before I continue on? Question: Will data be available for the Behaviour Resource Utilisation Assessment (BRUA) tool? Yes, we will be. Question: Is the BRUA tool still in trial? We've tested it already and we're still collecting at the moment with the NPI but we finished all the correlations and we've looked at all the psychometric testing has been done and it works well. What it's doing is that it's not measuring behaviour; it's measuring the implications for care providers. It’s how often does a person have a problem sufficient that care providers need to do something about it and that's a really important because what we're looking at is what's driving cost. Somebody who's extremely anxious and care providers need to be constantly dealing with that anxiety, that's what's driving cost. So it's care burden rather than the underlying problem.

48:55

Question: Were minutes spent on care by staff broken down? Yes. Question: Does that include time spent talking to families? Yes, so there's about, I didn't do it for brevity today and I didn't include all the categories, but there are there's a series of time categories. So they literally had a swipe card on a lanyard and they swipe the card and that was care planning, social time, personal care in the person's room, time with families, etc. And we had different time categories for RNs, clinicians, physios etc versus personal care and other workers and we are reporting each of those categories.

49:37

Question: Do the assessment tools that focus on functional ability capture of mobility was affected by pain? We didn't capture if a person wasn't mobile we didn't say why, other than in the mobility index and in the BRUA etc. If a person couldn't mobilize then they can't do it irrespective of the reason because pain is one of those things that's notoriously difficult to assess because it's point in time, it's amenable in some cases to medication, physiotherapy and other sorts of interventions. What we're wanting to do is capture at point of entry into a

home and a point of reassessment what a person is capable of doing, irrespective of the of the reasons that the person's unable or unwilling or doesn't want to do some things.

50:29

Question: How are assessors finding the levels/rating scales in the BRUA? The feedback from the assessors who are using it is that they're not finding it a problem. The frequency is that they know of no problem than they were of occasional. Can you just remind us what the categories you've got? The ratings are extensively, intermittently, occasionally and not applicable. Yeah, the Assessors are saying that they're easily able to look at referral notes, ACAT assessments etc and it's quite apparent how the rating is because there's not like it's got ten categories and with all those different domains is not rating severity. It's saying ‘what is the occupational disruptiveness factor from this?’ ‘What does this mean for care workers?’

51:12

Question: Do you have a breakdown of the people on the study e.g. Aboriginal and Torres Strait Islander, Culturally and Linguistically Diverse etc? We've got all of the demographics on that and I'll show you something, I won't actually show you here, but we know a lot about people, we know their age, we know those have culturally and linguistically diverse, we know all the ones who are Aboriginal and Torres Strait Islander. We know about those people in designated Aboriginal Torres Strait Islander homes versus not. The sample also included a couple of specialist homeless facilities, a couple of specialists dementia facilities, a couple focusing and targeting people who have who were financially disadvantaged and some dementia specific. so they were a genuine representative sample.

52:00

Question: Was the time of day taken into consideration when assessments were undertaken? No. I know the assessor's went in and they went in at one point in time, they were not assessing what the person did that day. They were assessing capability and the capability they were, the instructions for the assessors take into account all sources of information available to you - what the person tells you, what their family tells you, what's written in the notes, what you observe. So it wasn't just at night-time when somebody's really tired. Because that comes back to you capturing what they're doing at that moment in time, it's a much more global assessment of capability.

52:42

Question: What was the validity and reliability of external assessments? The answer that was about the validity of the instrument. The assessment tool consists of a number of, sorry the assessment overall, consists of a number of tools. Each of those tools was already established and already had to establish psychometric properties. So it wasn't like we were out there inventing new tools. So we were taking tools that had already had been tested for validity, reliability, sensitivity, interrater reliability, etc. Then we were putting them together and then we were getting the sort of ratings I showed you before, how long it took each person. The assessors also gave us a lot of qualitative information about every assessment items that they found difficult. They also gave us an indication for every assessment - What sources of information did they use for every assessment? Did they talk to the family? Did they talk to

the resident? Did they observe the resident? Did they talk to the staff? Did they access notes so we know quite a lot about it?

53:40

Okay, let's move on. I want to introduce you to the main outcome from the first study which is the Australian National Aged Care Classification (AN-ACC), we've called it version 1. Obviously because this is the sort of classification that having developed it you then need a focus, a process for periodic revision. What makes a good classification? There are four principles and they're really important. We want to classify what drives the cost for residents. So it's resident characteristics rather than the services that the person is using. There's no point having a classification that's circular. What is this person needing? We gave them a lot; therefore they must have needed a lot. It's not based on what the person is receiving; it's based on the characteristics of the person. Statistically we're trying to create some payment classes or use the word “class”. A payment class, a group of people who've got similar needs for care in terms of total dollars and we want the classes to be as different from each other as possible. The third is sensible clinical groups - they need to make sense as well as for payment classes. We also think that this classification should be used for outcome measurement and therefore the group's need to make clinical sense. The last is ease of collection, the variables used should be capable of routine collection, coding and data entry

55:15

The NPI we loved, it's actually quite a good tool for our purposes but it didn't, it failed the ease of use test. It's just too good. It's too big, too comprehensive so that said it's a really good tool for use within homes. The statistics of interest, and I'm going to try and give a lay version on the stats, the statistics of interest are the reduction in variation statistic. Sometimes people use reduction in deviants as well. All you need to know about that is the bigger number is the better number. But it's about how much of the variability in the data is explained by the classification you've got. The more important number is the coefficient of variation for those who can remember statistics 101, it's the standard deviation divided by the mean. Within a class how much how similar are people in that class to each other?

56:16

All the way through I'm going to present the results as relative value units rather than as dollars as dollars go out of date as soon as you select them because it's twelve-month on so. When you see an RV, 1.0, that's the national average. In the hospital payment model the RVU is called the national weight of activity unit and each year the Commonwealth through the Independent Hospital Pricing Authority determines a dollar value of one. I’ll just come out and say the national value, the dollar value of an of an RV U of 1 is x dollars and then all the other costs, all the other payments are relative to that. So when you see the 0.5, on average people in that group cost half the national average and 1.5 is 50% more, it's just a lot easier than trying to get your head around dollars and I will present our use here and also in the cost study later on.

57:20

When we tested the ACFI and we use staff times as a proxy and that's our benchmark if we clearly, if we can't statistically improve on ACFI then we should stay with ACFI. The RIV

for ACFI is 0.2, the AN-ACC is 0.5, so it's better, twice as better. This slide shows you the major categories of the ACFI. And you'll see the RVUs too and if you look at the some of these are very little so just ignore them. You're looking at the RVU based on time that we collected in our study for people in the high-high-high category, on average, they got 26% more than the average. So for high-high-high they got 26% more which is actually not that much more. Over on the third one on the other side, you'll see medium-medium-medium, and they got 63% of the average. Then the low-low-low got 43%, so they're running in the right direction but there's not that much difference between low-low-low and high-high-high (43% to 126%) and not much variability between them. The other thing to look at is the coefficient of variation, how homogeneous the groups are, and they're mostly not that homogeneous. They're okay. Some of them are okay, some of them are poor but there's also small numbers. So that's our baseline.

59:16

When we tested the data to say what predicts costs there were seven aspects of seven tools within the assessment that were the best predictors of cost. Where cost is time in minutes that staff spent with each resident per day the single best predictor? Was the function as measured by the 12 items in the FIM motor scale It's really sensitive because there's 12 items and their 7 levels, but almost as good within a percentage point was the Demi and The Demi is actually proved to be better for technical reasons later on and that's actually with the starting point in the classification, the third best was the four items of the rug ADL scale wound risk was the fourth best predictor followed by frailty followed by palliative performance as measured by the Karnofsky performance scale followed by cognition and behaviour and that's really important that cognition behaviour came in much lower in the scale.

60:31

The reason for that is somebody's got challenging behaviours or really calm of the impaired then it really affects their ability to complete these functions. So you've already measured at once function is not just their physical function, but also their cognition and behaviour so by measuring function you've already measured a person's physical abilities and their cognitive abilities and their behaviour.

61:00

So we've come up with thirteen classes. One classes for those people who arrive in residential care explicitly to receive end-of-life palliative care. There are two classes only for those who are independently mobile. There are five for those who need physical assistance with mobility, so the assisted mobility isn't just somebody who's on a walking frame, but somebody who needs somebody walking with them the supervision and five classes for those people who cannot mobilize The RVU is 0.5which we're really happy with it performs. That's about as good as medical DRG's performance in hospitals, so we're really happy with that, but that we're 13 classes and as I said, the ACFI is 0.2. This is 0.5 it’s two and a half times met up the coefficients of variation for the big classes are already small They range from point 3 to point 6, so we're very happy with that more importantly. There's a fivefold variation in cost

62:18

From the top class to the bottom class in terms of staff time in minutes from point three seven, People in that group on average costs only thirty-seven percent of the average daily cost to one point nine five if the average daily cost is 150 dollars and that's a $300 group but only on fifty percent so the there's a five times variation here in the ACFI there was a two Twice the two variation. There's a lot more variability in the 13 classes then across the 64 classes in the ACFI that's a really important finding because If you've got your residents are really at the high need end you're probably really underfunded relative to what's happening with the rest of it, so that's why this is an important finding I think so the fivefold difference is quite but of course if you and I'm come back to my distinction between cost and price. This is the cost Tim your comment was about what it would look like in a pricing model, Where 50% of you but this is the individual last time. It's only on the individualized time so at the top level

63:42

We start off and we pull people out the first question is has this person arrived at the door to receive palliative care. There were only six and that's an artefact of the way we designed our study, we went into existing homes, and we assessed existing residents and only six people turned up at the door in the time. We were there who were there for end-of-life care? but we are still convinced and our clinical panel felt we should keep that class in the classification and we're revisiting that in studies three and four to look at what the real numbers look like so the definition you get into that class if you've arrived at the door with a palliative care plan developed either via by primary care plan like a GP or by a Specialist palliative care group and you've got a Karnofsky performance scale of forty or less go back to the Karnofsky that we saw and a life expectancy of less than three months although that's not the case. Then we split you into classes based on your mobility and the measure on mobility, Is the deme this is a hard to see slide, but I've included it because you can have a look at it. It's the items that best predict cost where you've got binary splits. What's the best it's the FIM and simply splitting everybody into two groups gives you an RIV of 0.39. In other words the fem alone is twice as good as the whole ACFI the better measure Is some of these others so you'll see how close the FIM and the DEMI were point three eight nine and point three eight one. We have used the DEMI we have the first split in the trees based on the DEMI.

65:40

You'll see that the items at the bottom are really minor and also there's a little note at the bottom that said the factors that did not drive costs were age whether or not the person was Aboriginal whether they'd lost a lot of weight and Then the technical nursing items oxygen intro feeding Trekkies catheters stomas and peritoneal dialysis because they were already those people who had those and these were already in the high paying group and I'll show you that so the top group admit for palliative care, we've created a class if not split everybody into mobility using the DEMI The De Morton mobility index. They split into three groups those who are independent those who need some assistance and those who can't mobilize. The independent group to class are split on whether or not there are compounding factors that compound the person's care needs and that's where the technical nursing behaviour cognition etc comes in.

66:50

And I'll show you what's in each of them the assisted mobility branch that group the first the best predictor for that group was cognition that independent group has very few people who were really cognitively impaired because if they really cognitively impaired they're not independent for mobility. The majority of people with higher cognitive needs are in this middle group and one of the major reasons that they're needing students because of their cognitive ability not their physical so cognition fits that group and then they're split based on. Compounding factors and the non-mobile group. The first split is by the late-loss ADLs the full items and the pressure area risk. Which is exactly what you'd want to see clinically it makes perfect sense that the Braden is not predictive of course for the people independently walking around but it is for the people who can't get out of bed the compounding factors we've used variables that explain differences in resource consumption they come in in the branches though.

67:57

Now I'm going to talk about a classification tree and they come in down in the branches rather than up the top, the factors that we've got in the model are cognition behaviour and technical nursing requirements both the single items and in combination being careful that they don't create perverse incentives, the wound-care one is on risk of wound care whether other than whether or not the person has a pressure area and remembering, of course that this is a branching classification not an additive and I'll show you that as we go so we start off at the top. All residents admit from palliative care all residents then take out the grip that where you're admitting for palliative care take the rest the Demi split them into three classes. Classes two and three for those who are independently mobile on the DEMI Classes four through eight for those with assisted mobility they split first of all on cognitive ability that little group it's a small group wasn't enough to split it again five classes there and five classes for the people who can't mobilize. This slide shows you what's in the compounding factors in the darkest colour shows you the best the most important factor in each but you'll see the factors vary by branch of the tree and What that suggests is in an assessment you could use an algorithm based assessment. Do the deme and then the tools that you use within it would only depend on what branch of the tree you go to. We haven’t recommended that though. We're saying we should actually do the whole assessment, but you could. It also starts to suggest that one of the criteria for reassessment is that somebody goes to a different branch in the tree somebody who moves from being independent to needing assistance to being bed bound that is clearly a trigger for reassessment high up in the tree

70:09

Okay, this is what it's a FIM look like and I won't stay on this slide. I will move on because we you can't read it and I'll show it to you bit by bit. This is the independent group so they've got a score of 13 or more on the DEMI. There were only two hundred and sixty nine of them. They're basically less than fifteen percent of people getting this branch of the tree, so if you go back to the start there's 1761 because we've narrowed up two data sets together and only 269 are completely independent 10 to 15% that’s why there's only two classes because they're actually only quite a small group and I think that is an important measure and so all of a sudden we're starting to talk about the real evidence we have about the needs of people in residential aged care in a way, we've never been able to quantify before and I think that's a really important development

71:14

You will see the coefficient of the resource utilization the RV use. For a people in class two, they're independently mobile and they don't have complicating factors, There's only 179 there small group out of the 1,000 said they'd listen 10% There are bu is 0.37 they cost on average 37 percent of the average. Everybody comfortable that we thought you're looking now you're looking at the RV you and the people with complicating factors is only 90 out of 1700 of them on average cost 60% of the day per day the middle group there's 867 of these so even this bit telling is an important story. I think there were only 269 who were independent? There's 867 in this middle group, their cost weights or their RVU’s range from 0.41 to 1.06 these squiggles this little squiggle is the coefficient of variation it shows you how homogenous the group is. The non-mobile group is 625. So 1/3 of the people even residential aged-care can't mobilize they split based on the rug and the Braden and the most resource intensive group in the whole classification are the people who can't mobilize. Who can't do their late-loss activities of daily living? That is they're getting a 17 or 18 on those 4 rug items of bed mobility eating toileting transfers and they're at high risk of pressure area care and pressure area wounds and on average, they cost one hundred and ninety five percent. They cost Ninety five double per day so for people who reach end-of-life once in care they would mostly end up in that group and we have pegged class while the palliative care group to that group so the way you can you win so the palliative care class? Even though it was too small and clinical panel has endorsed the idea that we set the RVU for the palliative care group to be 1.95. That is we've pegged them to class thirteen so there's twelve classes in the in the branches of the tree and One class for the palliative care group giving the thirteen classes. Any questions or comments on the tree before I move on and talk about what that means for assessment

74:28

So that's what the classification would look like process is somebody gets assessed the assessment assigns them to one of thirteen classes each of those has got a relative value unit in a pricing model the commonwealth job each year is to determine the price of An RVU of one and Everything else all the other things fall out from that it's irrelevant because it's all relative to a value of an RV you of one

75:00

We have done a number of case mixed classifications in my group, We developed this net the National what's called the and snip the Australian national subacute non-acute patient classification This performed statistically as well as the hospital funding models that have been in place now for ten or twenty years. It's version one and deliberately so I can see and we will be recommending that there be another study within a couple of years There's a lot of incentives in the system at the moment that are not necessarily the ones you'd want to see Normally, you would only do another classification. We developed the snap classification twenty years ago. We've only had four versions in twenty years because there's not a lot of technology driving a lot of change from year to year DRG’s in acute care in hospitals. There's a new version every two years. We don't think once the aged care systems at steady state you need every need and change every two years But we would be recommending another refinement in about two years when you've got rid of the axial Incentives in the system and then you go steady state with maybe every five years. So we think this is a really good

technically. we're very happy to say this is as good as any classification with and with the RVU of point five to start with it's quite more than twice as good as what you've got now, but you can also see because it's branching you can see how you can develop and grow it over time like for example sup at some point you'd want to do something about respite. They're not in you could have another branch for them so you couldn't actually you can actually grow branches of a tree that's what that's the advantage of a branch one of the advantages of a branching structure over an additive structure okay.

76:48

Everybody comfortable in terms of assessment, we have included in the final assessment items if they're needed in version one and they're all the items, I showed you if they would be potentially. Contenders for inclusion when you had more data the bit that I'm really unhappy about is the end of life because it's an artifact of the way we did the study that we weren't seeing brain lots and lots of brand-new people coming in the door where we're seeing people who are already in care Or if we they provide objective measures of need I think what we've got in the data that I've just showed you is much better objective measures of the resident the needs of residents than we've ever had before and I think it's very strong evidence they're much more frail population though I think most people had thought who didn't work in the sector. I think people who work in the sector knew that but I think for other people that's been we did identify that you could go to an algorithm based assessment but our clinical panel really felt that for now and leading up to version two you should do the whole assessment on everybody even though you don't need all items on everybody because that is how you get to version two Any final comments on that because I do want to move on into study two quite complicated as you make gathered Okay, I'll move on study two is our is our costing study

78:26

Again, I'll remind you of the distinction between costs price and funding model. I'm showing you cost results It's still in progress we've I’m only presenting today a univariate analysis is a multivariate analysis and I have a couple of other models that I’m not including Study two will come out in our third report so report one is about the classification report two with all the issues to do with assessment and reassessment Report three will have this one in Reminding you of some earlier comments. I made fixed care cost the costs of delivering shared care. We're calling them fixed but they're the cost of sharing care out among all the residents including their share of overhead salary costs for example than the Director of Nursing isn't care closets allocated out the variable costs the time spent delivering Individualized care residents plus them consumables for that resident so consumables who had cotton and supplies or oxygen and whatever that was costed and allocated to the resident Across all of the care costs 80 7 percent of all costs were direct costs 80 percent of total costs were salaries 48 percent as I've already said was shared 52 percent of that was individualized 5.6 percent of costs were indirect admin and training and workers comp insurances and all that sort of stuff 7.4 percent corporate what they were is where there's a chain and they're holding things that corporate central level workers Compensation for example that if you're a free-standing unit you'd hold in the facility We had to get the corporate if you if you were in a chain we had to get the overhead costs out of the chain and allocate the amount the corporate overheads and allocate them to each home in scope

80:41

So there was three lots of costs there were the variable costs based on the lanyards that staff collected where they collected time in minutes for each resident and they got their share of corporate overheads, and I don't mean corporate overheads. I mean overhead staff costs workers compensation costs for example director of nursing fixed care costs which is shared care and Then the hotel cost the hotel costs and just to remind everybody hope combination was out of scope But they needed to get that we had to cost them as well because they had to get their share of corporate overhead cost so that we can factor them out of the model everybody with me so far could the overall proportion of fixed to individual care costs after the for our patient was the 48 52 I've talked about and again, I'm going to present the results from now on and our use rather than as dollars the reason I'm doing that is because dollars go out of date too quickly this is what it looks like the average is one The average dead bed day cost has got an RV U of 1 But if they're in a remote location, their fix costs is 38% higher Because it's 38% of one higher than by definition the others have to come down Everybody comfortable that how you're reading an RV you occupancy is a really big driver low occupancy units have fixed costs of 34% higher size is a big driver and no really for wind there's a little bit of variation in the other size categories We looked at up to 30 30 to 50 50 blah blah blah The only one that's worth talking about in terms of materiality is under 30 beds They are inordinately much more expensive and the last ones also important Those units which are specialist indigenous units on Average cost 69% extra in terms of their fixed care costs. So this is their fixed cost the obvious point to make is that there are lots of small remote units that have all of those things happening at once So this is cost and that's not how you would deal with it in a pricing model But that's what the cost looks like variable by variable

83:27

Homelessness Is an important issue, but I need to just make a comment. We only had three units that specialize in homelessness So the results for the homelessness units are not robust One of them's cost was right on the average in the other two was really high But the average across the three noting that they're not robust because of the small volume Was 26 percent extra fix costs In the homelessness units the same thing apply, but but there were more home specializing in those people who are financially Disadvantaged there was a ten percent difference in the fixed cost in homes that are targeting people who are financially disadvantaged versus not the last two Results I think will surprise some people but not others we found no difference In those units that are dementia specific. In fact, they were a bit cheaper in their fixed costs because a lot of their costs are actually in the individualized time rather than in the fixed time not surprising me and the cord we found no difference either i'll do two findings and then we'll open that up for conversation because this is new and it's I think needs a big conversation The fixed cost drivers the very remote facilities the there fell seven six and seven incur Significantly higher fixed cost there is no doubt about that and at the moment that's dealt with via viability supplements but because we've been saying the fixed component of the funding model would have different prices depending on what part of Australia You can deal with that through the fixed component add to that then you've got another top on cost for indigenous remote 'less remoteness is obviously associated with size and also with low occupancy and they become founding when we take the units that are remote low occupancy small and Indigenous their costs are really through the roof compared to everybody else you can explain most of the costs of small facilities by low occupancy and

indigenous but not all of them There are some about being remote that are important Country tomaten, I think we were told and what many people thought the specialist dementia units. We're not more expensive Than the non-dimension. It's I've always a called units and either with a specialist palliative care again a word of caution about those there was only a couple that were specialist palliative care But the additional costs are in the cost of the individualized care rather than in the cost of the fixed care At that point I should open it up for conversation or question. This is still this bit of the analysis is still a work in progress because we have to actually put all of those together about what if you've got this and this and this and this what does it look like and

86:54

We've only got a hundred and ten and a hundred and six facilities in the analysis so sometimes you get to very small cells and we've got to really work out The cells were really confident about that said it is a nationally representative sample of homes so the cells we've got large volumes honors the fills where most of the activity across the country is No the quality occasions a really important issue to bring in but we can certainly and there's a whole issue about what we've done is gone out and cost current average practice and There's a whole question that's been debated in health for the last twenty years of how do you smooth the system from costing current average? practice to costing good practice well the first requirement to do that is you need a case-mix classification and then you need a Consensus about what is good practice for people in that in that class?

87:55

So we have costed current average practice but this provides the building blocks to start to define good practice or appropriate practice and that's what paying for performance models are largely around in in other parts of the human services sector but the issue in the aged care sector is that everybody's got to understand that the sector's got to walk before it runs you need these sorts of information tools in order to define good practice, and that's about defining what good practices and systematically measuring the outcomes you get

at the moment this sector does not systematically measure quality or outcomes And I you know someone I don't come from the aged care sector, but I work across disability aging in health And I'm working in other sectors that systematically measure the outcomes of every consumer You can't measure outcomes unless you've got building blocks like this if you want to measure things like the rate of Falls Adverse events, then you need a case-mix classification to do so because if your Falls is twice as high as your Falls, all you're going to say is our residents are frailer but unless I can standardize for frailty. I can't actually draw any conclusions about the relative quality of your care versus yours and that's why I Health has been able to make really good progress. They can measure adverse events like a met medication errors Falls trans to unnecessary transfers all these other stuff that everybody's concerned about because they've got a classification and they can calculate rates per class and That allows you to start to compare like with like and that's where this sector has been a really big Disadvantage because if I said the rate of the hospital transfer in your house in your home is this and in your home? It's double that the person that's got the higher hospital transfer rates. Just going to say well I got the seekers resident. I mean it's a no-brainer. That's

what you're going to say. You need tools that allow you to measure that more systematically Okay any other questions before I move on to the implications.

90:20

Okay the first implication the funding model and say this is not a costing issue now I am moving on to what are the implications of the funding model? The funding model should include a fixed care baseline payment and within that fixed payment we have evidence at the moment that small remote and in specialized Indigenous need loadings that is that payment needs to be higher. it may also be and I'm not prepared to be definitive about this today That those units that are home. They're focusing on people who are homeless and units focusing on people who are financially disadvantaged should also get a higher fixed payment rate the problem of god Is that the numbers in ours? Sample of those two are really quite low and therefore our results I think are a bit unstable. So I'm not exactly confident. We're cutting the data in different ways looking at that a bit more we have said this before it makes perfect sense to us that the small units in remote you fund the fixed component based on capacity. Rather than occupancy with the individualized payments based on actual people you say the night but the capacity the ability to have the door open whether you have 24 or 28 residents in the home your knight supervision requirements are exactly the same So if you fund small units based on capacity rather than occupancy you start to account for the very sizeable factor, we found in the data about the financial impact of low occupancy so if you started to think about a funding model with a fixed and a variable component half of the payment would be the same across the country varying by location and size you might have and then there'd be individualized payments which anyone here in Class eight will be paid $0.10 and that would be the same across the whole country all the differences that are currently dealt with in supplements and allowances would be built into the fixed payment rather than into the individualized payment the payment rates for class or the the 13 classes would be the same across the country I do want to obviously stress that part of our study is still a work in progress We have a team of very good statisticians and health economists on the job but it is enormous ly complicated as you might have mentioned because we have days of care for thousands of residents in study 1 and then there's very detailed study in.

93:16

Study 2 which we did in partnership with Stewart Brown so the key outcomes for us to date is a kleenex classification the Australian national aged care classification that's got 13 classes based on the capacity of the resident and that are showing a fivefold variation in cost from the least expensive to the most expensive care cost that's that's a headline. You know, that's a really important finding if everybody cost about the same, you wouldn't even need a classification. You just go for a standard day rate but when you're getting 5 fold difference, but Tim you were right as fivefold on 50% we have come up with an assessment tool that is suitable for use by external Assessors I do want to stress you we need to do some work the sector needs to do some work to develop a complementary assessment model for use within homes this is not a substitute for homes doing assessments there's even more need for homes to be doing assessments, but that assessment within homes needs to be care of you know resident need resident preferences building on resident strengths all that sort of stuff and driving care planning and models and also that as a by-product gives you some outcome measures the bits that are still to be finalized for us is the funding system design the

reassessment protocols as I said we have collected the data on the resident of the people who were reassessed six months apart and 900 or so of people and also the transition implementation strategy, how would you meet new to this model? And what does that mean?

95:09

For the system. It's big system change just to remind you again. We are talking about seven reports because We do know that different people will be interested in different aspects of this study. It's it's a huge I cannot tell you what it's like in my group other than it's so busy that you know We've had up to 20 people on different points in time. It's an enormous lis complicated piece of work clinicians economists statisticians the logistics in this exercise has been huge I just want to remind you again of the core the core elements are still the same and we are confident that these are the right elements. So everything we're doing from this point is refinement rather than changing the core. We are committed to the core finding separate assessments for funding from assessment for care planning to improve assessment. Internally in homes to be driven by consumer needs and preferences and that that's driving care planning independent of financial incentives in them system the third assessment by for funding by external Assessors linked to protocols for reassessment that would result in you moving within the classification. There is no point having a low threshold for reassessment if somebody gets reassessed and ends up back in the same class there’s only 13 of them. That means you've got the bar set fairly high for reassessment the next element a one-off adjustment payment for each resident recognizing that there are additional costs in that initial period We're currently working on that at the moment of Outlook and said the residents we've got we're looking at cost per week to look at what that threshold time is that's what we've got we don't know we've got two options We're looking at with the one off adjustment payment, but it's a really good question one says everybody gets 2 and 6 One says the costs of people who come through the door the adjustment period for those who were independent is a different adjustment than for the people who are requiring assistance with mobility versus bed down. We don't know the answer to that yet the next is the fixed per diem prop cost for the cost of care that are shared equally we do know and this is what this slide is the Replica of the one I started with that we do know it does vary by location and size the question then their only remaining question for us is the financially disadvantaged and homeless, the other factors have not proved to be significant and a variable price per day based on one of thirteen classes

98:06

This is my final slide and it comes back to the question I was asked about quality, if you start to move to this sort of system you start to routinely collect data to better understand resident profile and the changing needs of residents in this sector. The more successful we are at developing community-based care for people the more the cohort of those who do go to residential care is going to be a much higher knee group. It's not a lifestyle choice people who are going to residential aged-care because they can no longer live at home It's a much more needy population than it was a decade ago. We won't know that until we get more objective routine measures of need my last point is the one that was raised if we've got classes that contain residents who look quite similar in terms of their needs and costs then you can start to measure quality and outcomes in ways, which allow you to do genuine like with—like comparisons whether the hospital transfer rates, but for each class I've got 13 think about

those 13 classes. What are the rates of function the client adjusted for the class? Somebody was at entry what are the rates of functional improvement adjusted for the talk about reo? Berman will be able to measure it by class Functional decline by class, what are the rates of adverse events false medication errors injuries adjusted for the class that somebody's in that actually starts to allow consumers to make really informed choices about the sorts of places they want to be in and at the moment. They don't have the information to make those sorts of informed choices nor governments to know what the value for money is in the sector that’s all I want to say Nigel, but I'm happy to take any final questions

100:12

And one of the slides and I'm Oh quick Dover it was the transition strategy and and reassessment. The end of handle assessment workforce we're talking about is the first to assess people the first time that they come into a home there's then a whole question about what is a reassessment protocol look like to what Gregory could that be done internally? Does that go back to back out through an independent Assessor? Etc it makes sense to me that there are some and I skipped over it but in the study we captured key events between the two assessment points that you enter Hospital for more than five days. It's five nights or that you enter Hospital for more than two nights, but had a general anaesthetic that you had a fall trigger events that are sufficient to require a change in the care plan and would therefore justify reassessment that said We don't want to create a system where there's incentives for people to be continually reassessed every five minutes that's been a real issue in the system for now this payment is only half of the payment for the resident anyway, and there's only thirteen classes you want a system that only triggers a reassessment if a person is genuinely moving from at least one class to another if not a branch, but you clearly need you know, The person who's had a stroke or fractured their hip and he's coming back That will be that will be one of the protocols to trigger a reassessment.

102.20

Absolutely, right. That's the piece of work that's not done But people know that that's at the minutes on the work program to do that's all part of a transition strategy but I think One of the things to be mindful of is that the sector reference group was really clear about this You don't want to create a system that continually has residents continually reassessed hopefully to get them into a higher payment class If that happens, it really defeats the purpose people can stay in the same class and if because the issue of reassessment is inevitably linked to the issue of timing of recasting studies. What happens in hospitals is that there is an annual costing study every year and the classes the cost weights of the RV use are recalibrated you don't need a whole new version of the classification you just need the cost weights calibrate if everybody stays in their same group, but twelve months later. They're all a bit frailer the RV you will go up without anybody having to move class and that's an important distinction between the way the system works now a cluster a big change in the classification is we're going to have 15 classes instead of 13 an annual costing study will still keep the current thirteen classes, but recalibrate the relativities between them if all of a sudden everybody in class 8 is much frailer than they were a year ago the other you'll go up without anybody moving class. That's a sensible system because you want to add value to the system by re-assessment. You want to add equity rather than just create another industry.

103:38

No, I wish they were we're aiming to have them all out by Christmas. But with wet produce we are we are producing them as we're completing them we're hoping that my team told me that they will all be done by the 21st of December

104:08

I have to say though this is enormously complicated, We've had some delays in study three because sometimes they were originally have withdrawn because of concerns about the external environment that they're operating in and that that's a much more uncertain environment than it was before I am much more concerned that we get the technical detail right than went up even if that means a delay, I would I do intend that we would deliver before Christmas but if we're not consonant the Devils in the detail and the bit of work, we're doing we've done all the data collection but this analysis is enormous ly complicated and if that means we go a bit slower to get it right. We'll do that.

104:58

I'm going to come back to the three issues that I made a distinction on at the beginning which is cost funding model and price and a lot of what you're talking about whether the price is right, but there's also the issue of the funding model. One of the things questions. I was just asked about was reassessment if a person's needs change because the person's got higher need the flipside applies equally if you're running a reablement program and as a result of that or somebody arrives in from home and they've been malnourished because they've been trying to struggle through on their own at home and you resolve that issue. We're proposing that they would not be reassessed so if you can improve somebody's function from where they are at entry Then they stay in that payment class so it's you partly it's about the price and I can't answer the price I'm not Treasury and I'm not the government but partly it's about a funding model that creates incentives for good practice and also that starts to systematically report quality and outcomes because I think one of the problems I have as someone who's not in the aged care sector is that people in the sector tell us tell us about quality good or bad outcomes good or bad and nobody's got the evidence so once we start to measure care in a systematically way we can start to make I think arguments about the sort of issues you've raised No, it's not an easy answer but that's why I think the sector has to learn to walk before it runs.

106:44

I think the other the other issues I'd want to raise because I don't think it’s right to reduce it solely to a pricing issue there’s also issues about quality standards. There's a whole lot of other issues in the system there's issues about consumer choices There's a whole lot of other factors and it's a far too complicated issue for a simple answer in this sort of forum I think everyone would understand that. We should be aiming to systematically drive improvements in quality of life and outcomes for residents but that alone is not simply a pricing issue. It's a system issue. That's much bigger.