Program bookwww.abfconference.com.au

Activity Based FundingConference 201423  –  25 June 2014Melbourne Convention and Exhibition Centre

#ABF14

Chair’s welcome

It is with great pleasure that I welcome you to Melbourne and to the Activity Based Funding Conference 2014.

This is the second year the Independent Hospital Pricing Authority (IHPA) has hosted this event and it is encouraging that so many health professionals have returned and once again contributed to the conference.

This year’s program has been developed with a focus on how Activity Based Funding (ABF) is being implemented at the local level. A combination of case studies and updates from hospitals and jurisdictions will demonstrate successes and lessons learnt.

You will hear from some leading health professionals and have an opportunity to ask questions about the future of ABF in Australia and where we might expect the journey to take us over the next few years.

I am also delighted to welcome our speakers from overseas and look forward to hearing about ABF from an international perspective.

I would like to thank all of the presenters and chairs and everyone that submitted a paper for consideration in the conference, without your participation this event would not be possible.

Shane Solomon Chair, Independent Hospital Pricing Authority

Contents

Chair’s welcome ..........................2

Workshop program ......................3

Conference program ....................4

General information .....................8

Speakers ...................................10

Abstracts ...................................14

Venue map ................................30

Glossary ....................................31

Conference hostIndependent Hospital Pricing Authority

Level 6, 1 Oxford StreetSydney NSW 2000 AUSTRALIA

Phone: 61 2 8215 1100 Fax: 61 2 8215 1111Email: communications.ihpa@ihpa.gov.au Website: www.ihpa.gov.au

Conference managersArinex Pty Ltd

Level 10, 51 Druitt StreetSydney NSW 2000 AUSTRALIA

Phone: 61 2 9265 0700 Fax: 61 2 9267 5443Email: abfconference@arinex.com.au Website: www.abfconference.com.au

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Workshop program

Monday 23 June 2014 Room

0900 Acknowledgment of country

0900 – 1030 Workshop A: Managing performance under Activity Based FundingProf. Stephen Duckett, Director of the Health Program, Grattan Institute

210 and 211

Workshop B: Technical costing forumChair: Joanne Siviloglou, Manager Costing, Analysis & Reporting, IHPA

212 and 213

1030 – 1100 Morning tea Foyer 2.5 and 2.6

1100 – 1230 Workshop A continued: Managing performance under Activity Based FundingProf. Stephen Duckett, Director of the Health Program, Grattan Institute

210 and 211

Workshop B continued: Technical costing forumChair: Joanne Siviloglou, Manager Costing, Analysis & Reporting, IHPA

212 and 213

1230 – 1330 Lunch Foyer 2.5 and 2.6

1330 – 1500 Workshop C: Using Activity Based Funding dataChris O’Gorman, Health consultant and costing/Activity Based Funding consultant, Health Roundtable

210 and 211

Workshop D: Update on classificationsJoanne Fitzgerald, Senior Manager, Classification Standards, IHPA

212 and 213

1500 – 1530 Afternoon tea Foyer 2.5 and 2.6

1530 – 1700 Workshop C continued: Using Activity Based Funding dataChris O’Gorman, Health consultant and costing/Activity Based Funding consultant, Health Roundtable

210 and 211

Workshop D continued: Update on classificationsJoanne Fitzgerald, Senior Manager, Classification Standards, IHPA

212 and 213

1700 Workshops conclude

3

Conference program

Tuesday 24 June 2014 Room

0900 Welcome to countryIan Hunter, Elder, Wurundjeri people of the Kulin Nation

Plenary 3

0905 – 1000 Plenary one: Activity Based Funding – where are we now?Shane Solomon, Chair, IHPA

Plenary 3

1000 – 1045 Plenary two: What happens at IHPA? Dr Tony Sherbon, Chief Executive Officer, IHPA

Plenary 3

1045 – 1115 Morning tea Main Foyer 3

1115 – 1200 Plenary three: How we pay matters: payment and health system innovation, A U.S. and international perspectiveCathy Schoen, Senior Vice President for Policy, Research and Evaluation, The Commonwealth Fund

Plenary 3

1200 – 1230 Plenary four: Closing the Activity Based Funding loop: the National Health Funding PoolBob Sendt, Administrator, National Health Funding Pool

Plenary 3

1230 – 1330 Lunch Main Foyer 3

1330 – 1510 Concurrent session one: Implementing Activity Based Funding: a clinician’s perspective

• Clinical participation: The key to prosperity under Activity Based Funding Dr Philip Hoyle, National Centre for Classification in Health, University of Sydney and Harvey

Lander, Hornsby Ku-Ring-Gai Hospital • Opportunities for quality and efficiency improvements through reducing unwanted variation in

clinical practice in Australian maternity care Michael Nicholl, Women’s Healthcare Australasia, Royal North Shore Hospital and University

of Sydney; Dr Barbara Vernon, Women’s Healthcare Australasia; Peter Baghurst, University of Adelaide; and Heather Artuso, Women’s Healthcare Australasia

• Identifying opportunities for quality and efficiency improvements through benchmarking paediatric care in Australia

Trish Davidson, Children’s Healthcare Australasia, Hunter New England Local Health District, University of Newcastle; Dr Barbara Vernon, Children’s Healthcare Australasia; Julie Hale, Children’s Healthcare Australasia; and Beth McGaw, Children’s Healthcare Australasia

• Coding complexity of emergency department care: A realistic measure of workload Dr Sue Ieraci, Bankstown Hospital

Plenary 3

Concurrent session two: The building blocks of Activity Based Funding: High quality coding and costing information

• Integrating patient costing with health unit management – a case study Mr Garth Barnett, PowerHealth Solutions• Capabilities for Activity Based Management Matthew Swanborough, PwC and Julia Strelitz, PwC• Cost impact of hospital acquired diagnoses Deniza Mazevska, Health Policy Analysis; Jim Pearse, Australian Health Services Research

Institute, University of Wollongong and Health Policy Analysis; Akira Hachigo, Health Policy Analysis; and Prof Terri Jackson, Northern Clinical Research Centre, University of Melbourne

• Building the blocks for strong foundations for Activity Based Funding: A NSW Health partnership approach

Dr Melanie Boursnell, NSW Health Education & Training Institute; Anita Jacobsen, NSW Health Education & Training Institute; Aditi Wahi, NSW Health Education & Training Institute; Rajita Jeyapalan, NSW Health; and Alfa D’Amato, NSW Health

• The national mental health services costing study – a work in progress Joe Scuteri, HealthConsult and L. Fodero, HealthConsult

218

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Concurrent session three: Hospital case studies: Implementing Activity Based Funding at the hospital level

• A team approach to data quality Shane Downey, Mater Health Services and Susan Gardiner, Mater Health Services• Clinical Engagement – respiratory clinical review of patients with community acquired pneumonia Dr Peter Wu, Westmead Hospital, Western Sydney Local Health District• Lessons learned in Activity Based Funding implementation at Sydney Children’s Hospital

Network: Two years in Anna Hoffman, Sydney Children’s Hospital Network; Caroline Wraith, Sydney Children’s

Hospital Network; Sharon Behan, Sydney Children’s Hospital Network; Cheryl McCullagh, Sydney Children’s Hospital Network; and Colin Murray, Sydney Children’s Hospital Network

• Clinical engagement through matching evidence to cost drivers Alexander Smeaton, Illawarra Shoalhaven Local Health District; Natalie DeWit, Illawarra

Shoalhaven Local Health District; and Sofia Halligan, Illawarra Shoalhaven Local Health District• Activity Based Management and the National Weighted Activity Unit calculator Susan Dunn, NSW Ministry of Health

219

Concurrent session four: Subacute care in an Activity Based Funding setting

• A data journey – the Australian National Subacute and Non-Acute Patient data collection in New South Wales

Sharon Smith, NSW Ministry of Health and Mindy Xie, NSW Ministry of Health• Subacute care funding and transition to Activity Based Funding Andy Wu, Department of Health, Western Australia• Implementing Activity Based Funding for subacute care in the private sector Nicolle Predl, Australian Health Service Alliance• Exploring outcomes and cost savings through the establishment of an integrated rehabilitation

model of care Sophie Kent, PwC and Carrie Schulman, consultant

220

1510 – 1530 Afternoon tea Main Foyer 3

1530 – 1700 Panel: Implementing Activity Based Funding at a federal, state and territory level

• Commonwealth: Charles Maskell-Knight PSM, Principal Adviser, Acute Care Division, Commonwealth Department of Health

• New South Wales: Dr Rohan Hammett, Deputy Director General Strategy and Resources, NSW Ministry of Health

• Victoria: Frances Diver, Executive Director, Hospital and Health Service Performance, Department of Health, Victoria

• Queensland: Nick Steele, Executive Director, Healthcare Purchasing, Funding and Performance Management Branch, Queensland Health

• Tasmania: Michael Pervan, Deputy Secretary, System Purchasing and Performance, Department of Health and Human Services Tasmania

• Western Australia: Beress Brooks, A/Executive Director, Performance, Activity and Quality Division, Department of Health, Western Australia

• South Australia: Kym Piper, Director, Data and Reporting Services, South Australia Health• Northern Territory: Michael Kalimnios, A/Executive Director Corporate Services, Department of

Health Northern TerritoryChair: Prof. Stephen Duckett, Director of the Health Program, Grattan Institute

Plenary 3

1700 – 1900 Networking drinks and canapés Main Foyer 3

Room

5

Wednesday 25 June 2014 Room

0900 Acknowledgment of country Plenary 3

0900 – 1000 Plenary five: From DRG to diagnoses: What our data tells us about our clinical practiceDr Michael Wilke, Managing Partner, Dr. Wilke GmbH (Activity Based Funding specialist in Germany)

Plenary 3

1000 – 1030 Plenary six: IHPA’s Clinical Advisory Committee A/Prof. Alasdair MacDonald, Deputy Chair, IHPA’s Clinical Advisory Committee

Plenary 3

1030 – 1100 Morning tea Main Foyer 3

1100 – 1145 Plenary seven: A review of IHPA’s major classification workJames Downie, Executive Director, Activity Based Funding, IHPA

Plenary 3

1145 – 1230 Plenary eight: State of health reform in 2014: Where are we now?Prof Christine Bennett, Dean, School of Medicine, Sydney, University of Notre Dame Australia

Plenary 3

1230 – 1330 Lunch Main Foyer 3

1330 – 1510 Concurrent session five: The building blocks of Activity Based Funding: high quality coding and costing information

• Equipping allied health for Activity Based Funding – a marriage between clinical and technical partners Paula Caffrey, NSW Ministry of Health; Patricia Bradd, – South Eastern Sydney Local Health

District; Christine Fan, Sydney Children’s Hospital Network; and Steve Bowden, South Eastern Sydney Local Health District

• The building blocks of Activity Based Funding – high quality coding and costing information in Medical Imaging – the MICC Model

Ingrid Klobasa-Egan, Northern Beaches Health Service; B. Sorensen, St Vincents Hospital; S Baichoo, St Vincents Hospital; J. Heberle, NSW Ministry of Health; N. Emanuel, Royal North Shore- Ryde Hospitals; A. Scott, Liverpool Hospital and K. Altern, NSW Ministry of Health

• PORTAL or TARDIS? Julia Heberle, NSW Ministry of Health and Judy Rong, NSW Ministry of Health• Which way from here? The Tasmanian Activity Based Funding coding experience Kevin Ratcliffe, Department of Health and Human Services, Tasmania• Bringing efficiency and additional controls to the costing process Julia Strelitz, PwC and Laila Qasem, PwC

Plenary 3

Concurrent session six: Hospital case studies: Implementing Activity Based Funding at the hospital level

• Demand forecasting of patient Activity Based Funding measures Ravind Raniga, Biarri and Stephen Cole, Gold Coast University Hospital• Activity Based Funding implementation - counting activity correctly and consistently counts Kathleen Alloway, Department of Health, Western Australia• After the big bang: the creation and expansion of the non-admitted Activity Based Funding

universe – a New South Wales experience Xiao Cai, NSW Ministry of Health• Length of stay and cost impact of hospital acquired diagnoses: multiplicative model for South

Eastern Sydney Local Health District A/Prof Dominic Dawson, South Eastern Sydney Local Health District; Jenny McNamee,

University of Wollongong; and Michael Navakatikyan, University of Wollongong• Activity Based Funding to Activity Based Management – Implementation at the Local Health

District level A/Prof Dominic Dawson, South Eastern Sydney Local Health District and Karen Foldi, South

Eastern Sydney Local Health District

218

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Concurrent session seven: Reviewing classifications to effectively enable Activity Based Funding

• Principles for splitting Adjacent Diagnosis Related Groups Dr Qingsheng Zhou, National Centre for Classification in Health, University of Sydney; Philip

Hoyle, National Centre for Classification in Health, University of Sydney; Vera Dimitropoulos, National Centre for Classification in Health, University of Sydney; and Richard Madden, National Centre for Classification in Health, University of Sydney

• Building your own Activity Based Funding budgets in a purchaser provider environment – a DIY approach

Stephen Cole, Gold Coast Hospital & Health Service• Clinic 40.04: A 20 year journey Karen O’Leary, the Society of Hospital Pharmacists of Australia and Sue Kirsa, Peter

MacCallum, Cancer Centre• The Australian Refined Diagnosis Related Groups classification review and refinement project Vera Dimitropoulos, National Centre for Classification in Health (NCCH), the University of

Sydney and Dr Trent Yeend, Independent Hospital Pricing Authority• Apples and oranges – a review of Australian Diagnosis Related Group A06 to assess the

homogeneity of the grouping and the impact of the bundled intensive care unit payment Stuart Bowhay, Children’s Health Queensland

219

Concurrent session eight: The building blocks of Activity Based Funding: High quality coding and costing information

• Queensland rural costing project – an overview of challenges to accurate costing Colin McCrow, Department of Health, Queensland• Defining student clinical placements and understanding the benefits to deliver to health

providers: findings from a scoping study Prof. John Buchanan, University of Sydney; Linda Scott, University of Sydney; and Sascha

Jenkins, University of Sydney• Diagnosis Related Groups: it is not about Patient Clinical Complexity Level; rather it is about the

management of reform – Experience in the countries of former Yugoslav Republic Dr Karolina Kalanj, Karol Consulting Pty Ltd and Karl Karol, Karol Consulting Pty Ltd

220

1510 – 1530 Afternoon tea Main Foyer 3

1530 – 1630 Panel: IHPA Q & A panel session and conference round-up

Shane Solomon, Chair, IHPAJames Downie, Executive Director, Activity Based Funding, IHPAJennifer Nobbs, Director Mental Health Care, IHPAChair: Dr Tony Sherbon, Chief Executive Officer, IHPA

Plenary 3

1630 Conference concludes

Room

7

General information

AccommodationThe contact details of all conference hotels can be found below.

Hilton Melbourne South Wharf

2 Convention Centre Place, South Wharf, VIC Australia 3006

Tel: +61 3 9027 2000 Fax: +61 3 9027 2001

www.hiltonmelbourne.com.au/hilton-melbourne-south-wharf.html

Holiday Inn Melbourne On Flinders

575 Flinders Lane, Melbourne, VIC Australia 3000

Tel: +61 3 9629 4111 Fax: +61 3 9629 7027

www.ihg.com/holidayinn/hotels/us/en/melbourne/melsf/hoteldetail

Pensione Hotel Melbourne

16 Spencer Street, Melbourne, VIC Australia 3000

Tel: +61 3 9621 3333 Fax: +61 3 9621 1922

www.8hotels.com/melbourne-hotels/pensione-hotel

ATMsATMs are located adjacent to the Convention Centre entry and on the Exhibition Centre concourse.

Business centreA business centre with reception, secretarial support and business equipment for sale and photocopying services is located off the Clarendon Street entrance to the Exhibition Centre. You can contact the centre on +61 3 9235 8448.

CateringOn Monday 23 June, tea breaks and lunches will be served in the Foyer 2.5 and 2.6. From Tuesday 24 to Wednesday 25 June, tea breaks and lunches will be served in the Main foyer 3. For timings please view the detailed program.

Cloakroom and luggage storageThe cloakroom is located on the ground level of the Convention Centre, near the main entry, providing storage for visitors’ and delegates’ belongings.

Delegate listThe list contains each delegate’s name, organisation and email address. The conference organisers have excluded delegates who have withheld permission to publish their details.

Dietary requirementsIf you have notified the conference of any special dietary requirements, please speak to a member of the catering staff. Visit the conference registration desk if you require any further assistance.

DisclaimerThe conference reserves the right to change the program at any time without notice.

Activity Based Funding Conference 2014 mobile app

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Alternatively, tap on More and then on Abstracts to view the complete list of abstracts.

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Entitlements

Registration categoryWorkshop sessions

Conference sessions

Networking event

Lunch and tea breaks

Full workshop and conference registration √ √ √ √

Conference only √ √ √

Workshop only √ √

Tuesday registration √ √ √

Wednesday registration √ √

MessagesAll messages received during the conference will be placed on the message board in the registration area. To collect or leave messages please visit the registration desk.

Mobile phonesAs a courtesy to fellow delegates and speakers, please ensure your mobile phone is switched off during conference sessions.

Name badgesEach delegate registered for the conference will receive a name badge at the registration desk. This badge will be your official pass and must be worn to obtain entry to all sessions and networking functions.

Photography / videographyThe conference may arrange for photography / videography onsite throughout the event. The images may be used for post-conference reports, case studies, marketing collateral and may be supplied to industry media if requested. If you do not wish to be included in the shot, please move out of the range of the camera.

Prayer roomSeparated male and female prayer rooms including washing facilities are located in the Convention Centre off the main foyer.

Registration desk operating hours

Monday 23 June 2014 0730 – 1700 Level 2 Foyer 2.5 and 2.6

Tuesday 24 June 2014 0800 – 1600 Main Foyer 3

Wednesday 25 June 2014 0800 – 1600 Main Foyer 3

Social mediaConnect with IHPA, speakers and your fellow delegates through the hashtag #ABF14 and by following @IHPAnews on Twitter. You can also connect via LinkedIn by following the Independent Hospital Pricing Authority page.

Speakers’ preparation roomThe speakers’ preparation room is located in room 201. The room will be open at the following times:

Monday 23 June 2014 0800 – 1700

Tuesday 24 June 2014 0700 – 1700

Wednesday 25 June 2014 0830 – 1600

Speakers are asked to visit the speaker preparation room well in advance of their session to upload their presentations and make any final changes if required.

SmokingSmoking is not permitted in, or outside of, the session rooms.

TransportThe central business district is 30 minutes from the airport. A taxi costs approximately AUD$40.00. A regular airport to city bus service (Skybus) departs the airport or city every 10 minutes between 0600 and 2400 and every 15 to 20 minutes between 2400 and 0600. The cost is approximately A$18.00 one way or A$30.00 return.

Melbourne’s public transport ticketing system allows multiple journeys using the complete Myki transport network. Tickets are known as Myki cards and provide flexible travel on trains, trams and buses. Check maps located at stations, tram stops and on transport to match your ticket to your journey. Myki cards can be purchased at major train stations, selected tram stops within the CBD and at convenience stores.

WiFiComplimentary WiFi can be accessed by delegates. To connect to the wireless network please select “M Connect” through your wireless device and generate an account.

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Speakers

International speakers

Cathy SchoenCathy Schoen is Senior Vice President of The Commonwealth Fund. Ms. Schoen is on the Fund’s executive management team and leads

the Fund initiative on controlling health care costs.

Her work also includes comparing and assessing U.S. and international policy developments. As research director for the Fund’s Commission on a High Performance Health System from its inception in 2005 to its closing in 2013, she developed policy options and “scorecards” assessing health system performance across the U.S. Prior to joining the Fund in 1995, Ms. Schoen taught health economics. In the 1970s, she was staff to President Carter’s health insurance task force.

She has authored numerous articles on health policy, insurance, and national and international health system performance and co-authored the book, Health and the War on Poverty. She holds an undergraduate degree in economics from Smith College and a graduate degree in economics from Boston College.

Dr Michael WilkeDr Michael Wilke is Managing Partner of Dr Wilke GmbH, a Munich based private Diagnosis Related Groups (DRG) research

institute and consulting company.

His primary focus of research is combined analyses of casemix data and clinical care settings with a focus on infectious diseases.

Dr Wilke is active in DRG development projects in Germany and other countries. His institute is currently conducting a major research project with the German Medical Society of Gastroenterologists, where the reflection of endoscopic services in the G-DRG system shall be optimised.

He is also steering a costing study with over 40 hospitals and developing recommendations for the Institute for the Hospital Remuneration System (InEK-institute) in Germany.

Dr Wilke is a member of the German Paul-Ehrlich Gesellschaft (PEG) and is part of the committee that develops the guidelines on initial intravenous antibiotic therapy.

In 2012 he was involved in an analysis of the healthcare system and hospital payment system in Kyrgyzstan. In this project he developed recommendations to optimise health service provision and hospital payment in this country.

From 2001, Dr Wilke was the head of the DRG Competence Center at Munich Schwabing Hospital. During this time he conducted various national and international DRG research projects and was a member of the national DRG advisory board at the German Ministry of Health.

Prior to this, he worked as a clinician in surgery, anaesthesia, intensive care and emergency medicine. Since 1995 he has worked in various hospital reorganisation projects as well as participating in budget planning.

He has been a member of Patient Classification Systems International (PCSI) since 2000 and a member of the Scientific Committee since 2005.

Domestic speakers

Professor Christine BennettProfessor Christine Bennett was awarded an Officer of the Order of Australia (AO) in the Australia Day 2014 Honours List. The

award recognises Professor Bennett’s distinguished service to medicine and health care leadership, as a clinician, researcher and educator, particularly in the fields of child and family health, and social policy.

Professor Bennett was appointed to the role of Professor and Dean, School of Medicine, Sydney, The University of Notre Dame Australia in May 2011. Prior to this appointment, Professor Bennett was the Chief Medical Officer for Bupa Australia Group.

Professor Bennett is a specialist paediatrician and has over 30 years of health industry experience in clinical care, strategic planning and senior management in the public, private and not-for-profit sectors. She is a Fellow of the Royal Australasian College of Physicians and has an active commitment to and involvement in medical professional issues, social policy and medical research.

In February 2008, Professor Bennett was appointed by the then Prime Minister Kevin Rudd as Chair of the National Health and Hospitals Reform Commission that provided advice to governments on a long term blue print for the future of the Australian health system. The report was presented to the government in June 2009.

Professor Bennett’s experience has included being Partner in Health and Life Sciences for KPMG Australia, CEO of Research Australia, CEO of Westmead Hospital, General Manager for the Royal Hospital for Women and Head of Planning in NSW Health.

She has held many Non-executive Director roles for private and publicly listed companies, as well as government and charitable organisations.

Professor Bennett is currently Chair of The Australian National Preventive Health Agency Advisory Council; Research Australia – an alliance of over 170 member organisations promoting health and medical research in Australia; The Sydney Children’s Hospitals Network in NSW; and the Bupa Health Foundation Steering Committee.

Professor Bennett currently sits on the boards of Capital Markets CRC, Bupa Health Dialog and ICON (Integrated Clinical Oncology Network). She was previously on the board of HeartWare Inc – a medical device company listed on both NASDAQ and the ASX (2004 to 2012), Obesity Australia (2011 to 2013) and was Deputy Chair of the Schizophrenia Research institute (previously NISAD) (2000 to 2006).

A mother of five children, Professor Bennett is passionate about giving all children a healthy start to life; supporting the mental health and wellbeing of young people; addressing the boarder determinants of health; educating future doctors and health leaders; and the importance of empowering people to have the central role in their own health and health care decisions.

In 2013, Professor Bennett was selected as a finalist in NSW for Australian of the Year.

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Beress BrooksBeress is currently the Director of Health Services Purchasing in the Western Australian Department of Health. In this role he has

responsibility for leading the development of health services purchasing in the Western Australian public health system using an Activity Based Funding (ABF) and management methodology.

Beress has worked in a number of senior roles in the Western Australian Public Health System including operational and senior management roles in the Metropolitan Area Health Services.

Beress has significant experience in clinical casemix and development and implementation of Activity Based Management in a health system including development of classification systems, implementation of clinical costing systems and operational management in an ABF environment.

Frances DiverFrances Diver is the Deputy Secretary, Hospital and Health Service Performance within the Department of Health Victoria. In this position

Frances is responsible for managing the governance and formal accountability arrangements, including the performance of public health services across the state of Victoria. Her responsibilities include policy and program development for acute health and ambulance services, service planning, delivery of a 2.3 billion dollar capital program, health data collections and funding policy. Frances also leads the quality and safety programs.

Victoria operates a devolved governance structure for health service delivery and Frances works extensively with boards, senior management and clinicians across the sector to deliver the government’s policy. In her role Frances also works closely with other government agencies and with relevant Ministers. She leads a division of more than 200 staff and is directly accountable for a budget of approximately 9 billion dollars.

Frances has worked extensively within the health sector in clinical and managerial roles with over 30 years of experience in metropolitan and rural health services, government, community based services, public health, unions and private hospitals.

James DownieJames Downie is the Executive Director of Activity Based Funding (ABF) at the Independent Hospital Pricing Authority (IHPA). He leads the

teams responsible for delivering the classification, costing and pricing functions of IHPA as well as the data acquisition activities.

Prior to this he was Manager Funding Systems Development in the Victorian Department of Health, responsible for Victoria’s existing funding models and the national ABF developments. He has also worked on service redesign at the Royal Children’s Hospital in Melbourne, and prior to that spent 15 years in the mining industry.

Professor Stephen DuckettProfessor Stephen Duckett is Director of the Health Program at Grattan Institute in Melbourne and Professor of Health Policy at La Trobe

University. He has held senior health care leadership positions in Australia and Canada, with a reputation for creativity, evidence-based innovation and reform in areas as diverse as hospital funding (introduction of Activity Based Funding for hospitals) and quality (new systems of measurement and accountability for safety of hospital care).

Professor Duckett is an economist with a Masters and PhD in Health Administration from the University of New South Wales and a higher doctorate, the DSc, awarded on the basis of his scholarly contributions, from the Faculty of Medicine of the same University. He is a Fellow of the Academy of the Social Sciences in Australia.

Joanne FitzgeraldJoanne Fitzgerald is Senior Manager, Classification Standards at Independent Hospital Pricing Authority (IHPA). In this role, Joanne

provides technical input and has oversight of all of the Activity Based Funding (ABF) classifications.

Joanne has over 15 years of experience as a health information manager, working as a clinical coder and later a medical records manager. Joanne was Clinical Information Manager at the Royal Rehabilitation Centre Sydney for a number of years, overseeing coordination of the medical record department, hospital data collections and classifications, policy development and management of release of information and privacy for the hospital. Joanne has also worked in the NSW ABF Taskforce, specifically dealing with ABF for subacute care in NSW.

Dr Rohan HammettDr Rohan Hammett is a Consultant Physician in Gastroenterology. Over the last two decades he has worked in the Australian, US and UK health

systems and has performed senior clinical and management roles within the New South Wales and Commonwealth health systems.

Dr Hammett was appointed as Deputy Director-General, Strategy and Resources at the NSW Ministry of Health in February 2012. Prior to this appointment, he was the National Manager of the Therapeutic Goods Administration (TGA) and previously the Principal Medical Adviser at the TGA.

His portfolio responsibilities within the NSW Ministry of Health include the development and implementation of strategic policy initiatives relating to health system funding and sustainability; integration of primary, community and tertiary care to deliver improved patient outcomes; aged care; rural health; service and capital planning; health technology evaluation; inter-government negotiations and Commonwealth-state relations.

Dr Hammett is a member of the board of the Sax Institute, Health Infrastructure, the Agency for Clinical Innovation and the Clinical Excellence Commission. He is the NSW representative on the Hospitals Principal Committee of the Australian Health Ministers’ Advisory Council.

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Michael KalimniosMichael Kalimnios commenced as Chief Finance Officer for the Department of Health, Northern Territory in November 2012. Michael is a

Chartered Accountant who has worked in the public health sector for over 20 years, with his most recent position being Deputy Director General Corporate Services in Queensland Health.

Michael has had broad experience across all areas of corporate services and has participated and led many significant reforms of back office functions in support of better delivery of clinical services during his career.

With significant experience in corporate service provision, Michael has also taken on the role of Acting Executive Director Corporate Services to assist with transitioning corporate bureau services into the new service framework.

Charles Maskell-KnightCharles Maskell-Knight PSM is Principal Adviser in the Acute Care Division of the Commonwealth Department of Health. He has worked in the

department for over 20 years and can remember when the casemix section had five staff and a consultant. Charles has worked on hospital financing policy for many years and was heavily involved in the development of the National Health Reform Agreement which moved Commonwealth hospital funding to an activity basis.

A/Prof. Alasdair MacDonaldAlasdair MacDonald is a physician in general and acute medical practice, a member of the National Lead Clinician Group and the Past President of

the Adult Medicine Division of the Royal Australasian College of Physicians (RACP).

His physician work started in private practice with limited public hospital sessions and he still has a small private practice. His current appointments include Director of Medicine at the Launceston General Hospital and Clinical Associate Professor at the University of Tasmania. After graduation and before physician training Alasdair worked in general practice, emergency and intensive care.

Alasdair is a Past President of Internal Medicine Society of Australia and New Zealand. At the RACP he is involved in physician training along with being a member of the Senior Examination Panel. He is on the Clinical Advisory Committee to the Independent Hospital Pricing Authority and advisory committees to Australian Commission on Safety and Quality in Health Care and National Health Performance Authority. He is the chair of the Tasmanian Lead Clinician Group and is one of the Commissioners into the delivery of healthcare to Tasmania.

Jennifer NobbsJennifer Nobbs recently joined the Independent Hospital Pricing Authority (IHPA) as the Director of Mental Health Care. She leads the team responsible

for developing a new classification for mental health services.

Jennifer joined IHPA from the NSW health system where she was senior advisor to the NSW Minister for Mental Health and

Healthy Lifestyles, and prior to that manager of national and state priorities in the Mental Health and Drug & Alcohol Office at the NSW Ministry of Health. Jennifer previously worked in the UK at the Ministry of Justice, managing legislation to develop a new regulatory structure for the legal services sector.

Chris O’GormanChris O’Gorman has over 25 years of experience in Health and hospitals holding Executive Director and senior management

roles in public, teaching hospitals in a casemix/Activity Based Funding (ABF) environment in Victoria.

Since 2009, as a consultant to the Health Roundtable, Chris has led the Costing Improvement Group in the development of peer-based, management costing briefings, highlighting significant, potential savings opportunities across participating health services.

The costing group produces cost analysis across the patient journey of inpatient, emergency, and outpatients including standard cost reports, peer comparison briefing reports, and cost verses revenue analyses for around 40 to 50 hospitals across Australia and New Zealand.

Over the last five years, Chris has consulted to a range of organisations including the Victorian Department of Health. Relevant projects include examining the development of performance measures to assist health service performance monitoring, and reviewing the current state and future directions of clinical costing in Victoria in an ABF environment.

Michael PervanMichael Pervan is the Deputy Secretary of System Purchasing and Performance with the Tasmanian Department of Health and Human Services and is

responsible for the implementation of Activity Based Funding and other funding and performance reforms in Tasmania. Prior to this appointment he was the CEO of the Royal Hobart Hospital from September 2008 and became the inaugural CEO of the Southern Tasmanian Area Health Service at its creation in July 2009.

He previously occupied key reform roles including Director Acute Care Strategies and Reform with the Department of Health and Human Services in Tasmania and Director of Western Australia’s Health Reform Implementation Taskforce as well as the statutory position of Commissioner of Health. Michael is a Churchill Fellow and has also worked in areas such as ethics and accountability and change management.

Kym PiperKym Piper is the Director, Data & Reporting Services in SA Health. In addition to overseeing the national activity based funding work, Kym

has responsibility for South Australia’s local casemix funding model and all data and reporting matters in SA Health.

Kym’s involvement with Activity Based Funding dates back to the late 1980s when South Australia was experimenting with various casemix funding models and is joyously still involved.

Speakers

Domestic speakers continued

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Bob SendtBob Sendt is the inaugural Administrator of the National Health Funding Pool. He is also a director of Healthdirect Australia, a former Chair

of Job Futures Ltd, and a former director of the Accounting Professional & Ethical Standards Board, the NSW Cancer Council and Australasian Reporting Awards Limited.

Bob had a long career in the NSW public sector including a seven-year term as NSW Auditor-General. Prior to that he held a number of senior roles in the NSW Treasury over a 22-year period.

Bob is a Fellow of the Australian Institute of Company Directors, of CPA Australia and of the Institute of Public Accountants.

Dr Tony SherbonDr Tony Sherbon has been Chief Executive Officer of the Independent Hospital Pricing Authority (IHPA) since December 2011 when

IHPA was established under the National Health Reform Act 2011.

Before taking up the position at IHPA, he had 22 years of experience in health and public administration including leadership of the South Australian Health Department from 2006 to 2011. He has also held senior leadership roles in the New South Wales and Australian Capital Territory health systems.

Dr Sherbon has previously chaired the Australian Health Ministers’ Advisory Council, and has been a board member of the South Australian Health and Medical Research Institute, National E-Health Transition Authority and Health Workforce Australia.

Joanne SiviloglouJoanne has been employed at the Independent Hospital Pricing Authority for close to two years as the manager of hospital reporting and costing.

During this time she has worked on the National Hospital Cost Data Collection (NHCDC) for Round 15, 16 and 17, updated the Australian Hospital Patient Costing Standards version 3.0 and provided technical assistance on various projects and studies.

Prior to this she had been the Costing Analyst at Austin Health for close to 15 years. There she was responsible for maintaining and reviewing both the inputs and outputs of the costing system as well as responsible for providing benchmark and project reports at various levels of management, both internally and externally.

Joanne was also a Director on the Clinical Costing Standards Association of Australia (CCSAA) which developed and produced the clinical costing standards. These standards provided information and guidance for clinical costing managers and users in Australia and for CCSAA international users who are all members of CCSAA.

Her career in clinical costing began at St. Vincent’s Hospital in 1990 where she was working partly as a Management Accountant in Finance and partly as a Costing Analyst for

the Clinical Costing Department. Prior to commencing at the Austin, Joanne worked at Women’s and Children’s Hospital as a Management Accountant in the Finance Department and assisting in the costing processes there.

Joanne holds a Bachelor of Business (Accounting).

Shane SolomonShane Solomon has over 30 years of international and national healthcare management expertise. In April 2013, Shane was appointed as Head of

Health for Telstra’s new Health Business Unit. Shane is also the Chair of the Independent Hospital Pricing Authority.

Prior to joining Telstra, Shane was KPMG’s Partner in Charge, Healthcare. In this role, he worked with state and Commonwealth governments, along with private sector health organisations.

Shane was the Chief Executive of the Hong Kong Hospital Authority, managing Hong Kong’s 57,000 public hospital staff. During his five-year tenure, he implemented significant funding and service quality reforms, including a casemix pay for performance model and the ongoing development of a comprehensive integrated e-health system.

In Victoria, Shane was Under-Secretary of Health at the Department of Human Services (as it then was) where he was responsible for managing the funding system (including casemix) for Victoria, and performance and governance of Melbourne metropolitan health services. He was responsible for developing the Hospital Admission Risk Program and governance reforms to Victoria’s public hospital system.

Shane was the first Group Chief Executive Officer of the integrated Sisters of Mercy Victorian hospital and aged care services group, merging public hospitals, private hospitals, aged care services and palliative care services into a single new organisation and expanding the Sisters of Mercy mission from five entities to 12.

Nick SteeleNick Steele joined Queensland Health in early 2010 as Chief Finance Officer for Clinical and Statewide Services. His current role is Executive

Director, Healthcare Purchasing, Funding and Performance Management. This has involved the development of the Queensland Healthcare Purchasing Framework, implementation of the national Activity Based Funding model and negotiation and management of service agreements with Hospital & Health Services and Mater Health Services.

Prior to emigrating to Australia Nick worked for the National Health Service in England as an Assistant Director of Finance at a major acute teaching hospital and Finance Director at two Primary Care Trusts.

Nick holds an Economics degree from The University of Leeds, is a member of the Australian Institute of Company Directors and has dual membership with CPA Australia and the Chartered Institute of Public Finance & Accountancy in the UK.

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Abstracts

Activity Based Funding implementation – counting activity correctly and consistently counts

Kathleen Alloway, Department of Health Western Australia.

Reporting activity correctly is essential in an Activity Based Funding (ABF) environment. This presentation will highlight key issues, challenges and risks for health services in collecting quality activity data and how the provision of effective policy is critical to ensuring compliance with activity reporting rules and requirements.

Key points

• Activity counting and classification

• Change Management

• Hospital implementation of ABF

• Policy development and evaluation

• Data quality and reliability

Background

ABF Management as the principal funding mechanism means that counting and classifying of activity accurately and consistently is especially important so that we may use the data with confidence to:

• Inform the setting of health activity levels for clinical service planning.

• Inform funding and budget allocations to area health services.

• Provide information to measure and assess performance

• Provide reliable information to national bodies (e.g. inform Commonwealth funding to Western Australia).Provide reliable data for a range of uses (e.g. research, performance management and other national and local reporting requirements).

The WA Health’s Admission, Readmission, Discharge and Transfer (ARDT) policy is critical to ensuring compliance with activity reporting. It is the first policy of its kind in the state in terms of its scope and scale. It is innovative as it reflects or replaces key information from several related documents providing a one stop policy document guide to effectively classify and count activity.

Of relevance is how the policy is one of the most successful mechanisms we have used to engage health services in the implementation of ABF.

The policy was developed through research into other health jurisdictions and in collaboration with staff across WA Health. It outlines the requirements for ensuring consistent and meaningful activity data collection in a range of settings.

Results

The policy was audited in 2012 and 2013 identifying a range of concerns with interpretation, business practice alignment, policy awareness and documentation. Conflicts with existing work practices and programs such as national emergency access targets have had to be resolved through engagement, negotiation and problem solving workshops bringing together

staff from across WA Health. As a result of this work we have achieved a 98 percent reduction in short stay invalid admitted activity.

Audit results have informed adjustments to activity projections and budget allocation for 2013 – 2014 ensuring funds are distributed efficiently and equitably across our health care system, to achieve value for money and deliver the most benefit to patients and the community.

A range of projects with stakeholder groups are ongoing as we work through the range of admitted care activity, improving both compliance with the policy and the quality of activity data for its use in a range of applications including funding.

Conclusion

Policy management can vary across the health services. Policy written does not equal policy implemented and there are gaps in the implementation, education, monitoring and compliance. Activity is complex and ongoing support to health service colleagues about the importance of how this is classified and counted is vital to success.

Integrating patient costing with health unit management – a case study

Garth Barnett, PowerHealth Solutions

Background

During 2013, the South Australian Department of Health (SA Health) implemented the Power Performance Manager (PPM) patient costing system throughout its five Local Health Networks (LHNs), giving the department a new ability to cost outpatient & emergency activity at the encounter level, along with inpatient activity.

During this session, I will cover SA Health’s implementation stages configuration setups and standards, including lessons learnt and quality check tips.

Integrating patient costing with health unit management

Following on from the SA Health implementation, PowerHealth Solutions has been further engaged by two LHNs (Northern Adelaide and Central Adelaide) to integrate patient costing within their operational management. This process has had a dual role to improve the quality of patient costing, as well as to educate the business in utilising costing results.

I have conducted numerous workshops and sessions aimed at the different business levels to communicate the common goals of ABF, patient costing, and how they participate in the process. These were aimed at the key business stakeholders LHN executive, finance staff, and divisional management.

At every session, I have used LHN activity costing information relevant to their areas to engage their attention. For example, the divisional workshops, which each had different specific issues, I provided benchmarking reports to assess high and low performing areas. It is intended that costing information will form part of their monthly performance reviews and assist them in developing targeted efficiency improvement strategies.

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Benchmarking reports

At the conference, I will be sharing many of these benchmarking reports in detail, and demonstrating how to use patient costing information to target performance improvement. Patient costing business intelligence has generally been underutilised, and now under an ABF environment, it is more important than ever to use it to your advantage.

For health organisations to thrive under ABF, measuring performance against the National Weighted Activity Unit is vital in order to know when to take corrective action to maximise their funding revenue and minimise loss activities.

Conclusion

This case study shows that under ABF, when health units successfully integrate patient costing into their business, the quality of the performance management and decision making increases, which is a win-win situation for everyone involved.

Building the blocks for strong foundations for Activity Based Funding: a New South Wales Health partnership approach

Melanie Boursnell, NSW Health Education & Training Institute; Anita Jacobsen, NSW Health Education & Training Institute; Aditi Wahi, NSW Health Education & Training Institute; Rajita Jeyapalan, NSW Health; and Alfa D’Amato, NSW Health

This paper provides a case study of the work undertaken in partnership between the Activity Based Funding (ABF) Taskforce in New South Wales (NSW) Health and the Health Education & Training Institute also at NSW Health. This partnership was formed in order to support the implementation of ABF management within NSW Health. This paper will outline the methodological approach taken and strategies/activities to date to support and build strong foundations for Local Health Districts and specialty networks to move towards successfully achieving full implementation of ABF management. The authors will provide some examples of these and discuss their successes and key learnings.

In outlining achievements to date we will discuss the principle learning approach undertaken which is based on increased capacity in this instance to function within a system of health reform. The cognitive-rational approach learning developed is based on the premise that NSW Health employees need to be empowered to operate in the ABF management environment which itself is transforming their roles and responsibilities and requires perspective transformation (Mezirow,1996). The authors will outline the overlap between the implementation of ABF management education and its correlation with the units other activities in up skilling NSW Health workforce in the fields of both clinical coding and costing. We will show how the educational approach is contextually based, in that increasing the quality of knowledge about ABF management also impacts on other work such as the clinical coding workforce enhancement education program which in turn is enabling more health staff to operate within an ABF environment and identify accuracies and efficiencies in clinical documentation. Therefore, whilst the primary activity of the partnership is ABF management education, robust foundations are developing in numerous supporting and complementary areas which are interrelated.

Secondly, this paper will also discuss the partnership between the two organisations which is fundamentally built around the core values of NSW Health and operates on collaboration, openness, respect and empowerment. The agreed approach

to the development of educational learning offerings and resources itself has been built on the methodological principles of transformational learning. One of the interesting, albeit unanticipated outcomes that will be discussed in this paper is that the andragogical approach taken whereby learning can occur both gradually or from a sudden, powerful experience to assist NSW Health to change the way that people see health reform has also impacted on the participants of the partnership in that they have also gained significant learning from the collaboration (Clark,1993; Kegan,2000). Examples of the positive impact of the partnership and transference into the health service delivery environment will also be outlined.

Apples and oranges – a review of Australian Diagnosis Related Group A06 to assess the homogeneity of the DRG grouping and the impact of the bundled intensive care unit payment

Stuart Bowhay, Children’s Health Queensland

The understanding of clinical casemix and costs within a Paediatric Intensive Care Unit (PICU) is a critical element of performance management and it is essential that patients are classified in a clinically meaningful way that is matched to resource utilisation for an Activity Based Funding (ABF) system to be fair and equitable.

Summary analysis of patient activity and costs at Children’s Health Queensland (CHQ) indicates a wide ranging underlying patient casemix with considerable variation in patient length of stay and associated costs.

Background

The CHQ Paediatric Intensive Care Unit (PICU) is a high cost area accounting for six percent of the total hospital budget.

The A06 group represents a low volume, high cost cohort of patients at 0.2 percent of total CHQ separations, 6.7 percent of total cost CHQ and 38 percent of total PICU bed day utilisation.

Method

Analysis of CHQ activity for the July 2012 to February 2014 period identified 140 patient separations for ADRG A06 (Version 7).

The patient total length of stay in the A06 group ranged from one to 274 days (average 31.5 days) with a PICU length of stay ranging from one to 165 days (13.7 Days).

High level analysis of ADRG A06 showed episodes across all clinical units and a regrouped sample of 72 patients (with the PICU ventilation component excluded) indicated activity across 11 major diagnostic groups providing further evidence of wide casemix variation.

Analysis of CHQ data indicates the assigned DRG is not a good indicator of likely length of stay or cost. The revenue benefit of short stay patients is outweighed by the impact of the longer stay PICU patients with an additional 291 PICU bed days utilised above the indicated national intensive care unit average length of stay.

Conclusion

Analysis of CHQ patient data supported by clincian interviews indicates a wide underlying range of casemix impacting on cost and length of stay within ADRG A06.

The CHQ Intensivists view is that for children, ADRG A06 is not clinically meaningful and tracheostomy nor surgical procedures provide a reliable indicator of cost (45 percent of A06C patients had a higher cost than the 2014 – 15 paediatric inlier price, an

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indication that a DRG split based on surgical procedures may not be as relevant for paediatric cases).

It is recommended that further patient differentiation including the development of more paediatric focused DRGs be considered including the assessment of complications and comorbidities such as multi organ failure and oncology diagnoses to provide a better indicator of likely costs.

The unpredictable PICU length of stay, cost and underling casemix are inconsistent with a bundled, semi-fixed price that fund these patients, consideration to unbundling the PICU payment and funding on a per diem basis should be considered to provide a more equitable model.

Student clinical education: a scoping study on the role and contributions of universities

John Buchanan, University of Sydney; Linda Scott, University of Sydney; and Sascha Jenkins, University of Sydney

Given the doubling of university enrolments in health degrees in the previous decade, clinical placements have become a matter of growing interest and challenge for those concerned with the development of future health professionals and with sustaining a high quality health system. This scoping research examines how clinical placements operate and the benefit they provide to NSW Ministry of Health and the community at large. It covers developments in the following disciplines at The University of Sydney: dentistry, exercise physiology, medicine, nursing and midwifery, nutrition and dietetics, occupational therapy, pharmacy, physiotherapy, psychology, radiation science, rehabilitation counselling, social work, and speech pathology. The research involved a review of academic and grey literature and key informant interviews with 26 stakeholders. Special attention was devoted to getting interdisciplinary agreement of where different disciplinary of clinical placements sit relative to each other.

The research found that there is no one standard model of student clinical placements. Instead they differ dramatically on the basis of two dimensions: the capacity a student has to practice autonomously (the degree to which a student is able to deliver a service in the profession for which they are studying before or at graduation) and how embedded the learning experience is within a worksite (or, the extent to which on-the-job learning arrangements within the degree are defining, integral or relatively incidental to the education of health professionals).

While there is no one model of clinical placement, all contribute significant benefits to the health system. These benefits fall into one of six categories: provision of direct clinical services, provision of indirect services (e.g. quality assurance), improvements in human resource operations and climate, continuing professional development of core staff, innovation from research and benefits arising from having a large pool of workers with transferable skills acquired through on the job learning experiences. Given the complex nature of governance, administrative and relational arrangements that enable the current system of clinical placements to operate, the research concludes a move away from a transactional system of engagement between universities and health providers and towards the creation of a new, more financially sustainable compact concerning the development of health workforce professionals is necessary.

Equipping allied health for Activity Based Funding – a marriage between clinical and technical partners

Paula Caffrey, NSW Ministry of Health; Patricia Bradd, Sydney Local Health District; Christine Fan, Sydney Children’s Hospital Network; and Steve Bowden, South Eastern Sydney Local Health District

On 30 July 2012, the New South Wales (NSW) directors of allied health, NSW Activity Based Funding (ABF) Taskforce Unit and the Chief Allied Health Officer held a NSW Allied Health ABF Forum. The forum aimed to facilitate a state wide discussion in order to identify strategies which could assist allied health to create a common understanding of ABF issues and processes affecting allied health in NSW Health.

A pre-forum questionnaire in relation to ABF collected from nine allied health disciplines indicated significant variability in understanding of ABF principles and methods across allied health disciplines and Local Health Districts. There was an overall self-reported reduced understanding of both costing and coding processes for most disciplines. The ability to capture patient level and clinical level data varied and disciplines did not appear to have a common state wide code set.

The 2012 forum served as an opportunity for allied health disciplines, the allied health directors and the NSW ABF Taskforce to liaise with interested allied health clinicians in planning for future ABF and data related issues. This led to the formation of a NSW Allied Health ABF Strategy Steering Committee and proved a catalyst for a successful partnership between the NSW ABF Taskforce and allied health clinicians.

One of the outcomes of this partnership has been the development of allied health minimum data set standards and requirements for clinician level data as well as patient level data for ABF and other purposes. This information will better inform cost derivation, from which national prices are derived and help ensure consistent counting coding and costing of allied health activity across the state. Extensive work has been undertaken within and across disciplines to establish and revise the code sets to ensure:

• Compliance with data entry through the management of code set length and definitions.

• Usability of the data for planning / service evaluation and establishing and clarifying the purpose of data collection.

• Greater internal consistency of the code sets within allied health disciplines.

• Greater cohesiveness of code sets between allied health disciplines.

Other outcomes of the partnership to date include:

• The implementation of a state wide approach to improving accurate data collection and data reporting through state wide resources.

• The development of systems and resources which support the education and training of allied health clinicians in ABF, including an Allied Health Fact Sheet.

• Informed contribution to the development of a National allied health minimum data set.

Future work is being scoped for the development of a suite of benchmark reports which compare activity and costs between peers for each allied health discipline. This will encompass the provision of information on models of care and best practice for

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key areas of quality and efficiency improvement. It will also entail using data evidence to highlight any impacts to services under ABF arrangements.

After the big bang: the creation and expansion of the non-admitted Activity Based Funding universe – a New South Wales experience

Xiao Cai, NSW Ministry of Health

A novel approach: the speaker reflects on the New South Wales (NSW) experience in developing an understanding of the non-admitted services Activity Based Funding (ABF) space.

Like the black skies that our forefathers stared into, the non-admitted universe has been there, observed by clinicians and hospital administrators alike. Yet, our understanding of the non- admitted universe remained fairly static for a long period.

The introduction of ABF to non-admitted services provided a catalyst for a new renaissance in work and exploration to further understand this area. In NSW, this took us on a journey of discovery. Our understanding of the non-admitted space has evolved in leaps and bounds since the big bang (the signing of the National Health Reform Agreement in 2011).

Much of what we now know is vastly different to what we knew a mere three years ago. As a direct result of an integrated effort of NSW Ministry of Health, Local Health Districts, hospitals and services, the patient level data reported has increased from 0.7M service events in 2011 – 12 to over 4.5M service events in 2012 – 13. Predictions show that the non-admitted universe is still expanding and patient level reporting will continue to increase in 2013 – 14. This has dramatically improved NSW’s ability to cost and understand non-admitted services, and paves the way to apply activity based management principles in the area.

Take a journey with NSW as the speaker outlines how:

• NSW developed and matured its understanding of counting, classifying, costing and funding in this continuously expanding non-admitted universe.

• The challenges in launching of a viable non-admitted ABF model.

• The planned trajectory for future work.

Building your own Activity Based Funding budgets in a purchaser provider environment – a DIY approach

Stephen Cole, Gold Coast Hospital & Health Service

In a purchaser provider environment it is useful to be able to align the purchased activity as revenue with your expenditure by developing methods that allow you to track the expenditure relationship with revenue. Building an Activity Based Funding (ABF) budget is one method that facilitates this.

Our ageing clinical costing system provided some ABF budget capabilities, but there were a number of difficulties and risks associated with using this tool, hence a methodology using more accessible tools was developed.

The initial intention at the Gold Coast Hospital and Health Service (GCHHS) was to develop the ABF budget as a proof of concept, following which it would be developed to run alongside our conventional budget build.

After ensuring that the patient level data included the relevant revenue coding and the purchasing target groupings, internal weights were developed for each target group, for each

department, and the type of cost (direct or indirect). It was not necessary to develop weights to the same level as the funding for the initial budget development. For example, it was possible to develop weights at the Surgical Related Group level rather than the Diagnosis Related Group level if there was a clean alignment with the structure used for the traditional budget. All analysis and processing was done using Microsoft Excel, SQL Server, or Crystal Reports. The costing system provided data allowing the apportioning of indirect activity components to the overhead departments such as finance and human resources. Within our costing system, the departments represent groupings of costs centres; hence it was possible to align the activity directly to the cost centres.

The key outcome was initially to determine what the level of alignment was with the conventional budget build. This proved to be very high and highlighted the anticipated differences in the clinical divisions. More interestingly was the allocation of the activity component to the non-clinical areas which in most areas demonstrated fairly high congruency with the conventional budget, but importantly, in the areas where there was a disparity, it was possible to highlight the reasons for the disparity. The initial findings were presented to other interested sites in Queensland in a workshop, and it is anticipated that further work will be done to develop standard procedures and benchmarking opportunities.

Whilst it will take time for the ABF budget build process to mature at GCHHS, it will form part of our standard budget development as we seek to match our expenditure to our ABF revenue in a Purchaser Provider environment.

Length of stay and cost impact of hospital acquired diagnoses: multiplicative model for South Eastern Sydney Local Health District

Dominic Dawson, South Eastern Sydney Local Health District; Jenny McNamee, University of Wollongong; and Michael Navakatikyan, University of Wollongong

Background

The Classification of Hospital Acquired Diagnoses (CHADx) groups administrative diagnosis codes International Statistical Classification, Tenth Revision, Australian Modification (ICD-10-AM) into a hierarchy of 17 classes and 145 sub-classes which describe hospital acquired conditions (Jackson et al., 2009a). CHADx was originally designed to be used at the hospital level to identify and address specific areas of concern, however, if adjustments are made to account for variables such as age, hospital specific casemix and existing levels of comorbidity, the classification can be used to assess the impact of hospital acquired conditions across a number of hospitals.

Objective

To identify opportunities for reducing unwarranted clinical variation and any avoidable waste; the additional Length of Stay (LOS) and cost that may be attributable to issues of care quality and unwarranted clinical practice variation, by assessing the incidence and impact of hospital acquired diagnosis in overnight inpatient episodes in the South Eastern Sydney Local Health District.

Method

Inpatient episodes for two financial years 2011 – 12 (92,250) and 2012 – 13 (94,185) were grouped using the Condition Onset Flag (COF) and CHADx to identify complicating diagnoses that arose during an inpatient episode: the application of the COF, a key

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variable in the CHADx grouping, was validated using Jackson et al. (2009b) software, and CHADx v.4.1was applied using software developed by the authors Utz et al. (2012).

The following variables were used in the model to adjust for other factors that may cause increases in LOS and costs; Charlson Comorbidity Index, Australian Refined Diagnosis Related Groups (AR-DRGs) v6.x, separation type, age group, episode type (acute, other), urgency on admission. This was done to ensure that the LOS and cost impact that was measured could not be attributed to these factors. An additional variable, the CHADx indicator, was created to identify the number of CHADx codes assigned for an episode (0, 1 to 10+), and a number of statistical models were applied in the subsequent analysis.

Results

Assignment of episode data to COF and CHADx resulted in 14,832 and 15,391 episodes with at least one CHADx code allocated for 2011- and 2012 – 13, respectively. This equates to 9.5 percent of all episodes for both years (including same day episodes).

For episodes with at least one CHADx diagnosis code the additional LOS and cost per patient were: LOS_add2011/12 = 7.3days, LOS_add2012/13 = 6.6days, direct_costadd2011/12 =$9,266. After adjusting for confounders using Model 1 (impact based on number of CHADx diagnosis codes), the additional LOS and cost for episodes with CHADx were: LOS_addj2011/12 = 5.4days, LOS_addj2012/13 = 4.5days, direct_cost_addj2011/12 =$6,333.

The adjusted additional LOS and cost equated to an additional 16 percent, 14 percent and 19percent respectively for LOS2011/12, LOS2012/13 and direct cost2011/12.

Conclusion

This analysis demonstrates that there is an observed additional cost and LOS for episodes with hospital acquired conditions identified using the CHADx. However it does not comment on the extent to which hospital acquired conditions are avoidable. It also demonstrates that the CHADx can be used to compare results across hospitals when risk and comorbidity are accounted for.

Activity Based Funding to Activity Based Management – Implementation at the Local Health District level

Dominic Dawson, South Eastern Sydney Local Health District and Karen Foldi, South Eastern Sydney Local Health District

South Eastern Sydney Local Health District is a large local health network servicing a population of 794,945 according to Census 2006, covering 490 square kilometers. The Local Health District (LHD) has five major tertiary facilities, three third schedule hospitals, a number of community health centres, oral health clinics and population based health services.

In terms of the budget, 79.33 percent of the LHD budget is attributable to being funded by the Activity Based Funding (ABF) methodology. The total of the ABF budget is made up of three specific lines: ABF in-scope (acute, emergency department and subacute and non-acute patient) -57.89%, interim ABF (mental health) – 7% and interim ABF non-admitted patient – 14.4%.

The LHD undertook a well-structured approach to the development and issue of its budget in 2013 – 14 using the

ABF methodology.

This paper identifies the Positron Emission Tomography (PET) approach utilised in the planning and implementation of the budget. This includes the development and establishment of key principles agreed by key stakeholders, the governance process established, the consultation process engaged in and the methodology of allocation, including addressing the appropriate funding of high cost services with the LHD hospitals. The process included the clinical councils, LHD executive and the LHD board.

The ABF budget for acute, emergency and subacute in-patient care was based on a single price and allocated on purchased activity. Mental health and non-admitted patients had separate prices and funding was based on relevant purchased activity. There was a high cost service subsidy payment that was either a grant amount or provided based on the outcomes of a locally built high cost modelling tool. This tool used the costing data and applied LHD agreed rules to identify the services that required recognition within the budget allocation process. Importantly, this is imperative for the continuity of safe delivery of care.

The paper will demonstrate the outcomes of process and the allocation, identifying what worked well and what were some of the key issues that need resolution for the following years. Finally, the paper will outline the outcomes of an external review of the budget process undertaken by an external academic organisation.

It is anticipated this presentation will provide participants a well-structured process of budget allocation in the ABF context within an LHD with a reflection on our learnings for the future to ensure that the ABF method of budget allocation facilitates Activity Based Management as a strategic approach to the delivery of quality and efficient care to our communities.

The Australian Refined Diagnosis Related Groups classification review and refinement project

Vera Dimitropoulos, National Centre for Classification in Health (NCCH), the University of Sydney and Dr Trent Yeend, Independent Hospital Pricing Authority

The Australian Consortium for Classification Development (ACCD) led by the National Centre for Classification in Health (NCCH) with partners, the University of Western Sydney (UWS) and KPMG have an overall task of developing and refining the Australian Refined Diagnosis Related Groups (AR-DRG) Classification System in an ongoing capacity for at least the next two editions/versions of the International Classification of Diseases and Related Health Problems, Tenth Revision, Australian Modification, the Australian Classification of Health Interventions (ACHI), the Australian Coding Standards (ACS) (ICD-10- AM/ACHI/ACS) and the AR-DRG classification.

ACCD have a number of deliverable tasks to undertake for ICD-10-AM/ACHI/ACS Ninth Edition and AR-DRG V8.0, under contract to the Independent Hospital Pricing Authority (IHPA).

This presentation will provide detail on the progress to date from both a work program and a methodological perspective.

An update will be provided on the exciting classification development and refinement work undertaken to date, including detail on innovations made in the measurement of diagnosis and episode-level clinical complexity from a cost perspective. An overview will also be provided on plans for delivering the classification, its derived products and education to our national and international stakeholders moving forward into the future.

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The core streams of work that ACCD are progressing include:

• ICD-10-AM/ACHI/ACS updating and refinement including overarching areas (e.g. ACS 0002 Additional diagnoses).

• AR-DRG updating and refinement including a review of complications and comorbidities and the patient clinical complexity level.

• ICT infrastructure expansion to underpin classification development and stakeholder engagement.

• Pre-edition and continuing on-line education initiatives.

A team approach to data quality

Shane Downey, Mater Health Services and Susan Gardiner, Mater Health Services

The introduction of the national pricing model for public outpatient services (what is referred to as Activity Based Funding (ABF)) represented a real challenge to an organisation using best-of-breed health solutions. With data and information being captured in several key systems (i.e. separate Patient Administration Systems (PAS) for insured and non-insured patients, theatre booking and management systems, pathology, pharmacy, and oncology the list goes on) how could Mater Health Services (MHS) meet this new requirement to provide accurate Patient activity data within the required timeframes?

Our solution was to leverage our existing clinical data integration middleware platform, and utilising the principles and practices of master data management, MHS have established a centralised ABF repository for reporting of all outpatient services. The benefits of this approach include a reduction in the amount of time required to prepare statutory reporting, a reduction in the amount of data quality errors, and opportunities for providing value added services.

In March 2014, the MHS solution won the International Association for Information and Data Quality APAC team project award for innovation in data quality.

Activity Based Management and the National Weighted Activity Unit calculator

Susan Dunn, NSW Ministry of Health

As part of its commitment to Activity Based Management (ABM), the NSW Activity Based Funding (ABF) taskforce is developing an interactive web based National Weighted Activity Unit (NWAU) calculator for use at a local level by Local Health Districts (LHDs) and Specialist Health Networks (SHNs). It will allow for the calculation of NWAUs within each work stream; through one or several patient journey(s).

The goal of the NWAU calculator is to increase the understanding, awareness and familiarity with NWAU, its implication and application and ABM within NSW Health.

The objective is to develop and implement a mature interactive application to be used as an educational tool to demonstrate the impact different parameters will have on NWAU.

The ABF taskforce uses interactive calculators allowing individuals to manipulate parameters in a theoretical environment and observe any subsequent variation. They provide a simple means of understanding how NWAUs are calculated and how parameters can affect available funding.

The development is intended for clinical staff, performance management, finance, and senior executives within LHDs/SHNs. It will provide a simple to use and intuitive application to

assist in understanding the impact on NWAUs of different clinical activity over single or multiple encounters and/or journeys across different care settings.

The NWAU calculators format provides assistance in educating hospital personnel as to ABF and ABM.

This application supports the increased adoption of ABM by participants in NSW Health by providing a viable, intuitive, easily updated NWAU calculator that is based on current data, current Independent Hospital Pricing Authority tables and standard classifications embracing all relevant work streams (emergency department, acute, non-admitted, mental health and subacute and non-acute patient) as an educational tool available to clinical staff, finance, performance management at each LHD/SHN.

The desired business outcomes of the NWAU calculator are:

• An attractive, simple and intuitive, consistently themed application incorporating an NWAU calculator allowing at-a-glance awareness of the impact of changes on NWAU of a number of parameters.

• An application that can be used in ABF presentations or accessed remotely by interested personnel to educate and promote familiarity with the NWAU and its impact on funding.

• Increased understanding of NWAU within the LHDs/SHNs.

• Increased ability to plan activity to maximise clinical and funding outcomes.

Portal Or Tardis?

Julia Heberle, NSW Ministry of Health and Judy Rong, NSW Ministry of Health

Background

Activity Based Funding (ABF) is now the main driver for funding public hospitals in New South Wales (NSW). Patient costing has therefore become a critical data source used in the development of Local Health Districts and Specialist Health Networks (LHDs/SHNs) annual budgets. It is imperative that a cultural shift occurs in health management from simple data processing to data analysis and actioning of financial outcomes at a local level to improve service delivery and patient care.

Objective

The ABF taskforce has been challenged by yearly submissions of extensive data sets which required the design of a robust, user-friendly IT solution. The initial objective was to develop methods for the efficient transfer of patient cost data from LHD/SHNs to the taskforce and the consolidation of each submission into a single state dataset. This was the platform from which the business intelligence tool could be deployed to the operational staff in the LHDs/SHNs

Method

The ABF taskforce was formed in 2011. The taskforce consists of financial managers, analysts and health professionals, from a range of backgrounds who have a thorough understanding of the patient level costing and have been involved in the implementation of ABF across the state.

Over a six month period, the taskforce identified a platform to quickly and easily transfer the very large (up to two gigabyte for one LHD) patient cost files – the secure file transfer. Files are consolidated into a SQL database, many validations ensuring that the cost data complies with predefined standards. A reasonableness report is generated and returned to the LHD/SHNs the next day for review of any anomalies in cost allocation.

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This turnaround time of less than 24 hours means that LHD/SHNs have an opportunity to focus of the quality of the cost data, rather than just the processing.

Once signed off by the LHD/SHN chief executive, the data is loaded into a business intelligence tool named the ABM Portal. The tool selected by the ABF Taskforce is Qlikview. The vendor Qlik worked with the ABF Taskforce to establish the various levels of detail needed by NSW Health, LHD/SHNs, hospital managers and clinical departments. Security settings to ensure patient privacy was a high priority in the development of the ABM portal.

Conclusion

As Australia becomes more challenged with tighter healthcare budgets, and begins to better understand the impacts of ABF, data becomes critical for all clinicians and managers. However, without suitable tools and the appropriately skilled and experienced staff to setup the large and complex health information repository, the information would not have been available to those who need it the most.

The ABM portal is an important step forward to assist the transition to ABF management of health care budgets. Its development has succeeded in an economic climate of high urgency and low budget.

Lessons learned in Activity Based Funding implementation at Sydney Children’s Hospital Network: Two years in

Anna Hoffman, Sydney Children’s Hospital Network; Caroline Wraith, Sydney Children’s Hospital Network; Sharon Behan, Sydney Children’s Hospital Network; Cheryl McCullagh, Sydney Children’s Hospital Network; and Colin Murray Sydney Children’s Hospital Network

Accurate, complete and timely information is not only important in providing a seamless service for children and their families, but it is also fundamental to the implementation of Activity Based Funding (ABF). There is now a requirement for all facilities to supply patient level activity data across all ABF funding streams. At the Sydney Childrens Hospital Network (SCHN) collecting information for ABF has been integrated into ongoing process improvement activities: from front end staff data collection, to electronic and paper medical records and coding reviews, patient level non-admitted data capture and reporting to ensure all information collected is accurate and incorporates the necessary requirements for ABF. Clinical engagement is at the centre of these improvements.

Lessons learned two years in will overview initiatives that have brought together activities across coding, classification, costing, data entry, reporting and finance in collaboration with clinicians to improve outputs and model in this paediatric environment. These improvements have come about as a result of a process of consensus and standardisation. The following initiatives will be discussed:

• The collaboration of clinicians, records, finance and coding as a team to review the issue of a high volume of oncology separations exceeding upper bound length of stay relative to peer, provided clarity, promoted understanding and ultimately resolution.

• A high number of incomplete discharge summaries for Bone Marrow Transplant (BMT) patients led to comprehensive coding review for BMT patients resulting in more accurate coding, the implementation of a front sheet across the

network and monthly meetings between the medical records department and the BMT team on coding decisions to ensure consistency.

• Collection for Non-admitted Patient (NAP) services is an ongoing challenge for SCHN. Capture of ABF statistics as part of electronic clinical documentation processes has improved NAP data capture. SCHN has moved from manual submissions to patient level extracts in almost all hospital based clinics in the past 12 months.

• An enabler of SCHN ABF implementation has been the availability of ABF information to departments and clinicians as part of the networks performance framework. The Children’s Hospitals Information Management Portal (CHIMP) is enabling clinicians to understand and analyse ABF data outputs and to contribute to ongoing data quality improvements.

SCHN has a regular plan of engagement with its departments, specialties and clinicians to educate staff the importance of ABF to their services, to review current documentation practices, and to inform and instruct staff how to access and utilise the activity reports provided monthly.

Clinical participation: The key to prosperity under Activity Based Funding

Philip Hoyle, National Centre for Classification in Health, University of Sydney and Harvey Lander, Hornsby Ku-Ring-Gai Hospital

The impact of Activity Based Funding (ABF) on health services, staff and patients is profound, from high level resource allocation, to reshaping services, to the design, delivery and oversight of care processes and their outcomes. As the activity in ABF is inherently clinical, clinician participation is crucial if the benefits are to be obtained.

Despite the opportunity to put care at the centre of the health system, in much of Australia there has been relatively little organised clinician interest in, or practical engagement in, development and rollout of the ABF system beyond the clinicians home unit. A survey by NSW Ministry of Health confirms that active clinician participation is the exception. This raises the question why is it hard to ignite and sustain clinical interest in ABF? This contrasts with casemix version one of 20 years ago.

The paper considers why clinician participation in ABF matters, why it may be withheld and how it can be promoted.

Why clinical participation matters

Clinical participation in ABF offers:

• Leadership, responsibility and accountability for care processes: ABF provides a platform for clinicians to take charge of the effectiveness, efficiency and improvement of care.

• Cultural alignment: The reciprocity of financial and clinical decisions can enmesh and mutually honour planning, managerial and clinical cultures .

• Practice improvement: Process efficiency and clinical values are aligned.

• Technical benefits such as coding and costing, which require good clinical documentation

• Human capital development from clinicians understanding and contribution to systematisation.

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Despite this, ABF is often seen as clinically and personally irrelevant (e.g. as being purely about categorising, costing and pricing), and active engagement of clinicians especially at a system level is the exception.

Why clinical participation is not the norm

We theorise that clinical participation is lagging because:

1. The opportunities for better care and professional development are unrecognised. ABF is often lumped with top-down executive, unit and organisation performance requirements, and therefore not internalised.

2. The clinical role is not supported to deliver the benefits from reform.

3. Existing ABF information is not integrated into non-financial business systems such as service planning and clinical governance: there is no natural platform to build on.

After reviewing the literature on effective implementations of casemix, and touching on the literature on clinical engagement, we propose three broad groups approached to securing and maintaining clinician involvement:

1. Making ABF relevant to the clinical world through integration into care design, process improvement, clinical governance and clinical strategy.

2. Opening minds to the opportunities in ABF by resonating with clinical and professional values; education and visibility of ABF principles in everyday activities; reports and communications.

3. Supporting clinical involvement through recognition of clinical participation as real (i.e. funded) work, inclusion in training and professional development curricula, access to data/ intelligence and meaningful rewards for those who do become involved.

Conclusion

Clinical participation is desirable and possible. Interventions can make ABF relevant; open minds to the opportunities and by supporting involvement, prompt clinicians to become involved.

Coding complexity of emergency department care: A realistic measure of workload

Sue Ieraci, Bankstown Hospital

Case-mix systems seek to relate resources used to the care provided by forming logical categories, which can either group by clinical similarity (iso-disease, such as Diagnosis Related Groups (DRGs)) or by similar resource use (iso-resource). The DRG system commonly used for inpatient case-mix is inappropriate for Emergency Departments (EDs) for two main reasons: i. ED care is based on presenting problem, not necessarily final diagnosis; and ii. The spectrum of severity within a disease that presents to ED is much wider than for inpatient care (from minor to life-threatening).

Previous ED casemix measures have generally used parameters like triage category (urgency) or disposition (admission verses discharge after ED care) as surrogate measures for complexity (Urgency Related Groups (URGs), Urgency Disposition Groups (UDGs). Some measures have included age Urgency Disposition Aged Group (UDAGs). ED data show that the large majority of attendances (60 to 80 percent) are classified in urgency (triage) categories three and four. A classification system that divides such a large proportion of attendances into only two classes fails to distinguish the great range of complexity of cases therein, as so provides only limited information of the diversity of work undertaken in EDs.

The significance of ED disposition has changed with changes to the way EDs and hospitals have worked over time. As pressure for inpatient beds has increased, much more complex work-up and definitive care is now completed in ED. The complex work required to investigate, treat and return an elderly patient to the community may involve much more time, effort and cost in ED than admitting the same patient to hospital. Currently this work is unmeasured.

The term ‘complexity’ refers to the degree of difficulty or effort required to complete assessment, care and disposition. Most of complexity relates to diagnostic difficulty. This is different to severity (how dangerous the condition is) or urgency (time criticality).

A draft tool has been developed to characterise the complexity of ED care, incorporating a binary urgency score with the nature of the visit and the number of procedures. This is not designed to be done in real time by clinicians, but by coding professionals retrospectively from the record. Complexity coding need not be done on every single patient presentation, representative snapshot data can be used.

A small pilot trial conducted in 2003 confirmed the feasibility of collecting the required data from clinical records. The current draft tool, which will be presented, has been created through an extensive Delphi-style process, and has been presented at various forums of ED and coding experts. The current format appears to represent a good fit for ED processes, when considered by active clinicians and managers it has been found to be both plausible and feasible to code.

The draft tool appears to be understandable and usable, but it is not yet known whether it actually reflects real resource use or workload. If shown to have reasonable validity against a direct costing study, it will be suitable for release as a general case-mix tool for coding ED presentations.

Diagnosis Related Groups: it is not about Patient Clinical Complexity Level; rather it is about the management of reform – Experience in the countries of former Yugoslav Republic

Dr Karolina Kalanj, Karol Consulting Pty Ltd and Karl Karol, Karol Consulting Pty Ltd

Following the split-up of Yugoslavia, the region now essentially comprises seven countries that share common roots and a similar language.

All of these countries embarked on a process of public sector reform including health reform which involved making changes to hospital payment systems.

Following Slovenias lead, five other Former Yugoslav Republic (FYR) countries, Croatia, Serbia, Bosnia and Herzegovina, Macedonia and Montenegro decided to embark on the implementation of the Diagnosis Related Groups (DRGs) system and like Slovenia, selected Australian Related Diagnosis Related Groups (AR-DRGs) system as the classification of choice.

In general, proponents of DRGs in these countries did not fully appreciate the full implications of the introduction of an activity based payment model for hospitals and the continuing efforts that it requires. Broadly speaking, the various stakeholder groups had varying visions and concerns. For example:

• Politicians promoted the introduction of DRGs as the implementation of the world’s best hospital payment model a system which would deliver efficiency gains and lead to a more effective allocation of funds.

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• Hospital managers tended to welcome the system because they felt that their budgets did not fairly represent the work done by their institutions and felt that they may do better under DRGs.

• Patient organizations were concerned that the DRG system would diminish the quality of care through pressures to reduce Length of Stay (LOS).

Although significant effort was put into the implementation of international aid funded development projects, most countries ended these projects without institutional frameworks to support the maintenance of the DRG system and ongoing development of an activity based payment model.

The main challenges facing these countries in continuing the work started by the inception projects have been as follows:

• Ensuring that all AR-DRG documentation is completely and accurately translated into local language

• Defining clearly what is included, and what is not included in the acute care payment model

• Undertaking costing studies to make the adopted cost-weights relevant to local conditions

• Implementing a financially realistic transition period for moving to activity based payments and providing a clear discipline for hospitals

• Adoption of a fair base price base price levels tended to be set by payers in response to austerity measures

• Managing contract based on performance that includes both output and quality; and conducting audits in some jurisdictions more than 30% of all inpatient cases were reported at Patient Clinical Complexity Level (PCCL) 4

• Continuing capacity building and skills development programs in DRGs and activity based funding

The conclusions is that after some 11 years since DRGs were introduced in FYR countries, little has been done to follow up on original projects. Authorities essentially failed to continue the work started by the projects and organise and fund sustainability – and establish local organisations such as the Independent Hospital Pricing Authority and the Institute for the Hospital Remuneration System (InEK).

Given the history and background of these countries, it would also seem that they can combine their efforts and establish a FYR AR-DRG that shares knowledge and unites resources for development activities. Importantly, there is a need to follow progress with latest versions of AR-DRGs to incorporate most recent thinking on the subject.

Exploring outcomes and cost savings through the establishment of an integrated rehabilitation model of care

Sophie Kent, PwC and Carrie Schulman, consultant

The costs associated to providing care in a particular care setting cannot be examined in isolation of the care continuum. It is important to recognise the interdependencies that exist between care settings, in particular the additional value that may be realised through the existence of integrated, complementary care settings. For example, looking at the impact that improved access to care in home-based or outpatient settings can have on reducing total costs in the subacute inpatient setting. The value created through integrated care settings will be explored in the context of the New South Wales rehabilitation model of care- endorsed by the Director General Health in 2011 and currently being implemented across rehabilitation services in NSW.

The model of care is made up of six different care settings:

1. In-reach to acute (admitted acute care)

2. Subacute inpatient (admitted subacute)

3. Day hospital (admitted or non-admitted, depending on local policy)

4. Outpatient (non-admitted)

5. Home based (admitted or non-admitted, depending on frequency of treatment)

6. Outreach (care setting where care is delivered, based on care type rule)

Both quantitative and qualitative measures of economic value or benefit will be discussed in relation to this suite of care settings in particular how these are interlinked across multiple settings. Examples of the importance of collecting data and reporting against such measures will be discussed in terms of informing strategic decisions regarding enhancements to or the establishment of new care settings from both a hospital management and a patient outcomes perspective.1 In the process of seeking permission for use of NSW Rehabilitation Model of Care from the Agency of Clinical Innovation wording subject to change.

The building blocks of Activity Based Funding high quality coding and costing information in medical imaging – the Medical Imaging Coding and Costing Model

Ingrid Klobasa-Egan, Northern Beaches Health Service; B. Sorensen, St Vincents Hospital; S. Baichoo, St Vincents Hospital; J. Heberle, NSW Ministry of Health; N. Emanuel, Royal North Shore-Ryde Hospitals; A. Scott, Liverpool Hospital and K. Altern, NSW Ministry of Health

New South Wales (NSW) radiology and nuclear medicine departments are rapidly expanding their diagnostic services at a growth rate of three to 10 percent per annum, this impacts significantly on health budgets. Many changes have occurred in the delivery of these services over the past 10 years (e.g. digital imaging verses film).

A review of historic costing processes demonstrated the need to reflect changing work practices, equipment maintenance, workforce and non-clinical roles to provide the true cost of these services.

Objective

The project aimed to engage clinical departments in the accurate allocation of costing for imaging procedures using consistent data and agreed assumptions. To ensure effective and accurate benchmarking across NSW a standardised set procedure codes and a consistent method of up-loading state-wide data extracts was necessary.

Method

The NSW Health Medical Radiation Practitioners Local Health District (LHD) Advisory Group formed an Activity Based Funding (ABF) Working Party in 2012 to develop a costing system together with the ABF taskforce, known as the Medical Imaging Coding and Costing (MICC) template.

A MICC template was designed to flow cost centre financial data from ORACLE to SMRT (state-wide management reporting tools) and then uploaded into a Relative Value Unit (RVU) spread-sheet. Cost centre general ledger data was then adjusted by managers

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for salaries/wages, consumables, equipment costs and non-face- to-face activity such as supervision, education and research. This four bucket MICC model included all overheads (e.g. penalty rates based on time of procedure).

This adjusted account data provides an automated RVU for an average procedure in a modality e.g. computed tomography, ultrasound and general imaging, whole-body scans / Single-Photon Emission Computerised Tomography SPECT.

MICC model looks at the imaging suite as a whole and then applies a complexity weighting factor, known as modality banding. Each imaging modality has been broken down into two to five bands according to complexity and length of procedure.

The cost items can then be aggregated across category and modality to provide the total RVUs for each. When provided with the activity and resource split for each modality, MICC calculates the RVU and total costs.

Results

Imaging departments can use the MICC template to determine their individual RVUs by modality, compare relative costs for each procedure and isolate unexpected costs. Managers can use this data to assist in meeting budget bottom lines and provide LHD reports.

The project has identified the need for medical imaging managers to assign account codes accurately and consistently, as some variation was experienced between sites and LHDs.

The MICC model provides an opportunity for NSW Health to conduct state-wide mapping of Medicare Benefits Schedule to the modality RVUs and inform AR-DRGs/URGs/OP costs.

Additionally, the relative costs for procedures from different facilities/ LHDs allowing for site specific operational differences, can now be benchmarked/compared across NSW.

Conclusion

The MICC provides managers with a method to determine activity based costs for each modality with a range of complexity. It provides a reporting tool that can accurately and efficiently compare Imaging costs across the state. This in turn will provide opportunities for efficiency improvements and better patient outcomes.

Cost impact of hospital acquired diagnoses

Deniza Mazevska, Health Policy Analysis; Jim Pearse, Australian Health Services Research Institute, University of Wollongong and Health Policy Analysis; Akira Hachigo, Health Policy Analysis; and Terri Jackson, Northern Clinical Research Centre, University of Melbourne

Background

Internationally, there have been efforts to adjust hospital funding based on the quality of care provided by the hospital. A variety of approaches have been used by different countries and payers. Incorporating quality signals into Activity Based Funding (ABF) is also a possibility for Australia.

Objective

This study set out to explore the cost impact of potentially poor quality care in Australian hospitals.

Method

The Admitted Patient Care National Minimum Data Set and the National Hospital Cost Data Collection for 2011 – 12 were used.

The analysis of the cost impact was limited to large and medium hospitals (using the national peer group classification), hospitals within these groups that were coding the Condition Onset Flag (COF), acute cases, and a set of conditions/ interventions of interest identified by the Australian Commission on Safety and Quality in Health Care (the Commission), based on volume, cost and priority areas for quality and safety initiatives. Just over 400,000 episodes were included in the detailed analysis.

Results

An estimate was made of the total incremental impact of the presence of hospital-acquired conditions, both within the sample and scaling this to reflect all acute episodes allocated to the selected conditions/interventions (mapped to adjacent Diagnosis Related Groups (DRGs)) in public and private hospitals.

Across the sample of conditions/interventions identified by the Commission, the mean incremental impact of the presence of any COF diagnosis was estimated to be $9,244 (median = $6,710).

Scaled to all acute episodes, hospital-acquired conditions accounted for between 12 percent and 16.5 percent of total costs within the sample, and 11.6 percent and 15.9 percent of costs across all hospitals for the selected conditions. Across all acute episodes assigned to Adjacent DRGs of the selected conditions, the incremental cost of hospital-acquired conditions was estimated to be between $634 million and $896 million. To place this estimate in context, total expenditures for public hospitals were $40,384 million in 2011 – 12, of which an approximated $28,000 million (70 percent) related to admitted patients.

The highest costs were associated with less costly (per case) but more frequent complications. Total cost impacts of these conditions ranged from $10.9 million for pressure ulcers (1,866 episodes) to $27.4 million for electrolyte disorders without dehydration (9,808 episodes).

Conclusion

This study estimated the cost impact of hospital acquired diagnoses, and therefore offers some insights to the costs that could be shifted if incorporating quality signals into ABF reduced these complications. While not all hospital-acquired conditions can be prevented with current medical knowledge, such an incentive might motivate greater efforts to reduce them where possible.

The limitations of the study should be noted. We found coding of the COF to vary between hospitals ands. The study is vulnerable to endogenity bias because of the circular relationship between length of stay and rates of hospital-acquired harms. Length of stay may be extended by complications that arise during the admission, but longer stays also expose patients to a higher probability that a hospital-acquired condition will occur. Both are highly correlated with higher costs.

Queensland rural costing project – an overview of challenges to accurate costing

Colin McCrow, Department of Health, Queensland

This paper will review and outline the challenges that have occurred in Queensland (QLD) in our endeavours to ensure the accurate patient level costing of rural and remote health services can be supplied to the National Hospital Cost Data Collection.

It will outline the costing process that has occurred over the last three years when a decision was made to provide patient level

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costed data for all facilities in QLD and identify the methods used to cost these services where patient level costing systems were available and where a cost model process was required.

A number of issues have been identified in underlying costing assumptions and costing methodology and changes made to processes to improve the overall costing outcome. The impact of the availability of patient level consumption data will be explored and plans for the ongoing improvement of costing in rural and remote settings will be discussed.

Clinic 40.04: A 20 year journey

Karen O’Leary, the Society of Hospital Pharmacists of Australia and Sue Kirsa, Peter MacCallum Cancer Centre

The expected benefits associated with the use of medicines may be compromised when a consumer does not take their medicines appropriately, or when the consumer has a poor or insufficient understanding of health information which impacts on their ability to make effective decisions about their health care.

Non-adherence to medicine regimens presents a significant challenge with an estimated 50 percent of patients with chronic disease not taking their medicines as prescribed. This is known to contribute to medicine-related presentations to emergency departments and hospital admissions. Approximately two to three percent of all hospital admissions, 12 percent of all medical admissions and 20 to 30 percent of admissions in consumers aged 65 years and over are medication-related.

More than 20 years ago hospital pharmacists explored ways to assist consumers to use their medicines appropriately after they were discharged from hospital. Early trials of a post-discharge pharmacist review services targeting consumers with medicine-related admissions showed improvements in medicines use and reduced re-presentations to hospital.

This work formed the basis of the Residential Medication Management Review (RMMR) and the Home Medicines Review (HMR) services funded by the Commonwealth for community- based consumers who experience problems with their medicines. It also led to the funding of Hospital Outreach Medicines Review (HOMR) services in selected Victorian public hospitals which provided a pharmacist consultation to consumers identified with medicine-related problems when they returned home after an acute admission or emergency department presentation.

The inclusion of clinic 40.04 clinical pharmacy in the list of non-admitted services will enable all public hospitals to provide this service as a hospital-based clinic or an outreach service. The challenge will be to ensure that consumers most at risk of medicine-related problems are targeted to ensure cost-effectiveness of these services. Recent problems with funding community-based medication review programs have highlighted the importance of appropriate consumer selection criteria and delivery of the most appropriate type of service based on consumer need rather than service or provider location. They have also identified how business/funding rules can lead to unintended gaps in service delivery.

The Society of Hospital Pharmacists has published Standards of Practice for Clinical Pharmacy Services which include guidelines on the consumers most at risk of medicines – related problems, the structured interview process that should be used to identify medicine – related problems and how a medication management plan should be constructed to communicate suggested medicines changes to the consumers’ healthcare team. These standards, that have been used to guide clinical

pharmacy services for inpatient services almost 40 years, have recently been updated to be equally applicable to non-admitted services.

This paper will trace the evolution of medication review services for non-admitted consumers and the limitations in the current selection criteria for the community-based services funded under the fifth Community Pharmacy Agreement and explore how these services can be best targeted to reduce readmissions and presentations to emergency departments, propose selection criteria to ensure that consumers are appropriately referred to community-based services and how hospital-based services can be targeted to those at greatest risk.

Implementing Activity Based Funding for subacute care in the private sector

Nicolle Predl, Australian Health Service Alliance

Australian Health Service Alliance (AHSA) funds purchased more than $73 million in rehabilitation services in 2013 – 14, and has recently commenced funding these services by Australian National Subacute and Non-Acute Patient (AN-SNAP) in some facilities using a model developed internally known as the Rehabilitation AN-SNAP Model (RAM), which is based on a robust classification system, payment dependent on relative cost and step downs/outlier points based on industry benchmarked Length of Stay.

In order to achieve successful introduction of a new payment model into hospitals, transparency, fairness and data quality are key elements of the process that are often given less attention than the standard expectations of a good payment model.

Changing payment models in the private sector is significantly different to the public sector. Irrespective of its intrinsic merits, any new private sector model must be agreed to by both parties before it can be introduced, as there is no mandate. It is not just about having a good model; its about getting the model agreed to by the hospital.

Agreement of base data, verification of charges, and collection of AN-SNAP class for each and every case has proved not only to be challenging, but to improve confidence in the process and the underlying calculations to set a baseline to convert hospitals from one payment model to another.

This paper does not provide specific details about the payment model, but rather looks at all facets of the process in which successful implementation of Activity Based Funding in the private sector can be achieved for subacute care.

Demand forecasting of patient Activity Based Funding measures

Ravind Raniga, Biarri and Stephen Cole, Gold Coast University Hospital

Forecasting of future patient throughput at hospitals is an extremely data-intensive task that is often undertaken with simple back-of-the-envelope calculations. Since hospital admissions and Weighted Activity Units (WAUs), the unit of measure for the health Activity Based Funding (ABF) model, are all captured in hospital databases. The potential to apply analytics and mathematical optimisation exists across a wide range of hospital spaces, including ABF.

In early 2014, Biarri and Gold Coast University Hospital undertook

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forecasting of patient admissions and WAUs across scheduled/unscheduled surgeries, Surgical-Related Groups (SRGs), high volume Diagnosis Related Groups (DRGs) and waiting list urgency categories. The methodologies used in this forecasting were time series forecasting techniques, which are already implemented in forecasting in other industries (e.g. the energy sector). These forecasting techniques can take into account weighting of recent admissions, seasonality and noisy data.

Forecasting techniques applied to patient admissions and WAUs across various categories (SRGs, etc.) can provide visibility in growth/stability/decline across these categories. This in turn can provide hard evidence for use in various hospital resource allocation activities, such as capacity planning and staff allocation/workforce optimisation. Capacity planning is currently being undertaken at Gold Coast University Hospital, based on results from demand forecasting of admissions and WAUs.

Which way from here? The Tasmanian Activity Based Funding coding experience

Kevin Ratcliffe, Department of Health and Human Services, Tasmania

Tasmanian clinical coded data have been reported to the Commonwealth and used by Tasmania and its hospitals for internal analysis for various purposes for many years. There has been no specific study of its quality or how fit for purpose these data were, but there was nothing to particularly flag material deficiency.

Preparing for the introduction of Activity Based Funding (ABF) in Tasmania, it was necessary to question how well does the Tasmanian clinical coded data, that is currently produced, support the ABF process. Initial indications were not good and further investigation began. Strategies to improve the quality and suitability of clinical coded data for ABF were applied concurrently.

• A Department of Health and Human Services casemix risk team formed.

• Comparative analysis undertaken of the complexity reflected by Tasmanian coded data with that from other states.

• Some key coding standards reinforced to clinical coders.

• Engaged clinicians regarding documentation that supports clinical coding.

• Opportunities for improvement in coding quality processes explored.

• The appropriateness and application of national definitions and directives for Tasmania investigated.

How well have we done and where do we want to get to? This presentation highlights some of the journey, novel strategies and invites discussion.

The national mental health services costing study – a work in progress

Joe Scuteri, HealthConsult and L. Fodero, HealthConsult

There have been a number of national mental health-specific data collections and one classification system developed and implemented in Australia in the last 15 years, but this infrastructure is not widely accepted within the mental health sector as suitable for use in Activity Based Funding (ABF). The Independent Hospital Pricing Authority (IHPA) has been addressing this issue, firstly by commissioning a consortium

led by the University of Queensland to develop a definition and analyse cost drivers for mental health services for ABF purposes.

As a follow-on from that study, IHPA has recently commissioned a consortium led by HealthConsult undertake a national mental health costing study. The study approach has a number of features that make it somewhat different to recent national costing studies, including:

• A prospective collection of utilisation and costs data at the patient/client level from 1 July to 31 December 2014 in at least 25 study sites that are representative of mental health services and clients across Australia.

• The development of a comprehensive mental health costing study manual that includes a detailed data specification and costing methodology which reflects strict adherence to the Australian Hospital Patient Costing Standards.

• The maximal use of existing mental health datasets at each participating site, supplemented by the primary data collection needed to obtain some study specific data elements.

• A capacity building approach that supports staff at study sites to cost their services locally, with the aim of creating more expertise in ABF within the mental health sector.

• The use of two-person Fieldwork Management Teams (FMTs) that will provide on-site training and support to participating sites throughout the study.

• The use of strict protocols, including obtaining ethics approval, to ensure the privacy and confidentiality of the data at both client and service levels.

• The availability of support for the appointment of a coordinator at each site for the duration of the study.

The study will produce a dataset that includes characteristics of the clients/patients, as well as a measure of the costs of providing mental health services that can be used as the basis for developing the Australian mental health services classification system, which will then be used to further ABF implementation.

Clinical engagement through matching evidence to cost drivers

Alexander Smeaton, Illawarra Shoalhaven Local Health District; Natalie DeWit, Illawarra Shoalhaven Local Health District; and Sofia Halligan Illawarra Shoalhaven Local Health District

Illawarra Shoalhaven Local Health District implemented Activity Based Funding (ABF) by engaging clinicians through matching evidence to cost drivers. This was achieved by delivering a high volume and high cost Diagnosis Related Group (DRG) project, development of specialty based ABF reports in our district report system Standard Performance and Reporting Collaboration (SPaRC) and ABF finance road shows.

The high volume and high cost DRG project identified the top five DRGs with both a long length of stay and a high cost compared to our peers. A diagnostic review of each DRG was undertaken to gain a greater understanding as to why this was occurring in our district.

The diagnostic review showed that for our top five high volume and high cost DRGs there was no documented model of care, clinical documentation was poor for correct coding to occur and our clinicians were not aware of the link between clinical documentation and ABF.

The project worked with clinicians to develop efficient models

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of care for the top five DRGs. The models of care are based on best evidence practice within an ABF environment. The project team also developed education packages for all levels of clinicians around correct clinical documentation in the health care record. A template was developed using a standardised issue list for discharge summaries across the district with the aim to improve the quality of information not only for coding purposes but also for quality of clinical information given to GPs.

The high volume and high cost DRG project also identified the need for real time education of clinicians on documentation and ABF. The district created DRG facilitators that follow patients through from admission to discharge in our high volume DRGs, working with clinicians to make sure that clinical documentation reflects the true complexity of the patients and any delays occurred in the patient journey is identified and escalated early. The project has seen a significant improvement in complexity capture and reduced length of stay for the identified DRGs.

To help clinicians monitor and review their activity during this project, reports were developed and disseminated through a locally developed reporting application known as SPaRC.

SPaRC is designed as a one-stop-shop for access to performance and monitoring reports. The system is available to all staff within the District and is accessed through the local intranet site. Due to the ease of use, accessibility and up-to-date data available within SPaRC, clinicians were encouraged to use this application to help monitor their high cost, high volume DRGs as well as length of stay and cost weighted activity. This self-serve model of data availability increased the level of engagement from clinicians, reducing the dependency and time in asking for data to be supplied.

The finance roadshows have been established and delivered to hospital executive and senior clinicians.

The aim of the roadshow is to understand ABF and National Weighted Activity Units (NWAUs), price versus costs, how ABF budgets are derived, the funding process, and provide them with the tool to monitor ABF performance. Addressing factors that will impact on the performance reports for example:

• Lack of coding, data quality – completeness of recording,

• Invalid records,

• Incorrect account grouping, financial data not classified appropriately.

• paying for activity you are not funded for, paying for other sites activity, no multi-costing, FTE establishments not matching actuals.

The three ‘Cs’ are the main theme: ‘counting’, ‘coding’ and ‘classification’. The focus is to highlight that these three Cs apply not only to activity but to financial records. The ABF financial and activity reports developed and delivered via SPaRC.

This message is delivered to all cost centre managers not only medical and nursing so that all have the full picture on the ABF process and the part that they all play. The clinical costing process is key to this and this is included in the roadshow explaining the raw inputs and the output with examples of final patient encounter costs.

A data journey – the Australian National Subacute and Non-Acute Patient data collection in New South Wales

Sharon Smith, NSW Ministry of Health and Mindy Xie, NSW Ministry of Health

In 1999 New South Wales (NSW) implemented the Australian National Subacute and Non-Acute Patient (AN-SNAP) data collection for sub and non-acute activity. Since implementation a variety of factors have contributed, both positively and negatively, to the quality of the data collected. For many Local Health Districts (LHDs) the process of linking AN- SNAP data to admitted patient data has been a necessary but problematic process.

In 2013 the NSW ABF taskforce began providing monthly reports to LHDs that contain a linked dataset and National Weighted Activity Unit data. These reports have developed from relatively simple beginnings to become a rich source of information for LHDs regarding sub and non-acute activity within each facility.

This paper will discuss how detailed patient level reporting of linked AN-SNAP can assist LHDs to understand the scope of sub and non-acute activity and can have a positive impact on data integrity.

Examples of reporting approaches and the outcomes will be presented.

Bringing efficiency and additional controls to the costing process

Julia Strelitz, PwC and Laila Qasem, PwC

Undertaking patient level costing is a timely and complex process, from selecting the relevant episodes and expenses to be included, incorporating feeder system data from multiple sources and determining overhead allocation methodologies. Performing quality assurance checks on the pre-costed data could significantly improve the efficiency of the process through the identification of errors before the costing actually commences.

PwC are currently coordinating the Private Sector Round 17 National Hospital Cost Data Collection, requiring us to perform the costing for approximately 100 participating hospitals. As part of this engagement we have developed a series of quality assurance checks which are displayed in a graphical, easy to use report, all of which can be performed before the costing process is carried out. These tests can help highlight missing encounter records, costs which have been excluded from the costing process and inconsistencies between hospital products and allocated costs. In this session, we will showcase some example reports we built for the pre-costing QA process (all using dummy data.)

Capabilities for Activity Based Management

Matthew Swanborough, PwC and Julia Strelitz, PwC

With the introduction of Activity Based Funding (ABF) through the National Health Reform Agreement in 2011, hospitals and system managers have had to shift their traditional approaches of managing hospitals under one budget.

Under Activity Based Management (ABM), a whole new range of skills and capabilities become relevant – such as devolution of budgets and responsibility down to service lines, effective clinical engagement, managing from the ward to the board level and performance reporting.

In this session, we will explore the key capabilities required to successfully manage under an ABF environment. Core to this is the key principles for activity based management and the way in which ABF can drive reform and change management across hospital environments as well as health economies.

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This will use a number of Hospital level case studies to demonstrate good practice in ABM and the way in which ABF has been implemented within Local Health Districts and across hospital services, taking account the impact of regional and state differences in clinical service provision, workforce and infrastructure.

Opportunities for quality and efficiency improvements through reducing unwanted variation in clinical practice in Australian maternity care

Michael Nicholl, Women’s Healthcare Australasia, Royal North Shore Hospital and University of Sydney; Barbara Vernon, Women’s Healthcare Australasia; Peter Baghurst, University of Adelaide; and Heather Artuso, Women’s Healthcare Australasia

Women’s Healthcare Australasia (WHA) is the peak not for profit body that represents the majority of health services providing specialist care to women. WHA supports over 40 member hospitals that care for over 100,000 women giving birth annually or around one third of all births in Australia each year.

WHA works to achieve excellence in women’s healthcare through benchmarking performance, networking to share information and expertise, delivering education and training and through advocacy to governments, agencies, other not-for-profits and to the community.

WHA conducts annual activity and costing and clinical indicator benchmarking for tertiary and medium sized maternity hospitals and has done so for many years. WHA member hospitals recognise that there is significant variation in both clinical performance and costing between maternity services of similar size and capability. Members are committed to examining this variability with a view to both improving outcomes for women and babies and to achieving efficiencies in the use of scarce resources.

Areas where there are opportunities for a reduction in clinical variation and cost include:

• Significant variation in rates of induction of labour for a clinically comparable population of women (known as selected primiparas).

• Significant variation in rates of surgery (caesarean section) for selected primiparas resulting in significant difference in theatre costs and length of stay.

• Significant variation in rates of adverse outcomes, such as post-partum haemorrhage, with associated variations in costs (mainly through impacts on Length of Stay (LOS)).

• Differences between LOS for neonates between tertiary and medium sized hospitals.

This presentation will summarise these and other results of our investigation into benchmarking data and consider the implications of Activity Based Funding for driving quality improvement and cost efficiencies in Australian maternity services.

Please Note: If this oral paper is accepted, Professor Nicholl would only be available to present on 24 June

Identifying opportunities for quality and efficiency improvements through benchmarking paediatric care in australia

Trish Davidson, Children’s Healthcare Australasia, Hunter New England Local Health District, University of Newcastle; Barbara Vernon, Children’s Healthcare Australasia; Julie Hale, Children’s Healthcare Australasia; and Beth McGaw, Children’s Healthcare Australasia

Children’s Healthcare Australasia (CHA) is the peak not for profit body representing the majority of health services providing specialist care to children across Australia and New Zealand. CHA supports over 40 member hospitals that are collectively responsible for over 350,000 paediatric inpatient separations and many thousands of paediatric outpatient consultations annually within Australia.

CHA works to achieve excellence in children’s and young people’s healthcare through benchmarking performance, networking to share information and expertise, delivering education and training and through advocacy to governments, agencies, other not-for-profits and to the community.

CHAs benchmarking program has been running for over 15 years now. Both activity and costing, and clinical indicator benchmarks between like sized services are provided to members each year. We provide time series trends as well as comment on trends that we see across the industry. These data are used by individual members to benchmark their services with similar hospitals to facilitate quality and efficiency improvements. The data are also used to inform discussions in a range of Special Interest Groups, in which innovations, changes to models of care, improvements in length of stay, and other performance improvements are discussed and shared among member health services.

In this presentation we will draw on data from our benchmarking program to highlight some of the key trends and changes occurring in the paediatric healthcare sector and the discussions held with members to outline the implications of these for service performance and efficiency. These include:

• Summary comparisons of the top 10 Diagnosis Related Groups (DRGs) by cost and volume for different types of paediatric health services (specialist tertiary and secondary services provided by paediatric units in general hospitals) and trends in length of stay for high volume admissions.

• A significant rise in complicated appendectomies across tertiary hospitals associated with a coding change in 2008, changes in referral patterns from smaller to larger centres, an apparent increasing propensity for parents in capital cities to preferentially seek care from a tertiary service, and a general increase in the incidence of complicated appendicitis across the 11 – 17 year age group.

• A one hundred per cent increase in the oncology related DRGs has occurred over a four year period. Clinicians attribute a part of this to the increase in complex chemotherapy treatments as well as changing models of care

The impact in these emerging patterns on member hospitals will be discussed and further opportunities for enhancing the performance and efficiency of paediatric services highlighted.

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Clinical engagement – respiratory clinical review of patients with community acquired pneumonia

Peter Wu, Westmead Hospital, Western Sydney Local Health District

Enrolment in a clinical redesign school, led the respiratory medicine department to review an area of clinical practice with an aim to improving quality of care, providing appropriate evidence based care and generating a sustainable change to clinical practice.

Westmead Hospital has been a long standing member of Health Round Table (HRT) and the reports from HRT were used to work with clinicians with the aim of understanding clinical variation and cost drivers in clinical practice by engaging clinicians in reviewing their activity against performance benchmarks.

A multidisciplinary team reviewed the HRT activity and cost reports and determined that the family Australian Refined Diagnosis Related Groups (AR-DRGs) E62 respiratory infection/inflammation demonstrated a high Relative Stay Index (RSI) in all three complexity levels of the AR-DRG. This was surprising to the team as a clinical pathway was in place for patients with pneumonia who we suspected made up the majority of patients in this AR-DRG.

This raised a number of questions in relation to the data and its appropriateness for benchmarking:

• Based on volume, mix of Diagnosis Related Groups (DRGS), are the benchmark hospitals appropriate?

• Is coding or clinical documentation accurate?

• Is there unwarranted clinical variation?

Once we had answers to these questions, the team could drill further into the data to scope a project that look at clinical variation more closely. The review of the data showed that as suspected Pneumonia was the most frequent diagnosis and the project was scoped to community acquired pneumonia patients with minimal co- morbidities present.

Specific International Classification of Diseases (ICD) 10 diagnosis codes were selected to define Community Acquired Pneumonia (CAP) (n=184). Specific conditions were excluded (e.g. patients with cancer, HIV, immunosuppressed patients, Chronic Obstructive Pulmonary Disease (COPD), aspiration pneumonia, lung abscess and, tubercle bacillus). This was to ensure an optimal result by removing complex patients from this cohort.

Factors that influenced clinical practice were then reviewed, such as correct diagnosis, interpretation of radiology, use of intravenous therapy (IV) and oral antibiotics, physiotherapy usage and discharge patterns (split into consultant driven factors, hospital driven factors and patient factors). All of these factors not only have an impact on clinical practice but also on length of stay and cost of care.

The clinical pathway for CAP that was in place outlined strict antibiotic usage (IV antibiotics for two days then a day of oral and then discharge). It was decided that antibiotic usage would be investigated in detail within the review, comparing linked pharmacy data to the day of stay of the patient.

The investigation found a surprising variance to the CAP pathway in that patients were receiving IV antibiotics for average of 1.8 days (min 0.7, max 2.8) and oral antibiotics for an average of 4.2 days (min 2.1, max 7) prior to discharge. The investigation led to changes in practice in regard to prescribing patterns, changes to pharmacy rounds and dispensing amounts.

Other clinical changes were also required, including a revised pathway, use of CURB _65 sticker, early onset of physiotherapy,

encouragement of early discharge and options for exceptions to the pathway.

One of the biggest changes was pharmacy only dispensing a two day supply of antibiotics with the third and subsequent days only dispensed if the Attending Medical Officer (AMO) had signed a new antibiotic sticker. The pharmacy changed the timing of their rounds to the respiratory ward to ensure that patient care was not compromised by a late delivery of the antibiotics if required on the third day.

The performance results for the complete AR-DRG E62C respiratory infection/inflammation without Complication and Comorbidity (CC) improved from a Relative Stay Index of 132 percent to 103 percent in the following 12 months and E62B respiratory infection/inflammation with SMCC improved from 117 percent to 106 percent.

Subacute care funding and transition to Activity Based Funding

Andy Wu, Western Australia Department of Health

Subacute care in Western Australia has seen substantial growth through the two recent National Partnership Agreements (NPAs), Hospital and Health Workforce Reform (HHWR) and Improving Public Hospital Services (IPHS). The two agreements provided significant opportunities to develop new rehabilitation services and to expand existing services. The services have assisted to enhance public hospital rehabilitation infrastructure and capacity, as well as reduce demand pressure on the acute care sector.

In Western Australia, there are limited paediatric rehabilitation services providing intensive, consistent and coordinated rehabilitation therapies, particularly in the ambulatory setting. Most often, children and adolescents either have an extended inpatient stay or are readmitted to hospital for bursts of intensive therapies, placing additional pressure on the acute care beds.

The paediatric rehabilitation Step Down Unit (SDU) was established under the NPA, IPHS, and is the first and only dedicated paediatric rehabilitation same day ambulatory service in Western Australia. It provides intensive medical and multidisciplinary interventions to children and adolescents with acquired or congenital functional impairment who will benefit from rapid and early intensive rehabilitation. The emphasis of the SDU is to optimise the potential of the child and adolescent through improved individualised activity and community participation programs.

Significant improvement in patient outcomes has seen 80 percent of the children and adolescent achieving or exceeding their functional goals at the end of their episode of care at the SDU.

70 percent of children and adolescents currently attending the SDU are accessing services that were not previously available while the remaining 30 percent are those who previously received specialist rehabilitation by extending their initial hospital stay or through readmission to hospital.

With the conclusion of the NPAs and subsequent transition to Activity Based Funding (ABF) it was imperative that the SDU service continue to operate and provide dedicated ambulatory paediatric rehabilitation. However, the service faced unique challenges in ensuring its sustainability under ABF as well as providing quality care according to the current service delivery model.

This presentation will provide an example of how an innovative and valuable subacute care service, such as the paediatric rehabilitation SDU can successfully transition into an ABF funding model following the cessation of the NPAs in June 2014.

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Principles for splitting Adjacent Diagnosis Related Groups

Qingsheng Zhou, National Centre for Classification in Health, University of Sydney; Philip Hoyle, National Centre for Classification in Health, University of Sydney; Vera Dimitropoulos, National Centre for Classification in Health, University of Sydney; and Richard Madden, National Centre for Classification in Health, University of Sydney

Introduction

Diagnosis Related Groups (DRGs) have a long history of development in Australia, commencing with the release of the Australian National DRG (AN-DRG) classification in July 1992. Coinciding with the introduction of the First Edition of the International Statistical Classification, Tenth Revision, Australian Modification (ICD-10-AM), the Australian Refined DRGs (AR-DRGs) replaced the AN-DRGs in 1998.

Using ICD-10-AM and the Australian Classification of Health Interventions (ACHI) as a basis, the AR-DRGs were developed to reflect Australian clinical practice and use of hospital resources. The AR- DRGs are used by both public and private hospitals to provide better management, measurement and payment for high quality and efficient health care services. IHPA now uses AR-DRGs to set the National Efficient Price (NEP) for health services.

The AR-DRGs classify units of hospital output. The classification is designed to group inpatient stays into clinically coherent categories of similar levels of care complexity as judged by diagnostic, intervention and patient characteristics (outputs) that consume similar amounts of resources (inputs).

A new AR-DRG version is made available every two years. A modified version of AR-DRG 6.0 (Version 6.0x) is now in use as a national reference point for public hospital pricing in admitted services. AR-DRG Version 7.0 was released in October 2012 and will be implemented from July 2014.

Outline

The Australian Consortium for Classification Development (ACCD) has been commissioned to review Version 7.0 and to make recommendations for future AR-DRG versions.

One of the tasks is to review the ADRG splits and to make recommendations to any revision that may involve splitting, un-splitting and refinement of the current ADRGs.

This project involves the development of a set of principles that are considered important to provide overall guidance for the revision of ADRGs.

The AR-DRG classification needs to be developed with maximum regard to the clinical needs of the patient, and with minimum regard to who is providing the service or the setting in which it is provided.

Under consideration are four principles, including clinical coherency, operational feasibility with minimum adverse impacts, reasonable homogeneity in resource use, and classification soundness. A range of issues will be discussed in the presentation, such as:

• Should a hierarchy or weighting be applied to the above principles?

• Should the AR-DRG classification focus on existing differences, regardless of the causes behind the differences?

• How to judge clinical coherence?

• Partitioning should not impact on organisational or administrative practice.

Conclusion

It is expected that the principles elaborated in the presentation will be applied to the review of AR-DRG Version 7.0 in general and the revision of ADRG/DRG splits in particular.

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Venue map

Plenary session, Concurrent one and Concurrent

five sessions

Workshop A and

Workshop C

Workshop B and

Workshop D

Concurrent sessions

Registration desk and catering area

(Tuesday and Wednesday)Networking

function

Registration desk and

catering area (Monday)

Registration desk and

catering area (Monday)

Speaker preparation

room

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ABF Activity Based Funding

ABM Activity Based Management

ACHI Australian Classification of Health Interventions

ACS Australian Coding Standards

ACCD Australian Consortium for Classification Development

ADRG Australian Diagnosis Related Groups

AHSA Australian Health Service Alliance

AMO Attending Medical Officer

AN-SNAP Australian National Subacute and Non-Acute Patient

AR-DRG Australian Refined Diagnosis Related Groups

ARDT Admission, Readmission, Discharge and Transfer

BMT Bone Marrow Transplant

CAP Conditional Adjustment Payment

CAP Community Acquired Pneumonia

CC Complication and Comorbidity

CHA Children’s Health Queensland

CHADx Classification of Hospital Acquired Diagnoses

CHQ Children’s Health Queensland

CHIMP Children’s Hospitals Information Management Portal

COF Condition Onset Flag

COPD Chronic Obstructive Pulmonary Disease

ED Emergency Department

GCHHS Gold Coast Hospital and Health Service

HHWR Health Workforce Reform

HMR Home Medicines Review

HOMR Hospital Outreach Medicines Review

HRT Health Round Table

ICD International Classification of Diseases

ICD- 10-AM

International Statistical Classification, Tenth Revision, Australian Modification

IPHS Improving Public Hospital Services

IV Intravenous therapy

LHD Local Health District

LHN Local Health Network

LOS Length of Stay

MBS Medicare Benefits Schedule

MHS Mater Health Service

MICC Medical Imaging Coding and Costing)

NAP Non-admitted Patient

NEP National Efficient Price

NCCH National Centre for Classification in Health

NHCDC National Hospital Cost Data Collection

NPA National Partnership Agreements

NWAU National Weighted Activity Unit

PAS Patient Administration System

PET Positron Emission Tomography

PICU Paediatric Intensive Care Unit

PPM Power Performance Manager

RAM Rehabilitation AN-SNAP Model

RMMR Residential Medication Management Review

RSI Relative Stay Index

RVU Relative Value Unit

SCHN Sydney Children’s Hospital Network

SDU Step Down Unit

SHNs Specialist Health Networks

SNAP Subacute and Non-Acute Patient

SPaRC Standard Performance and Reporting Collaboration

SPECT Single-Photon Emission Computerised Tomography

SRG Surgical-Related Groups

UDAG Urgency Disposition Aged Group

UDG Urgency Disposition Group

URG Urgency Related Group

WAU Weighted Activity Units

WHA Women’s Healthcare Australasia

Glossary

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Activity Based FundingConference 201423  –  25 June 2014Melbourne Convention and Exhibition Centre

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