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A joint Australian, State and Territory Government Initiative
Casemix & Activity Based Funding Developments in Australia
Philip Burgess & Tim Coombs
AMHOIC: 13 June 2013
A joint Australian, State and Territory Government Initiative
Mental Health Outcomes in Australia: The future of information development in practice 2
"It’s time to remember NOCC is also about casemix:
Australian casemix development in mental health"
Philip Burgess, Analysis & Reporting
AMHOC: 19 November 2010
What we talked about then …
Casemix 101 Casemix Myths:
Not just DRGs – there are over 100 casemix classification systems;
Not a payment system: but a tool that can be used for payment purposes
Not about reducing quality of care – but a tool that can be used to look at relationship between quality & cost
Branching Out: The 4th Australasian Mental Health Outcomes and Information Conference 2013 3
Diagnosis Related Groups The most widely used casemix classification Used to classify acute admitted care
Not used for non-admitted care Classes defined by principal medical diagnosis,
plus variables such as other diagnoses, age and procedures
These variables are ‘cost-drivers’ They drive (predict) the cost of acute care But they have not proven to be good predictors of the
cost of mental health
Problems with DRG-centred modelsProblems with DRG-centred models
DRGs don't work for many case types: mental health rehabilitation chronic illness palliative care intensive care
DRGs not sufficiently refined in some areas multiple conditions principal diagnosis
Because theprincipal diagnosis
is not the maincost driver
Branching Out: The 4th Australasian Mental Health Outcomes and Information Conference 2013 8
There is an underlying episode classification, not just in inpatient care but also community;
Modest but acceptable levels of variation explained;
The costs being driven by ‘casemix’ are often confounded by the costs driven by provider variations
MH-CASC findings
Branching Out: The 4th Australasian Mental Health Outcomes and Information Conference 2013 9
The variables driving costs in inpatient settings are also driving costs in the community but:
the patterns of care are different …. so ….
the importance of the variables differs across the two settings (e.g., focus of care)
MH-CASC findings
10
DIAGNOSIS
SEVERITY, using the HoNOS scales as the main measure
LEVEL OF FUNCTIONING, measured through an amended Life Skills Profile (adults) or child/adolescent specific measures; and
Other CLINICAL AND SOCIO-DEMOGRAPHIC characteristics e.g., age
MH-CASC based on:
Branching Out: The 4th Australasian Mental Health Outcomes and Information Conference 2013
Branching Out: The 4th Australasian Mental Health Outcomes and Information Conference 2013 11
Some indicative comparisons:% RIV Completed Inpatient Episodes
1997 – AR-DRGs (V3) – costs 11.3% (8 classes);
1997 – MH-CASC – costs 17.3% (9 classes);
2009 – AR-DRGs (V6) – LOS 15.1% (9 classes);
2009 – MH-CASC – LOS 22.7%
Reflections 2010
A better system than DRGs but not great; No real appetite among stakeholders for its
implementation: other than the NOCC was designed to capture to
necessary clinical attributes; but Linkages to costing and activity collections
remained unresolved
Branching Out: The 4th Australasian Mental Health Outcomes and Information Conference 2013 12
2011: Brave New World
National Health Reform Agreement (NHRA) Signed by COAG 31 July 2011 Health system splits into 5:
Hospitals - State responsibility Private sector primary care - Commonwealth responsibility “Aged care” – Commonwealth responsibility Disability services - State responsibility Community health, population health and public health - State
responsibility
Branching Out: The 4th Australasian Mental Health Outcomes and Information Conference 2013 13
Commonwealth Premise Hospitals - big white buildings surrounded by
a fence Everything outside the fence is either ‘primary
care’ or ‘aged care’ or a ‘disability service’ no terms defined
Specialist services outside the fence (public and private) not adequately recognised or addressed
Hospitals the centre of the health reform
Commonwealth role Pay a ‘national efficient price’ for every public hospital
service
Fund States (and through them LHNs) a contribution for: teaching, training and research block funding for small public hospitals
Agreement has detailed arrangements for defining a ‘hospital’ service that the Commonwealth will partly fund
Scope of Commonwealth funding Hospital services provided to both public and private
patients in a range of settings and funded either: on an activity basis or through block grants, including in rural and regional communities;
teaching and training undertaken in public hospitals or other organisations (such as universities and training providers)
research funded by States undertaken in public hospitals and public health activities managed by States Community health not included unless a “hospital service”
2012: Activity Based Funding
From 1 July 2012, funding is to be based on ABF principles.
ABF means exactly what it says – providers are funded based on the activity they undertake.
Because most hospital activity involves treating patients – or cases – the term ‘casemix funding’ is also used.
“Nationally Efficient Price”
Different classifications for different streams and different prices for ‘activities’ within streams acute admitted emergency department subacute & outpatient services
No special provisions for mental health
National ABF – the IHPA approach Acute - AR-DRG Subacute and non-acute - AN-SNAP ED - Urgency Related Groups - URGs or
Urgency Disposition Groups - UDGs Outpatients - Tier 2 clinic list Mental health – new mental health
classification to be developed Current project is the first step in the process and
needs to ‘fit’ into this broader context
What to do with Mental Health?
A prerequisite for ABF is that ‘activity’ is classified and counted
But MH services are complex and don’t neatly fit the kinds of care models used in other health sectors
Moreover, technically, MH casemix models are “modest”
Steps in developing a Mental Health ABF model
Define the scope of ‘activity’ for ABF purposes
Agree on how to count that activity
Develop a classification framework
Determine the Nationally Efficient Price for MH
2013
2014
Steps in developing an ABF model
Define the scope of the ‘activity’ for ABF purposes Boundaries with other IHPA classifications
Agree on how to count activity What is a mental health ‘activity’ for ABF purposes?
Develop a classification framework A classification not just for IHPA pricing purposes but
more broadly (states, territories, private hospital sector) There may be classes in the classification that are
deemed to be out of scope for IHPA pricing purposes But pricing is a separate issue
A joint Australian, State and Territory Government Initiative
IHPA: Stage A
Defining the scope of mental health services for classification
purposes
Mental Health Care Type5. Mental health care is care in which the primary
clinical purpose or treatment goal is improvement in the symptoms and/or psychosocial, environmental and physical functioning related to a patient’s mental disorder. Mental health care is always:
delivered under the management of, or regularly informed by, a clinician with specialised expertise in mental health; and
evidenced by an individualised formal mental health assessment and the implementation of a documented mental health plan.
A joint Australian, State and Territory Government Initiative
IHPA: Stage B
Identifying Cost Drivers in Mental Health & Developing a
Classification Framework
Proposed mental health information architecture
Branching Out: The 4th Australasian Mental Health Outcomes and Information Conference 2013 26
Why a phase?
27
1 2 3 4
Service Contacts
Episode of Care
Inpatient Community Residential Ambulatory
CO1 CO2 CO3 CO4COR
Acuity of Symptoms A
B
CD
Illness
A B
Development pathway What unit of counting?
Same level for the whole classification or Different levels for different branches?
What data items to collect and analyse? How to develop the classification?
via a one-off study (as MH-CASC was in the 1990s) or A series of one-off studies or through analysis of routinely collected data (as AR-
DRGs are developed)? Implementation issues?
One important implementation issue
In practice, the scope of the mental health classification will be determined by the information that is collected. A patient episode can only be assigned to a class in the mental health classification if: The episode is classified to the Mental Health Care Type
AND The information required to assign a patient episode to a
class is both collected and reported No information, no class
Have a class for ‘Mental health not further specified’?