Independent Hospital Pricing Authority Emergency care ...Emergency care costing and classification project – Costing methodology Page 1 1 1 Introduction and purpose of this document

Independent Hospital Pricing Authority

Emergency care costing and classification

project

Costing methodology

Revision history

Version Date Modifications

0.1 15 June 2015 Initial draft

0.2 5 August 2015 Revisions following review by consortium members

0.3 13 August 2015 Revisions following review by IHPA

0.4 16 November 2015 Revisions following consultation.

0.5 27 January 2016 Revisions to align with update of data request specification.

0.6 14 March 2016 Minor edits, and modification of tables at Appendix C to match

Data request specification document.

1.0 4 April 2016 Version officially released for the study.

Health Policy Analysis consortium

The Emergency care costing and classification project is being undertaken by a consortium

led by Health Policy Analysis Pty Ltd. The consortium includes:

Health Policy Analysis Pty Ltd (Jim Pearse - Project Director, Deniza Mazevska - Project

Manager, Joel Tuccia, Akira Hachigo, Jane Elkington)

HealthConsult Pty Ltd (Joe Scuteri, Lisa Fodero, Cathy Hoadley)

Health Outcomes International Pty Ltd (Lilian Lazarevic, Darren Button)

Dr Sharon Wilcox (Health Policy Solutions Pty Ltd)

Dr Tim Smyth (timsmythconsulting Pty Ltd)

Dr Ralph Hanson

Professor Peter Sprivulis

Dr Sue Ieraci.

Suggested citation

Health Policy Analysis 2016, Emergency care costing and classification project – Costing

methodology, Independent Hospital Pricing Authority, Sydney.

Disclaimer

In accordance with Health Policy Analysis’ policy, we are obliged to advise that neither

Health Policy Analysis nor any employee nor sub-contractor undertakes responsibility in any

way whatsoever to any person or organisation (other than the Independent Hospital Pricing

Authority) in respect of information set out in this report, including any errors or omissions

therein, arising through negligence or otherwise however caused.

Health Policy Analysis Pty Ltd

Suite 102, 30 Atchison Street, St Leonards 2065

ABN: 54 105 830 920

Phone: +61 2 8065 6491

Table of contents 1 Introduction and purpose of this document ............................................................................. 1

Introduction .............................................................................................................................. 1

Purpose of this document ....................................................................................................... 2

2 Key features of the study ............................................................................................................. 3

Overview ................................................................................................................................... 3

Costing study scope ................................................................................................................ 6

Data collection components ................................................................................................. 6

Costing components of study ................................................................................................ 8

Study stages ............................................................................................................................ 10

3 Overview of methodology ......................................................................................................... 12

Local costing .......................................................................................................................... 12

Allocation of direct costs ...................................................................................................... 13

Final product categories ....................................................................................................... 17

4 Detailed description of each costing step .............................................................................. 20

Step 1: Final allocation statistics ........................................................................................... 20

Step 2: Alignment of costs to all product categories ........................................................ 23

Step 3: Overhead allocation ................................................................................................ 26

Step 4: Allocation to product categories ........................................................................... 26

Step 5: Allocation of costs to patients ................................................................................. 27

Step 6: Intermediate costs (pathology, imaging and pharmacy) .................................. 29

5 Reporting cost results and related data .................................................................................. 30

Appendix A – Approaches to developing RVUs ............................................................................. 31

A: Total clinician time method ............................................................................................. 31

B: Standard cost method ...................................................................................................... 37

Appendix B – Description of data submissions ................................................................................ 44

Appendix C – Cost data submissions – data elements .................................................................. 46

References ........................................................................................................................................... 48

Emergency care costing and classification project – Costing methodology Page 1

1 1 Introduction and purpose

of this document Introduction

The Independent Hospital Pricing Authority (IHPA) engaged Health Policy Analysis, as the

lead for a consortium, to develop a new classification system for emergency care services for

Australia, for the purposes of activity based funding. The project is referred to as the

Emergency care costing and classification project.

The objectives of the project are to:

1. Undertake a targeted costing study to further investigate the impact of particular

drivers in emergency department stay cost variation and thereby aid in the

development of a new emergency care classification system.

2. Develop a new classification system for emergency care services for activity based

funding purposes, based on a structure agreed by IHPA.

3. Undertake data development work to modify and enhance selected data items in

the emergency care data collections to support the implementation of a new

emergency care classification system.

The costing component of the study involves costing by a sample of emergency

departments and emergency services across Australia, and will be conducted between April

and June 2016. This component is referred to throughout this document as the Emergency

care costing study.

This document, the Costing methodology, is part of a suite of documents developed for the

study. Other documents in the suite are:

Sampling strategy, which provides an analysis of data already available from

previous round of the National Hospital Cost Data Collection and also sets out the

sampling strategy for the study.

Data request specification (DRS), which sets out the data to be provided by

participating sites and the timeframes around which these data are to be provided.

Site implementation plan, which provides guidance to participating sites on planning

for and implementing the study.

Health Policy Analysis Pty Ltd| Project commissioned by IHPA


Purpose of this document

This document provides guidance for hospitals participating in the costing component of the

Emergency care costing and classification study on the methods for costing activity in scope

of the study. The document:

Describes the key features of the study.

Provides an overview of the costing process for the study.

Summarises key dates related to the costing component of the study.

Provides guidance on the key steps in the costing process, namely:

Step1: Development of final allocation statistics for clinical staff and other resource

categories based on data on clinician time allocated to individual patients and/ or in

undertaking specific activities/ procedures over a two-week period.

Step 2: Assignment of cost centres in the general ledger to appropriate final cost

centre types (reflecting product categories wherever possible, including the specific

emergency care product categories) and indirect (overhead) cost centre types.

Mapping of cost line items to National Hospital Cost Data Collection line items.

Step 3: Allocation of costs from indirect (overhead) cost centres to direct cost

centres.

Step 4: Allocation of costs accumulated in final cost centres to product categories.

Step 5: Allocation of costs to patients within product categories.

Describes the cost data to be submitted for the study.


2 2 Key features of the study

Overview

The primary objective of the Emergency care costing study is to achieve accurate patient

level costs that can be used to develop a classification system for emergency care for

funding purposes. To achieve this, the costing study has been designed with the following

key features:

● The study will include a representative sample of emergency departments and

emergency services from across Australia (i.e. including metropolitan, regional and

remote locations alongside other strata). The final data set will be weighted to reflect

the population of emergency departments and emergency services across Australia.

The data set will provide a means of exploring the cost differences for emergency

departments in metropolitan, regional and remote locations, and potentially

differences between emergency departments and emergency services, depending

on the number of emergency services participating.

● To explore the boundary between emergency care and admitted patient care, the

scope of the study includes the emergency care component of admitted hospital

episodes, plus the cost of any short stay units directly managed by or integrated with

the emergency department. Costs of other components of admitted patient care will

also be explored through data supplied to the National Hospital Cost Data

Collection.

● Hospitals participating in the study are required to comply with the Australian Hospital

Patient Costing Standards Version 3.1 (Independent Hospital Pricing Authority, 2014).

● Costs yielded by the study are required to be based on direct measures of resource

consumption from within the study rather than external reference information.

● A particular focus in the study is on good measures of resource consumption for:

o clinical staff inputs to care

o consumables used within the emergency department

o imaging ordered within the emergency department

o pathology ordered within the emergency department

o pharmacy ordered within the emergency department.

The levels of consultation and liaison services provided by staff from outside the

emergency department will be identified, and associated resources estimated and

assigned to a separate product.

● The study will be run over a minimum of one month within each participating site.

Patient characteristics and stay information identified as being important for the

study, and additional to that routinely collected by the hospital, will be required over

this one month period. In addition, two weeks within the month (with a two-day lead

in period, to settle data collection processes and maximise data quality), will be

dedicated to the collection of clinicians’ times associated with delivering care to



individual patients. This will require recording of clinicians’ time spent consulting with

each patient and/ or undertaking other specified activities, investigations and

procedures.

● In allocating emergency department/ service clinical staff resources to patients, two

broad strategies are available to sites. These are:

a. A total clinical time method: Under this method, all clinicians within the

emergency department participate in data collection and identify the

patient attributable time associated with each patient managed within the

emergency department during a two-week period. Data on activities and

procedures is also collected during this time. These data are then used to

quantify the total clinician time associated with each patient, and to

estimate the marginal impact on clinician time of specified patient

characteristics or the undertaking of specified procedures/activities. In the

costing process, relative value units (RVUs) can be applied that reflect (a)

directly measured clinician time (for the two-week period); (b) a standard

costing approach applied to utilisation indicators/measures derived from

data collected in the four week period of data collection; and (c) a

standard costing approach applied to utilisation indicators/measures

derived from data routinely collected for the rest of the financial year.

b. Standard cost method. Under this method, the sites undertakes data

collection related to specified activities/procedures undertaken within the

emergency department. This is then used to estimate the mean clinician

time associated with each activity/procedure, which is then used for

developing RVUs. In the costing process, RVUs are applied using (a) a

standard costing approach applied to utilisation indicators/ measures

derived from data collected in the four-week period; and (b) a standard

costing approach applied to utilisation indicators/measures derived from

data routinely collected throughout the rest of the financial year.

● Most emergency departments have several treatment areas. Examples are

resuscitation and fast track. Many patients are managed in only one treatment area,

but some move between areas. It is proposed to use data on the treatment areas

within the costing process, particularly for the allocation of nursing time. Each

treatment area has a specific number of nurses assigned reflecting the types of

patients managed within that area. Hence this information provides a good starting

point for the allocation of nursing costs. The standard cost method described above

can then be used to identify variations in costs for individual patients within a

treatment area (i.e. by identifying the types of consultations or interventions that they

received from other types of clinicians).

● RVUs will need to be developed separately for different types of clinicians, as follows:

● senior medical staff

● junior medical staff

● nurse practitioners

● nursing

● allied health.



An alternative to developing RVUs for senior and junior medical doctors separately is

to have a single set for ‘medical staff’. The former is preferred for this study, but the

latter may be used if the seniority of medical staff cannot be distinguished in the data

collected.

● Each site will need to cost emergency care using a local costing application, and

submit the results of this for the study. Data on utilisation and staff-related RVUs

generated from the study should be used towards allocating costs to individual

patients. The principal reason that the costing needs to be undertaken locally is to

ensure indirect (overhead) costs are allocated appropriately to emergency care

products. This can only occur where the costing component of the study is

embedded within a whole-of-hospital costing study. A secondary objective of

requiring local costing to be undertaken is to create a capability within the

participating sites that results in improved emergency care costing in future years.

● Sites will be required to submit emergency care costs for the full 2015-16 financial

year.

● The data submission requirements for the study include the submission of key input

files for costing emergency care (i.e. those loaded into the costing application), in

addition to the costing results. This approach will assist the study in two ways:

● In some cases, sites may not have the flexibility to change RVUs within their

costing system. In this case the consortium will generate and apply the RVUs

instead.

● The input files will allow the consortium to reproduce local costing results as a

means of validating the results produced locally by the sites.

● The timing of when local costing is undertaken for the study has been aligned with

the period during which annual hospital costing is undertaken for the National

Hospital Cost Data Collection; draft costing results are due by 31 October 2016 and

final costing results by 16 December 2016. Subsequently, the costing approach used

in this study will be embedded within the National Hospital Cost Data Collection as

routine for emergency care costing.

● The costing study at each site will be supported by a field management team (FMT)

from the Health Policy Analysis consortium. FMTs will:

● Facilitate communication between study sites/ jurisdictions and the

consortium/ IHPA project management team.

● Train study site coordinators and other site project team staff (this will be on a

train-the-trainer basis; site co-ordinators will train clinicians).

● Assist site coordinators in setting up sites for data collection.

● Monitor site progress during data collection.

● Troubleshoot problems that arise.

● Feedback data to the site at the end of the study and collect information

about the site’s experiences with the study.



Costing study scope

The study is designed to capture the clinical and stay characteristics of patients receiving

emergency care and related acute services (e.g. short stay units attached to the

emergency department), and costs. It will be conducted in a representative sample of

emergency departments and emergency services across Australia.

In Australia, emergency care units are classified into different levels according to a system

developed by IHPA in consultation with the Emergency Care Advisory Working Group (IHPA

2015). The levels reflect the nature and roles of the service and staffing of the units. Using this

classification:

Emergency departments are defined as emergency care services at levels 3B-6.

Emergency departments are usually located in medium to large hospitals.

Emergency services are defined as emergency care services at levels 1-3A.

Emergency services are usually located in small hospitals in rural and remote settings.

The classification is available at: www.ihpa.gov.au/internet/ihpa/publishing.nsf/Content/nep-

glossary-2015-16#attach.

Note that in this document the term ‘emergency department’ will be used to refer to both

emergency departments and emergency services, unless specific reference is being made

to one of these groups.

A Sampling strategy has been developed to ensure a representative spread of large, small,

regional, rural and metropolitan emergency departments/ services in the study. It is aimed to

include between 20 and 30 sites in the study from across Australia.

Emergency departments in larger hospitals often have one or several short stay units that are

managed as a part of the emergency department or closely coordinated with the

emergency department. Short stay units and models have a variety of names, such as short

stay units, medical assessment units, emergency management units, observation units.

Patients managed in short stay units are in scope of this study. The costing study component

has been designed to be broader than the current scope of emergency care classifications.

The reason for this is that the study will explore the implications of the boundaries between

emergency and acute care as defined under the current model of activity based funding.

Data collection components

The study has four data collection components, which are described below.

Part A: Service level descriptive and related data. This is service level data describing the

emergency care service and its relationships with other services within the hospital setting

(e.g. short stay units). These data are provided once at the start of the project (8 April 2016),

with an update of one component (annual staffing for 2015-16) later in the study (12 August

2016).

Part B: Clinician related time. This component of the study is to occur for a two-week period,

commencing between 1 April 2016 and 1 June 2016 (preceded by two days lead in, to settle

http://www.ihpa.gov.au/internet/ihpa/publishing.nsf/Content/nep-glossary-2015-16#attach

http://www.ihpa.gov.au/internet/ihpa/publishing.nsf/Content/nep-glossary-2015-16#attach



data collection processes and maximise data quality). During this two-week period data is to

be collected on clinical time associated with either:

patients and defined activities/procedures OR

defined activities/procedures.

The actual data collection approach adopted for a particular site will depend on the

capacity to collect the relevant clinical time data. Costing will be most accurate and

informative where clinical time associated with individual patients is collected. However, this

may not feasible for all sites. An alternative approach will be to collect clinical time

associated with a defined set of activities and procedures. This will yield an empirical basis for

assigning costs associated with clinical inputs.

The data from Part B is to be submitted by 12 August 2016.

Part C: Additional patient and emergency department stay characteristics. This component

of the study is to occur for a four-week period, overlapping with Part B, and commencing

between 1 April 2016 and 1 June 2016. A broad range of patient and emergency

department stay characteristics are already routinely collected by emergency department

staff. During this phase, additional data items will be collected, either prospectively or

through retrospective review of patient electronic and/or paper records. These additional

characteristics relate to:

Additional factors related to patients that potentially impact the cost of care

(referred to as diagnosis modifiers in this document).

Procedures and investigations undertaken on patients.

Patient movements between treatment areas within an emergency department.

Many of the data items above are already available in electronic form, in either emergency

department systems, patient administration systems, or imaging, pathology and pharmacy

systems. However, for most sites, this part of the study will involve collection of some

additional data on patient characteristics. Data on admitted patient episodes immediately

following an emergency department stay will also be required for the study.

In addition to data from the four-week period, data already routinely available for the full

2015-16 financial year is required to be submitted as part of the study. It should be

emphasised that there will be no additional data collection requirements outside the four-

week period.

The data from Part C is to be submitted by 12 August 2016.

Part D: Cost data: The final component of the study relates to costed emergency department

stays. The costing activities have been integrated with the annual National Hospital Cost

Data Collection process, and thus will occur in the period July-October 2016. Data from Parts

B and C will be used in the costing process, to generate more accurate costs for patient

emergency department stays. The costing results need to relate to the full 2015-16 financial

year, although analysis is likely to be focussed on data from the four-week period covered by

Part C.

In addition to the outputs of the costing process, key files that are inputs to the costing

process are required to be submitted for the study. Further information about costing is in the

Costing methodology document.



Draft cost data is to be submitted by 31 October 2016, with final data submitted by 16

December 2016.

Costing components of study

For this study, costing is required to be undertaken for the full 2015-16 financial year. This is for

the following reasons:

Most sites cost either a six- or 12-month period. Many sites do not have the capacity

to cost shorter periods of time.

Requiring sites to submit input files to produce costs for one month (i.e. the length of

this study) would be onerous.

There is a capacity through this study to improve the costing results for the full 2015-16

financial year (this is described further below).

There is an interest in testing hypotheses over whether costs within emergency

departments vary across seasons, and this can be explored if the costing is done over

the full financial year.

All sites participating in the Emergency care costing study will be undertaking costing for the

full 2015-16 financial year for the National Hospital Cost Data Collection. (Participation in the

National Hospital Cost Data Collection is a prerequisite for participating in the Emergency

care costing study.) Given this, the additional requirements for this study are:

preparation of input files

development of RVUs based on data collected at the site during the study

application of the locally developed RVUs for the allocation of direct costs to

emergency care patients.

There is further discussion of the processes that can be used to develop RVUs in Chapter 3 of

this document.

The input files for costing are structured differently within different hospitals depending on the

costing system that a hospital uses. The systems in use include Power Performance

Management Version 2 (PPM2), Transition II, the Combo costing application (VisaSys) and

CostPro Plus (SyRis). Within these systems, a key file (known by various names, including

‘Emergency treatment data’, ‘Services table’) is used to identify whether there was utilisation

of a particular intermediate product during a patient episode or stay, and the amount of

utilisation of that product. The file includes data from a range of sources, including

emergency department stay data, admitted patient episode data, and extracts from

imaging, pathology and pharmacy systems. In this file, utilisation may be quantified (e.g. in

minutes or actual charges), or it may be flagged that there was use of a particular resource

(e.g. a value of 1 indicates that the service had been used during the stay or episode).

For this study, sites will be required to submit the overall results of the costing study and the

relevant input files used for costing. In addition to service level and activity data, there will be

four cost related submissions for the study. These are described in Table 1.



Table 1 – Cost data submissions for the study

Submission File name File description

Submission D1 EDCost Patient and product cost file data elements: Costs of

emergency department patients, and admitted patient

episodes for patients subsequently admitted to hospital. This

file will be the output of a local costing application, structured

to reflect the standard output for the National Hospital Cost

Data Collection.

Submission D2 CostCentreExtract Final cost centre file: Extract from costing system to reflect the

direct cost centre costs for the emergency department cost

centre and associated short stay units. This will be extracted

from the local costing application and reflects the direct

costs after allocation to final emergency care cost centres,

and reflects any reclassification of costs that has been

applied through the costing process.

Submission D3 ServiceTreatment Service/ utilisation/ products file: This is the file within the

costing the application that reflects the indicators of

utilisation used in the costing process to allocate final cost

centre costs to patient stays.

Submission D4 RVU Relative value unit (RVU) file: The file will include details of all

RVUs used in the costing process for emergency care stays.

For this study, the RVUs for clinical staff costs are to be generated from data collected during

the study itself. The Health Policy Analysis consortium will be able to assist with this if sites are

not able to generate the RVUs themselves. The consortium will generate RVUs based on the

activity data collected by sites, which is to be submitted to IHPA (through the state/ territory

health authority) by 12 August 2016. The consortium will analyse the data to develop RVUs,

and provide the results back to sites through IHPA, in time for these to be used in the costing

phase of the project.

Staff related costs represent around three-quarters of emergency care costs. Improving the

allocation of staff costs to emergency care stays will be one of the key areas in which the

study will aim to improve cost estimation. Improvements will also be sought for the allocation

of other costs through greater attention to the processes that are generally in place for

routine costing for the National Hospital Cost Data Collection. These include the accurate

allocation of diagnostic imaging, pathology and pharmacy costs to emergency department

stays.



Study stages

A sampling strategy for the study has been developed that identifies the numbers of sites

required to achieve representation of emergency care across metropolitan, regional, rural

and remote settings, and other relevant characteristics.

State and territory health authorities will coordinate the nomination of sites to participate in

the study. Sites that have been proposed to participate in the study will first be assessed to

determine the feasibility of their participation in the study. The feasibility assessment will

consider issues such as the sites’ existing capacity to collect relevant emergency care data

and undertake a patient costing process. Sites will complete a short feasibility survey form,

which will be analysed by the project team. Final decisions on site participation will be

undertaken by IHPA and state/territory health authorities.

The Table below describes the key stages of the project and timing.

Table 2 – Study stages

Project stage Project management tasks*:

Specific costing related tasks are in bold Target dates

Site selection Site nomination for participation in study 30 September 2015

Decision on sites selected for participation in study 31 December 2015

Study

preparation

Commencement of study coordinator February 2016

Establish arrangements for data collection of study

Identify mechanisms through which specified

data will be collected.

Take steps to ensure data collection/

extraction/ coding mechanisms are in place

and working prior to study commencement.

Coordinate training for clinical and other staff

on an additional data collection processes

required for the study.

Set up study database (to be provided by

consortium).

February to end of March

2016

Part A submissions due. Related to service level

characteristics, details of treatment areas,

medical and nursing staffing of shifts, allied health

arrangements, approach to setting RVUs for

clinical time for previous National Hospital Cost

Data Collection submissions.

8 April 2016

Data collection Commencement of collection of additional

patient characteristics.

Commencement of collection of clinician time.

Between 1 April 2016 and

1 June 2016

Part B and C submissions due. Relate to clinician

time, additional patient characteristics, and Non-

admitted patient emergency department care

and Admitted patient care national minimum

data sets.

12 August 2016

Costing Commence costing process. 1 July 2016

Develop process for partitioning emergency

department cost centres to address consultation/

liaison services, teaching training and research,

reception/triage, other product services.

July to August 2016

Clinical time RVUs to be prepared and finalised. 16 September 2016



Project stage Project management tasks*:

Specific costing related tasks are in bold Target dates

Prepare data feeds for costing system, including

clinical time RVUs applied to activity data.

Mid-July to mid-

September 2016

Undertake a whole-of-hospital costing study using

the inputs from the data collection period.

Obtain and submit ancillary services price/RVU

schedules used for the costing study.

Import results into study database, generate and

review reports.

Follow up issues with corrective actions.

Repeat costing process if necessary.

Import final cost data into study database.

Mid-September to end

October 2016

Part D (Cost data) submissions due – draft. 31 October 2016

Address issues raised in feedback/edits provided

by consortium/ FMTs and prepare final cost data

returns.

November 2016

Part D (Cost data) submissions due – final. 16 December 2016

Project

conclusion

Close out visit:

Invite clinicians from site to participate in on-line

survey providing feedback on key data items and

issues encountered during the study.

Participate in study close out visit through which

study participants will be able to interactively

discuss the experience and learnings from the

study and implications for classification

development.

Clinician survey: July 2016

Site close out visit: Late

January to early February

2017

* See description of files in Appendix B. These are also specified further in the Data request specification document.


3

3 Overview of methodology The Emergency care costing study involves several components designed to create the

necessary foundation for a rigorous costing process that is consistent with the Australian

Hospital Patient Costing Standards (Independent Hospital Pricing Authority, 2014).

The key features of the costing methodology are described below.

Local costing

A key design principle for this study is that patient level costing will be undertaken by study

sites. FMTs will provide support and advice to study site staff, but it is not intended that the

FMTs actually do the costing. As discussed above, the data submission requirements for the

study have been designed so that a costing process can be replicated by the Health Policy

Analysis consortium, and the sensitivity of results tested for variations in costing approaches.

However, local costing has been adopted as the appropriate strategy for the project for two

reasons:

By taking this approach, capacity and capability for improved patient level costing

of emergency care will be built within the participating sites. It is hoped that following

the completion of the study, sites will continue to apply the costing enhancements

implemented during the study and further refine these.

Certain aspects of any modelling of costs at the national level are best based on the

results of a local costing process. An example of this is the allocation of indirect costs

in the costing process. To meet the Australian Hospital Patient Costing Standards

Version 3.1 (Independent Hospital Pricing Authority, 2014), indirect cost allocations

should be based on a consistent process applied within the context of a whole-of-

hospital/health service costing study.

The study involves each site undertaking costing using a local costing application. This part

will be undertaken by local staff with costing expertise (e.g. those with experience with the

National Hospital Cost Data Collection).

Data submitted by sites will allow the costs generated at the local level to be analysed by

the Health Policy Analysis consortium. This will be for the purposes of understanding the

differences between sites in the approaches undertaken (which will be important for

classification development), as well as validating the local results.



Allocation of direct costs

Emergency department clinical staff inputs

Staffing costs represent the most significant component of emergency department costs. In

this study, sites will be required to develop RVUs for clinical staff inputs, separately for senior

medical staff, junior medical staff, nurse practitioners, other nursing staff, and allied health.

(There is an option to develop ‘medical staff’ RVUs if the costs of senior and junior doctors

cannot be differentiated.) These RVUs will be based on data collected locally for the study,

supplemented, where appropriate, by other information generated from the study. In

addition, other data will also be collected through the study to allow a better basis for

allocating clinical staff inputs to emergency patients.

Table 3 gives an overview of the allocation methods for clinician time that are possible for

the Emergency care costing study based on data collected during the study.

Table 3 – Description of final allocation statistic methods to be applied in the Emergency

care costing study for clinician time

Allocation method

for clinician time

Description Use in Emergency care costing

study

Actual time

The actual time spent by a clinician to

provide services to an individual patient.

For allocating the costs of clinician time,

this number will be multiplied by the

average hourly rate of the clinician type.

This option is available for those

sites collecting actual clinician

time for all clinicians and across all

patients. This approach can only

be applied for the two-week

period during which clinician time

will be collected.

Actual utilisation

with internally

derived RVUs

The actual number of units consumed

(from the feeder system), with RVUs

developed from internal data

(preferably with local clinical

involvement) applied to reflect the

relative cost of each product/service

consumed in the end-product class.

These RVUs may be calculated on

several bases depending on the service

setting, including occupied bed days,

theatre sessions, emergency

department and non-admitted patient

products.

This is the ‘standard’ costing

method described earlier. RVUs

will be more specific for the weeks

in which data on additional

patient characteristics have been

collected. The study will also

develop RVUs that can be applied

to data routinely collected by

each site, which will be used in

costing the remainder of the

financial year.

This study also intends to address the issue that staffing varies across shifts during the day and

also potentially across days of the week, as well as the impact of public holidays on staffing.

It is also recognised that the seniority of staff, staffing levels by shift, penalty rates and call

back arrangements all have an impact on cost, and will be explored in the analysis.

An analysis of the National Hospital Cost Data Collection shows that many sites are using

externally derived RVUs to allocate costs. In addition, these are frequently applied to

measures of utilisation such as treatment time in the emergency department, triage

category, or emergency department class (i.e. using Urgency Related Groups or Urgency

Disposition Groups). Without appropriate adjustment, treatment time is problematic for

allocating costs in that it assumes that more resources were allocated to a patient due to the



fact that they stayed longer in the emergency department. This is not necessarily the case.

Also, the use of triage category or emergency department class results in circularity in the

costing, as these variables are reinforced as cost drivers rather than reflecting actual

variation in costs between patients based on other characteristics.

Another issue identified within the current approaches to costing emergency care is possible

over-allocation of costs to patients who do not wait to be treated. It is suspected that this is a

result of treatment costs being allocated to this group of patients, and/or the use of

measures of treatment time that including a waiting time component. For the purposes of this

study, sites will be requested to separate out costs associated with the pre-treatment/ triage

stage from those associated with treatment. This will allow only the pre-treatment/ triage-

related costs to be allocated to patients who do not wait for treatment.

In summary, the study will capture information on actual clinician time. This will be used to

generate local RVUs to apply to other components of the study. By collecting additional

utilisation measures and paying close attention to factors known to impact costs, the study

will yield cost estimates which will be significantly more accurate than those routinely

generated from costing processes currently contributing data to the National Hospital Cost

Data Collection. The study will avoid the inherent circularity in using external RVUs based

on triage and existing classification systems.

Short stay units

Costs of short stay units managed within the emergency department are in scope of the

current study. One of the aims of the study is to explore the boundaries between emergency

departments and short stay units. It is also possible that the type of patients managed in a

short stay unit by some hospitals are managed in the emergency department by others; and

thus these differences in classification of these patients will be important to explore in the

study. The approach to costing this component of the stay will be based on the usual

National Hospital Cost Data Collection approach.

Mental health services/units located in emergency care settings

Mental health services/units located in emergency care settings will be in-scope for the

study. The main reason for this is to understand the crossover between the emergency

department and these units in care provision, and the types of patients referred to these units

where they exist.

Diagnostic imaging

Diagnostic imaging costs are an important component of emergency care costs. For most

sites participating in the National Hospital Cost Data Collection, these are usually costed

separately as an intermediate product and then allocated to patients actually receiving

imaging. This provides an accurate measure of resource utilisation of diagnostic imaging.

The additional insights that will be provided by the Emergency care costing study are:

Diagnostic imaging data will be captured for each patient, as part of the

investigations submission (Submission C4).

Diagnostic imaging utilisation data used in costing will be collected as part of the

study.



Additional information will be obtained from each site on the RVU/cost schedule used

for diagnostic imaging, together with relevant descriptors.

Analysis will be undertaken nationally to determine whether differences in RVU/cost

schedules for diagnostic imaging items has a material effect on cost estimates. If

there is evidence of material and systematic effects, then adjustments to address

these may be considered.

Pathology costs

The approach proposed for pathology costs is the same as that for diagnostic imaging.

Pharmacy costs

The approach proposed for pharmacy costs is similar to that for diagnostic imaging. An issue

to be considered for the study will be the impact of pharmacy imprest. There are a few

relatively higher cost drugs used within emergency departments, such a thrombolytics. These

may or may not be recorded as individually prescribed drugs and allocated to patients

based on the relevant pharmacy data extracts used for costing. This issue should be

investigated by site costing coordinators. If higher costs drugs prescribed and administered

within the emergency department are not included in pharmacy extracts (e.g. they are

available as imprest), site costing co-ordinators should consider whether there are alternative

means of identifying the emergency department patients being administered these drugs

and incorporating this into the costing process.

Medical and surgical supplies

The approach to medical and surgical supplies will align with the approaches for the

National Hospital Cost Data Collection.

Consultation liaison services

Clinical liaison is a significant activity for some emergency departments, and thus will be

captured in this study. There are two types of consultation liaison services that are relevant to

the current study:

a. Emergency department outreach: Consultation liaison services provided by

emergency department staff for patients who are not currently patients of the

emergency department. This can occur where a general practitioner or clinician at

another emergency department calls and requests advice about a patient. In some

instances, the patient may be subsequently referred to the emergency department,

but in many cases, this may be avoided. In this study:

Aggregate counts of these contacts will be captured (Submission B4).

Costs for these contacts should be allocated to a separate final product (NE2

- Non-admitted care provided by an emergency department clinician to a

patient who is not currently a patient of the emergency department, through

consultation and liaison, telemedicine or other means).

b. Emergency department in-reach: Consultation liaison services provided by other

clinical staff in the hospital (who are not paid for under the emergency department

cost centres) for patients currently in the emergency department. This type of care

might involve, for example:



A specialist assessment of a patient, which helps inform the treatment course

(including whether the patient should be admitted). In a substantial

proportion of these instances the patient may not be subsequently admitted.

A specialist assessment of a patient where the treatment course is generally

known, but that early assessment will facilitate the next stages of treatment

(e.g. a surgical advanced trainee’s and/ or an anaesthetist’s assessment of a

patient who will need surgery, an assessment of a patient with hip fracture by

an orthogeriatrician or geriatric advanced trainee).

Provision of an intervention by a nurse from a specialised team (e.g. pain

management).

A count of these services has been included in study (Submission B5). However, it is

not expected that separate adjustments will be made for these services within the

costing component of the study.

Costing study steps

The costing component of the study has five broad steps, which align with the steps involved

in the conduct of any hospital costing study. As mentioned previously, the costing should be

conducted as part of a whole-of-hospital costing study. The key steps are:

Step1: Development of final allocation statistics for clinical staff and other resource

categories based on data collected during the study.

Step 2: Assignment of cost centres in the general ledger to appropriate final cost

centre types (reflecting product categories wherever possible, including the specific

emergency care product categories) and indirect (overhead) cost centre types.

Mapping of cost line items to National Hospital Cost Data Collection line type item

categories.

Step 3: Allocation of costs from indirect (overhead) cost centres to direct cost

centres.

Step 4: Allocation of costs accumulated in final cost centres to product categories.

Step 5: Allocation of costs to patients within product categories.

These five steps are shown in Figure 1. The Figure references the most relevant standards from

the Australian Hospital Patient Costing Standards that need to be applied at each step. The

chapters following this one provide additional guidance on each of these steps, highlighting

the issues that are likely to be specific to the Emergency care costing study. In each of the

sections, specific Australian Hospital Patient Costing Standards that will be important for the

study are highlighted. However, the published version of Australian Hospital Patient Costing

Standards Version 3.1 should be references for detail on the standards and related material.

This is available at:

http://www.ihpa.gov.au/internet/ihpa/publishing.nsf/content/Australia-Hospital-Patient-

Costing-Standards.htm

http://www.ihpa.gov.au/internet/ihpa/publishing.nsf/content/Australia-Hospital-Patient-Costing-Standards.htm




Final product categories

In an activity based costing exercise, all products generated by a health service should be

costed (i.e. including both patient and non-patient products). It is only through the costing of

all products that one can be reasonably confident that there will be reconciliation between

the costs incurred by a health service and the costs reflected in the patient level costing

results.

The final product categories defined for this study are shown in Table 4 below. These align

with the National Hospital Cost Data Collection product classes, except for Non-admitted

emergency care (NE), where for the purposes of this study, the product is to be split into:

NE1 Non-admitted emergency care for patients currently within emergency

department.

NE2 Non-admitted care – external consultation and liaison - patient not currently

within the emergency department.

The study will capture the cost of admitted patient episodes that immediately follow an

emergency department stay. These will principally be acute episodes (product class AC).

This will capture the cost of the short stay unit(s) plus, the cost of any additional components

of the acute care episode that follows the short stay unit.

This data may include some sub-acute episodes that follow emergency department stay

(reflected in products RH, PC, GM, PG, MA, OA). Non-admitted services following an

emergency department stay (products OP, OC and MH) are not in scope of the study.

Table 4 – Final product categories for the Emergency care costing study

Code Product class Comment

AC Acute As defined for the National Hospital Cost Data

Collection. Will include the cost of patient stay within

short stay units. This may be followed by a transfer to

another ward or discharge

RH Rehab As defined for the National Hospital Cost Data

Collection PC Palcare

GM GEM

PG PsychGer

MA Maint

OA OthAdmPatCar

OG OrganProc

BD Boarder

NB Newborn

AE AdmED The costs of the emergency department component

of care prior to transfer to a short stay unit, ward,

operating theatre or intensive care, coronary care

unit or other admitted patient service.

NE1 Non-admitted emergency care for

patient currently within emergency

department.

The costs of emergency department care provided

to patients who are treated in the emergency

department but not admitted to the hospital in which

the emergency department is located. This will

include the costs of patients who did not wait.

NE2 Non-admitted care – external

consultation and liaison - patient

not currently within emergency

department.

Non-admitted care provided by an emergency

department clinician to a non-admitted patient who

is not currently within the emergency department,

through consultation and liaison, telemedicine or

other means.



Code Product class Comment

OP Outpat Not relevant for the study

OC OutComm

RS Research As defined for the National Hospital Cost Data

Collection TC Teaching

OT Other

MH Mental Health (Community)



Figure 1 – Schematic representation of emergency care costing process and related Australian Hospital Patient Costing Standards (AHPCS)


4

4 Detailed description of

each costing step This Chapter details the steps for costing for the Emergency care costing study. The costing

component of the study can proceed once the activity data collection has been

completed.

Step 1: Final allocation statistics

Final allocation statistics are required for:

medical staff

nursing staff

allied health staff

other staff

medical and surgical supplies.

In most sites intermediate or ancillary services (diagnostic imaging, pathology and

pharmacy) are represented separately, with costs allocated to individual patient episodes or

stays. Within many hospitals and health services, there are cross-charging arrangements in

place for ancillary services. Alternatively, standard approaches to developing RVUs for

ancillary services are in place, with data that allow allocation of costs to individual patients.

Existing data sources which indicate clinical inputs at the patient

level

Many sites have data collection systems for some clinical categories that provide an

indication of clinical input (either time or other service) associated with an individual patient.

In the initial establishment stage for the study, each site should investigate and assess local

data systems that can be used for identifying clinical inputs to emergency care for individual

patients. Examples include:

In small hospitals, medical services are sometimes provided by a local general

practitioner, and in some instances these general practitioners are paid on a fee-for-

service basis. In this case the fee-for-service charge reflects the actual cost allocation

statistic for medical services at the patient level.

In many hospitals, allied health departments or specific allied health disciplines have

implemented data capture systems for clinician time associated with individual

patients. These data collection systems can be used to generate actual time

allocation statistics for all (or some components) of allied health services.

In some hospitals nurse dependency systems are in place that classify patients

according to the level of nursing required. These systems give an indication of the

relative nursing input for patients at different levels of dependency on average, but

do not necessarily reflect the actual nursing input an individual patient receives.



These systems can be used to generate RVUs for allocating nursing costs. The RVU

depends on whether estimates of the relative levels of nursing input for different levels

of nursing might have been generated from a local study (internally-derived RVUs),

an external study (externally-derived RVUs), or a judgment about the levels of nursing

implied for different types of patients.

The assessment of existing collections should consider whether these systems are sufficient to

meet the requirements for the Emergency care costing study. The following points should be

considered:

How complete is the data collection? That is, is the data collected for all patients by

all relevant clinicians? If not, gaps will need to be filled.

Are some elements of the data based on sources external to the site? In this case it

would be important to consider a local study to validate the RVUs.

Does the relativity need to be adjusted to reflect a different denominator? For

example, the RVUs may be applied to time a patient spends in a unit. However, if it

has been calculated to reflect relativities for patients as a whole, it may need to be

re-weighted.

For this study, RVUs based on triage, Urgency Related Group or Urgency Disposition Group

will not be accepted.

Approaches to developing RVUs

As outlined in earlier in this document, there are two broad strategies are available to sites for

developing clinician time RVUs based on data collected through this study. These are:

A: Total clinician time method: Under this method all clinicians within the emergency

department participate in data collection. They collect their time associated with

providing care to individual patients within the emergency department during a two-

week period. RVUs are developed by analysing the relationships between patient

and stay characteristics (including the provision of procedures) and clinician time. For

this method the focus of the clinician time data collection will be on total clinician

time for a patient.

B: Standard cost method: Under this method a standard set of activities/ procedures

that are undertaken on patients in the emergency department is specified. Data

collection is focussed on estimating the time associated with these activities/

procedures, and how this is impacted by patient characteristics. For this method the

focus of the clinician time data collection will be on activities and procedures, and it

is not necessary to consider the total clinician time associated with a patient.

These approaches are described in detail in Appendix A.

Definition of treatment, waiting and other periods

In local systems and the Non-admitted patient emergency department care national

minimum data set, the following date/time variables are recorded:

Presentation date/time (when the patient first presented to the emergency

department).

Triage date/time (when the patient was assessed by a triage nurse).



Clinical care commencement date/time.

Episode end date/time.

Physical departure time.

(Some local systems also report the time first seen by a nurse and the time first seen by a

doctor.)

With the exception of resuscitation patients, patients attending an emergency department

usually present to the emergency department reception where they are registered and then

seen and assessed by a triage nurse. The patient then usually waits for a period of time prior

to commencement of treatment. This waiting period may be extended. Some patients do

not wait for treatment, and for these patients, there will be an episode end date/time but no

clinical care commencement date/time. These patients have an episode end status of ‘did

not wait’. Some patients may also not be assessed by a triage nurse.

The treatment phase of a patient emergency care stay will end when treatment has been

completed. In most cases patients depart the emergency department at this time. In other

instances there may be delay before the patient physically leaves the emergency

department.

These date/time stamps and associated periods are described in Figure 2 below. For the

costing study it will be important that:

Treatment time is measured on a consistent basis. This should be the time between

the commencement of clinical care and the episode end time.

Waiting time is not included in treatment time and the costs of the triage process are

appropriately allocated. For this study, the costs of triage and waiting times are to be

separately identified. Where the site does not have an actual separate cost centre

for this service, a virtual cost centre should be created, based on the usual staffing for

the triage function. Through Step 2 of the costing process described in Figure 1 (p. 19),

study sites should allocate the costs of triage to this separate cost centre. Costs from

this cost centre should then be allocated to patients based on an indicator that the

patient was triaged. This will be able to be derived from the emergency department

stay data. This should exclude all visit types (including patients that are dead on

arrival) other than ‘emergency presentation’1.

Adjustments are made for patients where the stay has ended, but the patient has not

yet physically departed the emergency department. This time should be excluded

from the treatment time calculations. However, some consideration should be given

to appropriate means to address costs that may occur in these circumstances.

Arrangements are likely to vary across sites.

1 See ‘Type of visit to emergency department’, METeOR identifier 495958,

http://meteor.aihw.gov.au/content/index.phtml/itemId/495958.



Figure 2 – Components of an emergency department stay

Source: Australian Institute of Health and Welfare 2014. Australian hospital statistics 2013–14: emergency

department care. Health services series no. 58. Cat. no. HSE 153. Canberra: AIHW, Figure 1.1 page 5.

Dead on arrival

Dead on arrival may have different meanings at different sites, and between states and

territories. A common definition is that the patient was attended to by an ambulance, but

died at the scene or prior to their arrival to the emergency department. However, in other

cases the category is also used to register people that die outside of hospital without being

attended to as an emergency, prior to transferring the body to the mortuary. An appropriate

approach to costing dead on arrival patients needs to be developed by sites reflecting the

local meaning of this category.

Step 2: Alignment of costs to all product categories

The emergency care costing for this project will be undertaken as part of a whole-of-hospital

costing study. This will ensure that all relevant costs are considered, that emergency care

services are allocated appropriate overhead costs, and that costs of the subsequent hospital

stay for patients in short stay units associated with emergency departments can also be

estimated.

Step 2 of the costing process described in Figure 1 (p. 19) involves working with the general

ledger for a hospital to ensure the data is in a structure that can be most effectively used for

costing. As discussed previously, the product categories for this study align with the product

categories for the National Hospital Cost Data Collection. The one enhancement in this study

is that the product category of NE Non-admitted emergency care has been split into two

sub-categories:

NE1 Non-admitted emergency care for patient currently within emergency

department: The costs of emergency department care provided to patients who are

treated in the emergency department but not admitted to the hospital in which the

emergency department is located. This will include the costs of patients who did not

wait.




within emergency department: Non-admitted care provided by an emergency

department clinician to a patient who is not currently a patient of the emergency

department, through consultation and liaison, telemedicine or other means.

The key elements of this step are well described in the Australian Hospital Patient Costing

Standards. Standards that have a particular relevance to the current study are listed below.

SCP 1.004 Hospital Products in Scope: Which defines the broad set of products that should be

in scope for any hospital costing study, specifically:

admitted patient products

non-admitted patient products

emergency department patient products

teaching, training and research products

non-patient products.

For this study, these broader categories have been split into the categories specified in Table

4 above.

SCP 3B.001 Costing all Products: This standard requires that all costs should be accounted for

in the costing process and allocated, as appropriate, across all patient and non-patient

products generated by the hospital in the costing period.

SCP 3G.001 Reconciliation to Source Data: This standard requires that there be a statement

that reconciles the activity and cost data outputs of the product costing process to the

activity and costs that were captured in the source data. For this study, this requirement

would be met through exactly the same processes adopted for the National Hospital Cost

Data Collection.

SCP 3.001 – Matching Production and Cost: This standard is important for several stages in the

costing study. The following points are particularly important to note for Step 2 of the costing

process described in Figure 1:

Matching starts at the level of the whole hospital by determining the manipulations

required to the general ledger entries to align the costs to be used in product costing

with the quantities of products produced (application of SCP 1.004, SCP 2.003., SCP

3E.001, GL 1.003, GL 1.003, GL 2.004, GL 4.004).

This manipulation process should generally occur within the product costing systems

(not the general ledger), and should be done in such a way that there is a clear

reconciliation of the costs reported in the product costing system to the hospital’s

general ledger.

…it may be necessary to partition final cost centres into product categories

(application of SCP 2A.003, SCP 2B.002, SCP 3B.001, SCP 3C.001, GL 4A.002, GL 4B.003,

GL 4C.002).

In the current study the following issues may need specific attention by sites:

Partitioning costs related to management of emergency department

reception/triage and waiting times. A clear basis and rationale for partitioning costs



related to these functions should be developed and documented as part of the

study.

Partitioning costs related to short stay units managed within an emergency care unit

cost centre. A clear basis and rationale for partitioning costs related to these

functions should be developed and documented as part of the study.

Ensuring cost centres/costs associated with TTR that are directly managed within the

emergency care department are allocated to separate TTR cost centres.

Determining whether costs for the consultation liaison services provided by

emergency department clinicians are to be identified as a separate “cost centre” at

Step 2 or partitioned in an allocation process at Step 3 of the costing process

described in Figure 1. A clear basis and rationale for partitioning costs related to

these functions should be developed and documented as part of the study. This

should reflect the results of the clinician time allocation study undertaken as part of

the study.

Partitioning costs related to any other services/non-patient costs. These might

include, for example, costs of emergency care staff involved in retrieval services.

Sometimes retrieval relates to patient admitted to another hospital and this also

needs to be factored into the costing study. A clear basis and rationale for

partitioning costs related to these functions should be developed and documented

as part of the study.

GL 4B.003 ED definition: This standard provides a definition of an emergency department as

follows:

A department that provides initial, typically unscheduled, treatment to patients with a

broad spectrum of illnesses and injuries, some of which may be life threatening and

require immediate attention.

The guidelines for the standard go on to state:

Any discrete areas of the hospital that may be attached to, or associated with, the

emergency department in which admitted patients are managed are considered to

be general ward areas for product costing purposes…Such services include Short

Stay Admitted Units, Clinical Decision Units, Short Stay Medical Assessment Units, and

Emergency Management Units. The key defining attribute is admission to a bed in a

discrete area that is used only for admitted patients, in contrast to admitting a patient

while he/she is occupying a trolley or examination bay in the emergency department

that is also used to provide care to patients who are not admitted.

This study will be consistent with this standard, but the scope of the study will include costing

patients managed by or closely associated with emergency departments, such as short stay

admitted units, clinical decision units, medical assessment units, and emergency

management units. This will allow the study to yield data that will assist in examining issues

associated with the boundaries between emergency department and these units.

The guidelines for this standard also state that:



For the purpose of product costing, the emergency department service event is

considered to comprise all the services provided in the period from a patient’s

presentation to his/her departure from the emergency department including all

ancillary services ordered for the patient during that period.

This guideline will also be applied during the study. As a consequence, ancillary services

ordered for the patient during the emergency department stay are to be attached to the

emergency care stay.

The standard is silent with respect to Emergency Services. These will be in-scope for this study.

GL 2.004 – Account Code Mapping to Line Items: This standard requires hospitals to map all

in-scope costs to the list of line items specified in the GL 2.004 standard. This standard will also

apply for this study.

Some states and territories have adopted standard that split a range of other line items into

more detailed categories. For this study data reported using the more detailed line

categories will be accepted, as long as these can be mapped without ambiguity to the

standard list of line items specified in the Australian Hospital Patient Costing Standards.

Step 3: Overhead allocation

The process of allocating indirect costs (overheads) to direct cost centres is an important

stage of any product costing process. The Australian Hospital Patient Costing Standards have

several standards that address these issues, including:

COST 1.002 – Overhead Allocation Method

COST 1A.002 – Overhead Allocation – Hotel Services

COST 1B.002 – Overhead Allocation – Overhead Depreciation Costs

COST 2.004 – Overhead Allocation Statistics.

Study sites participating in the Emergency care costing study should apply these standards. It

is anticipated that this involves no specific additional efforts over and above those

undertaken for rounds of the National Hospital Cost Data Collection.

Step 4: Allocation to product categories

Ideally many of the issues associated with the allocation of costs to product categories will

have been resolved in Step 2 of the costing process described in Figure 1. Final costs centres

should be aligned with final products. As discussed above, the product categories for this

study align with the product categories for the National Hospital Cost Data Collection. The

one enhancement is that the product category of NE Non-admitted emergency care, has

been split into two sub-categories:

NE1 Non-admitted emergency care for patient currently within emergency

department: The costs of emergency department care provided to patients who are

treated in the emergency department but not admitted to the hospital in which the

emergency department is located. This will include the costs of patients who did not

wait.




within emergency department: Non-admitted care provided by an emergency

department clinician to a patient who is not currently a patient of the emergency

department, through consultation and liaison, telemedicine or other means.

Step 5: Allocation of costs to patients

The allocation of costs within final cost centres to patients is at the centre of costing

processes. Costing application typically process several files including:

Data allocated to the final cost centres (with overheads) split into cost components.

(In this study, this is Submission D2: Final cost centre file).

Data identifying and describing the patient stay/ episode to which costs will be

allocated. (In this study, this is Submission C1: Emergency department stay and C6:

The Admitted patient care NMDS).

Data inputs indicating the utilisation/level of services provided to the patient during

their stay. These may include, for example, variables related to the length of stay in a

ward, the treatment time in an emergency department and other indicators related

to the service level involved. In many instances these variables are flags that indicate

that a particular service was accessed (1) or not (0), rather than the level of service

used. There may be several records for a single patient episode, reflecting indicators

of the service level for different types of input (e.g. medical staff inputs, nursing inputs,

medical and surgical supplies). (In this study, this is Submission D3: Service/ utilisation/

products file).

RVU or weights files, which provide an indication of the relative weights that should be

applied against the utilisation/services data in C above. For example in current

costing for emergency care it is not uncommon for the Urgency Related Groups or

Urgency Disposition weights to be specified in the RVU/weights file (reflecting

estimates of the time input or indeed the national cost weights). A specification of

how the weights are to be applied may also be included. For example, it is not

uncommon for the specification to be that the treatment time in the emergency

department should be multiplied by the weights based on the Urgency Related

Group of the episode. Weights associated with particular indicator variables (such as

related to a particular procedure) may also be specified, reflecting the addition

resource (or time) input that may be required when that procedure is performed. (In

this study, this is Submission D4: RVU).

The costing process will involve merging the data from the utilisation/services file with the RVU

file to identify an indication of the relative utilisation of particular intermediate product (e.g.

medical salaries), for each emergency care stay or episode. The result is then merged with

the final costs data (A) so that all final costs for an intermediate product are allocated to

across patient stays/ episodes reflect the measure of utilisation.

The allocation of costs to stays/episodes is driven by the data in the Service/ utilisation/

products file and the RVU files. For the Emergency care costing study, RVUs for staff related

costs will be generated through the processes described in Step 1 of the costing process

described in Figure 1 (p. 19), and further described in Appendix A.



The standard from the Australian Hospital Patient Costing Standards which has particular

relevance to this stage of the study is: Cost 3.004 Final Cost Allocation to patients and other

products. This standard requires that “all final costs will be allocated to patients and other

products using methods prescribed in this standard”. The standards include an Appendix

(Table E.2) which includes suggested allocation methods. The sections of this Table related to

emergency departments are shown in Table 5.

A key objective if this study is to allocate clinical staff costs to patients based on either data

collected on total clinician time (Alternative 1 in Table 5), or based on RVUs generated from

the study (Alternative 3 in Table 5). These RVUs will be applied to indicators of services/

utilisation generated from the study and also services/utilisation that can be generated from

routinely available data. The study aims to provide a sound empirical basis on which these

internally derived RVUs are developed.

Table 5 – Allocation methods for final costs suggested in

the Australian Hospital Patient Costing Standards

Cost type Alternative 1 Alternative 2 Alternative 3 Alternative 4

Medical Salaries &

Wages Actual time

Planned/ rostered

time

Internally derived

RVUs by patient

service event

Externally derived

RVUs by patient

service event

Nurse Salaries &

Wages Actual time

Planned/ rostered

time

Internally derived

RVUs by patient

service event

Externally derived

RVUs by patient

service event

Allied Health

Salaries & Wages Actual time

Planned/ rostered

time

Internally derived

RVUs by patient

service event

Externally derived

RVUs by patient

service event

Other Salaries &

Wages

Actual time Planned/ rostered

time

Internally derived

RVUs by patient

service event

Externally derived

RVUs by patient

service event

Prosthetics

Actual cost

Actual utilisation

with internally

derived RVUs

Actual utilisation

with externally

derived RVUs

Externally derived

RVUs

Other Goods and

Services Actual cost

Actual utilisation

with internally

derived RVUs

Actual utilisation

with externally

derived RVUs

Externally derived

RVUs

Pharmacy Actual cost

Actual utilisation

with internally

derived RVUs

Actual utilisation

with externally

derived RVUs

Externally derived

RVUs

Pathology Actual cost

Actual utilisation

with internally

derived RVUs

Actual utilisation

with externally

derived RVUs

Externally derived

RVUs

Imaging Actual cost

Actual utilisation

with internally

derived RVUs

Actual utilisation

with externally

derived RVUs

Externally derived

RVUs

On-costs As per relevant Salaries & Wages line item.

Hotel Services Actual cost

Actual utilisation

with internally

derived RVUs

Actual utilisation

with externally

derived RVUs

Externally derived

RVUs

Depreciation

Actual utilisation

with internally

derived RVUs

Actual utilisation

with externally

derived RVUs

Externally derived

RVUs



Step 6: Intermediate costs (pathology, imaging and

pharmacy)

Intermediate/ancillary costs such as diagnostic imaging, pathology and pharmacy are

important components of the costs of emergency care. In most costing studies, these are

costed in a separate intermediate product costing process and then allocated to individual

patients. Allocation to individual patient is often possible because systems for managing

orders for imaging and pathology are electronic as is the case for most pharmacy systems.

The costing of intermediate products generally involves determining average costs for items

in hospital or services specific schedule that specifies the type of diagnostic imaging

procedures, pathology tests or drugs. Sometimes external reference schedules are used to

estimate relativities (e.g. the Medical Benefits Schedule) and sometimes relativities for items

have been generated through a local costing process.

For this study, sites should use the costing processes already established for ancillary services

with respect to the National Hospital Cost Data Collection. Through the study, however,

information is to be gathered from each participating site on the schedules and the

prices/relativities that will be used for costing. This information will be used to test the

sensitivity of final results to differences in prices/RVUs for ancillary services.

One of the important processes in costing is the attribution of ancillary costs. This study will

adopt the approach stated in the standard GL 4B.003 ED definition:

For the purpose of product costing, the emergency department service event is

considered to comprise all the services provided in the period from a patient’s

presentation to his/her departure from the emergency department including all

ancillary services ordered for the patient during that period.

The standard COST 6.001 – Intermediate Product/Service Matching Method also has

relevance to this stage of the study. The purpose of this standard is to “ensure that the cost of

all intermediate products/services prescribed or ordered during an admitted patient,

emergency department or non-admitted patient service event are captured and attributed

to that service event”. The standard states that:

Intermediate products/services will be costed to the patient service event in which

they are ordered or prescribed. Where there are multiple possibilities for cost

attribution, the point of referral or an explicit preference order encounter matching

method must be used.

Emergency care costing and classification project – Costing

methodology

Page 30

5 5 Reporting cost results and

related data Cost results and related data are to be submitted initially in draft form by 31 October 2016.

Final data are required by 16 December 2016.

The cost results for the study will be submitted as Submission D1 Patient and product cost file

data. This submission is structured in the same way as outputs for the National Hospital Cost

Data Collection. Three other files are also required:

Submission D2: Final cost centre file: An extract from the costing system related to the

emergency department cost centre and associated short stay units. This needs to

include the allocations of direct and indirect costs for emergency care, and the

allocation of within these costs centres to non-patient products such as teaching,

research and other products.

Submission D3: The service/ utilisation/ products file, which is also an extract

from/input to the costing system costing emergency department stays and

associated inpatient episodes.

Submission D4: Relative value unit file: Through which details of RVUs used in the

costing process for emergency department stays are provided.

These files were described in Table 1, and further details of the data elements are shown in

Appendix C. Detailed specifications for each of these files are provided in the Data Request

Specification document.

The provision of these files will allow analysis to be undertaken by the Health Policy Analysis

consortium to understand the local costing allocation approaches, and validate the costing

results. In some instances, local sites will not have the flexibility to change RVUs and related

files to reflect the results of the study. In these cases the consortium will reconstruct the input

files reflecting the utilisation and RVUs, and undertake the costing on behalf of the site. This

also requires the input files described above to be submitted.



Appendix A – Approaches to

developing RVUs Two broad strategies for developing clinician time RVUs based on data collected through

this study were identified in this document:

A: Total clinician time method

B: Standard cost method.

These are described in detail here.

A: Total clinician time method

Under this method all clinicians within the emergency department participate in data

collection and identify the patient attributable time associated with each patient managed

within the emergency department during a two-week period. Depending on the assessment

of the adequacy of existing systems (as discussed above), the scope of this data might be

limited to a certain group of clinicians (e.g. medical staff only), or collected for all clinicians.

Table 6 below illustrates the structure of data that would be collected under the total

clinician time method. The data reflects Submission B3 (Cliniciantime), with the value of the

professions/discipline derived by reference to Submission B1 (StaffStudy), which includes a

de-identified list of all staff contributing to the study and their professions/disciplines. Within

the data collected procedures/activities undertaken will also be recorded. There may be

more than one procedure/activity recorded for each entry.

Table 6 – Structure of patient related clinician time data

Staff ID

(studyStaffID)

Profession/

discipline

(staffProf)

Emergency

department stay

ID (studyStayID)

Procedure/activity

undertaken

(ProcActivity)

Patient related

time

(ClinStafftime)

101 253112a 100000001 xxx 20

101 253112a 100000001 xxx 10

102 253112c 100000001 xxx 15

301 254499 100000001 xxx 20

302 254499a 100000001 xxx 40

401 252511 100000001 Xxx 30 (Profession/ discipline code have the following meanings: 253112a Staff specialist emergency medicine; 253112c =

Advanced trainee (registrar); 254499 = Registered Nurse other; 254499a = Enrolled nurse/Endorsed enrolled nurse;

252511= Physiotherapist.)

This data can be summarised into the total time per patient for each discipline group

representing an intermediate product in the costing system (and which RVUs will be

required). In the summary process, relativities could be introduced to reflect the average

difference in base salary costs between different categories within a discipline group (e.g.

weighting the time of a specialist emergency doctor relative to the time of an advanced

trainee to reflect the difference in in salary levels on average). Total emergency department

treatment time (that is elapsed time between when clinical care commences and when the



stay ends) can also be included in the data set, from analysis of the Emergency department

stay file. Table 7 illustrates how this data can be summarised as described above.

Table 7 – Summary by Emergency department stay used for developing RVUs Medical summary example

Emergency

department

stay ID

Staff

type

Clinician

time

(mins)

Clinician

time

adjusted

for salary

relativities

Total

treatment

time

Ratio adj.

clinician

time to

treatment

time

Patient

Charact-

eristic 1

Flag

Patient

Charact-

eristic 2

Flag

Activity

1 Flag

Activity 2

Flag

100000001 Medical 20 26.0 40 0.65 1 1 1 1

100000002 Medical 10 13.0 50 0.26 0 0 0 0

100000003 Medical 15 19.5 30 0.65 0 0 1 0

100000004 Medical 5 4.5 30 0.15 0 0 0 0

100000005 Medical 20 21.5 40 0.54 0 0 0 0

100000006 Medical 25 18.5 50 0.37 0 1 1 1

100000007 Medical 10 8.5 40 0.21 1 0 1 0

100000008 Medical 20 18.0 30 0.60 1 1 1 1

100000009 Medical 15 19.5 25 0.78 0 1 1 0

Nursing summary example

Emergency

department

stay ID

Staff

type

Clinician

time

(mins)

Clinician

time

adjusted

for salary

relativities

Total

treatment

time

Ratio adj.

clinician

time to

treatment

time

Patient

Charact-

eristic 1

Flag

Patient

Charact-

eristic 2

Flag

Activity

1 Flag

Activity 2

Flag

100000001 Nursing 55 50 40 1.25 0 1 1 0

100000002 Nursing 50 0.00 0 0 0 0

100000003 Nursing 10 12 30 0.40 0 1 1 1

100000004 Nursing 30 0.00 0 0 0 0

100000005 Nursing 40 41 40 1.03 1 1 0 0

100000006 Nursing 50 45 50 0.90 0 1 1 1

100000007 Nursing 10 12 40 0.30 1 1 1 0

100000008 Nursing 40 45 30 1.50 0 0 1 0

100000009 Nursing 30 35 25 1.40 0 1 1 1

For the two-week period in which clinician time date is collection, time adjusted for salaries

relativities (or clinician time itself) could be used directly within the costing system as the RVU.

Generating RVUs to apply to other periods costed

The data described in Table 7 can also be used for developing RVUs that will be used in

costing emergency department stays for other periods. The first step in this process is to

include data on relevant patient characteristics and procedure/activity flags collected

during the data collection process. These should only relate to the characteristics and

procedure/activity that will be used for the RVUs. There are likely to be many of these flags,

although Table 7 illustrates the structure of data with just two patient characteristic flags and

two procedure/activity flags.

There are two basic methods that can be used to generate RVUs: an average relativity per

category method, or a regression modelling method. Both approaches start with data in a

structure similar to Table 7.

A1: Average relativity per category method

In the average relativity per category method differences in the average adjusted medical

time per stay can be calculated for stays with or without a particular characteristic or

activity/ procedure. The ratio of cases with or without a characteristic/activity can then be

divided by the overall average to generate a ratio, reflecting a RVU, as illustrated in Table 8.



Table 8 – Illustration of development of RVUs

(using the data illustrative medical clinician time data from Table 7)

Character-

istic 1

Character-

istic 2 Activity 1 Activity 2

Mean adjusted clinician time

Without characteristic/activity 16.08 13.40 13.00 14.42

With characteristic/activity 17.50 20.50 18.33 20.83

Overall mean 16.56 16.56 16.56 16.56

RVUs

Without characteristic/activity 0.97 0.81 0.79 0.87

With characteristic/activity 1.06 1.24 1.11 1.26

Mean 1.00 1.00 1.00 1.00

The resulting RVUs can be applied in the costing processes to emergency care stays outside

the two-week period in which clinician time data was collected, using data that indicates

whether or not the specified patient characteristics are present or activities/procedures have

occurred for a patient.

The approach described above is simplified in that the tables above show only two patient

characteristics and two activities. In the study there will likely be a much wider range of

characteristics and activities.

The disadvantages of average relativity per category method include:

At its simplest level of implementation, as illustrated above, the method does not

control for the impact of other characteristics/activities that may be present. This can

be partly addressed by considering the combined effects of two characteristics

together. However, this becomes unwieldly if there are too many patient

characteristics to consider in the analysis.

It is possible that there will be some combinations of patient characteristics that were

not observed during the period in which clinician time was collected.

A2: Regression modelling method

An alternative is to generate estimates of the impact of the presence of patient

characteristics through a multiple regression model. In the model, adjusted clinician time

could be specified as the response or dependent variable, with the characteristics and

activities included as predictor or independent variables. For example, using the example

above, the model could be specified as:

Adjusted Clinician time = Intercept + β1*Characteristic1 + β2*Characteristic2 +

β3*Activity1 + β4*Activity2

Table 9 and Table 10 illustrate the results of regression modelling applied to the illustrative

data from Table 7. Table 9 shows the estimated coefficients for the model. These include an

intercept (the average predicted level of adjusted clinician time when none of the

characteristics or activities are present) and coefficients for each characteristics and activity,

representing the increase (or decrease) in adjusted clinician time associated with the

presence of absence of the characteristic/activity. Table 9 shows how these coefficient can

be combined to estimate all combinations of characteristics and activities. In this simple



example there are ten unique combinations, but with the addition of other

characteristics/activities possible combinations increase significantly.

Table 9 – Illustration of estimation of a multiple regression model using the

medical clinician time data from Table 7: Estimated coefficients

Estimate Std. Error t value Pr(>|t|)

(Intercept) 13.00 4.44 2.9280 0.0429*

Characteristic1 -2.71 7.12 -0.3810 0.7224

Characteristic2 4.14 10.07 0.4110 0.7018

Activity1 2.36 7.87 0.2990 0.7795

Activity2 3.14 10.07 0.3120 0.7705

Table 10 – Illustration of results from a multiple regression model used to generate RVUs for

combinations of characteristics and activities

Combinations of characteristics Predicted adj.

clinician time RVU

Mean all observations 16.56 1.00

Characteristic 1 alone 10.29 0.62

Characteristic 1+2 14.43 0.87

Characteristic 1+2 + Activity 1 16.79 1.01

Characteristic 1+2 + Activity 1+2 19.93 1.20

Characteristic 2 alone 17.14 1.04

Characteristic 2 + Activity 1 19.50 1.18

Characteristic 2 + Activity 1+2 22.64 1.37

Activity 1 alone 15.36 0.93

Activity 1+2 18.50 1.12

Activity 2 alone 16.14 0.98

The model described in above can be extended by including a treatment time variable in

the specification as follows:

Adjusted Clinician time = Intercept + β1*Treatmenttime + β2*Characteristic1 +

β3*Characteristic2 + β4*Activity1 + β5*Activity2 + β6*Activity2

This model, yields the results shown in Table 11. The results of this specification are similar to

the interpretation of the previous model, except now there is an additional coefficient for

Treatmenttime. This coefficient can be interpreted as the additional amount of adjusted

clinician time for each additional minute of treatment time (i.e. the elapsed time the patient

spends within the emergency department from when clinical treatment starts). The model still

includes an intercept, which reflects the minimum amount of adjusted clinician time for any

patient. However, as treatment time increases, this approach would also allow for an

increase in the adjusted clinician time estimated for a patient.



Table 11 – Illustration of estimation of a multiple regression model using the

medical clinician time data from Table 7: Estimated coefficients,

including an additional predictor for treatment time

Parameter Estimate Std. Error t value Pr(>|t|)

(Intercept) 11.00 17.87 0.6160 0.5820

Treatmenttime 0.05 0.43 0.1170 0.9140

Characteristic1 -2.50 8.41 -0.2970 0.7860

Characteristic2 4.75 12.71 0.3740 0.7330

Activity1 2.50 9.15 0.2730 0.8020

Activity2 2.25 13.89 0.1620 0.8820

While the regression models described above may appear daunting, this approach has

several advantages over the average relativity per category approach. These include:

The estimated coefficients reflect the effect on the relative utilisation measure,

controlling for the presence of other factors.

The coefficients estimated include a default value for converting treatment time into

adjusted clinician time when particular patient characteristics are missing from the

data.

The impact of unique combinations of patient characteristics not observed in the

two-week period during which clinician time was collected can be estimated.

Provided the right software is available, the resulting models can be easily applied to

data from other periods.

The disadvantages include that sites may not have the relevant skills or software to estimate

the models and apply the models. Models such as these can be estimated using the

standard Analysis Toolpack add-in for Excel. This would yield estimates of the coefficient

which then need to be applied to data from the data from the extended and retrospective

costing periods. These processes are more easily handled in software environments such as R,

SAS, Stata or SPSS.

Recognising the complexity involved in developing and applying RVUs for this study, the

Health Policy Analysis consortium is able to generate the staff RVUs for sites that need this

assistance. These will be based on the two-week collection of clinician time to be submitted

on 12 August 2016. These RVUs will be provided back to sites through IHPA in time for these to

be used during the costing stage of the project. The consortium will also provide guidance to

sites in how the RVUs can be applied to the retrospective activity data.

Different sets of RVUs

Given that the costing study is for a full financial year, the RVUs will need to be applied to

other periods outside of the collection of the additional patient characteristics. The Table

below shows the periods for which RVUs need to be applied, and describes the issues in

applying them to these.



Table 12 – Periods to be costed during the study and

the issues in applying RVUs to these periods

Periods included in the costing study Issues in applying RVUs generated

from the study

The period prior to the start of data collection for

the study.

RVUs need to be applied to data that is routinely

available.

The period during which clinician time has been

collected (a 2 week period). During this time

additional data on patient characteristics and

activities/procedure will also be collected.

The costing process could use the results clinician

time component of the study (i.e. allocate costs

to patients based on actual clinician time), or

use the RVUs generated from this process,

applied to the extended set of patient

characteristics/ activities collected during this

period.

The period during which additional data on

patient characteristics and activities/procedure

is collected, but collection of clinician time has

ceased (a one-month period all up, with two

weeks overlapping with the collection of the

clinician time collection).

The costing process will use the RVUs generated

from this process, applied to the extended set of

patient characteristics/ activities collected

through the study.

The period following the end of the data

collection for the study (unless the study finishes

on 30 June 2016).

RVUs need to be applied to data that is routinely

available.

One implication is that at least two sets of RVUs need to be generated for the costing

process:

1. RVUs limited to data on patients characteristics and activities/procedures which are

routinely available.

2. RVUs related to the full set of patient characteristics and activities/procedures

collected during the study.

These can be easily estimated using the clinician time data using the methods described

above. For the regression modelling approach, models can be estimated including and

excluding the variables that are not available for certain periods to be costed. This will ensure

the resulting RVUs are calibrated between periods (although additional checks should be

applied).

For practical reasons in the costing process, these resulting RVUs will need to be combined

into one comprehensive set of RVUs that can apply across both periods. As mentioned

above, in doing this it is extremely important to calibrate the overall effect of the RVUs so that

they do not result in over- or under-allocation of resources between the study period and the

rest of the financial year.



B: Standard cost method

The approach starts with the development of a standard set of activities/ procedures that

are undertaken on patients in the emergency department. Table 13 provides examples of

these activities. They include:

Activities that are associated with the usual flow of patients through an emergency

department (e.g. triage assessment, initial nursing assessment, initial treating clinician

bedside evaluation).

Activities related to discrete procedures undertaken for specific patients (e.g. IV

medication dispensing and administration, chest tube/catheter insertion).

Figure 3 illustrates the types of activities that might occur within a particular emergency

department stay.

For each of these activities an estimate of the average clinician time associated with the

activity is developed. The estimates of average clinician time is used to develop RVUs

associated with each activity. The process for the development of estimates of average

clinician time per activity and RVUs is described further below.

The next step in the process is to analyse data collected routinely and data collected

throughout the study on activities/procedures to flag in which emergency department stays

specific activities/procedures occurred. Many activities/procedures can be inferred through

routinely collected data. For example, for each patient with a triage assessment date and

time and a valid triage value, it can be inferred that a triage assessment was undertaken. For

patients where there is a clinical care commencement date and time recorded, it can be

inferred that an initial nursing assessment and an initial treating clinician bedside evaluation

occurred. For patients where a diagnostic imaging investigation is recorded, it can be

assumed that a clinician ordered the test (and also interpreted the results).



Table 13 – Examples of activities used for standard costing approach Activity examples Description How the activity can be flagged

Nursing activities – standard workflow

Triage assessment All actions undertaken at initial contact by triaging

clinician until triage process completed.

All emergency department stays in which a

triage assessment date and time is recorded.

Exceptions include where the visit type is a

planned visit, or the patient is dead on arrival.

Initial nursing assessment All actions undertaken during initial assessment and

documentation of initial assessment. This may include an

initial set of observations and actions to prepare a

patient for treating clinician assessment (e.g. positioning

patient, cleaning patient, changing patient etc.).

All emergency department stays in which the

patient is moved to treatment areas in which an

initial nursing assessment is routinely undertaken

for patients.

Clinical observations Acquisition of a set of clinical observations relevant to

the attendance including explanation of process, actual

measurements and documentation of observations -

when done as a distinct activity rather than part of an

initial nursing assessment

For most patients within particular treatment

areas observations will be undertaken regularly

during the patients stay in that area. The time in

the treatment area can be used to estimate the

number of times observations will be taken.

Nursing summation and disposition Activities undertaken to complete the episode of care

including dispensing of discharge medications,

discussion of discharge instructions, finalisation of

documentation, liaison or assistance to facilitate patient

physically leaving emergency department, finalisation of

data entry into emergency care system.

End of emergency department stay within

treatment area.

Nursing activities – other activities/procedures

IV medication dispensing and

administration

All actions from preparation, checking out medications

from stores, administration at bedside, documenting

administration and any post administration actions –

(e.g. dispensing packaging/sharps, other than additional

observations undertaken post administration (which are

counted separately)

Procedure code recorded for Peripheral IV

insertion.

Blood specimen collection Pathology test code reported in Investigation

data return



Table 13 continued Activity examples Description How the activity can be flagged

Treating clinician activities – standard workflow

Initial treating clinician

bedside evaluation

All actions from first assigning self to patient on emergency

department tracking system until detailed patient assessment at

bedside completed. This may include an initial perusal of referral

information, results or imaging or viewing of clinical documentation

from prior clinical record before actually moving to the bedside.

All emergency department stays in which

clinical care commences. Estimated times

may vary between different types of patients

which can be inferred from patient data and

treatment area.

Initial treating clinician

synthesis & documentation

All actions undertaken in preparing and completing the initial

documentation of the patient assessment and plan of management

in the clinical record. This may include perusal of referral information,

results or imaging or viewing of clinical documentation from prior

clinical record and discussion with other clinicians in the emergency

department or external to the emergency department, conversations

with GPs, residential care facilities and next of kin not present in

emergency department prior to completing the initial entry in the

clinical record.

All emergency department stays in which

clinical care commences. Estimated times will

vary between different types of patients based

on analysis of patient data and treatment

area.

Additional treating clinician

bedside evaluation:

Additional discrete periods of time the treating clinician spends at the

bedside irrespective of activity undertaken (e.g. could include re-

evaluation, discussion with relatives present, updates on progress,

addressing concerns)

Involvement of an additional clinician may

need to be inferred by the nature of the

patient, based on analysis of patient data and

treatment area.

Additional treating clinician

synthesis and documentation

Discrete periods of time a clinician spends on one patient perusing

results or imaging or in discussion with other clinicians in the

emergency department or external to the emergency department or

reading and editing the clinical record of the patient or

communicating with external individuals like GPs, residential care

facilities and next of kin not present in the hospital.

Involvement of an additional clinician may

need to be inferred by the nature of the

patient, based on analysis of patient data and

treatment area.

Treating clinician activities – other activities/procedures

Place diagnostic imaging

order

Diagnostic imaging order code reported in

Investigation data return

Interpret diagnostic imaging

order

Diagnostic imaging order code reported in

Investigation data return

Chest tube/catheter insertion Procedure code recorded for Chest

tube/catheter



Figure 3 – Illustration of possible activities to be used within a standard costing approach



Estimation of average clinician time per activity

Estimation of the average clinician time per activity can be based on empirical data

collection and/or clinician estimation. This study will primarily rely on empirical data collection

occurring during the study. However, a clinician estimation process will also be undertaken to

provide a means of triangulating and supplementing the empirical results from data

collection at a site. This may be important, as the local data collection processes may not

fully capture all types of activities required for costing.

Prior to the study’s commencement a clinical estimation process will be undertaken by the

study consortium. This will yield estimates of the average clinician time associated with the list

of activities and how these vary across a high level categorisation of patient types as follows:

Table 14 – Patient type grouping for estimate variation in clinician time by

activity/procedure related to the usual flow of patients

Patient

type

Description Possible criteria for assigning patients

1 Simple case No more than one each of an investigations,

procedures or external consultations.

2 Complex case - medical Medical diagnosis (excluding mental health

diagnosis) with more than one of either investigations,

procedures or external consultations.

3 Complex case – injury Injury diagnosis with more than one of either

investigations, procedures or external consultations.

4 Resuscitation case Resuscitation triage or relevant procedure recorded

5 Cooperative mental health

case

Mental health diagnosis, without presence of

diagnosis modifier – Distress/ confusion/ agitation

requiring one-to-one nursing

6 Aroused/ aggressive case

requiring sedation

Presence of diagnosis modifier – Distress/ confusion/

agitation requiring one-to-one nursing

Within the study data on clinician time for each activity is to be collected in the format

specified for Submission B2 Clinician time allocated to patients and procedures/activities,

which has been illustrated Table 6. The principal difference with the total clinician time

approach, is that data on all clinical interactions with each patient need not be collected

for the standard costing approach. Rather data needs to be collected on a sufficient

number of activities to enable the mean clinician time associated with the activity to be

estimated and analysis of how that varies across different patient categories undertaken.

Once data is collected it will need to be summarised by activity/procedure. This will yield the

total clinician time per activity/procedure. Using data on the type of clinician involved in the

activity/procedure it is also possible to calculate clinician time adjusted for salary relativities

as described earlier. Information on patient characteristics and other factors will also be used

to categorise the patient for which the activity is undertaken into one of the patient types

described in Table 14. Table 15 illustrates how this summarises data would appear for

selected nurse interventions.



Table 15 – Illustration of summary by clinician time related to activity/procedure

Activity code Staff

type

Clinician time

(mins)

Clinician time adjusted for

salary relativities

Patient

Type

Triage assessment Nursing 5 6 3

Initial nursing assessment Nursing 12 12 3

Clinical observations Nursing 5 4.5 3

Blood specimen collection Nursing 10 9.5 3



Nursing summation and disposition Nursing 12 12.6 3

Triage assessment Nursing 4 4.8 2

Initial nursing assessment Nursing 7 6.3 2

Blood specimen collection Nursing 8 1.1 3





Initial nursing assessment Nursing 6 6 2


Nursing summation and disposition Nursing 10 10 2




Blood specimen collection Nursing 9 9 3





This data can be further summarised as shown in Table 16, to provide an average time per

activity, with variation across patient types. This forms the basis of the RVUs to be used within

the costing processes associated with the presence of the relevant activities/procedures. An

alternative to taking simple averages would be to estimate the averages within a regression

model, similar to the processes described previously. The use of a regression model could be

used to explore in more detail the effects of patient characteristics and interactions between

these and the presence of other factors.



Table 16 – Illustration of average clinician time per activity/procedure

Activity Patient types

1 2 3 All types

Average of Clinician time (mins)

Triage assessment 4.5 4.0 4.5 4.4

Initial nursing assessment 4.0 6.5 10.5 7.6

Clinical observations (per set of observations) 4.0 6.7 6.0

Nursing summation and disposition 8.5 12.0 9.7

Blood specimen collection 9.0

Average of Clinician time adjusted for salary relativities

Triage assessment 5.4 4.8 5.2 5.2

Initial nursing assessment 4.1 6.2 11.0 7.7

Clinical observations 3.6 6.1 5.5

Nursing summation and disposition 8.5 12.0 9.7

Blood specimen collection 6.5

Different sets of RVUs

The standard costing method described will require RVUs that are applicable outside the

period of the data collection. As discussed above, it will be possible to infer that certain types

of activity occur, using routinely available data. However, for periods outside the four weeks

of the data collection, data on additional procedures may not be available.

One consequence of this is that the RVUs for the periods outside the data collection need to

calibrated, so that one average, they end up allocating an appropriate proportion of

resources to stays within and outside the data collection period. Unless this occurs, the

costing process will over allocated resources to the data collection period, and under

allocate resources to the rest of the financial year.



Appendix B – Description of

data submissions See Data request specification for detailed specifications of files.

Table 17 – Description of data files


Submission A1 ServiceReturn Service level return: Characteristics of the emergency

department (e.g. annual volume, role delineation,

location).

Submission A2 TreatmentArea Treatment areas: A listing of treatment areas within the

emergency department, characteristics and usual nursing

staffing across shifts.

Submission A3 MedTeam Medical teams: A listing of medical teams within the

emergency department.

Submission A4 MedTeamStaff Medical team staff: A listing of medical staff types within the

team and usual shift start and end times.

Submission A5 AlliedStaff Allied health staff: A listing of allied health staff types and

usual shift start and end times.

Submission A6 StaffProfile Staff profile: Full time equivalent staff directly employed in

the emergency department by type of staff for 2014-15 and

2015-16.

Submission A7 LocalCodesDis Local disposition codes: The list of emergency department

disposition codes recorded in local system with mapping to

national and study values.

Submission A8 LocalCodesPP Local presenting problem codes: The list of emergency

department presenting problem (complaint) codes

recorded in local system (if these exist) with mapping to

study values.

Submission A9 LocalCodesProc Local procedures codes: The list of emergency department

procedure codes used for the study. For most hospitals,

these will be those listed on barcodes for clinicians and/ or

coders to collect during the study. For some they might be

those contained in the local emergency department

information system.

Submission B1 StaffStudy Staff in study: A de-identified list of clinical staff of the

emergency department employed during the data

collection period of the study, including their discipline and

the cost centre from which they are paid.

Submission B2 StaffStudyShifts Staff shifts: Days and shifts worked by staff of the emergency

department during data collection period for the study.

Submission B3 ClinicalTime Staff time allocated to individual patients and/or

procedures/activities: Clinical staff time allocated to

individual patients and the associated procedure/activity.

Submission B4 ExternalConsults External consultations: Consultations provided by

emergency department clinicians related to patients who

are not currently patients of the emergency department.

Submission B5 InternalConsults Internal consultations: Consultations provided by clinicians

not part of the usual staffing of the emergency department.

These are in relation to patients of the emergency

department, and may be to clinicians, or directly to the

patient.

Submission C1 EDStay

Emergency department stay: All of the data elements of the

Non-admitted patient emergency department care NMDS

2015-16 (METeOR identifier 588932) together with additional

study-specific items.




Submission C2 DiagModifiers Diagnosis modifiers: Additional data elements related to

diagnosis modifiers specified for collection during the study.

Submission C3 EDProc Emergency department procedures: Additional data

elements related to procedures specified for collection

during the study.

Submission C4 EDInvest Emergency department laboratory and imaging

investigations: Additional data elements related to

laboratory and imaging investigations specified for

collection during the study.

Submission C5 PatientTA Patient treatment area: Additional data elements related to

treatment areas in which a patient received care, including

date/time of start and end of time in treatment area.

Submission C6 APCNMDS The Admitted patient care NMDS 2015-16: (METeOR identifier

588909) for emergency department patients subsequently

admitted to the hospital, including to short stay units*, during

2015-16. Modified to include data elements for admission

and discharge date/time for any short stay unit.

Submission D1 EDCost Patient and product cost file data elements: Costs of

emergency department patients, and admitted patient

episodes for patients subsequently admitted to hospital. This

file will be the output of a local costing application,

structured to reflect the standard output for the National

Hospital Cost Data Collection.

Submission D2 CostCentreExtract Final cost centre file: Extract from costing system to reflect

the direct cost centre costs for the emergency department

cost centre and associated short stay units. This will be

extracted from the local costing application and reflects

the direct costs after allocation to final emergency care

cost centres, and reflects any reclassification of costs that

has been applied through the costing process.

Submission D3 ServiceTreatment Service/ utilisation/ products file: This is the file within the

costing the application that reflects the indicators of

utilisation used in the costing process to allocate final cost

centre costs to patient stays.

Submission D4 RVU Relative value unit (RVU) file: The file will include details of all

RVUs used in the costing process for emergency care stays.

* Includes a variety of short stay units, sometimes called short stay medical assessment units, emergency

management units, observation units etc.



Appendix C – Cost data

submissions – data elements Table 18 – Submission D1 Patient and product cost file (EDCost) - data elements

Data element ID Data element name METeOR

identifier Type

estid Establishment—organisation identifier 269973 Char[9]

EDCostRowNo Table row identifier – patients and products n.a. Num

studyPersonID Person – Emergency department costing study

patient ID (encrypted ID)

n.a. Char[20]

studyStayID

Emergency department stay – Emergency

department costing study episode ID (encrypted

Episode ID)

n.a.

Char[20]

studyadmitepID Admitted patient episode ID (encrypted Episode

ID)

n.a. Char[20]

ProdType Product type n.a. Char[2]

StudyProduct Study product subtype n.a. Char[3]

ORP Order Request Point n.a. Char[9]

NhcdcCC NHCDC Final Cost Centre n.a. Char[15]

NhcdcItem NHCDC line item n.a. Char[15]

CostDir Direct cost n.a. Num[7]

CostOH Indirect cost n.a. Num[7]

TotalCost Total cost of episode n.a. Num[7]

The following items are maintained in the local study site management system, but not included in

the data submitted for the study:

hospPersonID Person—person identifier (local) 290046 Char[20]

hospEDstayID Emergency department stay identifier (local) n.a.

hospadmitepID Admitted patient episode identifier (local) n.a.

Note: The National Hospital Cost Data Collection involves reporting of cost data at the phase

level for admitted subacute patient care. Phase level reporting will not be required for this

study.

Table 19 – Submission D2 Final cost centre file (CostCentreExtract) – data elements

Data element ID Data element name METeOR identifier Type


CCExtractRowNo Table row identifier – final cost centre extract n.a. Num

CCCode Cost Centre code n.a. Char[20]

CCName Cost Centre name n.a. Char[20]

ProdType Product type n.a. Char[2]

StudyProduct Study product subtype n.a. Char[3]

NhcdcCC NHCDC FINAL Cost Centre n.a. Char[15]

NhcdcItem NHCDC line item n.a. Char[15]

Amount Direct costs for this cost centre 2015-16 n.a. Num[9]



Table 20 – Submission D3 Service/ utilisation/ products file (ServiceTreatment) – data elements


identifier Type


ServTreatRowNo Table row identifier – service/ utilisation/ product n.a. Num

studyPersonID Person – Emergency department costing study

patient ID (encrypted ID)

n.a. Char[20]

studyStayID

Emergency department stay – Emergency


Episode ID)

n.a.

Char[20]

studyadmitepID

Admitted patient episode – Emergency


Episode ID)

n.a.

Char[20]

ServiceCode Service or treatment code n.a. Char[20]

ServiceQuantity Quantity of services n.a. Num[10]

ServiceUnits Service quantity units n.a. Char[10]

ServiceStartdatetime Start date and time for service n.a. Datetime

ServiceEnddatetime End date and time for service n.a. Datetime

ServiceOtherdatetime Other date and time for service n.a. Datetime

The following items are maintained in the local study site management system, but not included in

the data submitted for the study:

hospPersonID Person—person identifier (local) 290046 Char[20]

hospEDstayID Emergency department stay identifier (local) n.a.

hospadmitepID Admitted patient episode identifier (local) n.a.

The purpose of this Table is to provide a description of the codes used in reporting under the

ServiceTreatment file, identify the broad type of service to which the code related and

specific the RVUs applied in the costing processes associated with the service code.

Table 21 – Submission D4 Service/Treatment code descriptors and RVU – data elements


identifier Type


RVURowNo Table row identifier – RVU n.a. Num

ServiceType Service or treatment type n.a. Char[9]

ServiceCode Service or treatment code n.a. Char[20]

ServiceDescription Service or treatment code description n.a. Char[100]

Serviceunits Service quantity units n.a. Char[10]

Actualcostflag Actual cost indicator n.a. Num[1]

RVUdesc RVU application description n.a. Char[100]

RVU Relative value unit n.a. Num[10]



References Independent Hospital Pricing Authority. (2014). Hospital Patient Costing Standards Version 3.1.

Sydney: IHPA. Available at:

http://www.ihpa.gov.au/internet/ihpa/publishing.nsf/content/Australia-Hospital-Patient-

Costing-Standards.htm

Independent Hospital Pricing Authority (2015). Three Year Data Plan 2015-16 to 2017-18.

Canberra: Sydney: IHPA. Available at:

http://ihpa.gov.au/internet/ihpa/publishing.nsf/Content/ihpa-three-year-

plan.html~appendix-A



http://ihpa.gov.au/internet/ihpa/publishing.nsf/Content/ihpa-three-year-plan.html~appendix-A

http://ihpa.gov.au/internet/ihpa/publishing.nsf/Content/ihpa-three-year-plan.html~appendix-A

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