Costing across the continuum -Ambulatory services

Presenter: Colin McCrow RN,RM,PICC, B HlthSc(Nsg),

Grad Dip Hlth Admin & Info Sys, M Hlth Admin & Info Sys. Manager ABF Costing

Objectives

In this session we will: •  Outline the types of data that can be used

for costing ambulatory health care services at patient level.

•  Explore key concepts in encounter matching of ambulatory health care services.

Objectives

•  Identify the cost drivers that need consideration to ensure the accurate assignment of costs to patient level.

•  Discuss costing options to ensure that accurate activity cost matching occurs.

Presentation Focus •  There are four main types of ambulatory care

service delivery models, Non-admitted emergency, sub-acute care (including hospital in the home), community health services (Including community mental health) and outpatient clinics.

•  This presentation will focus on outpatient clinics but principles outlined in this presentation can apply to the other service delivery models

DATA TYPES Costing across the continuum -Ambulatory services

Data requirements for ABF

To accurately cost ambulatory care you need to answer seven questions; •  Who received the health intervention or support

service? •  Who provided the direct health intervention or

support service? •  What over services are required to ensure that

the health intervention or support service could be provided?

Data requirements for ABF

•  Where was health intervention or support service delivered?

•  What Supplies did the direct health intervention or support service require?

•  What cost centres are contain the GL account records associated with the health intervention or support service?

•  When (date and time) was the health intervention or support service delivered?

Feeder System Suitability

•  Data can be sourced from numerous clinical systems and financial systems associated with the delivery of ambulatory care.

•  Not all potential Clinical Feeder Systems may be suitable for consideration as a data source for costing systems. The following initial criteria must be met for Clinical Systems:

Feeder System Suitability

•  The system is patient/client centric. Where the system is associated with the care and treatment of patients/clients the clinical feeder system must have at least a one way interface with the hospitals patient administration system and use the registered patients unique identification number from the patient master index.

Feeder System Suitability

•  The service provider is clearly defined. •  The type of health care intervention is clearly

defined. •  The date and time of the delivery of the

service is clearly defined. •  The location where the service delivery

occurred is clearly defined.

Feeder System Suitability

•  The captured data elements align with business processes and can uniquely identify the type of activity and services provided by the department.

•  The data elements essential to classify the health care interactions, treatments or services delivered are mandatory fields in the information system.

•  Free text fields are limited to reports.

Feeder System Suitability

•  The majority of Code Sets/Reference Tables that are used to classify Data Elements within the system conform to International, National, State or Professional College code sets.

•  Any Code sets that are system specific are fully documented in a data dictionary which describes the data element and its business use in the workflow process associated with the information system.

Feeder System Suitability

•  The data elements that describe the healthcare activity are not duplicated with another system already interfaced and therefore add value to existing data.

•  The products derived from the data elements can costed accurately.

Suitable Ambulatory System Types

Core Patient Registration ADT /

PMI

Pathology Systems

Diagnostic Imaging Systems

Pharmacy Dispensing

Systems

Ancillary systems

Appointment Scheduling System

Core Systems

Allied Health Systems

Procedure Suite Systems

Specialist Clinical Systems

Local Clinical Systems

GP Clinical Systems

Clinical Systems

Why do we need interfaces? •  There are very few businesses where their total

information system needs can be managed within a single information system. Within Health Care Settings the information system needs within defined areas of activity are vastly different due to the number and complexity of different health care interventions and the settings where that activity occurs.

Why do we need interfaces? •  For example the information system needs of a

Diagnostic Imaging department and an Operating Theatre are vastly different yet both only exist to provide services to our consumers – the patients. In order for any health care service to be able to review their total service delivery (as is critical in a ABF environment) there must be a mechanism for linking common data elements between systems.

Types of interfaces- Two Way

•  In this interface transactional data elements are shared between both information systems usually on a real time basis. The information systems have as part of their design and implementation the ability to read and write data from one system to the other into defined tables in both systems with the end result that both systems have transactional records updated.

Types of interfaces- One Way

•  In this interface transactional data elements are read from a Feeder System and written to a Receiving System in order to update or insert a defined data element common between the information systems. This usually is associated with either Unique Identifiers or DSS Code Sets with the aim to ensure the commonality of the data elements between systems used by the organization. This is usually on a real time basis.

Types of interfaces- Extract Files •  In this interface transactional data elements are

written from a Feeder System into a defined flat text file for later transfer to the receiving system to be loaded for further data transformation activities. This is a point in time interface, the data between the systems is only correct as at the date of the extract run process in the Feeder System. This type of interface does however allow for a larger number of transactional data elements to be transferred in a single pass as records are being written to an output file and no updating of either the Feeder System or the Receiving System is included in the process

ENCOUNTER MATCHING Costing across the continuum -Ambulatory services

Encounter Definition

•  According to Medical Dictionary for the Health Professions and Nursing © Farlex 2012 and encounter is “A health care contact between the patient and the provider who is responsible for diagnosing and treating the patient”

Matching Definition

•  According to Dorland's Medical Dictionary for Health Consumers. © 2007 Matching is

•  1. comparison and selection of objects having similar or identical characteristics.

•  2. selection of compatible donors and recipients for transfusion or transplantation.

•  3. selection of subjects for clinical trials or other studies so that the different groups are similar in selected characteristics.

Encounter Matching Definition

•  Encounter Matching in a patient costing environment is the linking of data about the care of the patient from disparate clinical systems, utilizing like unique patient identifying fields based on patient record number, age date of birth, sex, date ,time & location of service and sometimes also includes ordering provider. This systematic data matching process allows the grouping of patient centric clinical utilization records that can be used to cost the services consumed by the patient.

Encounter Matching Definition •  Where possible point of order entry is used

to match clinical interventions to an admission, emergency presentation or ambulatory service event. Where legacy clinical systems do not collect this information encounter matching needs to be undertaken using defined business rules based of date of service data. A cascading set of business rules is used to provide the best match between the feeder systems and the admission/presentation/service event record

Encounter matching date/ time business rules •  Precedence 1 – Admission +/- 24 hours

else •  Precedence 2 – ED Presentation +/- 24 hours

else •  Precedence 3 – Ambulatory Service Event +/- 30

days else

•  Precedence 4 – Unlinked Encounter

Outpatient clinic services •  “Hospitals use the term ‘clinic’ to describe various

arrangements under which they deliver specialist outpatient services to non-admitted non-emergency department patients. Services provided through specific organisational units staffed to administer and provide a certain range of outpatient care in defined locations, at regular or irregular times and where one or more specialist providers deliver care to booked patients. Generally, in such clinics, a booking system is administered and patient care records are maintained to document patient attendances and care provided”.

Non-admitted patient service event •  A non-admitted patient service event is

defined by the National Health Data Dictionary as: “An interaction between one or more healthcare provider(s) with one non-admitted patient, which must contain therapeutic/clinical content and result in a dated entry in the patient's medical record”.

Key Concept

•  In admitted care all utilization data is linked to the admission episode.

•  In emergency care all utilization data is linked to the emergency presentation.

•  In ambulatory care all utilization data is linked to the clinic appointment.

•  Were none of the above can be found and unlinked encounter is created to carry the cost of the service consumed.

COST DRIVERS Costing across the continuum -Ambulatory services

Cost Sources

There are four sources of costs associated with the delivery of health services. •  Clinician time (60-80% total cost) •  Direct support staff time (2-5 % total cost) •  Consumables and other material

resources (2-15 % total cost) •  Overhead costs (15-35% total cost)

Costing Principles

•  Labour is the highest cost for 99.9% of all services provided in ambulatory settings.

•  Staff providing care in ambulatory settings may also provide care in other areas (Wards, Operating theatres ED etc.)

•  RVU’s need to have the same numerators and denominators.

•  The cost of every product is relative to all products, so all products must be costed.

Costing principles

•  Labour costs are based on time in minutes for each intermediate product produced by the provider (regardless of service delivery setting)

•  Non labour costs are based on cost in dollars.

•  Where more than one type of direct care clinical provider is involved in the service event each must be uniquely costed.

Procedure Clinic Cost Drivers •  Procedure clinics are driven by the

clinicians undertaking the specific procedure (can be medical, nursing or allied health).

•  In costing systems they are mapped to the key clinical steam where the procedure referral is sent)

•  Remember other types of clinicians may be involved and need to be costed.

Medical Clinic Cost Drivers •  Medical clinics are driven by Doctors – if

the doctor does not turn up the clinic does not happen……..

•  In costing systems they are mapped to the doctor unit.

•  Remember other types of clinicians may be involved and need to be costed.

Nursing Clinic Cost Drivers •  Nursing clinics are driven by Nurses and

Midwives •  In costing systems they are mapped to the

outpatient area or to the location where that clinic is delivered from (may be a ward based drop in clinic.

•  Usually other types of clinicians are not involved and do not need to be costed.

Allied Health Clinic Cost Drivers •  Allied Health clinics are driven by Allied

Health staff •  In costing systems they are mapped to the

Allied health unit associated with that allied health specialty e.g. physiotherapy.

•  Usually other types of clinicians are not involved and do not need to be costed.

Other clinic types

•  Group clinics need all staff types associated with direct care during the clinic accounted for in the costing process.

•  Diagnostic clinics may have labour components (eg Clinical measurement) others are dollar based such as unlinked pathology where the test charge may be used.

Non Labour Costs

•  For procedure clinics consider the high cost consumable items and where procedure clinics are located with other clinic types RVU’s must be used to ensure the relative costliness of material resources between clinics is maintained.

•  For all other non labour costs an even spread can be used.

Overhead Costs

•  A simultaneous equation will be used in all good costing systems to apply the overhead costs.

•  RVU’s should reflect the resource intensity of applicable overhead costs for each product.

•  99% however will not require a differential RVU and an even spread can be used

ACTIVITY COST MATCHING Costing across the continuum -Ambulatory services

Activity & Costs

•  There is a degree of Activity Cost Mismatch in every costing system. While this does not prevent the delivery of Quality Health Care Services, it will significantly impact our ability to analyse and identify opportunities for improvement in the cost effectiveness and quality of those services.

Reasons for Activity Cost Mismatch •  Failure to accurately map your cost

centre structures to your functional organisational structures.

•  Failure to identify the purpose of your cost centres /revenue centres/activity centres.

•  So the real question before we embark on the ABF journey for real is “Do you really understand your organisation?”

Aligning Activity Hit And Miss •  Here using the clinical feeder systems – we

hope we are getting all the right activity against the right departments. All the activity cost mapping is done in isolation based on prior years processes as standardised relative value units may be applied. Descriptions from records are used as the basis for decision making.

Aligning Activity Area Interview •  A bit of a novel idea for some it would seem

– to actually go an ask someone what they are actually doing and then mapping that activity to where we think the costs may be. In this style of alignment however we are only asking about the activity not the costs. We may get accurate RVU’s but not end up with accurate standard and actual costs per unit that reflect real costs. A step above hit and miss but not by much.

Aligning Activity Area Accountability •  Not only do we talk to the service providers

(and business managers) but by making them accountable they check not only that the activity is correct but that costs are going to the right cost centres and more importantly that costs are a real reflection of service provision. The devolution of responsibility and accountability to those people who are making service provision decisions is critical.

Activity Cost Review Questions The following questions need to be asked: •  Have I identified all of my Health Networks Service

Offerings? •  Have I identified all the Service Lines associated with

my service offerings? •  Have I identified all my service delivery locations

(including outreach)? •  Have I identified all primary service delivery providers? •  Have I identified the cost centres associated with my

Primary Service Providers?

Activity Cost Review Questions con’t •  Have I identified all clinical support providers? •  Have I identified the cost centres associated with my

clinical support providers? •  Have I identified all non clinical support providers? •  Have I identified the cost centres associated with my

non-clinical support providers? •  Have I identified each indirect service required to run my

direct service lines? •  Have I identified every activity for each service line, it’s

location/s and providers?

Activity Cost Review Questions con’t •  Have I contacted the Business Manager, Clinical

Manager, Cost Centre Manager ( or their delegate to check labour and non labour (where cost significant) RVU’s for every activity?

•  Do these managers agree that the costs for activities in our ABF system reflect actual cost relativity for the major activities associated with each service line?

•  Are they willing to accept accountability and responsibility for cost management of activity in the future?

New Service or change

Service type/location

ABF System-Structure Review Cycle

Identify Service Owner

Service Providers

Service Volume

Build Structures

Cost Products

Cost Review

Cost Types/Drivers

Load & Process Data

References

•  http://medical-dictionary.thefreedictionary.com/_/dict.aspx?rd=1&word=encounter

•  http://medical-dictionary.thefreedictionary.com/_/dict.aspx?word=matching

•  Australian Government, Australian Institute of Health & Welfare. National Health Data Dictionary (2007).

Questions ?

Questions & Contact Information

Please direct any questions to: Colin McCrow Manager ABF Costing ABF Model Team System Policy & Performance Division Queensland Health Email : colin.mccrow@health.qld.gov.au