Queensland Chapter Overview
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Queensland Chapter 21 July 2011 1 The Health Roundtable ©2011 The Health Roundtable Limited The Health Roundtable … … An Innovation Clearinghouse Health Roundtable The Health Roundtable Non-profit membership group 73 Members 127 Facilities Founded 1995 Share problems Share solutions Provide informal network 2 The Health Roundtable … Member Organisations (July 2011) Albury Wodonga Health Alfred Hospital Alice Springs Hospital Angliss Hospital Armadale Hospital Auburn Hospital Auckland City DHB Auckland Starship Austin Health Barwon Health Bass Coast Bendigo Hospital Bentley Hospital Blacktown Mt Druitt Box Hill Hospital Caboolture Hospital Cairns Hospital Caloundra Hospital Camperdown Hospital Canberra Hospital Canterbury DHB Capital & Coast DHB Casey Hospital Caulfield General Counties Manukau DHB Cumberland Hospital Dandenong Hospital Dunedin Hospital Flinders Medical Centre Fremantle Hospital The Health Roundtable Gisborne Hospital Gold Coast Hospital Goulburn Valley Hospital Gove Hospital Graylands Hospital Gympie Hospital Hampstead Rehabilitation Hawera Hospital Hawkes Bay Hospital Hawkes Bay Rural Hornsby Kuringgai Hutt Valley DHB Invercargill Hospital Ipswich Hospital John Hunter Hospital Katherine Hospital King Edward Memorial Lakes District Hospital Logan Hospital Lyell McEwin Hospital Maroondah Hospital Masterton Hospital Mater Adult Hospital Mater Children's Hospital Mater Mother's Hospital Mater Private Hospital Melbourne Health Mercy Hospital for Women Modbury Hospital Monash Medical Centre Moorabbin Hospital Nambour Hospital Nelson Hospital Nepean Hospital Noarlunga Hospital Waitemata Northern Health Victoria Northland Hospitals Osborne Park Hospital Palmerston North ( Peter MacCallum Prince Charles Hospital Prince of Wales Hospital Princess Alexandra Hospital Queen Elizabeth II Hospital Redcliffe Hospital Redland Hospital Repatriation General Robina Campus GCH Rockhampton Hospital Rockingham Peel Rotorua Hospital Royal Adelaide Hospital Royal Brisbane & Womens Royal Children's Hospital Royal Darwin Hospital Royal Hobart Hospital Royal North Shore & Ryde Royal Park Campus Royal Perth Hospital Royal Women's Hospital Ryde Hospital Sydney Sandringham Hospital Shellharbour Hospital Shoalhaven Hospital Sir Charles Gairdner St George Hospital St Vincents Health ( St Vincents Hospital Sunshine Hospital Sutherland Hospital Swan Kalamunda Sydney Hospital Talbot Park Taranaki Base Hospital Taupo Hospital Tauranga Hospital Tennant Creek Hospital The Queen Elizabeth Timaru Hospital Toowoomba Townsville Hospital Waikato Hospital Wairau Hospital (NM DHB) Waitakere Hospital Wanganui Hospital Wangaratta Warrnambool Hospital Werribee Mercy Hospital West Gippsland Hospital Western District Health Western Hospital Westmead Hospital Whakatane Hospital Whangarei Hospital Williamstown Hospital Wollongong Hospital 3 Today’s Agenda · 9.00 – 9.30am · · 9.30 – 10.00am · Introduction to the New Chapter · Terms of Reference and Role within The Health Roundtable · Goals for the next 6 – 12 – 18 months · David Dean and Richard Ashby · Latest Developments in Activity Based Funding Program · Commonwealth Perspective · · · 10.00 – 10.20am · Prof Ric Marshall, Assistant Secretary Health Reform Transition Office – DoHA Member perspectives · Gold Coast: Adrian Nowitzke · Townsville: Andrew Johnson · 10.20 – 10.50am · Morning Tea · 10.50 – 11.30am · Latest Developments in Activity Based Funding Program · Queensland Health Perspective · Terry Mehan, Deputy Director General · Performance and Accountability, Queensland Health · 11.30 – 12.00 noon · Small Group discussions and feedback · 12.00 – 12.30pm · Suggested Work Plan for the Queensland Chapter · Information sharing over six months – teleconference/webcasts · Costing pilot project to reconcile health service & State data · Lunch · 12.30 – 1.30pm The Health Roundtable ©2011 Confidential Draft Discussion Document 4 Today’s Agenda · 12.30 – 1.30pm · Lunch · 1.30 – 2.30pm · Workshop #1: Unbundling Activities by Funding Stream · What activities will be funded? At what price? · Identifying “orphan” activities that are not funded · Tracking revenue and cost by activity · Small group discussion – Handling unfunded activities · 2.30 – 3.00pm · Afternoon tea · 3.00 – 4.00pm · Workshop #2: Developing Performance Plans · Overview of performance planning (episodes, days, WAUs) · Operational Planning Simulation – Cardiology Unit · Small group discussion – Operational Planning Processes · Health Service Action Planning · Developing your own action plan for next 16 weeks · Identifying other health services for collaboration · Meeting Ends · · 4.00 – 4.30pm 4.30pm The Health Roundtable ©2011 Confidential Draft Discussion Document 5 Charter for the Queensland Chapter AIM: improve health service perform by sharing common issues and innovative solutions to operational issues INITIAL FOCUS: prepare for the implementation of Activity Based Funding by sharing information with each other and with experts on: • management accounting, • costing, • operational planning, and • inpatient coding techniques. SCHEDULE: Meet twice in 2011 – in July and November – specifically to discuss ABF issues plus monthly teleconferences in August, September, and October to share progress The Health Roundtable ©2011 Confidential Draft Discussion Document 6 Health Reform: Health services need much more expertise to learn how to deliver products within the price structure Health service providers need to understand their cost structure much better to know which services to offer efficiently However, they have limited systems and expertise Few have feeder systems to measure actual activity & cost beyond pathology and imaging Except Victoria, few have experience with activity based funding Few have any management accounting expertise Overall accounting expertise has been removed from many local health networks The Health Roundtable Money Talks: Pricing approach will drive health services to change behaviour What behaviour is sought? Increased surgical intervention rate? Greater usage of emergency departments? Increased usage of diagnostic testing? Greater use of primary care? Increased usage of “hospital in the home/nursing home?” Avoidance of hospital for chronic care management? The price differential between hospitals and other alternatives will affect the speed of change The Health Roundtable Queensland Chapter Suggested Goals for next 6 – 12 – 18 months The Health Roundtable ©2011 Confidential Draft Discussion Document 9 Latest Developments The Health Roundtable ©2011 Confidential Draft Discussion Document 10 Queries about the Queensland Funding Model Why would a Laparascopic Cholecystectomy have a different cost weight at different facilities? 1.92284 1.63590 1.78737 2.15900 $8103 at L3 $6894 at M2 $7532 at M1 $9099 at P Std Price $4214.08 “The prices for Acute Admitted Inpatients are dependent on funds available within the ABF pool and agreed activity targets” (2.9.1) (rather than “activity targets are dependent on funds available?”) The Health Roundtable ©2011 Confidential Draft Discussion Document 11 7. Understand The Horsham Insight ? The Alfred Hospital 500+ beds Horsham Base 90 Beds Very high acuity and gravitas “This is the end of the world if The Alfred is paid the same price as Horsham Base for Fracture of neck of femur” This was a universal belief The Health Roundtable … The Horsham Insight Learning / experience curves The Health Roundtable Queries about the Queensland Funding Model ED patients who do not wait for care are funded at $144.58 ?? “There is no fixed payment relating to ED as in previous models, being fully variable based on activity performed.” 2.16.5 Perverse incentives to avoid incurring imaging and pathology costs by ED staff, and to delay transfer to ward by inpatient units until imaging/pathology completed in ED? The Health Roundtable ©2011 Confidential Draft Discussion Document 14 Queries about the Queensland Funding Model “Outpatient services are defined as occasions of service with a clinician via a booked appointment”, including pathology and imaging costs How can related pathology and imaging costs be measured against specific outpatients or outpatient clinics when there is no outpatient record-keeping at the patient level? The Health Roundtable ©2011 Confidential Draft Discussion Document 15 Queries about the Queensland Funding Model Four payment components to each DRG based on length of stay Short stay outliers (10th percentile) Inliers Long stay outliers (95th percentile) Extra long-stay outliers (98th percentile) Perverse incentives to hold patients to reach inlier trim point due to trimming formula Example: Hip replacement I03B low trim point = 4 days Payment $19,852 if 4 days. Lose $4963 if 3 days. The Health Roundtable ©2011 Confidential Draft Discussion Document 16 Suggested Work Plan to December 1. 2. 3. 4. 5. Understand purchaser’s scope – what’s in? Out? Unbundle financing and activities Develop operational plans for each activity Track revenue and expense per activity Reconcile actual with expected payments Compare results with other hospitals at each step The Health Roundtable ©2011 Confidential Draft Discussion Document 17 Today’s Agenda · 12.30 – 1.30pm · Lunch · 1.30 – 2.30pm · Workshop #1: Unbundling Activities by Funding Stream · What activities will be funded? At what price? · Identifying “orphan” activities that are not funded · Tracking revenue and cost by activity · Small group discussion – Handling unfunded activities · 2.30 – 3.00pm · Afternoon tea · 3.00 – 4.00pm · Workshop #2: Developing Performance Plans · Overview of performance planning (episodes, days, WAUs) · Operational Planning Simulation – Cardiology Unit · Small group discussion – Operational Planning Processes · Health Service Action Planning · Developing your own action plan for next 16 weeks · Identifying other health services for collaboration · Meeting Ends · · 4.00 – 4.30pm 4.30pm The Health Roundtable ©2011 Confidential Draft Discussion Document 18 Workshop #1 -- Unbundling What questions/issues do you have with the current draft of the ABF operating manual? What activities that you perform do not appear to be covered in the funding model? The Health Roundtable ©2011 Confidential Draft Discussion Document 19 Workshop #2 -- Operational Planning Model Concept overview Cardiology Simulation Suggested improvements The Health Roundtable ©2011 Confidential Draft Discussion Document 20 Operational Planning Tool Queensland Chapter Meeting 21 July 2011 21 The Health Roundtable ©2011 Confidential Draft Discussion Document ABF Planning Overview Funder provides an overall inpatient activity target in Weighted Units and Dollars Executive works with clinical leaders to develop an activity plan which: 1. 2. Meets the target Reflects likely demand growth Matches skills available Executive works with clinical leaders to develop capacity plans which Fit within target funding Fit within expected physical bed capacity The Health Roundtable ©2011 Confidential Draft Discussion Document 22 Overall Planning Cycle Funding / Activity Targets Performance Plan Capacity Capacity & Plans Plans Staffing Plans Expenditure Plan The Health Roundtable No Within Funding ? Yes ©2011 Confidential Draft Discussion Document 23 Basic Performance Plan Hospital Specialty Eagle Cardiology Obstetrics DRG Chest Pain Unstable Angina Vaginal Delivery Activity Episodes Days Episodes Days Episodes Days The Health Roundtable ©2011 Confidential Draft Discussion Document 24 Capacity Plans for Each Service to Support Performance •Bed Days •Theatre Minutes •CT Scans •Allied Health Interventions •Pathology Tests The Health Roundtable ©2011 Confidential Draft Discussion Document 25 Performance Plan Summary Workbook The Health Roundtable ©2011 Confidential Draft Discussion Document 26 Illustration: Cardiology Unit Summary Last year’s actuals for Cardiology The Health Roundtable ©2011 Confidential Draft Discussion Document This year’s target set by Executive 27 Worksheet to Plan up to 20 DRGs per Unit The Health Roundtable ©2011 Confidential Draft Discussion Document 28 Adjust Episode Volume to Reach Activity Target “Slider Bar” for expected activity The Health Roundtable ©2011 Confidential Draft Discussion Document 29 Each DRG has link to Health Roundtable Benchmarks Use Roundtable Benchmarks to Understand Improvement Potential The Health Roundtable ©2011 Confidential Draft Discussion Document 30 Clinical Units Develop Their LOS plans for Top 20 DRGs Use Slider Bar to Plan LOS for each of top 20 DRGs The Health Roundtable ©2011 Confidential Draft Discussion Document 31 Goal is to Adjust Activity To Meet the Targets Adjust Planned Episodes and ALOS to reach Overall Targets The Health Roundtable ©2011 Confidential Draft Discussion Document 32 Result: Performance Plan for Each Major Clinical Unit ONCE OVERALL PLAN APPROVED, DEVELOP THE DETAILS Weekly Plan (Electives and Emergency Episodes, Seasonality) Ward Allocation ( Co-morbidity, Likely Gender Mix) Clinical Staffing Plan ( Workloads, Leave Schedules) The Health Roundtable ©2011 Confidential Draft Discussion Document 33 Other Plans Follow Performance Plan Funding / Activity Targets Performance Plan Capacity Capacity & Plans Plans Staffing Plans Expenditure Plan The Health Roundtable No Within Funding ? Yes ©2011 Confidential Draft Discussion Document 34 Suggested Next Steps Try out the planning tool Get your feedback If interested, we will load your historical data (with Queensland Weighted Units, if available) Provide tutoring on the use of the tool Encourage sharing of other tools and planning approaches in use in Queensland The Health Roundtable ©2011 Confidential Draft Discussion Document 35 Action planning In your hospital teams – Identify your next steps to prepare Identify assistance required from colleagues Identify assistance required from Health Roundtable The Health Roundtable ©2011 Confidential Draft Discussion Document 36 Will the world end with the introduction of ABF ? No Will the World, as we know it change ,with the introduction of ABF ? Yes ABF provides a great opportunity for improved services to patients 1. Understand the Purchaser’s Scope • The purchaser will only pay for their very precise scope of work • It is essential that a provider understands what activities are In Scope and consequently paid for • It is essential that a provider understands what activities are Not in Scope and consequently are not paid for The Health Roundtable 2. Unbundle the hospital’s finance and activities… Poor Finance (A,B,C) Activity ( A,B,C ) Expenditure (A,B,C) Good Activity (A) Finance (A) Expenditure A Activity (B) Finance (B) Expenditure B Finance (C) Activity (C) Expenditure C The Health Roundtable 3. Develop operational plans for each activity to match funded activities Historical Unbundled 1 Unbundled 2 Operational Planning Acute Inpatients Cardiac Surgery Acute Outpatients Rehabilitation 38 Cost Centre 1 Cost Centre Teaching 38 Operational Plans Training Professional Activities • Plan the Work • Work the Plan Research The Health Roundtable Investigational • Manage the Variances 4. Unbundle the hospital’s finance and activities, down to the lowest level… The Health Roundtable 41 5. Track the revenue and expense for each activity Finance Expenditure Surplus/Deficit The Health Roundtable Activity A Activity B Activity C Acute Mental Aged Output Pricing Model A Output Pricing Model B Output Pricing Model C 6. Reconcile actual and expected payments for each activity • A realisation that Cash ($$$) = Fn (coded transactions) • Daily, Weekly & Monthly Coded Performance reports to Units are required • Clinical Units must check coding weekly, Coding Audits • Forecast cash revenue weekly , monthly and yearly •Ability to replicate all Government Reports Patient Medical Record Coded Episode Transmit to Department and Hospital Dept Calculates Revenue Dept Calculates Cash Payment Cash to Bank Allocate Revenue to appropriate GL a/c Hospital Calculates Revenue Hospital Calculates Cash Payment The Health Roundtable Hospital Allocates Revenue to appropriate GL a/c Reconcile Oops! 7. Understand the cost dynamics of your Hospital Essential It is absolutely vital, that the unique cost dynamics of a Hospital are understood, measured and acted upon Data collection and reporting must be fit for purpose – both at the organisation and funder level Example : St Elsewhere The Health Roundtable St Elsewhere...1 The Health Roundtable St Elsewhere...2 The Health Roundtable St Elsewhere...3 The Health Roundtable 8. Understand that a clinician has 2 roles Role 1 The Patient Advocate / The Case Manager • Controller of service utilisation • The person who buys, requests, orders all services on the patients behalf Role 2 Departmental Member • A specific service provider • A member of a department delivering services to a patient Essential to Understand • The price of all services is determined by the Department • The quantity / usage of services is determined by The Patient Advocate • Initially the potential big $ savings are in the price of Departmental Products and in Bed Utilisation The Health Roundtable 9. Use ABF to build a major management tool Given that all outputs now have a price , with a sound costing system, it is possible to determine profitability (or loss) by clinician DRG Unit Service Division Facility Funding stream This management information enables the organisation to be tuned The Health Roundtable 10. Use Standard Costing to highlight variance from plan Departments Clinicians Quantity Variation Utilisation The Health Roundtable Price Variation 11. Compare results with other health services to identify improvement opportunities The Health Roundtable Cost Benchmarking… The Health Roundtable Average cost of DRG Family G07: Appendicectomy ranges from almost $9,000 at Gemma to $2,700 at Achilles 3 The Health Roundtable Episodes with Complications of Care are more costly, and should drive internal improvement efforts The Health Roundtable The Stages to improve readiness for ABF Recognise that ABF is just a point on a journey . It is not a destination. Advisor : Do not reinvent the wheel • Link to a coach /advisor / mentor with significant experience Essential Personnel per Hospital • An experienced ,world class Management Accountant (1 FTE) • Coding Capability (Good and Sufficient ) • Excellent Performance Analysis capability (1FTE) • Excellent Case Mix Modelling capability (1FTE) • Excellent Costing System capability (1+1 FTE) Tasks • Understand Purchasers Scope • Unbundle Activities ,financing and expenditure - A big big task • Understand the Purchasers Funding Model The Health Roundtable • - Questions ? Contacts David.Dean@healthroundtable.org Peter.Reeves@healthroundtable.org Tel: +61 2 9440 2016 The Health Roundtable Output Pricing Fundamentals… Provider Products &Services $ $9.00 Price setter Digital Data DRGW= 14.8 $62,160 The Health Roundtable Purchaser Output Pricing Fundamentals… Output Pricing =Activity Based Funding (ABF)=Casemix =Output based funding ≠ Historical funding Financing is based on outputs not inputs Acute Outputs are measured generically in terms of DRG Weights The purchaser may determine what they will buy and sets the price they will pay for a coded transaction Examples :Price per • Bypass Operation • Chest x-ray for outpatients • Registrar in training • Price per normal birth • Laparoscopic Cholecystectomy W/O Closed CDE W/O Cat or Sev CC The Health Roundtable 3.Thou shalt learn to count and code episodes accurately for this determines your financing Count everything Record everything Code appropriately Medical Record for one Patient The Health Roundtable Accuracy Essential at Each Stage 90% Conditions noticed 90% Documented 90% Interpreted 90% Entered correctly = only 66% accuracy The Health Roundtable Result: Garbage in – Garbage out Monthly performance Reports 1 The Health Roundtable Monthly performance Reports 2 The Health Roundtable Monthly performance Reports 3 The Health Roundtable Monthly performance Reports 4 The Health Roundtable Monthly Performance Report V1 INSTRUCTIONS for those completing the document: Please enter your responses in the shaded boxes in each section. Space for responses will automatically expand to handle all of the text you enter – ignore how this impacts on the pagination or other layout. This is a protected document and cannot be modified or reformatted. Clinical Unit/ Service / Hospital Standard Monthly Report from those accountable for delivery of the performance Plan RC if appropriate Performance Report Month 1. Reasons for Difference between Plan and Actual for the Month. 2. Action to address any unfavourable Monthly differences 3. Reasons for difference between Plan and Actual for Year to Date 4. Action to address unfavourable Year to Date differences 5. When is expected that the Unit / Service / Hospital will be back on the Year to Date plan. 6., Have any Bottlenecks been experienced. If Yes, please describe and suggest action to reduce Bottleneck, 7. Other Significant Matters (Both Positive and negative) Report authorised by Date of Report 8. Thou shalt understand that ABF provides the capability to build a major management tool… Given that all outputs now have a price , with a sound costing system, it is possible to determine profitability (or loss) by clinician DRG Unit Service Division Facility Funding stream This management information enables the organisation to be tuned The Health Roundtable Costing is not an essential element of ABF systems. Given that all outputs now have a price , with a modern costing system ,it is possible to determine profitability (or loss) by clinician DRG Unit Service Division Facility Funding stream A sound costing system combined with output pricing , provides a tool to significantly improve organisational transparency Cross subsidisation can be made visible The Health Roundtable 9. Thou shalt undertake strategic cost reduction projects … • Align bed days and wards to the Performance Plan • Address the Long Stay Patients issue • Benchmark Departments • Reduce the cost of Departmental services • Etc As Costs /waste decreases , Quality in general increases The Health Roundtable 10. Thou shalt understand the Cash Flow System • A realisation that Cash ($$$) = Fn (coded transactions) • Daily, Weekly & Monthly Coded Performance reports to Units are required • Clinical Units must check coding weekly, Coding Audits • Forecast cash revenue weekly , monthly and yearly •Ability to replicate all Government Reports Patient Medical Record Coded Episode Transmit to Department and Hospital Dept Calculates Revenue Dept Calculates Cash Payment Cash to Bank Allocate Revenue to appropriate GL a/c Hospital Calculates Revenue Hospital Calculates Cash Payment The Health Roundtable Hospital Allocates Revenue to appropriate GL a/c Reconcile Oops! Will the world end with the introduction of ABF ? No Will the World, as we know it change ,with the introduction of ABF ? Yes Questions ? Contacts david.dean@healthroundtable.org bill.kricker@healthroundtable.org Tel: +61 2 9440 2016 The Health Roundtable ©2011 Confidential Draft Discussion Document 71
