IHPA revenue modeling Comparing to costings in the private sector Dr David Phillips Why • Activity Based funding model • Cabrini - around 57% of our overnight activity is episodically funded • St Andrews – around 80% overnight activity • More health funds are looking at episode funding as well as newer models • Cabrini’s largest funders use models based on round 6 and round 7 DRG 4.2 • Interest both internally and externally • How our inpatient and ED costings will compare Overview • • • • Some Background Some Comparisons Methodology Some Results Overview - IHPA revenue modelling • Compare inpatient and ED costs to IHPA revenue model • How would a private hospital fare with NEP • Impact of DRG versions Private hospitals …in Australia • Treated 40% of all patients (AIHW, 2009-10a, pp. 139, Table 7.1) • 3.5 million patients admitted (AIHW, 2009-10a, pp. 139, Table 7.1) • 2.1 million occasions of service in non-admitted patients services (ABS, 2009-10, p. 18) • 8.4 million days of hospitalisation to patients (ABS, 2009-10, p. 6) • Performed 65% of elective surgery (AIHW, 2009-10a, pp. 250, Table 10.2) • Provided a total of 28,038 beds, just over 33% of all hospital beds. (AIHW 2009/10) Some Background • Cabrini Health, Melbourne • Catholic Not for Profit Organisation, 832 beds, 2 acute sites, palliative and rehab services • Established over 60 years ago by the Missionary Sisters of the Sacred Heart of Jesus • St Andrews Hospital, Adelaide • Not for Profit, affiliated with the Uniting Church, 207 acute beds, located on edge of picturesque southern parklands • Both have a high oncology workload • Both have a level 3 ICU • Both have Emergency Departments Comparisons between private and public • Similarities • Tertiary level services including • Cardiothoracic surgery • Level 3 ICU • Emergency Department • Cabrini 24/7 • St Andrews – 0800 to 2200 • • • • • Obstetrics / Paediatrics at Cabrini Overnight OBDs emergency – 50% Cabrini Malvern, 20% St Andrews Teaching and research, undergraduate and postgraduate Medical and nursing students Outreach / Mission Work Comparison between private and public • Differences • Salaried Medical Officers • ICU and ED, at Cabrini – small number in wards (on the increase) • Cabrini has accreditation for registrar training – • • • • • • • • Internal Medicine General Surgery ICU ED Capital Pathology service Medical Imaging Trauma Centres Casemix • Overnight Acuity • Using Round 14 Public Weights Hospital Average Overnight Weight Cabrini Brighton 1.26 Cabrini Malvern 1.90 St Andrews 1.73 All sites 1.75 Replicating the model • What adjustments to include/exclude • • • • Private patient adjustment Paediatric adjustment Indigenous adjustment Rural adjustment Which buckets to include/exclude • Using published round 14 National Public DRG6 Weights • Include • • • • • • • • • Ward Nursing Nonclinical Salaries Allied Health Pharmacy Critical Care Theatre / SPU Supplies Oncosts Hotel Which buckets to include / exclude • Exclude • • • • • • • Ward medical Depreciation Emergency Department Pathology Radiology Prosthetics Theatre Medical • Giving a revised total and % of original total – overall of 63% • Provides a revised % for each DRG Methodology • Base of $4,575 NEP for 11/12 • Use IHPA DRG6 weights * revised % • ICU addon as per IHPA model Comparisons – Inpatient Costings • • • • • SRG Stay type Admission Category Procedure vs Non Procedural SS/Inlier/LS split Overall • Overnight Costs per weight of one Hospital Cost per weight of 1 Av LOS All sites $2,706 4.43 SRG SRG Overnight SRG Sameday SRG SRG Overnight SRG Sameday Stay Type Stay Type Avg Profit % of NEP % Activity Overnight 6.27% 42% Sameday 3.39% 58% Admission Category Category Avg Profit % NEP % Discharges ALOS Emergency -9.33% 15% 6.12 Overnight -10.54% 6.51 Sameday 6.56% Elective 7.06% Overnight 14.71% 85% 1.78 3.39 Sameday 3.32% Overall 4.59% 2.44 Procedural Theatre Procedure Avg Profit % NEP % Discharges Procedural 6.95% 59% Overnight 10.58% Sameday 3.91% NonProcedural 1.09% Overnight -1.7% Sameday 2.71% 41% Overnight Stay type Stay Type Avg Profit % NEP % Discharges Shortstay 12.54% 1.7% Inlier 10.91% 93.7% Longstay -91.37% 4.6% Comparisons – Emergency Dept costings Hospital Average Cost Average Revenue IHPA Revenue Combined $601 $356 $576 Comparisons – RND 7 vs RND 14 • Which SRGs show significant movements in weights SRG RND7 WTD RND14 WTD Seps % Seps % % change SRG RND7 WTD RND14 WTD Seps % Seps % % change Cardiology Interventional 8% 4% -50% Medical Oncology 2% 2% 22% Pain Management 0% 0% -30% Paediatric Medicine 0% 0% 25% Medicine 2% 2% -28% Head and Neck surgery 0% 0% 30% Drug and Alcohol 0% 0% -26% Plastic Surgery 2% 3% 30% Cardiology 3% 2% -24% Gastroenterology 4% 6% 30% Rheumatology 1% 1% -22% Perinatology 0% 0% 31% Neurology 2% 2% -21% ENT 1% 2% 35% Geriatrics 1% 1% -11% Dentistry 0% 0% 56% Immunology and Infections 2% 1% -10% Chemotherapy 3% 5% 78% Cardiothoracic Surgery 7% 6% -10% Social Admissions 0% 0% 117% Summary • Acute private hospital would survive quite well on the NEP – even with chemoRx correction • Possible areas for review – chemotherapy, pharmacy, long stay outliers • Movement in weights will be of interest and possibly impact in the future • Private emergency department funding is poor • Issue of capital costs between the sectors and how it is handled • Importance of contributing to NHCDC