Can Private Sector
Experience Assist with
ABF Development?
Nicolle Predl, Senior Health Information Manager
Dr Brian Hanning, Medical Director
Casemix, Data Strategy & Development
Australian Health Service Alliance
Topics
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AHSA Overview
Private sector experience and ABF
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Critical Care
Mechanical Ventilation
Site of care funding
Data Issues
Payment models in the private sector
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Equitable Payment Model (EPM)
Issues with payment models
Who is AHSA?
Service company representing a number of health
funds, including:
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Australian Unity
GMHBA
CBHS
Defence Health
Formed in 1994 to provide management services to
member funds
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Hospital Contract Negotiations
Medical Agreements & Gap Cover
Integrated Health Management
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e.g. Chronic Disease Management
Data Management
Clinical and Casemix Analysis
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Payment Model Development (acute and rehabilitation)
Private Sector Payment Models
Acute
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Case Payment
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MBS or DRG
Casemix funding (hybrid)
Traditional per diem
}
Site of care can also
affect payment
Site of care
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Critical Care
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Intensive Care Unit (ICU)
Coronary Care Unit (CCU)
Special Care Nursery (SCN)
High Dependency Unit (HDU)
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Private Room
Shared Room
AHSA’s Equitable Payment Model (EPM)
Acute Care funding model
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Hybrid model – Casemix & per diem with step downs
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Each DRG has differing rates and step downs
Step downs based on industry norms
Payments based on relative cost
Heavily bundled
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Accommodation, including:
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Non-Mechanically Ventilated ICU
CCU
HDU
Special Care Nursery
Theatre
Nursing, allied health
Hotel costs
}
Removes Site of care
funding
Equitable Payment Model
Items not bundled
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Prosthesis
Private room
Mechanical Ventilation (MV)
Medical
Pathology/Radiology
Private Sector Experience: Critical Care Funding
Current ABF Funding Model
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Site of Care funding
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ICU Payments can bundled or paid on an hourly
basis
Data not available nationally for Mechanical
Ventilation
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Interim arrangement pending data collection?
Anticipated Consequences of Site of Care funding
 Payment unrelated to relative cost
 Increase in ICU utilisation
 Increase in CCU utilisation
 Effect will be significant
Private Sector Critical Care Funding
Site of care funding for ICU/CCU
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Not always driven by clinical need
At times, driven by payment model incentives
This is not fraud
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One example of hospitals responding to incentives &
disincentives
Mechanical Ventilation is different
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Expensive
Driven by clinical need
Payment model irrelevant
Occurrence unpredictable and uncommon in the
vast majority of DRGs
Where MV predictable, duration unpredictable
Critical Care Hypotheses to be tested
After Casemix Adjustment:
Significant Differences in public/private
sector utilisation of critical care
Differences between public/private sector
utilisation relate to site of care
MV utilisation will be similar between both
sectors
Methodology
Used 2010/11 data from DHS Victoria
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Used with permission from DHS Victoria
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Mechanical Ventilation data available
Victorian public sector bundle critical care except MV
Acute DRGs only
Vic DRGv6
DRGs with <30 case numbers excluded
All public and private cases included, irrespective of funder
Casemix adjustment made
Variables Compared between sectors
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MV Hours
Total ICU Hours (including MV)
ICU Hours (excluding MV)
CCU Hours
Methodology (cont.)
Compare effect on Critical Care parameters
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If Vic private sector norms (DRG level) applied in
the public sector
If Vic public sector norms (DRG level) applied to the
private sector
A Second Comparator was also used
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Overall state norms (DRG level)
Averages hours of each variable (DRG level) over
all Victorian cases
Results – Total Hours
Public
Comparison
Actual
All case norm
Private norms
MV
688,870
685,604
699,519
ICU
1,818,939
1,895,906
2,364,709
MV
115,565
118,831
123,639
ICU
580,273
503,306
476,941
ICU ex MV
CCU
1,130,069 871,088
1,210,302 1,043,366
1,665,191 1,898,389
Private
Applied to….
Actual
All case norm
Public norms
ICU ex MV
464,708
384,475
353,302
CCU
644,826
484,028
428,793
Results - % Change in Total Hours
Private vs. Public
Comparison
Private norms applied to public
Public norms applied to private
MV
1.5%
7.0%
ICU ex
ICU
MV
CCU
30.0% 47.4% 117.9%
-17.8% -24.0% -33.5%
All Case (Public & Private) Norms
Applied to….
Public
Private
ICU ex
MV
ICU
MV
CCU
-0.5% 4.2%
7.1% 19.8%
2.8% -13.3% -17.3% -24.9%
Private Sector & ABF
Private Sector Experience
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Is relevant to the development of ABF
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Given experience in different funding models
In context of uncapped funding
A further area where the private sector can assist is
data definitions
Data Definitions
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Hospital Casemix Protocol (HCP) & Private
Hospitals Data Bureau (PHDB)
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Some information collected not in NMDS
Some fields have inconsistent definitions to state/NMDS
Consistency is the key
Summary & Conclusion
Private sector can assist in ABF development
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Critical Care Hypotheses Confirmed
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Payment of “like” Critical Care cases
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MV utilisation similar between sectors
CCU and non-MV ICU significantly different
MV is different to any other intervention, and should
be treated as such
Site of care a sub-optimal means of payment
Comparability (public and private)
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Streamlining of processes
‘Single provision, multiple use’
Cannot be achieved without data consistency