2016¬-17 service agreement between the minister for web view2016-17 service agreement between...

June 2016

2016-17 Service Agreement between the Minister for Health and the Tasmanian Health Service

Page |

ContentsService Commitment 3

Service Agreement 2016-17 4Variation of the Service Agreement 4One State, One Health System, Better Outcomes 4Performance Framework 5Monitoring Suite 5Financial Management Standard 5Casemix Infrastructure 6Data Provision 6Elective Surgery 7

Part A: Tasmanian Public Health System - Accountabilities 9Minister for Health 9The Department of Health and Human Services 9The Tasmanian Health Service 10

Part B: THS Profile 12

Part C: THS Key Performance Indicators 132016-17 Key Performance Indicator Schedule 13

Part D: THS Funding Allocation and Activity Schedules 16

Appendix 1. 20Mental Health Services 20Forensic Mental Health Services 21Alcohol and Drug Services 21Correctional Primary Health Services 22Oral Health Services 23Cancer Screening and Control Services 23Primary Health Services 23

Appendix 2 - Tasmanian Funding Model Parameters 27

Page |

Service CommitmentThis Agreement supports the Tasmanian Government’s objective of a single, efficient and accountable state-wide health system that delivers optimal outcomes for the community.The parties agree that the Department of Health and Human Services (the Department) and the Tasmanian Health Service (the THS) will work in partnership to progress the following key elements of reform to the Tasmanian health system as outlined in the One State, One Health System, Better Outcomes – Delivering Safe and Sustainable Clinical Services – White Paper (the White Paper) released in June 2015: strengthening the acute care system; addressing issues in services where key changes are required; clinical services profile changes for the acute care system; strengthening the primary care system and linkages; working with partners to effect change across the system; strengthening transport and accommodation support systems; and further developing partnerships between the public and private sectors.The THS will work with the Department during the period of this Agreement to improve funding arrangements and other purchaser/provider matters to take effect for 2017-18.This Agreement is in accordance with the Tasmanian Health Organisations Act 2011 (the Act). The content and process for its preparation and agreement is consistent with the requirements outlined in sections 44 and 45 of the Act.This Agreement is also in accordance with relevant Commonwealth and State legislation as well as the National Health Reform Agreement which was ratified and amended to 30 June 2020 on 1 April 2016 through a COAG Heads of Agreement between the Commonwealth and States and Territories.

Signed by:

The Honourable Michael Ferguson MHATasmanian Minister for HealthDate signed:

John RamsayChair of the Governing Council of the THSDate signed:

Page |

Service Agreement 2016-17This Agreement is between the Minister for Health (the Minister) and the Governing Council of the THS. Both parties acknowledge that where required, this Agreement will be revised during 2016-17 to reflect the implementation of key reform elements as outlined in the Service Commitment section.This Agreement applies from 1 July 2016 to 30 June 2017. It does not override existing laws, agreements, public sector codes, statutes, government policies or contracts.The evaluation of THS performance against the requirements of this Agreement will be undertaken as outlined in the Performance Framework.The THS will ensure that structures and processes are in place to: comply with the requirements of this Agreement; fulfil its statutory obligations; ensure good corporate governance (as outlined in the Act); and follow operational directives, policy and procedural manuals and technical bulletins

as issued by the Department in its role as system manager.This Agreement consists of: Part A Tasmanian Public Sector Health System – Accountabilities; Part B THS Profile; Part C THS Key Performance Indicators; Part D THS Funding Allocation and Activity Schedules;

Variation of the Service AgreementAs outlined in section 44 of the Act, this Agreement may at any time, before or during the financial year, be amended by agreement in writing between the Minister and the THS Governing Council, or be amended by notice in writing by the Minister to the THS Governing Council if the Minister and the THS Governing Council are unable to agree as to the amendment.This Agreement will be jointly reviewed with the THS periodically within the financial year as required, to ensure it accurately reflects the circumstances of the THS and the requirements of the Minister across the entire financial year.

One State, One Health System, Better OutcomesThe White Paper, released in June 2015, outlines reforms to the design of the Tasmanian health system to deliver better health services.It outlines a health reform package that will deliver improved safety and quality of services, greater efficiency so that more services can be provided to the community with the resources available and improved patient support to enable access to those improved services.As implementation of those commence throughout 2016-17, this Agreement will be varied (as outlined above) to reflect the Tasmanian Clinical Service Profile and other changes to key services.

Page |

Performance FrameworkThe Performance Framework provides a clear and transparent outline of how the performance of the THS against the requirements of this Agreement is assessed and reported upon and outlines how responses to performance concerns are structured in accordance with the Act. It provides a single, integrated process for performance review and management against the requirements of this Agreement with the overarching objectives of improving service delivery, patient safety and quality.All Key Performance Indicators (KPIs) in this Agreement are compliance indicators. These KPIs have been assigned targets that if not achieved within the specified assessment period may lead to an escalation, with possible intervention by the Minister.

Monitoring SuiteThe Monitoring Suite is an internal monitoring tool used to observe and evaluate trends on a range of indicators about the health system to ascertain if the services are being delivered in a safe, effective and efficient manner.Its key focus is to provide information to inform discussions between the Department and the THS on the drivers, challenges and enablers of effective care provision and explore opportunities for potential improvement/innovation. It may also be used to inform, contextualise or support Service Agreement KPIs. It is being developed in phases, with the first phase focused on safety and quality indicators. The final Monitoring Suite will contain indicators in the domains of quality, safety, access and equity, patient experience, governance, activity/finance and workforce.

Financial Management StandardIn accordance with Section 11 of the Act, the THS must manage its budget, as outlined in this Agreement to ensure the efficient and economic operation and delivery of health services and use of its resources. Accordingly, it is critical that the THS has strong financial management and accountability.The THS Governing Council must comply with the following financial instruments: Public Account Act 1986; Financial Management and Audit Act 1990; Treasurer’s Instructions; and Australian Accounting Standards.To ensure compliance the Governing Council should: Clearly define the financial objectives of the organisation and ensure they are

consistent with the Government and responsible Ministers’ expectations; Ensure that the financial objectives are clearly articulated to the Executive who

ensure they are disseminated throughout the organisation; Establish appropriate oversight committees including an Audit and Risk, and

Finance and Performance Committees; Ensure all financial aspects of the THS are monitored and appropriate actions are

taken when issues are identified;Page |

Ensure appropriate financial risk management processes exist throughout the organisation; and

Ensure there is an effective system of internal controls for all financial management system and processes.

Casemix InfrastructureA casemix infrastructure provides the health care industry with a consistent method of classifying types of patients, their treatment and associated costs. In popular usage, casemix refers to the mix of types of patients treated by a hospital or other health care facility.Casemix is essential for the management of the health system and individual hospitals because it helps to explain the relationship between health care activity and costs. It makes use of data about patients that are clinically meaningful and that explain variation in resource use.Casemix is essential for the planning and funding of activity, both for the Purchaser and Provider of services and is essential for robust data required for performance management and benchmarking against peer group facilities.In Tasmania, the key building blocks or framework of casemix includes: product identification and classification: relates to a system of groupings or

categories that adequately classifies care across different products, care types and settings and to a level that allows for variation in complexity and care needs;

counting: encompasses systems that support accurate, electronic counting of all patient related services, linking clinical and accounting feeder systems;

clinical coding: the process of assigning codes to the diagnoses, health problems, external causes of injury and poisoning and procedures relevant to each patient episode of care;

patient level costing: in Tasmania, costing is undertaken to the patient episode level using, where possible service utilisation volumes. The costing process utilises data from a number of feeder systems including patient administration systems, ancillary information systems (e.g. pharmacy, pathology etc.) and the Finance One general ledger; and

statewide data management, analysis and reporting used for measuring, planning, evaluating performance, allocating resource and hospital funding.

The THS and the Department will work together in operating, maintaining and improving the Tasmanian casemix infrastructure through input into and adherence to policies and procedures developed by the Department. In this regard, a suite of policies has been developed covering Casemix issues, currently known as the Tasmanian Data Compendium. The Compendium, which is currently under review, comprises: Data Standards and Definitions; Key Performance Indicators Definitions Manual; Systems Purchasing and Performance Data Systems and Reporting Manual;

Page |

Statewide Admission and Discharge Manual; Tasmanian Clinical Coding Framework and Strategy Manual; and Tasmanian Patient Level Costing Manual (currently under development).

Data ProvisionSince the implementation of Activity Based Funding (ABF) the importance of complete, accurate, timely and transparent health and hospital casemix data has become more important than ever in terms of the level of hospital funding, decision making for planning and resource allocation.The Department submits a range of data to national and state bodies, including the Independent Hospital Pricing Authority (IHPA), National Health Funding Body (NHFB), the National Hospital Performance Authority (NHPA), the Australian Institute of Health and Welfare (AIHW), the Department of Veterans Affairs (DVA), National Joint Replacement Register, various National Partnership Agreements and the Australian Bureau of Statistics.Data reporting to national bodies and performance reporting against the KPIs in this Agreement will require the Department to regularly import data from hospital systems. The THS is to ensure that such data is recorded in accordance with the requirements of each data collection, ensuring data quality and timeliness. Failure to do so in accordance with the requirements outlined in the Performance Framework may in itself lead to the consideration of a performance escalation.

Elective Surgery The Tasmanian Government is developing a strategy which aims to stabilise the elective surgery system by: rebuilding public hospital capacity to manage activity for the long term; using targeted funding to dramatically reduce the problem of long waits through

the use of innovative purchasing strategies in the private and interstate sectors; and

supporting the THS to undertake a range of reforms to redesign and reform the way elective surgery is provided to improve timeliness, quality and efficiency.

The Government will establish clear state-wide leadership and accountability for surgical services that provides active management of the “business” of elective surgery, driving improvement and accountability across the surgical system. The reform program will combine the State Government’s investment in rebuilding public hospital elective surgery capacity with targeted use of short-term federal funds to purchase surgery for long-waiting patients and to support specific reform activities, in order to stabilise Tasmanian surgical activity and performance in the short term. In the longer term, strengthened public hospital capacity will be supported by significant reform and redesign of processes and policies to ensure that elective surgery in Tasmania is sustainable and efficient, and that the public health system in Tasmania effectively matches supply with demand for high quality services for the future.

Page |

Successful elective surgery reform requires rapid planning and coordination of how best to use Commonwealth National Partnership Agreement on Improving Health Services in Tasmania (NPA IHST) funds and State Rebuilding Health Services in Tasmania (RHST) funding together to maximum effect. Using NPA IHST funding, THS will be able to treat the longest-waiting patients by utilising the private sector, while using RHST funds to invest in strengthening capacity and improved scheduling and treat-in-turn performance for their patients who have not waited so long. Using the two funding sources intelligently and in parallel will allow both long waits and waiting times for newer patients to be managed downwards, towards clinically appropriate waiting times that can be sustained into the future. The KPIs against which the THS will be measured for its success in reforming and improving elective surgery (outlined at Part C) will explicitly incentivise the THS to use all the tools and resources at its disposal – in-house, state-wide, in the private and interstate sectors – to achieve the maximum improvement in waiting times for its patients.Under the RHST and NPA IHST initiatives, a total of $20 million and $13.4 million respectively (excluding any unexpended funding from 2015-16) has been allocated to treat additional longer waiting elective surgery patients. Admission targets for both initiatives will be finalised following completion of the THS Elective Surgery Plan (currently under development). The Plan will maintain a short term focus on the treatment of longer waiting, over boundary patients alongside a longer term reform agenda to ensure a more sustainable statewide elective surgery system. The NPA IHST – Schedule A – Action Plan 2015-2017 details state-wide system improvements to deliver cost effective sustainable, equitable, transparent and consistent benefits to the management and function of Tasmania’s elective surgery activity, and the delivery of additional targeted elective surgery procedures (including endoscopies) in surgical categories as agreed between the Commonwealth and Tasmania. The Action Plan aligns with the Tasmanian Government’s elective surgery priorities and its One Health System reform program.Under the Action Plan, a total of $13.4 million (excluding any unexpended funds carried forward from 2015-16) has been provided in 2016-17 for the targeted purchase of additional elective surgery/non-surgical cases from the private sector in Tasmania and interstate, and through existing public sector arrangements, specifically targeting: All current long-waiting children, and all current Category 2 and 3 patients who

have waited more than two years; All Category 2 and 3 patients on a treat in turn basis who are currently more than

six months over boundary; All Category 2 patients on a treat in turn basis who are currently more than 90

days over boundary; General over boundary patients once the long waiting cohort of patients has been

removed from the waiting list, or are not ready for care.The NPA IHST allocation will be expended by no later than 31 December 2016.

Page |

Part A: Tasmanian Public Health System - Accountabilities Tasmania’s health system is comprised of a wide network of public, private and not-for-profit services that collectively seek to deliver positive health outcomes for all Tasmanians. The health system covers the full range of services, from population and allied health services, general practitioners, allied health and community services, and tertiary and community hospitals. A significant part of Tasmania’s health system (including services provided under this Agreement) is delivered under the Act. For the purposes of this Agreement, the high level accountabilities of the Minister, the Department and the THS are outlined in the Tasmanian Health Service Accountability Framework, are summarised below.

Minister for HealthThe Minister is ultimately accountable for the performance of the THS in delivering services efficiently and safely. The Act provides performance management powers to the Minister alone, rather than the Minister and Treasurer. Apart from the Minister’s powers which are shared with the Treasurer and the Minister’s power to dissolve the Governing Council, the Department exercises the powers of the Minister under an instrument of delegation. These powers delegated relate to the operational management of the THS, subject to any Ministerial direction through the Department.The Minister has other functions and roles relevant to the regulation of the entire Tasmanian health system, through administration of legislation in relation to areas such as drugs and poisons regulation, private hospital licencing, radiation licencing, and so on. These are also primarily managed by the Department on the Minister’s behalf.

The Department of Health and Human ServicesThe Secretary of the Department is directly accountable to the Minister for the delegated powers exercised by the Department in respect of the THS. The Secretary advises the Minister on health services planning, purchasing and the performance of health services.The overarching role of the Department is to exercise its system manager powers to provide oversight, policy direction and purchasing for the Tasmanian health system on behalf of the Minister to ensure that the health system is being managed safely, effectively and efficiently in the interests of the people of Tasmania.The Department’s key functional accountabilities in respect of the THS are:Planning effective strategic planning of health services across the State.Standards and Regulation Ministerial Policy: requires the THS to implement specified policies such as

clinical governance frameworks and casemix infrastructure polices (including the Tasmanian Data Compendium)

Corporate Plan: review and recommend to the Minister any amendments to plans prepared by the THS; and

Page |

monitoring financial performance.

Page |

Service Delivery provide support services to the THS in areas such as finance, human resources

and corporate supportPurchasing and Performance Service Agreement - agree or determine for the THS by 30 June, including

services to be provided by or on behalf of the THS and funding for those services; performance standards, performance targets and performance measures; standards of patient care and service delivery

Performance monitoring – performance escalation of unsatisfactory performance which may require a performance improvement plan; appointment of ministerial representatives to the Governing Council; or appointment of a performance improvement team.

The Tasmanian Health ServiceThe THS is a State Service agency and its Chief Executive Officer (CEO) is the Head of Agency for the purposes of key public sector legislation. Similar to the Secretary and Department, the THS and CEO are subject to a wide range of legislative requirements under various Acts. These include the State Service Act 2000, Financial Management and Audit Act 1990 and many others.The THS is governed by a Governing Council with specific functions, which is accountable to the Minister and the Treasurer. The THS CEO is appointed by the Premier on the recommendation of the Governing Council and is accountable to the Governing Council for the administration and management of the THS.The organisation’s key statutory functions are, in summary: improve and maintain the health of persons as required by service agreement; conduct and manage hospitals and health services under the THS’ control; ensure effective provision of health services that are purchased by the THS; manage the THS funding and budget efficiently and economically; consult and collaborate with other providers of health services; provide training and education relevant to the provision of health services; undertake research and development relevant to the provision of health services; collect and provide health data for research, reporting, and prescribed purposes;

and any other functions in any Act or that are prescribed.The Governing Council’s key functional accountabilities are to the Minister and the Treasurer, to: ensure the THS operates consistently with the Ministerial Charter, Service

Agreement including funding levels, business plan, corporate plan, Ministerial policies, reporting requirements;

monitor THS performance against performance measures in the service agreement;

formulate, and ensure the implementation of, policy in respect of THS operations;Page |

provide advice to the Minister regarding capital investment requirements and service planning;

ensure that corporate and clinical governance procedures are in place; establish audit and risk sub-committees to comply with any Treasurer

Instructions; advise the Minister of issues arising with the Corporate Plan or the financial

viability of the THS; prepare subject to the Ministers’ approval and operate in accordance with:

o Corporate Plan: a planning period of not less than 4 financial years, agreed financial and non-financial performance targets, activity plan, HR strategy etc; and

o Business Plan: budget and plan to meet the annual service agreement.The Chair of the Governing Council has no specific statutory functions, and is the leader and spokesperson of the Council in respect of the delivery of these accountabilities.

Page |

Part B: THS ProfileThe primary role of the THS is to provide and coordinate health services and health support services across Tasmania. These services are provided in a range of inpatient, outpatient, community health, residential aged care and in-home settings.Services delivered by the THS include acute, subacute, emergency, non-admitted, primary health care, palliative care, oral health, cancer screening, mental health and alcohol and drug services. The services provided are flexible enough to target specific needs at the different stages of a patient’s health journey, in order to provide an integrated, holistic and patient-centred approach to health care delivery. The THS operates four major hospitals, each with a specific role in the system: the Royal Hobart Hospital is the principal tertiary referral hospital for residents of

Southern Tasmania and also provides a number of statewide services; the Launceston General Hospital is the principal referral hospital for the North

and North West of Tasmania and also provides a number of tertiary services for residents of those areas;

the North West Regional Hospital in Burnie provides acute general hospital services in the North West Region; and

the Mersey Community Hospital at Latrobe will be a dedicated elective surgery centre for all Tasmanians and continue to provide a mix of general hospital services to the local community.

Sub-acute inpatient care is provided at the major hospitals and the THS’ network of rural hospitals (including multi-purpose services and multi-purpose centres). The rural hospitals also provide some emergency care as well as a wide range of community health services. Some rural facilities also provide residential aged care. The THS also provides a range of services at the community level that includes allied health, community nursing (including specialised nursing), home care, palliative care, dementia services, specialised case management services, aids and appliances and health promotion programs. These services are generally provided from community health centres and rural facilities, but can also be provided in patients’ homes, schools and workplaces.Appendix One outline the specific services delivered under the following programs: Mental Health Services; Alcohol and Drug Services; Correctional Primary Health Services; Forensic Mental Health Services; Oral Health Services; Cancer Screening and Control Services; and Primary Health Services.

Page |

Part C: THS Key Performance IndicatorsThe Department and THS will continue to focus on a range of key performance indicators to measure, monitor and assess performance and activity and to support patient safety and health service quality.Indicators have been grouped under a number of quality dimensions, adapted from the Alberta Quality Matrix for Health, to better organise information and thinking around the complexity of health services delivery.The dimensions include: Acceptability – Health services are respectful and responsive to user needs,

preferences and expectations; Accessibility – Health services are obtained in the most suitable setting in a

reasonable time and distance. Appropriateness – Health services are relevant to user needs and are based on

accepted or evidence-based practice. Effectiveness – Health services are provided based on scientific knowledge to

achieve desired outcomes. Efficiency – Resources are optimally used in achieving desired outcomes. Safety - Mitigate risks to avoid unintended or harmful results.

2016-17 Key Performance Indicator ScheduleQuality

Performance Domain

KPI No. KPI Name KPI Target

Acceptability

AC1 Consumer experience - % of clients surveyed Indicators under

development. To be included during 2016-17

AC2 Consumer experience – consistent and coordinated care

AC3 Consumer experience – discharge planning

AccessibilityACC1

Percentage of Triage 1 emergency department presentations seen within recommended time

100%(all specified facilities)

ACC2Percentage of all emergency department presentations seen within recommended time


ACC3 Percentage of all emergency department presentations who do not wait to be seen

≤5%(all specified facilities)

ACC4 Percentage of all emergency patients with an ED length of stay less than four hours


ACC5 Percentage of patients admitted through the ED with an ED length of stay less than eight hours


Page |

Performance Domain


ACC6 Percentage of all ED patients with an ED length of stay less than 24 hours


ACC7 Elective Surgery - Average overdue days

Dec 16: 120Jun 17: 90(State-wide)

ACC8 Elective Surgery - Maximum wait time Dec 16: 550Jun 17: 500(State-wide)

ACC9 Elective Surgery Category 1 admitted within the recommended time

Dec 16: 90%Jun 17 90%(State-wide)


Dec 16: 60%Jun 17: 70%(State-wide)



ACC12 Elective Surgery Category 2 treat in turn rates


ACC13 Elective Surgery Category 3 treat in turn rates


ACC14 Percentage of all Aged Care Assessment Team (ACAT) clients seen ‘on time’ in all settings

85%(State-wide)

ACC15 Proportion of 'Emergency' clients managed on the same day that they are triaged (Oral Health)

80%(State-wide)

ACC16 Percentage of clients assessed within 28 days of screening mammogram

>90%(State-wide)

Appropriateness AP DHHS/THS to develop appropriate

indicators for 2017-18 by 28/2/2017

Effectiveness

EF1 28 Day re-admission rate (Mental Health)

≤13.9%(all specified regions)(State-wide)

EF2 Acute 7 day post discharge community care (Mental Health)

75%(all specified regions)

EF3 28 Day Readmission Rate – all patients (excludes mental health patients)

<5%(all specified facilities)

Efficiency EFF1 Admitted patient episode coding (clinical coding) including contracted care - timeliness

100% within 42 days of separation(State-wide)

EFF2 Admitted patient episode coding (clinical coding) including contracted

100% within 30 days of advice of error from the

Page |

Performance Domain


care - accuracy Department (State-wide)

EFF3 Ambulance offload delay - 15 minutes 85% within 15 mins (all specified facilities)

EFF4 Ambulance offload delay - 30 minutes 100% within 30 mins (all specified facilities)

EFF5 Hospital initiated postponements (HIPs)

Dec 16: 12.6%Jun 17: 12.6%(State-wide)

Safety

SAF1 Hand Hygiene compliance ≥75% increasing to 80% from 1/1/2017(all specified facilities)

SAF2 Healthcare associated staphylococcus aureus (including MRSA) bacteraemia infection rate

≤2.0 per 10 000 patient days(all specified facilities)

SAF3 Seclusion rates < 8 per 1 000 patient days(all specified regions)State-wide?

SAF4 Percentage of discharge summaries transmitted within 48 hours of separation

100%(Statewide)

SAF5 Percentage of Initial Reportable Event Briefs sent to the Department’s Clinical Governance Officer within the defined timeframe

80%(Statewide)

SAF6 Percentage of Reportable Event Brief Investigation Reports sent to the Department’s Clinical Governance Officer within the defined time frame

80%(Statewide)

ActivityPerformance Domain


Activity

ACT1 Acute admitted raw separations 95 580(State-wide)

ACT2 Acute admitted inlier weighted units (same day and multi day)

95 889(State-wide)

ACT3 Baseline elective surgery admissions 14 126(State-wide)

ACT4 Rebuilding Health Services in Tasmania admissions

Yet to be established(State-wide)

ACT5 Tasmanian Health Assistance Package admissions

Yet to be established(State-wide)

FinancePage |

Performance Domain


Finance

FIN1 Variation from funding - full year projected

Expenditure within funding allocation(State-wide)

FIN2 Cash liquidity THS Operating Account has a favourable balance(State-wide)

Page |

Part D: THS Funding Allocation and Activity SchedulesThe Tasmanian Funding Model translates the type and volume of activity the Department, as an agency of the Tasmanian Government, wishes to purchase into a funding allocation to the THS. The Model allocates funding to the THS based on the activity and services to be provided. It informs the Department’s planning and purchasing functions regarding the affordable activity configuration within approved funding allocations. The Model allows for inputting of block grants for non-Activity Based Funding (ABF) services and activity, and combines the ABF and non-ABF elements to identify a single total recommended funding allocation for the THS. The Model separates ABF allocations into four work streams i.e. acute admitted, other admitted (including sub-acute), non-admitted and emergency department patients. Services provided to mental health patients are funded where they fall within the four work streams.Details of the pricing framework used are contained in Appendix 2.The Department recognises that funding approaches can influence the way care is delivered and the way resources might be configured across services and the system. The design of funding models can help signal the overall goal to be achieved and influence how health services organise their resources. Funding model design can also change the risk profile between purchaser and provider.In this regard, the Government is fully committed to the full implementation of ABF in 2017-18. For this reason, the Department will work with the THS during the period of this Agreement to improve funding arrangements and other purchaser/provider matters to take effect for 2017-18.The total funding of $1.35 billion is based on the overall budgeted sources of funding as detailed in the 2016-17 State Budget Papers, with some adjustments to reflect updated Commonwealth revenue estimates and targets for own source revenue. A reconciliation is detailed in Appendix 2 under “Funding Envelope”.

2016-17 Activity and Funding ScheduleTasmanian Health Service Measure Activity Funding

allocation

($’000)Acute Admitted Patients

Acute Admitted Patients- Multi Day Inlier Weighted Unit 90 782 415 697Acute Admitted Patients- Same Day Inlier Weighted Unit 2 735 12 522Acute Admitted Patients- Short Stay Inlier Weighted Unit 1 834 8 397Acute Admitted Patients - Short Stay Per Diem

Inlier Weighted Unit 538 2 462

Length of Stay Outlier Days 11 525 8 650Intensive Care Payment Hours 379 812 35 775

Page |

Tasmanian Health Service Measure Activity Funding allocatio

n($’000)

Mechanical Ventilation Payment Hours 77 733 29 949Short Stay Unit Payment (EMU RHH & AMU LGH)

Inlier Weighted Unit 773 3 540

Total Acute Admitted Patients 516 992

Non and Subacute Care Admitted PatientsSub-Acute (Rehabilitation and Palliative Care) Block Funded 20 209 26 995Geriatric evaluation and management Days 2 550 2 361Non-acute (Maintenance care) Days 12 669 12 612Organ donor Days 12 129Boarder Days 3 874 291Total Non and Subacute Care Admitted Patients

42 388

Emergency Department Services

Non-admitted ED Services Weighted Service Event

55 637 35 127

Admitted ED Services Weighted Service Event

59 373 37 486

Total Emergency Department Services 72 613

Non-admitted Care

Non-admitted Weighted Service Event

456 615 117 807

Outside Referred Patients (ORP) Weighted Service Event

38 417 9 911

Total Non-admitted Care 127 718

Elective SurgeryRebuilding Health Services- Elective SurgeryProgramme 1

Block Funded 20 000

NPA IHST – Schedule A - Elective Surgery 2 Block Funded 13 400

Total Elective Surgery 33 400

Block grants for Activity Based Funded HospitalsNon-Activity Based Funded Activity 3 Block Funded 104 631

Teaching, Training and Research Grant Block Funded 36 400

Blood Products Block Funded 7 705

NPA IHST – Schedule A - Reform 2 Block Funded 2 700

Transfer to Practice Nurses 4 Block Funded 1 260

Enhancing Retrieval and Referral Services Block Funded 269

Page |

Tasmanian Health Service Measure Activity Funding allocatio

n($’000)

Interstate Charging Block Funded 19 300

NPA IHST – Schedule F - John L Grove Unit 5 Block Funded 5 000

North West Cancer Centre Block Funded 5 543

Patients First Block Funded 1 000Total Block grants for Activity Based Funded Hospitals

183 808

THS Operational Grants

Mersey Community Hospital (Incl own source revenue)6

Grant 81 852

Primary Health (Incl Rural Hospitals) Grant 137 236

Mental Health (Excl Mental Health Inpatient Services)

Grant 77 589

Alcohol and Drug Services Grant 14 107

Oral Health 7 Grant 32 417

Forensic Medical Service Grant 1 443

Cancer Screening and Control 8 Grant 6 413

Patient Transport Assistance Scheme (PTAS) 9

Grant 8 472

One Health System 10 Grant 8 000Equipment Replacement 11 Grant 5 000

Total Operational Grants 372 529

TOTAL Tasmanian Health Service 1 349 448

Notes:1 Rebuilding Health Services - funds to be held by the Department and provided to the THS on a claims basis2 NPA IHST funds to be held by the Department and provided to the THS on a claims basis3 Non-activity Based Funded Activity – block grants for specific services and other activity.4 State Government election commitment for additional Transition to Practice Placements for newly qualified nurses.5 The Commonwealth provided Tasmania $5 million per year for two years beginning 2015-16. 6 The Mersey Community Hospital is owned and funded by the Commonwealth under the Heads of Agreement for the continued management, operation and funding of the Mersey Community Hospital.7 Oral health services are partially supported through Commonwealth funding via the NPA

Adult Public Dental Services (APDS) and the Child Dental Benefits Schedule (CDBS). These agreements were due to expire on 30 June 2016, however the Commonwealth has advised that a six month extension of the current arrangements will be put in place. These funding arrangements are expected to be replaced by the Child Adult Public Dental Scheme, which is yet to be negotiated.

8 Cancer screening and control services are partially supported through Commonwealth funding via the NPA Specified Projects – Schedule D – National Bowel Cancer Screening Program Participant Follow-Up Function and the Project Agreement for the Expansion of the BreastScreen Australia Program.

9 In accordance with the PTAS Review Report – Stage 2, it was recommended that the cost of administering PTAS is accurately reflected and accounted for in the annual budget and

Page |

service agreement processes in order to allow the Department and THS to fulfil their respective roles regarding the PTAS. Accordingly, the following separate funding allocations for PTAS service delivery and administration have been combined into a single line item in the 2016-17 Activity and Funding Schedule.

10 Funds will be held by the Department and provided to support One Health System reforms as initiatives are implemented.

11 Replacement cost for plant and equipment items with a value over $10 000. These replacements are not included in the prices for activity.

Non-activity Based Funded Activity Funding Amount($’000)

Special Purpose & Trust funds available to Hospitals 4 117

Non-Discretionary Revenue available to Hospitals 6 164

Food Services - Non patient related 13 152

Rural Hospital Costs Incurred by Major Hospitals 5 704

Pharmacy, Pathology, Imaging Services unable to be matched to activity 20 429

Special Investigations Unit RHH 2 609

Sexual Health Services RHH 2 328

Forensic Pathology RHH 1 855

Community Based Services Operated From the Major Hospitals 15 466

Community Equipment Scheme 3 330

Statewide Spectacles Scheme 820

Organ Tissue Donation* 1 689

Other Non-activity Based Funding Activity 26 968

Total Non-activity Based Funded Activity $104 631

* Commonwealth funding for organ and tissue donation services is provided via the Commonwealth Initiative for Organ Donation agreement with the Organ and Tissue Authority.

Patient Transport Assistance Scheme (PTAS) Funding Amount($’000)

Administration 818Service Funding 7 751Total $8 569

2016-17 NWAU estimates

Page |

As part of the National Health Reform Agreement, States and Territories are required to include in Services Agreements the anticipated level of National Weighted Activity Units (NWAUs) to be produced by Local Hospital Networks (the THS in the case of Tasmania). The NWAU is a measure of Health Service activity expressed as a common unit, against which the National Efficient Price (NEP) is paid by the Commonwealth. It provides a way of comparing and valuing each public hospital service, whether they are admissions, emergency department presentations or outpatient episodes, weighted for clinical complexity.

ANNUAL NWAU ESTIMATETasmanian Health Service

Acute admitted services

Admitted mental health

Sub-acute

(admitted)

Emergency

Non-admitte

d

Annual NWAU estimate Total

NWAU Total 1 91 098 5 516 6 371 15 1549 15 169 133 303

1 The current 2015-16 NWAU estimate is 135 000. The NWAU estimate for 2016-17 is 133 303. The difference in estimates is due to improved Emergency Department data identification and NWAU calculation to comply with national requirements. Revised NWAU estimates are regularly provided to the Commonwealth and may be revised on a monthly basis during 2016-17.

Page |

Appendix 1.Mental Health ServicesMental Health ReformIn Australia, there has been major mental health reform in the last 30 or more years. This has mainly focused on the shift from institutional to community care, use of services provided by non-government organisations, recognition of mental health as equal to physical health, and efforts to support person-centred recovery.1 In Tasmania over the last 20 years there has been a greater focus on support and care in the community and an increasing role for community sector organisations. This has included strengthening of community based mental health teams across the state and across the life span, development of new residential, rehabilitation and psycho-social mental health services, and more recently a growth in programs that have a mental health promotion and prevention focus.Currently there are three key reforms relevant to the Tasmanian mental health service system; the Tasmanian Government’s mental health reform as outlined in the Rethink Mental Health Plan 2015-2025, the rollout of the National Disability Insurance Scheme (NDIS) in Tasmania and the Australian Government’s mental health reforms focussed on primary mental health care and building on the role of Primary Health Networks – Primary Health Tasmania and including the development of a fifth national mental health plan The fifth national mental health plan is currently being developed. The overarching focus of the plan will be to improve both system and service level integration at the regional level. Improvements in integration will lead to people with mental illness, their carers and communities, experiencing higher quality, seamless care, and a more efficient use of mental health resources.The fifth national mental health plan will not replace state and territory plans. It looks to complement them to facilitate Commonwealth and jurisdictions working together to achieve common goals. In October 2015, the Tasmanian Government released the Rethink Mental Health Plan 2015-2025. This is the Government’s ten year plan to deliver a co-ordinated and integrated mental health system and to improve the mental health and wellbeing of Tasmanians. The Rethink Mental Health Plan brings together promotion of positive mental health, prevention of mental ill-health and care and supports for people with mental illness into one strategic framework. It sets a reform agenda to improve the mental health and wellbeing of Tasmanians and outlines ten key directions for reform:

1. Empowering Tasmanians to maximise their mental health and wellbeing2. A greater emphasis on promotion of positive mental health, prevention of

mental health problems and early intervention3. Reducing stigma4. An integrated Tasmanian mental health system5. Shifting the focus from hospital based care to support in the community

1 The review of policy documents and related literature – informing the development of Tasmania’s long-term plan for mental health, The University of Melbourne and The University of Queensland, August 2014.

Page |

6. Getting in early and improving timely access to support (early in life and early in illness)

7. Responding to the needs of specific population groups8. Improving quality and safety9. Supporting and developing our workforce10.Monitoring and evaluating our action to improve mental health and wellbeing

The rollout of these reforms may necessitate a revision of the Service Agreement components relevant to the delivery of mental health services through the THS.Services to be delivered The THS will deliver specialist mental health treatment services. Specific services to be provided: Acute inpatient and hospital based services (including outpatient services)

provided at the Royal Hobart Hospital, Launceston General Hospital and North West Regional Hospital:

Inpatient and extended treatment services providing statewide service capacity: Statewide Triage Telephone Service: Community based services: Other services:

o Dementia Behaviour Management Advisory Serviceo Huntington’s Disease Services

Forensic Mental Health ServicesServices to be deliveredForensic Mental Health Services (FMHS) is a specialist area of the mental health field providing highly specialised interventions and clinical activities through community and inpatient mental health care for people generally aged 18 years and over experiencing a mental health disorder. These clients are involved with or at risk of becoming involved with the criminal justice system and in some extremely high risk cases, the service may also manage civil mental health patients. Services are delivered statewide and in the following streams. Operation of inpatient services is determined by the requirements of the Mental Health Act 2013:

Inpatient Forensic Mental Health Services providing statewide service capacity: Community Forensic Mental Health Services:

Alcohol and Drug ServicesServices to be deliveredThe THS will deliver, through the Alcohol and Drug Service (ADS) a range of specialist treatment services targeted at Tasmanian’s who are affected by alcohol, tobacco and other drug use. These services are delivered on a statewide basis.Specific treatment services to be provided will include: Consultation Liaison Services: Opioid Pharmacotherapy: Psychosocial Intervention: Smoking Cessation:

Page |

Withdrawal Management:

Page |

Correctional Primary Health ServicesServices to be deliveredCorrectional Primary Health Services (CPHS) provides primary health care and treatment and specialist referral for men and women held within the Tasmanian Prison Services.Health services provided include; emergency care, general health assessments, medical officer consultations, diagnosis and treatment, specialist psychiatric consultations and treatment, mental, emotional, suicide and self-harm assessments, drug and alcohol assessments, treatment and referral; opioid substitution, health promotion, inpatient care with six beds for primary health care and observation and outpatient nursing clinics. In addition to this dental services are provided by Oral Health Services Tasmania and physiotherapy and optometry services are also available.These services are provided across a range of correctional facilities: Risdon Prison Complex: Ron Barwick Minimum Security Prison: Mary Hutchinson Women’s Prison:Hobart and Launceston Remand Centres which are transitional centres aimed at managing the flow of prisoners entering into the prison system through the courts and are intended as short term management facilities;Tasmanian Prison Services (operated by the Department of Justice) is responsible for the management of the Prison facilities, as outlined above, and as such retains ultimate control over prisoner/detainees access to health services.Primary health care and treatment services are also delivered to Ashley Youth Detention Centre which is managed by Children and Youth Services. CPHS is responsible for the provision of healthcare to detainees within this centre.

Page |

Oral Health ServicesServices to be deliveredThe THS will deliver the following specific oral health services through Oral Health Services Tasmania (OHST): Episodic dental services for adults: General dental services for adults: Prosthetics dental services: Child and adolescent dental services: Clinical placement program: Admitted day surgery dental services: Special care dental services: Health promotion and community education: The delivery of oral health services in Tasmania is partially supported through Commonwealth funding via the NPA Adult Public Dental Services (APDS) and the Child Dental Benefits Schedule (CDBS). These agreements were due to expire on 30 June 2016, however the Commonwealth has advised that a six month extension of the current arrangements will be put in place. These funding arrangements are expected to be replaced by the Child Adult Public Dental Scheme, which is yet to be negotiated.

Cancer Screening and Control ServicesServices to be deliveredCancer Screening & Control Services (CS&CS) comprises four work areas: BreastScreen Tasmania (BST), the Cervical Cancer Prevention Program (CCPP) and Tasmanian Cervical Screening Register (TCSR), the Recruitment and Community Engagement Unit (RACE), the Tasmanian elements of the National Bowel Cancer Screening Program (NBCSP); and the Cancer Screening and Control Services’ Directorate which is responsible for the support, executive management and oversight of the screening programs and cancer control interventions. BreastScreen Tasmania: The Tasmanian Cervical Screening Register: The CS&CS Recruitment and Community Engagement Unit: The Tasmanian component of the National Bowel Cancer Screening

Program (NBCSP): Cancer screening and control services are partially supported through Commonwealth funding via the NPA Specified Projects – Schedule D – National Bowel Cancer Screening Program Participant Follow-Up Function and the Project Agreement for the Expansion of the BreastScreen Australia Program.

Primary Health ServicesServices to be deliveredThe THS will deliver primary health services. These include a range of health promotion, early intervention, care and assessment, inpatient and outpatient treatment, residential aged care1 and community health services to individuals, groups

Page |

and communities across Tasmania. Services may be targeted to the general population or to particular age groups (such as aged persons or young people). Other services are provided for specific health conditions (such as dementia or palliative care or people with chronic diseases).

Page |

Services to be provided include:THS sub-acute inpatient care at the following locations:2

Midlands Multi-Purpose Health Centre New Norfolk District Hospital Smithton District Hospital King Island Hospital and Community Health Centre West Coast District Hospital St Mary’s Community Health Centre Deloraine District Hospital3

Flinders Island Multi-Purpose Centre3

North East Soldiers Memorial Hospital (Scottsdale)3

Beaconsfield District Health Service George Town Hospital and Community3

St Helens District Hospital and Community Centre3

Campbell Town Health and Community3

Funded sub-acute inpatient care at the following locations: Toosey Aged and Community Care Swansea Community Health Centre Tasman MPS Huon Eldercare Esperance MPCCommunity health and community care services4 are located at/provided from the following locations:5

Brighton Community Health Centre Bruny Island Community Health Centre Central Highlands Community Health Centre Clarence Plains Community Health Centre Cygnet Community Health Centre Glenorchy Community Health Centre Huonville Community Health Centre New Norfolk Community Centre Risdon Vale Community Health Centre Sorell Community Health Centre Spring Bay Community and Health Centre Swansea Community Health Centre Kingston Community Health Centre Launceston Community Health Centre

Page |

Ravenswood Community Health Centre Westbury Community Health Centre St Marys Community Health Centre Devonport Community Health Centre Central Coast Community Health Centre Burnie Community Health Centre James Muir Community Health Centre West Coast Community Health ServicesResidential aged care services at the following locations:6

Beaconsfield District Health Service Campbell Town Multi-Purpose Health Service Midlands Multi-Purpose Health Centre North East Soldiers Memorial Hospital (Scottsdale) West Coast District Hospital Flinders Island Multi-Purpose Centre King Island Hospital and CommunityAdult Day Centres at the following locations:7

Beaconsfield District Health Service Westbury Community Health Centre Campbell Town Health Service Latrobe King Island MPC HealthWest (Queenstown, Rosebery) Wynyard UlverstoneIntegrated Care Centres (ICCs) at the following locations: Clarence ICC, Rosny Northern Integrated Care Service (NICS), LauncestonStatewide Primary Health services Contracted medical services: Health Promotion services: Youth Health services: Palliative Care Services: Community Options Services (COS): Home Care services:

Page |

TasEquip (Community Equipment Scheme): State-wide Orthotic and Prosthetic Service Tasmania (OPST): Aged Care Assessment Teams (ACATs):8

Regional Primary Health services Community Dementia Service North: Dementia Support Service NW: Community Rehabilitation Unit (CRU) South: Neurological Support Service (Parkinson's) South:

1. 1 Residential aged care services in these facilities are funded by the Commonwealth through a variety of site-specific agreements, including those that use the multi-purpose service model.

2. 2 A mix of community health and care services is also offered from these sites.3. 3 Denotes a partnership with UTAS as teaching site.4. 4 Including but not limited to: Community health nursing which includes but is not

limited to clinics, diabetes consultancy, continence consultancy, wound management and personal care via health care assistants and community allied health services which include but are not limited to physiotherapy, occupational therapy, speech pathology, psychology, podiatry and community health social work and also include Allied Health Assistants in some settings and disciplines e.g. Foot Care Assistants in podiatry. Chronic disease programs and health prevention activities may also be available.

5. 5 Not all services may be offered at all locations.6. 6 Residential aged care services in these facilities are funded by the Commonwealth

through a variety of site-specific agreements, including those that use the multi-purpose service model.

7. 7 Adult Day Centres cater for frail aged, socially isolated and younger disabled persons in the community. They provide group and individual lifestyle and leisure assessments and programs to maintain and enhance the quality of life for clients attending. Some Adult Day Centres are funded by the Commonwealth, including King Island and HealthWest.

8. 8 Aged Care Assessment Teams are Commonwealth funded. The current agreement expires on 30 June 2016. Negotiations are underway on a new two year agreement for the period 1 July 2016 to 30 June 2018.

Page |

Appendix 2 - Tasmanian Funding Model ParametersFunding Model CategoriesThe Tasmanian Funding Model funding categories are:Activity Based Funding (ABF)In 2016-17, the Tasmanian Funding Model will fund the following hospital services on an activity basis:

Acute admitted overnight, same day and short stay inpatient separations (including Mental Health acute admitted)

Other/sub- and non-acute admitted inpatient bed days Non-admitted/Outpatient service events Emergency Department service events

Elective SurgeryElective surgery activity will be purchased from the public and private sectors, both in Tasmania and interstate, through a mix of direct purchasing and competitive tenders.

Elective Surgery – Rebuilding Hospital Services in Tasmania (RHST) and Tasmanian Health Assistance Package (THAP) through the National Partnership Agreement on Improving Health Services in Tasmania (NPA IHST) – funds to be held by the Department and provided to the THS on a claims basis

Block Funding for ABF hospitalsFor services provided by ABF hospitals where existing data does not accurately describe current activity, the service will be block funded. ABF hospital services to be block funded in 2016-17 are:

Non-hospital activity costs Teaching, Training, and Research Blood Products Transition to Practice Nurses Enhancing Retrieval and Referral Services Interstate charging John L Grove Unit, with Commonwealth funding via the NPA IHST – Schedule

F North West Cancer Centre Patients First

Grant FundingIn 2016-17, the following services will be provided with a funding grant:

Mersey Community Hospital, with Commonwealth funding via the Heads of Agreement

Primary Health Services (includes rural hospitals) Mental Health Services (excluding mental health inpatient services) Alcohol and Drug Services Oral Health Services, partly delivered with Commonwealth funding Forensic Medical Services Cancer Screening and Control, partly delivered with Commonwealth funding Patient Travel Assistance Scheme One THS – funds to be held by the Department and provided as required Equipment Replacement

Funding EnvelopeThe Funding Envelope is the level of funding available to the Department to purchase activity and services from the THS. The Funding Envelope is based on the Tasmanian State Budget allocation handed down on 26 May 2016. Adjustments have

Page |

subsequently been made to the State Budget Allocation, in light of known variations to arrive at an overall Funding Envelope and consequently the amount of total funding outlined in this Service Agreement. Accordingly, the Funding Envelope has been determined as follows:

Page |

Budget Papers1

Adjustments

2016-17 Funding

Model$'000 $'000 $'000

Revenue from the Tasmanian GovernmentActivity based funding 363 118 363 118Block funding 309 829 309 829

672 947 672 947

Revenue from the Australian GovernmentActivity based2 293 755 9 043 302 798Block funding2 57 378 2 934 59 568Mersey Community Hospital funding 75 500 75 500National Partnership funding 25 404 25 404Commonwealth Own Purpose Expenditure3 30 917 52 30 969

482 954 12 029 494 239

Transfer of Infrastructure from the Department of Health and Human Services4

5 052 ( 5 052) 0

Other Sources of Revenue5 171 219 11 043 182 262

Total1 332

172 18 020 1 349 448

Notes:9. The budget paper figures are taken from Table 25.5, sources of revenue for

the THS.10. The funding model is based on estimates for Commonwealth ABF and block

which has been revised since the release of the budget papers.11. The figures in table 25.5 do not include the net effect of carry forwards.

The funding envelope used for the funding model includes the estimated net effect of carry forwards.

12. The transfer of infrastructure from DHHS to the THS is not included in the funding model.

13. - The budget papers include accruals for other sources of revenue. The funding envelope used for the funding model is based on cash projections for these fund sources.

- The funding model provides a target for own source revenue for RHH, LGH and NWRH which is higher than the budget papers. The target for non-patient food revenue is based on the 2013-14 national cost data collection with 3 years of CPI added at 2.5% per year. The target for all other own source revenue is based on the 2014-15 actual revenue received with 2 years CPI added at 2.5% per year.

- The funding model provides a target for private patient revenue for RHH, LGH and NWRH which is higher than the budget papers. The target for private patient revenue is based on the 2014-15 actual revenue received with 2 years CPI added at 2.5% per year.

Acute Admitted FundingActivity data at an Australian Refined Diagnosis Related Group (AR-DRG) level is used to set the volume and complexity of acute admitted services to be funded, where the

Page |

admitting care type is ‘Acute including qualified newborn’ and the pay class is not of the type ‘Bulk Billed (ORP)’. The only exception to using the admitting care type is in the instance where an ‘unqualified newborn’ becomes qualified during the same episode of care. In this instance, the discharge care type of ‘Acute including qualified newborn’ is used. Price weights will be based on the 2013-14 Round 18 National Hospital Cost Data Collection (NHCDC) National Cost Weights associated with AR-DRG version 8 for acute inpatient services. Where a separation meets the definition of activity data (above), its price is determined by its AR-DRG.In addition to price weights, the Tasmanian Funding Model funds acute admitted inpatient separations using the following components:

Same day inlier weighted units – Same day and overnight separations are funded separately to prevent the weighted separations total from being skewed by high-volume, low-cost same-day patients. The Tasmanian Funding Model recognises 136 AR-DRGs as same-day. A same day separation will receive an inlier price if the average length of stay is above a short stay trim point for its AR-DRG.

Overnight inlier weighted units – An overnight separation with a length of stay above the short stay trim point and below the high boundary point for its AR-DRG is allocated an overnight inlier weighted unit. The high boundary point is calculated by multiplying the NHCDC acute average length of stay for the AR-DRG by three.

Overnight and same day admissions that fall below the short stay trim point - Where the length of stay for the separation falls below the short stay trim point for the AR-DRG, a short stay price weight is applied to the separation.

Length of stay associated with short stay admissions – This component of the model quantifies the number of days, including the day of admission and discharge, associated with short stay separations. The total number of days is multiplied by a short stay per diem weight. This weight has been adjusted to reflect a lower cost for short stay admissions.

Long stay outlier days – Where the length of stay of an episode is greater than the high boundary point for the AR-DRG (three times the NHCDC average length of stay for the AR-DRG), additional funds are provided for the number of days occurring beyond the high boundary point.

Intensive Care Unit (ICU) hours – ICUs generate higher costs, and within an ICU some patients receive higher levels of care. The Tasmanian Funding Model recognises these higher costs and the elasticity of ICU within AR-DRGs. ICU costs are removed from the price weight and a co-payment is provided when a patient requires a stay in a Critical Care Unit (Intensive Care Unit, Neonatal Intensive Care Unit, Paediatric Intensive Care Unit and Psychiatric Intensive Care Unit) during their admission.

Hours of Mechanical Ventilation (HMV) - The Tasmanian Funding Model recognises the higher costs and elasticity of HMV within AR-DRGs. An extra payment is provided to patients who require mechanical ventilation to reflect the higher cost of care. The HMV payment is not dependent on the patient being admitted to an ICU.

The Tasmanian acute admitted inpatient price is based on the latest available national average acute cost per separation, with a price adjustment factor applied for interim

Page |

years. The Tasmanian price for 2016-17 is based on the average acute cost per separation from Round 18.2016-17 pricing for acute admitted patient activity is:

Price per Unit $

Acute admitted patient unit price 4 579

Acute length of stay outlier price (per diem) 751

ICU (per hour) 94

Mechanical ventilation (per hour) 385

Other Admitted Patient Funding (Sub-acute and Non-acute)In 2012, the Independent Hospital Pricing Authority (IHPA) determined the Australian National Sub-acute and Non-acute Patient (AN-SNAP) classification will be used to classify Other Admitted services under the national ABF model. All jurisdictions are required to make steps toward introducing AN-SNAP (version 3). The THS has been transitioning to AN-SNAP since 1st July 2015. However, difficulties have been experienced in implementing AN-SNAP across the THS.Accordingly, block funding based on historical costs will be used for Rehabilitation and Palliative Care care types. Per diem pricing will be used to value the cost of episodes where the care type is Geriatric evaluation and management, non-acute maintenance care, organ donor, and boarder. The per diem prices for Other Admitted activity are based on Round 18 NHCDC state average costs. Prices are detailed below:

Price per Unit $

Rehabilitation Block funded

Palliative Care Block funded

Geriatric Evaluation and Management (GEM) 926

Non acute (maintenance care) 995

Organ Donor 10 743

Boarder 75

Page |

Non-Admitted Patient Funding2016-17 marks the second year non-admitted services will be funded on an activity basis. The IHPA has determined the Tier 2 Non-Admitted Care Services classification system will be used to classify non-admitted services under the national ABF model.The Tasmanian Funding Model treats the following categories as non-admitted activity:

Public outpatient service events Private outpatient (Outside Referred Patient) service events Private inpatient (Outside Referred Patient) service events for which the doctor

and patient have elected to treat the patient as non-admitted. These are broadly categorised as Type B procedures. These are non-admitted patients that DHHS has chosen to admit to record and enable categorisation. These services are classified using AR-DRG version 8 which is mapped to a Tier 2 clinic for funding purposes.

Weighted episode pricing will be used to value the price of episodes for Tier 2 (version 2.0) service events. The price for non-admitted services is based on the Round 18 NHCDC State average cost per weighted service event as follows:

Price per Unit $

Non-admitted service event 258

Emergency Department FundingActivity for the Tasmanian hospitals’ Emergency Departments (EDs) is classified using the Urgency Related Groups (URG) version 1.4 classification system. A price will be paid for each weighted service event. In 2016-17, the ED service event unit price is based on the Round 18 NHCDC national average cost.

Price per Unit $

Emergency Department service event 631

Elective SurgeryElective surgery activity will be purchased from the public and private sectors, both in Tasmania and interstate, through a mix of direct purchasing and competitive tenders. Activity will be priced using the National Efficient Price (NEP) 2016 using the National Weighted Activity Unit (NWAU) as the basis.

Elective Surgery – Rebuilding Hospital Services in Tasmania (RHST) - state government election commitment

Elective Surgery - NPA IHST – Schedule A

Block Funding for ABF HospitalsIn instances where activity based funding is not appropriate, the THS will be funded via block funds for specific services. The following hospital services will be block-funded in 2016-17:

Non-hospital activity costs that fall outside the scope of the NHCDC eg ancillary services that cannot be matched to a patient. Funding is based on Round 18 NHCDC Tasmanian costs, inflated using the price adjustment factor.

Page |

Teaching, Training, and Research, based on Round 18 NHCDC Tasmanian costs, inflated using the price adjustment factor.

Blood Products, based on the 2014-15 THS blood expenditure inflated using the price adjustment factor.

Transition to Practice Nurses Enhancing Retrieval and Referral Services Interstate Charging - Based on estimated 2016-17 expenditure estimate John L Grove Unit as per NPA IHST – Schedule F North West Cancer Centre based on estimated 2016-17 cost Patients First State funded

Price Adjustment FactorAs indicated above the majority of the prices used for activity have been based on modified NHCDC costs for Round 18 (2013-14). These costs have had a price adjustment factor of 3.71% applied to bring prices current to 2016-17.

Operational Grants for THS ServicesThe following THS services will be funded through an operational block grant in 2016-17. Funding amounts for these services is based on the 2016-17 budget allocation as provided by Budget and Finance:Mersey Community Hospital as per heads of agreement with the Commonwealth of Australia

Primary Health Services (includes rural hospitals) Mental Health Services (excluding mental health inpatient services) Oral Health Services partly delivered with Commonwealth funding Alcohol and Drug Services Forensic Medical Services Cancer Screening and Control Services partly delivered with Commonwealth

funding Patient Travel Assistance Scheme – based on estimated 2016-17 expenditure.

Page |

2016¬-17 service agreement between the minister for web view2016-17 service agreement between...

Documents