activity based funding conference 2015...contents chair’s welcome chair’s welcome it is with...

Activity Based FundingConference 2015

Program book

Adelaide Convention Centre, Australiawww.abfconference.com.au | #ABF15

Contents Chair’s welcome

Chair’s welcome 3

Workshop program 4

Accommodation and transport 11

Activity Based Funding 12Conference 2015 mobile app

General information 13

International speakers 15

Domestic speakers and 16workshop presenters

Abstracts 23

Glossary 50

Venue map 51

It is with great pleasure that I welcome you to the Activity Based Funding Conference 2015 in Adelaide, South Australia.

This is the fourth year the Independent Hospital Pricing Authority (IHPA) has hosted this event and it is encouraging that so many health professionals from across Australia and overseas have once again contributed to the conference program.

The theme ‘Driving transparency and efficiency in Australian hospitals’ has focused the program on the broader aspects of Activity Based Funding (ABF) to promote discussion around the benefits that ABF can deliver beyond funding.

We hope that the next few days will give you the opportunity to gain a greater understanding of IHPA’s work as well as chance to hear from others about how they are using ABF to drive transparency and efficiency in their hospitals.

I would like to take this opportunity to thank all of the presenters and chairs and everyone that submitted a paper for consideration in the conference, without your participation this event would not be possible.

Regards,

Shane SolomonChair, Independent Hospital Pricing Authority

ABF Conference 2015 | page 2 ABF Conference 2015 | page 3

Conference details

Conference host

Independent Hospital Pricing AuthorityLevel 6, 1 Oxford StreetSydney NSW 2000, AUSTRALIAPhone: +61 2 8215 1100Fax: +61 2 8215 1111Email: [email protected]: ihpa.gov.au

Conference managers

Arinex Pty LtdLevel 10, 51 Druitt Street Sydney NSW 2000, AUSTRALIATel: +61 2 9265 0700 Fax: +61 2 9267 5443Email: [email protected] Website: abfconference.com.au

Conference venue

Adelaide Convention CentreNorth Terrace Adelaide SA 5000, AUSTRALIATel: +61 8 8212 4099

Workshop program

Room0900 - 1030 Workshop one: Managing hospital and system

performance under Activity Based FundingProf. Stephen Duckett, Director of the Health Program,Grattan Institute

L1

Workshop two: Explaining the National Efficient PriceDr Trent Yeend, Senior Advisor, Pricing & Funding, IHPA, Dr Sarah Neville, Mathematician & Statistician Analyst, IHPA and Joanne Siviloglou, Manager Costing,Analysis & Reporting, IHPA

L2

Workshop three: Australian Mental Health Care Classification updateJennifer Nobbs, Director, Mental Health Care, IHPA

Riverbank room 5

1030 - 1100 Morning tea1100 - 1230 Workshop one continued: Managing hospital and

system performanceL1

Workshop two continued: Explaining the NationalEfficient Price

L2

Workshop three continued: Australian Mental Health Care Classification update

Riverbank room 5

1230 - 1330 Lunch1330 - 1500 Workshop four: Advanced management using Activity

Based FundingAlfa D’Amato, Deputy Director, ABF TaskforceManager Activity Based Funding, NSW Health,Christopher Jackson, Clinical Costing Manager, Melbourne Health and Liz Lea, Manager Funding Analysis and Clinical Costing, Townsville Health Service

L1

Workshop five: Developments in classificationsJoanne Fitzgerald, Director, Classification andCoding Standards

L2

1500 - 1530 Afternoon tea1530 - 1700 Workshop four continued: Advanced management using

Activity Based FundingL1

Workshop five continued: Developments in classifications L2

1700 Workshops conclude

Wednesday, 27 May 2015


Room0855- 0900 Welcome to country

Chair: Dr Tony Sherbon, CEO, IHPAHall M

0900 - 0930 Plenary one: Conference welcomeJim Birch, Deputy Chair, IHPAChair: Dr Tony Sherbon, CEO, IHPA

0930 - 1030 Plenary two: If it’s about quality and cost, let cliniciansrun healthcareProf. Keith Willett, National Health Service (NHS),United KingdomChair: Dr Tony Sherbon, CEO, IHPA

1030 - 1100 Morning tea1100 - 1130 Plenary three: Future directions for Activity Based Funding

James Downie, Executive Director,Activity Based Funding, IHPAChair: Dr Tony Sherbon, CEO, IHPA

Hall M

1130 - 1200 Plenary four: Comparing the cost of acute admitted care in Australian public hospitalsDiane Watson, Chief Executive Officer, National Health Performance AuthorityChair: Dr Tony Sherbon, CEO, IHPA

1200 - 1300 Lunch1300 - 1500 Concurrent session one: Activity Based Funding

managementChair: Jennifer Nobbs, Director Mental Health Care, IHPA• Activity Based Funding - good in principle but harder in

practice in the private sector Dr Brian Hanning, Australian Health Alliance• Working in partnership with medical staff for activity

based management performance Renee Fortunato, Sydney South West Local Health District• Exploring the clinical opportunities of activity based

management: evaluating models of care for improved efficiency and provision of care

Caroline Wraith and Christine Fan, Sydney Children’s Hospital• Deep sea diving to uncover clinical variation Susan Dunn, ABF Taskforce, NSW Health• NSW ABM monthly reporting solution - predictive modelling Alfa D’Amato, Bee Sim Lim and Jian Wu, The ABF

Taskforce, NSW Health

Hall M

Thursday, 28 May 2015

Conference program

Concurrent session two: Using Activity Based Funding to drive efficiencyChair: Luke Clarke, Director, Policy Development, IHPA• Streamlining process in preparation for Activity Based Funding Lucy Whelan, Monash Health• Quantifying the total costs of care for people at risk of

established chronic disease to the Queensland public health system Wilf Williams, KPMG Qld, and Vickie Scells, Queensland Health • Using National Health Cost Data Collection (NHCDC)

data to support the review of the efficiency, effectiveness and operational performance of the state-wide clinical

support service Helen Rizzoli, Ernst & Young and Ken Barr, SA Pathology• Building robust intelligence systems to drive quality and efficiency A/Prof Dominic Dawson, Mark Shepherd, Alison

Cochrane, David Thurman, Subra Lyer, Jaime Wotherspoon and Joey Tso, South Eastern Sydney Local Health District (SESLHD)

L1

Concurrent session three: Developments in classificationsChair: Joanne Fitzgerald, Director, ClassificationStandards, IHPA • Classifying subacute and non-acute care – Australian

Subacute and Non-Acute Patient (AN-SNAP v4) Professor Janette Green and Rob Gordon, Australian Health Services Research Institute• Developments in Teaching, Training and Research

(TTR) - an update on work undertaken to develop a TTR classification

Julian Maiolo and Dean McKay, Paxton Partners• In search of the great oz: the road to developing the non-

admitted services classification through understanding cost and reporting variance

Alix Higgins and Vanessa D’Souza, IHPA• Developing a national allied health data set specification Catherine Stephens, Department of Health QLD and Jan Erven, AHPA• Implementing the episode clinical complexity model

into the Australian Refined Diagnosis Related Groups Classification (AR-DRG) for version 8.0

Vera Dimitropoulos, National Centre for Classification in Health, The University of Sydney

L2


Concurrent session four: Embedding Activity Based Funding locallyChair: Sue Davis, Nurse Director of Corporate Nursing and Education, Sir Charles Gairdner Hospital• Embedding activity based management at clinical unit

level - the experience of two hospitals in NSW Gowri Sriraman, Prince of Wales and Sydney Eye

Hospitals and David McKenzie, Prince of Wales Hospital• The changing costing picture for Australian maternity

services; improvements and challenges ahead Barbara Vernon and Graeme Boardley, Women’s

Healthcare Australasia • Clinician engagement in clinical variation analysis Professor Friedbert Kohler, Braeside Hospital NSW and Harry Doan, Fairfield Hospital NSW• Beyond Activity Based Funding to management - are we there yet? Kathleen Alloway, WA Department of Health• Are we there yet? The continuing NSW SNAP data journey Sharon Smith, The ABF Taskforce, NSW Health

L3

1500 - 1530 Afternoon tea1530 - 1700 Panel: Embedding Activity Based Funding in the states

and territories• Commonwealth: Janet Anderson, First Assistant

Secretary, Acute Care Division, Commonwealth Department of Health

• New South Wales: Neville Onley, Director, Activity Based Funding Taskforce, NSW Ministry of Health

• Western Australia: Beress Brooks, Director, Health Services Purchasing, Department of Health,

Western Australia• Victoria: Frances Diver, Deputy Secretary, Health Service

Performance and Programs, Department of Health and Human Services

• Australian Capital Territory: Phil Ghirardello, Executive Director Performance Information Branch

• Queensland: Nick Steele, Executive Director, Provider Engagement and Contract Delivery Branch,

Queensland Health• South Australia: Jenny Richter, Deputy Chief Executive,

SA Health

Hall M

1700 - 1900 Networking event Riverbank Foyer

Conference program

Room0845 - 0850 Acknowledgement of country

Chair: Glenn Appleyard, Pricing Authority member, IHPAHall M

0850 - 0930 Opening addressHon Jack Snelling MP, Minister for Health, South AustraliaIntroduced by: Dr Tony Sherbon, CEO, IHPA

0930 - 1030 Plenary five: Hospital payment reform in Maryland,United States: from unit rates to global budgetsDr Sule Calikoglu, Deputy Director, Research and Methodology Health Services Cost and ReviewCommission (USA)Chair: Glenn Appleyard, Pricing Authority member, IHPA

1030 - 1100 Morning tea1100 - 1130 Plenary six: Experience with patient costing and

embedding it as a management toolJenny Browne, Chief Financial Officer, Northern Adelaide Local Health Network, SA HealthChair: Glenn Appleyard, Pricing Authority member, IHPA

Hall M

1130 - 1200 Plenary seven: Developing an Evaluation Framework for the national implementation of Activity Based FundingLuke Clarke, Director, Policy Development, IHPA,Peter Tyler, Associate Director, KPMG National Health, Ageing and Human Services, and Professor Anthony Scott, Professorial Research Fellow and NHMRC Principal Research Fellow, University of MelbourneChair: Glenn Appleyard, Pricing Authority member, IHPA

1200 - 1230 Plenary eight: Development of a national set of high-priority health complicationsDr Robert Herkes, Clinical Director, Australian Commission on Safety and Quality in Health CareChair: Glenn Appleyard, Pricing Authority member, IHPA

1230 - 1330 Lunch

Friday, 29 May 2015


1330 - 1530 Concurrent session five: Costing issues at the hospital levelChair: Joanne Siviloglou, Manager Costings, Analysis & Reporting, IHPA• Activity based costing of medication to the individual in

the public hospital setting Peter Cronin, Prospection and Kate Richardson, St Vincent’s Hospital, Sydney• Making mental health part of mainstream costing Dr Christopher Jackson, Melbourne Health, Maura McSweeney, St Vincent’s Health, Cathy Mar, Department of Health and Human Services

and David Debono, Department of Health and Human Services • Implementing an Activity Based Funding budget Stephen Cole, Gold Coast Hospital and Health Service• The costing marathon... it is not about who wins but how

the race is run Suellen Fletcher, ABF Taskforce, NSW Health

Hall M

Concurrent session six: Coding and documentation improvement projectsChair: Jan Erven, Sub Acute Aged Care Manager, Port Kembla Hosptial• Monitoring Activity Based Funding quality through routine

clinical coding audit programs Jennie Shepheard, Vaughn Moore and Beata Steinberg Department of Health and Human Services• The write way is right Vanessa Gartrell and Tammy Dowrick, Mid North Coast

Local Health District• Improving documentation and coding of malnutrition - a

five year journey Natalie Simmance, Clara Newsome, Sonia Grundy and Sally Bell, St Vincent’s Hospital, Melbourne• Pilot study: the impact of consultant physician-led

review of medical discharge summaries and clinical documentation and its impact on diagnostic

related groups and subsequent weighted inlier equivalent separation Dr Nicholas Chin, Kylie Hall, John Ferraro and Dr Vikas Wadhwa, Maroondah Hospital• Documentation errors affecting funding in drug and alcohol service Dr Esther Munyisia, Drug & Alcohol Service NSW

L1

Concurrent session seven: Using Activity Based Funding to drive efficiency twoChair: Alfa D’Amato, Deputy Director, ABF Taskforce Manager, Activity Based Funding, NSW Health• Unpacking and addressing transition grants in NSW Xiao Cai, Vineet Makhija, Sharon Smith and Susan Dunn, The ABF Taskforce, NSW Health• Implementation of the Medical Imaging Coding and

Costing (MICC) model of Activity Based Funding - phase 2 of the MICC model Ingrid Klobasa-Egan, Northern Sydney Local Health

District (NSLHD) and Julia Herbele, The Activity Based Funding Taskforce, NSW Health

• Budgeting using Activity Based Funding data: how to use the outputs from clinical costing to improve hospital operations Harry Chiam, War Memorial Hospital, Waverley• We are being bold Julia Heberle and Kylie Hawkins, The Activity Based

Funding Taskforce, NSW Health• Embedding Activity Based Funding in the non-admitted

outpatient care environment Rory Carle, Department of Health WA

L2

Concurrent session eight: Pricing andfunding considerationsChair: Bruce Cutting, Director Technical Funding and Pricing Models, IHPA• Developing a National Efficient Cost for small rural hospitals Dr Samuel Webster, IHPA• Analytical insights into the acute admitted pricing model Dr Sarah Neville, IHPA• Costs of acute admitted patients in Australia’s public

hospitals in 2011-12 Dan O’Halloran, NHPA• Implications of a simplistic approach to Activity Based Funding in Croatia Dr Karolina Kalanj and Karl Karol, Karol Consulting• Data matching of hospital activity and MBS claims: an unexpected journey Beth Gubbins, Lynton Norris and Svetlana Angelkoska, National Health Funding Body

L3

1530 - 1600 Afternoon tea1600 - 1630 Panel: Question and answer wrap-up

Chair: James Downie, Executive Director, IHPA• Dr Tony Sherbon, CEO, IHPA• Jennifer Nobbs, Director, Mental Health Care, IHPA• Joanne Fitzgerald, Director, Classification and Coding

Standards, IHPA

Hall M

1630 Conference concludes


Accommodation and transport

Accommodation

Following are the addresses, phone andfax numbers of all conference hotels.

Intercontinental Adelaide120 North Terrace, Adelaide 5000Phone: +61 8 8238 2400Oaks Embassy96 North Terrace, Adelaide 5000Phone: +61 8 8124 9900Fax: +61 8 8124 9901Oaks Horizons104 North Terrace, Adelaide 5000Phone: +61 8 8210 8000Fax: +61 8 8210 8001Mercure Grosvenor Hotel125 North Terrace, Adelaide 5000Phone: +61 8 8407 8888Fax: +61 8 8407 8866

Airport and transport Adelaide offers superb access and convenience for those attending the Activity Based Funding Conference 2015. A number of transport modes to and from the airport are available including hire cars, taxis and public transport.

Adelaide’s international and domestic terminals are located seven kilometers from the central business district, approximately a 15 minute toll-free drive. Car rental desks are located on the ground level of the Adelaide Airport, adjacent to the baggage claim area. A new taxi rank has also been created, left of the pedestrian plaza as you walk out of the terminal. There is a $2 levy added to fares for taxis leaving the airport.

Public transport buses, pick up and drop off from the new bus stop location on the left hand side of the area as you leavethe terminal.

Activity Based Funding Conference 2015 mobile app


How to download the appScan the QR code to get the Activity Based Funding Conference 2015 program on your mobile phone, using a QR code reader app. Or, enter the URL below into your phone’s internet browser:https://www.emobilise.com.au/abfconference.app

Recommended QR code readersiPhone / iPadSearch for QR Scanner in the App Store.AndroidSearch for QR Droid in the Android Market.BlackberrySearch for QR Scanner in the App World.

How to add the app to your phone’shome screenOn the iPhone/iPad, when you’re looking at the app on Safari, just tap “+” or the <insert symbol of arrow jumping out of square> at the bottom of the screen, and then select “Add to home screen”.

On Android, follow these steps:1. Bookmark the page you want to add to a

home screen.2. View your list of bookmarks using the

browser menu.3. Long-press a bookmark and select “Add

to home screen”.

Need help?Visit us at the registration desk.

Download abstracts1. Search or browse to a presentation

under a session.2. Select Download abstract under the

selected presentation.Alternatively, tap on More and then on Abstracts to view the complete listof abstracts.

General information

CateringOn Wednesday 27 May, tea breaksand lunches will be served in the Foyer L1, L2 and L3. From Thursday 28 to Friday 29 May, tea breaks and lunches will beserved in Hall L. For timings please viewthe detailed program.

Delegate list The list contains each delegate’s name, organisation and email address. The conference managers have excluded delegates who have withheld permission to publish their details.

EntitlementsFor registration fee entitlements, please refer to the chart at the bottom of this page.

Messages All messages received during the conference will be placed on the message board in the registration area. To collect or leave messages please visit the registration desk.

Mobile phones As a courtesy to fellow delegatesand speakers, please ensure yourmobile phones are switched to silentduring sessions.

Name badges Each delegate registered for theconference will receive a name badgeat the registration desk. This badge willbe your official pass and must be wornto obtain entry to all sessions.

Networking event Dress: Smart casualVenue: Riverbank Foyer, Adelaide Convention CentreTime: 1700 - 1900

Photography / videography The conference may arrange for photography / videography onsite throughout the event. The images may be used for post conference reports, case studies, marketing collateral and may be supplied to industry media if requested. If you do not wish to be included in the shot, please move out of the range ofthe camera.

Registration category entitlements

Workshop sessions

Conference sessions

Networking event

Lunch andtea breaks

Full workshop and conference registration

3 3 3 3

Conference only 3 3 3

Workshop only 3 3

Thursday registration 3 3 3

Friday registration 3 3


Privacy Australia introduced the Privacy Amendment (Private Sector) Act 2000 in 2001. The conference organisers comply with such legislation which is designed to protect the right of the individual to privacy of their information. Information collected in respect of proposed participation in any aspect of the conference will be used for the purposes of planning and conduct of the conference and may also be provided to the organising body or to the organisers of future ABF conferences. All those participants included in the delegate list, which has been included in the conference satchels, provided their permission upon registration.

Registration The registration desk is located in Foyer M, Adelaide Convention Centre.Registration operating hours:

Wednesday 27 May 0730 - 1700Thursday 28 May 0800 - 1700 Friday 29 May 0800 - 1630

Smoking policy The Adelaide Convention Centre is a non-smoking venue. Delegates are requested to not smoke within the centre.

Social media Connect with IHPA, speakers and your fellow delegates through the hashtag #ABF15 and by following @IHPAnews on Twitter. You can also connect via LinkedIn by following the Independent Hospital Pricing Authority page.

Speakers’ preparation room The speakers’ preparation room is located in City Suite 1.

Wednesday 27 May 0730 - 1530Thursday 28 May 0800 - 1530 Friday 29 May 0800 - 1530

Speakers are asked to visit the speakers’ preparation room well in advance of their session to upload their presentations and make any final changes if required. The speaker room will close at the START timeof the final session.

Special dietary requirements If you have notified the conference managers of any special dietary requirements please be advised that this information has been supplied to the conference venue and the venues for any social events you have registered to attend. It is requested that you make yourself known to the venue catering staff during meal breaks and social functions.

WiFi Adelaide Convention Centre offers high-speed wireless and cabled broadband networks providing complimentary internet access to all delegates in public areas.

International speakers

Dr Sule Calikoglu Dr Sule Calikoglu, is the Deputy Director of Research and Methodology at the Maryland Health Services Cost Review

Commission (HSCRC). Dr Calikoglu is responsible for the development and implementation of innovative payment strategies to promote effective, efficient and quality care. Prior to her current position, she led the pay for performance programs and performance evaluation at the HSCRC. Before joining the HSCRC, she worked at the Maryland Health Care Commission where she participated in revising state health plan on long term care, assessment of quality of care in nursing homes, and race and ethnicity data collection. She has six years of experience as a clinical nurse. She holds a doctorate degree from the Johns Hopkins Bloomberg School of Public Health in Health Policy and Management and a Master of Public Policy from thesame university.

Professor Keith Willett Professor Keith Willett is the Director for Acute Episodes of Care to NHS England. He came from his role as the first National Clinical

Director for Trauma Care to the Department of Health. He has extensive experience of trauma care, service redesign and healthcare management and is Professor of Orthopedic Trauma Surgery at the University of Oxford. He was the co-founder of the unique resident consultant delivered Oxford Trauma Service in 1994. In 2003 he founded the Kadoorie Centre for Critical Care Research and Education focusing on outcomes of treatment for critically ill and injured patients. In 2009 as NCD for Trauma Care he was charged with developing and implementing government policy across the NHS to radically improve the care of older people with fragility hip fractures and to introduce Regional Trauma Networks and Major Trauma Centres. By 2012 both re-organisations and care pathways were successfully in place. In his current role, he has the national medical leadership roles for acute NHS commissioned services ranging from out-of-hours general practice, pre-hospital and ambulance services, emergency departments, acute and elective surgery, acute medicine, children’s and maternity services and is the lead for a transformation of the national urgent and emergency care services.

Janet Anderson Janet is First Assistant Secretary, Acute Care Division in the Commonwealth Department of Health. Before

joining the Department in early 2012, Janet was a senior executive in the NSW Ministry of Health. Over the course of more than 25 years working in the Australian public health system, Janet has held a range of positions at Commonwealth, state and regional levels, principally in health policy and planning roles. In 2009, she was awarded the Public Service Medal for outstanding public service in health policy development and reform.

Jim Birch Jim is currently Ernst & Young’s Global Health Care Leader, and the former Lead Partner for Government and Public Sector, Oceania.

Jim has been a Chief Executive of the Human Services and Health Department (South Australia), Deputy Chief Executive of Justice, and Chief Executive of major health service delivery organisations, including teaching hospitals. At a national level he has been Chair of the Australian Health Ministers’ Advisory Council, led the establishment of the Australian Commission on Safety and Quality in Health Care, was a Board Member of the National E Health Transition Authority, Chair of Rural Health Workforce Australia and a Director of the Board of Health Direct Australia. Since 2006, Jim has delivered or led major consultancies in Australia, Asia and also the Middle East in areas such as organisational review,


infrastructure, program evaluation, policy development, strategic planning, financial turnaround and change management. Jim was appointed as the Deputy Chair of the Independent Hospital Pricing Authority in 2011, is a member of the Cancer SA Board and Director of the Mary MacKillop CareSA Board.

Beress Brooks Beress Brooks is currently the Director of Health Services Purchasing in the Western Australian Department of Health. In this

role he has responsibility for leading the development of health services purchasing in the Western Australian public health system using an Activity Based Funding and management methodology. Beress has worked in a number of senior roles in the Western Australian public health system including operational and senior management roles in the Metropolitan Area Health Services. Beress has significant experience in clinical case-mix and development and implementation of activity based management in a health system including development of classification systems, implementation of clinical costing systems and operational management in an Activity Based Funding environment.

Luke Clarke Luke Clarke is the Director of Policy Development at the Independent Hospital Pricing Authority (IHPA). He leads the team responsible

for developing and articulating the policy work that underpins IHPA’s pricing

Domestic speakers andworkshop presenters

determinations, particularly through the annual Pricing Framework for Australian Public Hospital Services consultation process. Prior to this he was Manager Policy and Advocacy at The Royal Australasian College of Physicians (RACP) responsible for managing the RACP’s health policy and government relations functions where he focused on health reform and telehealth. He previously worked as a ministerial adviser in the New South Wales Government in the treasury, police and environment portfolios.

Frances DiverFrances Diver is the Deputy Secretary, Health Service Performance and Programs within the Department of Health Victoria.

In this position Frances is responsible for managing the governance and formal accountability arrangements, including the performance of public health services across the state of Victoria. Her responsibilities include policy and program development for acute health and ambulance services, service planning, the delivery of a 2.3 billion dollar capital program, health data collections and also leads the quality and safety programs. Victoria operates a devolved governance structure for health service delivery and Frances works extensively with boards, senior management and clinicians across the sector to deliver the Government’s policy. In her role Frances also works closely with other government agencies and with relevant Ministers. She leads a Division of more than 200 staff and is directly accountable for a budget of approximately 9 billion dollars. Frances has worked extensively within the health sector in clinical and managerial roles with over 30 years experience in metropolitan and rural health services, government, community based services, public health, unions and private hospitals.

James DownieJames Downie is the Executive Director of Activity Based Funding (ABF) at the Independent Hospital Pricing Authority. He leads

the teams responsible for delivering the classification, costing and pricing functions of IHPA as well as the data acquisition activities. Prior to this he was Manager Funding Systems Development in the Victorian Department of Health, responsible for Victoria’s existing funding models, and the national ABF developments. He has also worked on service redesign at the Royal Children’s Hospital in Melbourne, and prior to that spent 15 years in the mining industry.

Professor Stephen Duckett Stephen Duckett is Director of the Health Program at Grattan Institute. He has a reputation for creativity, evidence-based

innovation and reform in areas ranging from the introduction of activity-based funding for hospitals, to new systems of accountability for the safety of hospital care. An economist, he is a Fellow of the Academy of the Social Sciences in Australia.

Joanne Fitzgerald Joanne Fitzgerald is the Director, Classification and Coding Standards at the Independent Hospital Pricing Authority (IHPA).

In this role, Joanne provides technical input and has oversight of all of the Activity Based Funding (ABF) classifications. Joanne has over 15 years of experience as a health information manager, working as a clinical coder and later a medical records manager. Joanne was Clinical Information Manager at

imperatives of health services administrators and clinicians has allowed Dr Herkes to help influence the development and expansion of Critical Care Capacity and its place in modern hospital care. Dr Herkes was previously the Director of Intensive Care Services at the Royal Prince Alfred Hospital, Sydney, State Medical Director of the NSW Organ and Tissue Donation Service, and Chair of the NSW Critical Care Taskforce.

Christopher JacksonAfter finishing his PhD in science history, Chris spent three years with the Private Hospitals Association of Victoria, before

moving to the Austin Hospital as the data manager for Clinical Costing. Subsequently he worked as a Performance Analyst at the Alfred Hospital in Melbourne where he contributed to the development of new BI tools for costing and activity data. He is currently the Clinical Costing Manager at Melbourne Health with responsibility for costing and reporting the full range of activity across the organisation. He also chairs the Victorian Clinical Costing User Group’s sub group for mental health costing and represents Victorian hospitals on the National Hospital Cost Data Collection’s Advisory Committee.

Liz LeaLiz is currently the Manager Clinical Costing and Reporting for Metro North Hospital and Health Service (Qld Health). In

this role Liz is responsible for providing high level strategic leadership, professional support and expert advice to Metro North HHS staff in matters relation to Activity Based Funding (ABF) at a State and National level, the QHealth Healthcare Purchasing framework and activity based costing functions. Liz has over 15 years of


experience working in clinical costing and ABF roles in metropolitan and regional / remote facilities. Liz is the Qld representative on national committees including the IPHA NHCDC Advisory Committee.

Dr Sarah NevilleDr Sarah Neville is a Mathematical/Statistical Analyst at the Independent Hospital Pricing Authority (IHPA). She was the lead modeler for

the non-admitted stream for the National Efficient Price 2014 -2015 and the acute stream for the National Efficient Price 2015-2016. Sarah’s background is centered around mathematics and statistics, she holds a PhD in statistics from the University of Wollongong. She was invited to present doctoral research at the University of Oxford in 2012. Before her time at IHPA, Sarah was a cadet at the Australian Bureau of Statistics. Her interest in health was sparked whilst working as a Biostatistician at the NSW Department of Health.

Jennifer NobbsJennifer Nobbs is the Director of Mental Health Care at the Independent Hospital Pricing Authority (IHPA). She leads the

team responsible for developing a new classification for mental health services. Jennifer joined IHPA from the NSW health system where she was senior advisor to the NSW Minister for Mental Health and Healthy Lifestyles, and prior to that manager of national and state priorities in the Mental Health and Drug & Alcohol Office at the NSW Ministry of Health. Jennifer previously worked in the UK at the Ministry of Justice, managing legislation to develop a new regulatory structure for the legalservices sector.

Neville OnleyNeville Onley is currently the Director of the Activity Based Funding (ABF) Taskforce, established by the NSW Ministry of Health in September 2011 to oversee implementation of all Activity Based Funding aspects of the National Health Reform Agreement across the NSW health system. Prior to leading the Taskforce, Neville held a number of senior positions in the NSW health system, including Director, Financial Services for the Southern Clinical Support Cluster, and as Director, Finance and Corporate Services for the former South Eastern Sydney and Illawarra Area Health Service. Neville has extensive experience in reform processes having been involved in National rail reforms across Australia, the reform of NSW Ports and Waterways, and the SydneyOlympic Games.

Jenny Richter

Jenny Richter is the Deputy Chief Executive, System Performance at SA Health. Jenny has more than 25 years’ experience in the

health sector as a nurse, administrator and executive in community nursing and the private hospital sector, with public private partnership projects and with the SA public health system. Jenny began her career as a registered nurse at the Royal District Nursing Service and Ashford Community Hospital. Jenny then moved to the UK to work in the areas of hospital and health service planning and later the finance sector. On returning home, Jenny joined the public health system working in a number of leadership positions. After further time in the private sector, Jenny returned to the Department of Health and Ageing in 2011. Jenny Richter, MBA, BA, Grad Dip Hlth Admin, MAICD.

the Royal Rehabilitation Centre Sydney for a number of years, overseeing coordination of the medical record department, hospital data collections and classifications, policy development and management of release of information and privacy for the hospital. Joanne has also worked in the NSW ABF Taskforce, specifically dealing with ABF for sub-acute care in NSW.

Phil Ghirardello Phil Ghirardello is the Executive Director of Performance Information Branch in ACT Health. In that role, Phil is responsible for

setting activity and performance targets for the ACT public hospital system and reporting on performance against those targets. The Performance Information Branch also works with health services to develop information management products that assist disparate service areas better understand their performance and improve services to patients and clients. Phil has had an extensive career in ACT Health working in diverse areas such as Mental Health Policy, Intergovernmental Relations and service contract management.

Dr Robert HerkesDr Robert Herkes is Clinical Director at the Australian Commission on Safety and Quality in Health Care. He is a highly respected

Senior Clinician and leader in Intensive Care Medicine, with extensive operating and leadership experience in the development, evolution and provision of critical care services at both state and national levels. Dr Herkes’ enthusiasm for clinical education and training has allowed numerous students, junior doctors and nurses to experience the possibility of true ongoing and collaborative multidisciplinary learning. A comprehensive understanding of the


Professor Anthony ScottProfessor Anthony Scott is the Professorial Research Fellow and NHMRC Principal Research Fellow, University of Melbourne.

Tony leads the Health Economics Research Program at the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne. He has a PhD in Economics from the University of Aberdeen. Tony is a National Health and Medical Research Council (NHMRC) Principal Research Fellow and an Associate Editor of Journal of Health Economics and Health Economics. He leads the Centre of Research Excellence in Medical Workforce Dynamics (www.mabel.org.au). Funded by the NHMRC, the Centre runs a large nationally representative panel survey of physicians - Medicine in Australia: Balancing Employment and Life (MABEL). Tony’s research interests focus on the behaviour of health care providers, health workforce, incentives and performance. He was part of the team that evaluated the impact of case-mix funding in the English NHS, and is currently working in partnership with KPMG on the national evaluation of ABF in Australia, funded by IHPA.

Dr Tony SherbonDr Sherbon has been Chief Executive Officer of the Independent Hospital Pricing Authority (IHPA) since December 2011

when IHPA was established under the National Health Reform Act 2011. Before taking up the position at IHPA, he had 22 years of experience in health and public administration including leadership of the South Australian Health Department from 2006 to 2011. He has also held senior leadership roles in the New South Wales and Australian Capital Territory health systems. Dr Sherbon has previously chaired the

Australian Health Ministers’ Advisory Council, and has been a board member of the South Australian Health and Medical Research Institute, National E-Health Transition Authority and Health Workforce Australia.

Joanne SiviloglouJoanne has worked at the Independent Hospital Pricing Authority for close to three years as the Manager of Hospital Reporting

and Costing. During this time she has worked on the National Hospital Cost Data Collection (NHCDC) since Round 15 and currently working on Round 18 including the submission through the Enterprise Data Warehouse and quality assurance reports. Joanne has also has assisted on the Private Hospital collections for two rounds, updated the Australian Hospital Patient Costing Standards version 3.1 and provided technical assistance on various projects and studies. Prior to this she had been the Costing Analyst at Austin Health for close to 15 years. There she was responsible for maintaining and reviewing both the inputs and outputs of the costing system as well as responsible for providing benchmark and project reports at various levels of management, both internally and externally. Joanne was also a Director on the Clinical Costing Standards Association of Australia (CCSAA) which developed and produced the clinical costing standards. Joanne holds a Bachelor of Business (Accounting).

Hon Jack Snelling MPHon Jack Snelling holds office as Minister for Health, Minister for Mental Health and Substance Abuse, Minister for the Arts and

Minister for Health Industries in South Australia. He was first appointed to the Rann Labor Ministry on 25 March 2010. Jack’s other portfolio responsibilities have included

Treasury, Ageing, Veterans’ Affairs, Workers’ Rehabilitation, Employment, Training and Further Education, Science and Information Economy and Road Safety. Jack was first elected to the South Australian Parliament in 1997 as the Member for Playford, representing the people of Ingle Farm, Para Hills, Pooraka and Walkley Heights. Jack is married to Lucia with six children – Molly, Helena, Frank, Joe, Peter and Thomas. He enjoys cooking, reading, playing chess with his children, listening to classical music and training at the Para Hills Amateur Boxing Club.

Nick SteeleNick joined Queensland Health in early 2010 as Chief Finance Officer for Clinical and Statewide Services. His

current role is Executive Director, Provider Engagement and Contract Delivery Branch. This role involves the development of the Queensland Healthcare Purchasing Framework, implementation of the national Activity Based Funding model and negotiation and management of service agreements with Hospital & Health Services and Mater Health Services. Prior to emigrating to Australia Nick worked for the National Health Service in England as an Assistant Director of Finance at a major acute teaching hospital and Finance Director at two Primary Care Trusts. Nick holds an Economics degree from The University of Leeds, is a member of the Australian Institute of Company Directors and has dual membership with CPA Australia and the Chartered Institute of Public Finance & Accountancy in the UK.

Peter Tyler Peter Tyler is Associate Director, KPMG National Health, Ageing and Human Services. He has a Master of Science (by research in

Probability Theory) from Flinders University. Peter has worked on a number of large scale evaluations relating to national health reform programs including in Aboriginal and Torres Strait Islander Health, Aged Care, Primary Care and Hospital services. Peter recently worked on the evaluation of the Commonwealth’s Closing the Gap (Health Outcomes) strategy known as the Indigenous Chronic Disease Package (awaiting publication). Peter has also worked on national and state Activity Based Funding policy and operations over many years including pricing, costing and data integrity reviews

Dr Diane WatsonDr Diane Watson is the inaugural Chief Executive Officer of the National Health Performance Authority, taking up the position

on 1 June 2012 after being interim Chief Executive Officer since February 2012. The Performance Authority supports health system improvements through independent reporting on the comparable performance of more than 1000 public and private hospitals and primary health care organisations. Its information is available on the MyHospitals and MyHealthyCommunities websites. Dr Watson was the inaugural Chief Executive Officer of the Bureau of Health Information, established as an independent statutory body by the NSW Government in 2009. She has proven experience in organisations dedicated to independent monitoring and reporting of healthcare organisations and the comparable performance of health systems. She has held senior scientist and management positions for a number of national and state organisations. In 2005, she was a Harkness Fellow in the International Health Policy Program with the Commonwealth Fund.


Dr Trent YeendTrent Yeend is Senior Advisor of Pricing and Funding at the Independent Hospital Pricing Authority (IHPA). He has been with

IHPA since its inception in 2011 and led the development of the cost and pricing models for the 2012-13 and 2013-14 National Efficient Price. More recently, as a member of the Australian Consortium for Classification Development, he was involved in the refinement of the AR-DRG classification system including the development of a new episode clinical complexity model within version 8.0 of the classification. Prior to his time at IHPA, Trent worked in the Australian Department of Health and Ageing, providing health policy modelling advice across the areas of primary care, acute care, health workforce and aged care. Before working in the Australian Public Service, Trent was a mathematics lecturer and research academic at the University of Newcastle. He also spent a year as research academic and teaching assistant at the University of Iowa, IA USA. Trent is a mathematician with a PhD from the University of Newcastle and is an Honorary Senior Research Fellow at the University of Sydney.

Beyond Activity Based Funding to management- are we there yet?

Kathleen Alloway, WA Departmentof Health

The presentation will provide an insight into some of the challenges, achievements, lessons learnt and the future focus on Activity Based Management within the WA Health Reform Program. The implementation of Activity Based Funding (ABF) has also resulted in some significant improvements to the quality of care and efficiency of services. Health services have transformed what might be considered ABF collateral damage into service innovation and reform. Featuring the review of Hospital in the Home (HITH) care and raising the awareness of the extent and risk of incorrect recording of activity inherent within every health service.

Reporting activity correctly is essential in an Activity Based Funding (ABF) environment. There are areas of high risk that have been the focus of work in WA that are likely to be a similar for health services to acrossthe country.

This presentation will tell the story of the quest to ensure the collection of quality activity data, and how the development of effective policy and process compliance along with stakeholder engagement underpins successful ABF/ABM implementation and more.

Significant improvements have been achieved in WA Health in the counting and classification of activity through the development of comprehensive rules to guide staff. The application of policy and the assessment of compliance have achieved improvements, over 90% in some areas, in the rate of invalid admissions.

Compliance audits and activity data monitoring have generated a range of focus reviews that have identified activity that was being missed and inappropriately classified.

A review of metropolitan Hospital in the Home HITH care in 2014 revealed an error rate of approximately 30%. Within the invalid activity were a range of issues associated with the interpretation and application of counting and classification policy. For example; incorrect dates, non-admitted care, long length of stay outlier issues, leave days, clinical content and frequency of care. All of these impact upon on the reliable use of data for subsequent costing, pricing and other uses such as planning and research.

Subsequently projects associated with HITH have commenced within hospitals and a successful collaboration across all metropolitan HITH services has resulted in a range of innovation and improvement initiatives ensuring the correct counting and classification of activity and improvements in the efficiency and quality of care delivery.

WA Health has made a substantial investment in ABF/ABM over the last four years. An external review commissioned by the Department of Treasury in 2013 has found that ABM has not yet fully realised the anticipated benefits. The ABM implementation reform program will focus on increased clinical engagement, provision of business intelligence tools, and education and training.

It will also address areas where improvements could be made ensuring a transparent ABF model, accuracy and timeliness of activity data reporting, improved health service budgeting and financial governance, and system-wide coordination and governance of key ABF/ABM activities.

Unpacking and addressing transition grants in NSW

Xiao Cai, The ABF Taskforce, NSW Health, Vineet Makhija, The ABF Taskforce, NSW Health, Sharon Smith, The ABF Taskforce, NSW Health and Susan Dunn, The ABF Taskfoce, NSW Health

As part of the NSW Health funding reforms over the last few years, Activity Based

Abstracts


Funding (ABF) has been embedded in the system for budget allocation and performance monitoring. Increasingly, NSW has evolved its thinking beyond ABF,towards Activity BasedManagement (ABM).

NSW Health currently provides a “transition grants” where a local health district’s average cost is higher than the state price for an ABF stream. This is to ensure the health system remains safe and operating during this major cultural shift towards ABF and ABM. These grants are determined using layers of costing information. Starting from the intricate details at the cost bucket level and is eventually combined to construct the outer layer. The final façade serves as an overview of the district’s financial position.

This talk will guide the audience through the process by which the transition grant is meticulously unpacked layer by layer, like a Russian Matryoshka Doll. To eventually reveal the inner core - the drivers of negative cost-price variances and the root cause of transition grants within a district. This is a practical showcase of how ABM principles have been applied to guide evidence based management decisions and to ensure focus on achieving better patient outcomes and system-wide value improvements.

Central to this unpacking process is theuse of the ABM Portal as an investigative tool to uncover areas where value to the system and the patients are not being maximised. It is an exercise of turning ABF data into practical information and actionable insights.

Embedding Activity Based Funding in the non-admitted outpatient care environment

Rory Carle, Department of Health WA

For Activity Based Funding (ABF) associated with non-admitted patient care, there are a range of documentation to specify what is to be reported and some definitions and guidelines to help ensure these are reported correctly.

The challenge is to translate these in a practical way in a diverse health services environment (e.g. health care disciplines, work practices, patient informationsystems, people).

To assist in the promotion of requirements and remove any uncertainty within the WA Health Services and to help ensure the consistency and accuracy of implementation, the Non-Admitted Activity Recording and Reporting Policy (NAARRP) was developed. For those participants at the Conference 2014, you would be aware of the Admissions, Readmissions Discharge and Transfer Policy (ARDT) which was developed to assist WA Health Services responsible for admitted care. Although presented in a different way, in many respects, the NAARRP is the companion document for non-admitted, specifically outpatient, care.

As the name of the policy implies, there are two focusses: • Recording - essentially the responsibility

of Health Services• Reporting - essentially the responsibility

of Central Office.

The NAARRP was developed in consultation with health services staff to assist WA hospitals and health services to record non-admitted outpatient activity in a consistent and meaningful manner. The NAARRP provides a framework, containing detailed guidelines and criteria to enable this to occur. It also provides an understanding of reporting requirements to mitigate risks associated with failing to record activity appropriately. Accurate and timely information about the care we provide is used in many ways - including ensuring that our health services are adequately funded for the services they provide.

The NAARRP is a conceptual document that provides statements of intent and requirements (could be seen as aspirational). It is expected that the NAARRP will inspire work practice and system changes to affect how activity recording is undertaken, improve understanding and allow recognition of the impact that

recording of activity can have on reporting. There is also emphasis on the importance of classifying activity, particularly Tier2. In the WA context, reporting is undertaken centrally. The NAARRP provides direction on how this will be achieved.

Hear about the WA Health experiences and learnings; benefits and challenges; and future directions for the annual updates.

Budgeting using Activity Based Funding data: how to use the outputs from clinical costing to improve hospital operations

Harry Chiam, War MemorialHospital Waverley

Commonwealth and state governments have sponsored national costing studies that collect cost data by patient across all states and care types. The purpose of this exercise has been to allocate government funding growth to states and territories. The result is a very large database of costs by care type allocated down to doctors, nurses, allied health, etc. The purpose of the paper is to outline a method for taking this costing data for use in a multiple regression model to budget for healthcare costs. Concretely, this paper proposes a model that takes in clinical inputs, e.g. staff costs and explicitly links inputs to Activity Based Funding outputs. The model generated is in the form:

hθ (x) = θTx = θ0 + θ1x1 + θ2x2 ..+ θnxn

where hθ (x) is one bed day for a clinical speciality; θ0 θn represent amounts of input, e.g.

1 nurse, 0.5 allied health, etc. x1 .. xn represent clinical departments

For a hospital, clinical outcome is usually described in bed days for a diagnosis group. The paper outlines use of training, cross validation and test sets. The model is developed using real training data and is then cross validated to verify its predictive ability. The paper will detail where the data comes from and its form. There is a detailed look at the structure of the data and its make-up, how it is derived from a hospitals

clinical systems and the general ledger of a finance department which is the other side of clinical costing.

Pilot study: the impact of consultant physician-led review of medical discharge summaries and clinical documentation and its impact on diagnostic related groups and subsequent weighted inlier equivalent separation.

Nicholas Chin, Maroondah Hospital,Hall Kylie, Maroondah Hospital,Ferraro John, Maroondah Hospital and Vikas Wadhwa, Maroondah Hospital

Background In Australia, both the public and private hospitals inpatient episodes of care are case mix funded. Upon discharge, each patient is assigned one Diagnostic Related Group (DRG) that leads to a Weighted Inlier Equivalent Separation (WIES). Comprehensive clinical documentation is essential to ensure that the admission episode is accurate which results in the appropriate coding of the DRG and subsequent correct allocation of WIES. Ironically, clinical documentation and discharge summaries are usuallycompleted by the most junior membersof the medical team.

AimA consultant physician-led pilot study to determine the accuracy and comprehensiveness of clinical information recorded was conducted at Maroondah Hospital. Clinical notes, medication charts and investigation results were thoroughly reviewed to validate all diagnosesand comorbidities.

Method The Health Information Services (HIS) randomly identified twenty-five general medical cases with short (<5 days) inpatient stays within the current financial year. An independent consultant physician reviewed the cases. Following a detailed review of the clinical documents, the principal diagnoses,


associated comorbidities and complications were revised where appropriate. DRG and WIES were adjusted if necessary.

ResultsIt was identified from the 25 episodes reviewed by the consultant physician that clinical documentation could be improved in 10 (40%) of these records. Each case required 30 minutes (20 minutes physician time and 10 minutes coding coordinator time) to process from initial review to final assessment and (if required) amendment of the coding. Nine records (36%) had DRG changes that yielded a total WIES increment of 6.4935.

ConclusionA senior physician led review of clinical documentation is essential to ensure its accuracy and comprehensiveness which subsequently ensures that the correct DRG is assigned to the episode of care.

Implementing an Activity Based Funding budget

Stephen Cole, Gold Coast Hospital and Health Service

In October 2014 Gold Coast Hospital and Health Service (GCHHS) implemented an Activity Based Funding (ABF) Budget to supplement the existing conventional budget. Whilst there have been challenges, the implementation has proven to be quite successful in a short time, hence anActivity Based Budget (ABB) has been incorporated into our standard budget development process.

Implementing an ABB has allowed increased flexibility in how we manage our budgets, allowing the consideration of multiple target sets. Hence we can look at the difference between the purchased activity for the various target groups determined by the QLD Department of Health, as well as our own forecast activity for the same target groups.

Whilst we are able to allocate activity to the individual cost centre within GCHHs, we

did not try to mandate the ABB to the cost centre level. Instead, a tool was constructed which allowed the operational General Managers to manage to the service line, and the Divisional Finance Managers to manage to the cost centre level.

It has proven very effective in generating involvement in ABF management across the HHS as clinicians have now been provided with a feedback loop that highlights the need for high quality costing information. They now see the value in providing information to the Activity Based Costing team as the end result is greater equity in the budget build process.

By applying the methodology to the source year data to give both activity and actual expenditure to the cost centre level, we were able to build a cost per Weighted Activity Unit (WAU) for each cost centre and service line. This extra emphasis on efficiency has also caused an increased focus on benchmarking, with service areas looking to compare performance against both the NHCDC buckets and HRTcosting benchmarks.

GCHHS still has a number of challenges to ensure the long term sustainability of ABB including automating the generation process, improving the in-year reporting and monitoring, and the integration of benchmarking to assist in the building and monitoring of the budget.

Activity based costing of medication to the individual in the public hospital setting.Peter Cronin, Prospection and Kate Richardson, St Vincent’s Hospital, Sydney

The project objective was to develop a reporting system that would allow medication costs to be allocated to an individual at a hospital setting for Activity Based Funding.

A collaborative solution grant from NSW Trade and Investment provided an innovative model to bring together Prospection - a health analytics consultancy; St Vincent’s Hospital – a recognised e-Health leader, and the Centre for Health Informatics – a leading academic

research group. Medications account for approximately 5% of recurrent hospital expenditure in Australian public hospital. However there have been considerable challenges to allocate costs to an individual patient episode. As the hospital sector moves towards a widespread adoption of electronic medication management systems, this project provides insights into the opportunities for more granular costing.

Medications can be dispensed individually to patients or distributed to ward imprests with costs allocated to hospital cost centres. These costs are then allocated on a weighted basis to inform financial information. Approximately 50% of inpatient medication costs are unable to be matched to a patient as they are contained in the distributed ward imprest value. The electronic medication management system records each unit dose administered to a patient. The development of the reporting system involved developing a detailed business process map, and an integrated database from several clinical systems. The presentation will address the challenges, outcomes and future opportunities arising from the project and collaboration.

NSW ABM monthly reporting solution - predictive modelling

Alfa D’amato, The ABF Taskforce, NSW Health, Bee Sim Lim, The ABF Taskforce, NSW Health and Jian Wu, The ABF Taskforce, NSW Health

NSW Health ABF Performance monitoring system has evolved significantly over the last 3 years. We started off with excel based template and top level fractioning to an easy to use application. The app provides a state wide view for system managers whilst business users can slice and dice cost information by stream/class/facility or specialty level. The cost is modelled using gamma regression and is derived from the latest costing data submission.

The Gamma regression extracts and summarises the numeric relationship between each cost driver (predictor) and

estimates the contribution of each cost driver to the total formation of the cost. By using this relationship estimates from the regression model, we can predict the cost of new encounters.

As the system moves towards Activity Based Management (ABM), business users expect more up-to-date data and reports. NSW Health must improve its capacity to track each health services performance against activity and cost.

ABM is an evidence based management approach that focuses on patient level data to inform strategic decision-making. Through clinical costing results and other activity data, ABM allows clinicians and managers to identify areas for improvement and make informed decisions relating to patient care through the optimisation of resource allocation. It is a system for continuous improvement and it provides a link with service Key Performance Indicators where activity, cost and performance informationis used to attain strategic andoperational objectives.

This solution optimises the ways of working within the ABF system and supports the progression towards ABM in NSW.

Building robust intelligence systems to drive qualityand efficiency

Dominic Dawson, SESLHD, Mark Shepherd, SESLHD,Alison Cochrane, SESLHD,David Thurman, SESLHD, Subra Iyer, SESLHD, Jaime Wotherspoon, SESLHD and Joey Tso, SESLHD

The challenge every organisation faces is to deliver high quality services at an efficient price. In health care provision the criticality of quality care and sustainable outcomes for patients and the community is paramount. Activity Based Management is an opportunity that allows us to shine the light on what we do and its costs, in a different paradigm. It has been a significant driver in also starting to look at clinical variation,


benchmarking costs and improving the quality of data we collect as a system.

Over the last 3 years our local experience has allowed us to understand the funding model and working systematically and collaboratively achieve a process of negotiation and distribution of activity in order to provide care. As in all systems, there are many levers, as a health organisation it is imperative that we adopt levers to ensure clinician engagement and drive operational requirements for improved performance, efficiency and indeed transformation. The Triple Aim Framework describes an approach to optimising health system performance and is characterised by three dimensions; Quality of Care, Health of the Population and Value and financial sustainability. The framework gives us an aspirational model to identify and build intelligence for organisational transformation.

The paper will detail the journey inpreparing and implementation of ABF atthe local level, including the governance model and outcomes. It will explore the milestones achieved in our newest journey around imbedding quality care using data that will deliver better outcomes and financial efficiencies.

In moving from the funding model (ABF) to ABM the establishment of a robust Business Intelligence Program that brings into focus these various levers of influence by designing dashboards and reports that bring information to the desktop of clinicians and managers, is critical to the process. Some of this information includes quality and safety indicators, pathology utilisation, activity and other KEY PERFORMANCE INDICATORSs performance. Further this information is structured to provide analytical capacity for improvement, redesign and innovation within services and across the organisation. As we progress this challenging journey the ongoing need for integrating data external to the hospital system is critical particularly; understanding population health needs and chroniccare management.

The paper will describe the governance structure and the model on which the

significant development and implementation of intelligence systems has commenced. It will also provide a framework of how we evaluate progressive success.

The presentation will also include a view of a locally developed Business Intelligence Portal OrBiT (Organisation Reporting and Business Intelligence for Transformation) and demonstrate some of the key elements of the product. OrBiT is built using a software application that is progressively turning large volumes of data into useful information It aims to eliminate time consuming processes for staff to use multiple systems with the establishment of sophisticated data repository and reporting tools. It is anticipated that this portal as it is implemented and progressively matures will provide the data evidence for conversations that lead to innovation, improvement and efficient practices.

Making mental health part of mainstream costing

David Debono, Department of Health Victorian Clinical Costing Committee

Making Mental Health Part of Mainstream Costing, Dr Christopher Jackson (MelbourneHealth), Maura McSweeney (St Vincent’s Health, Cathy Ma (Department of Health and Human Services) and David Debono (Department of Health and Human Services).

In 2009, the Department of Health in Victoria funded two health services to pilot mental health costing across a range of programs. The results and experiences provided by this initial seed money have led to the formation of the Victorian Mental Health Clinical Costing Group with an ongoing commitment to mental health costing across a number of health services. It continues to cement mental health costing as part of mainstream clinical costing in Victoria. This paper presents the Victorian mental health costing journey, including the use of funding to resource staff in a costing workforce shortage, as well as the challenges of identifying activity and disentangling shared service arrangements. It grapples

with the challenges of measuring resource utilisation and the development of resource weightings, while maintaining mental health staff engagement and making the costing of mental health services central to ongoing work at the hospital level. It will also describe common issues mental health costing has with other types of hospital activity while tabling some of the work undertaken by the Victorian Mental Health ClinicalCosting Group.

Implementing the episode clinical complexity model into the Australian refined diagnosis related groups classification for version 8.0

Vera Dimitropoulos, National Centre for Classification in Health, The Universityof Sydney

Phase one in the development of AR-DRG Version V8.0, included a Review of the AR-DRG Classification Case Complexity Process resulting in a new Episode Clinical Complexity (ECC) Model. The ECC Model allows for the assignment an Episode Clinical Complexity Score (ECCS), to each episode. These scores quantify relative levels of resource utilisation within each Adjacent Diagnosis Related Group (ADRG) and are used to split ADRGs into DRGs on the basis of resource homogeneity. The process of deriving an ECCS for each episode begins by assigning a Diagnosis Complexity Level (DCL) to each diagnosis appearing against the episode. These DCLs are integers between zero and five that quantify levels of resource utilisation associated with each diagnosis, relative to levels within the ADRG to which theepisode belongs.

The DCLs of the episode are then combined using an algorithm to define the episode’s ECCS. The algorithm combines the DCLs in descending order and includes a decay component to adjust for the diminished contribution of multiple diagnoses vis-à-vis their individual contributions.

During Phase two, the development of AR-DRG V8.0 had at its core the implementation

of the ECC Model within the AR-DRG classification. A comprehensive set of ADRG splitting models were evaluated against classification structure principles, splitting criteria and in terms of statistical performance and clinical relevance. ACCD’s objective has been to minimise the use of non-complexity splitting variables, with a strong preference for ADRG splits based on relative complexity (i.e. ECCS). This has been achieved with only 6 of the 403 (non-error) ADRGs requiring the use of a non-complexity splitting variable.

ACCD’s governance arrangements enabled the consortium to efficiently obtain informed clinical and classification advice on the validity of the proposed splits through the Classifications Clinical Advisory Group and the DRG Technical Group (DTG), with further analysis on specific areas of the classification undertaken at their request prior to finalisation of AR-DRG Version 8.0.

AR-DRG V8.0 has 807 end classes or DRGs (including 3 error DRGs). V8.0 of the classification demonstrates comparable statistical performance to V7.0 in those ADRGs where LOS has been removed as a splitting variable, and outperforms V7.0 in almost all other ADRGs where splittinghas occurred.

The AR-DRG classification structure itself has not been altered for AR-DRG V8.0 apart from changes required as a result of a review of the surgical hierarchy and minor code movements facilitated by incorporation of DTG approved DRGpublic submissions.

The conceptually based, theoretically derived and data driven characteristics of the ECC Model implemented within the classification provide a strong basis for ongoing refinement of the classification as changes in clinical care and improvements in data quality occur over time.

Overall, AR-DRG V8.0 represents a significant refinement to the AR-DRG classification, with major improvement in the measurement of clinical complexity through the use of the ECC Model, and


simplified splitting logic leading to greater transparency. These refinements will provide improved performance and support of the AR-DRG classification in its many roles including those within hospital funding, health system analysis andclinical management.

Deep sea diving to uncoverclinical variation

Susan Dunn, ABF Taskforce, NSW Health

The ABF Taskforce have been diving for information since their conception, not happy with surface diving into the CD delivered cost data collection, we began a technical dive into the costing data with the ABM Portal. It was only with the added visuals at that depth that we were able to release the hidden treasures of information. Maximising the benefit of not only costing data but data crucial to clinical governance and appropriate models of care.

Not content with technical dives, the ABF Taskforce have moved on to commercial dives and unleashed the monster. A data mining tool that manages the monsters found within 100 metre sea depths. With great risks come great rewards. The risks of needing to be very controlled and focused whilst diving, leads to the treasures of understanding clinical variation.

This presentation will demonstrate the depth of analysis able to be undertaken within the Clinical Variation Application and the ability to descend all levels of diving from snorkelling on the surface to find AR-DRGs with the greatest LOS or cost dispersion, to reviewing encounters by age, complexity and urgency status; then completing a technical dive into multi analysis of secondary diagnoses and complications and comorbidities. Finally moving into a commercial dive of analysis of day of stay activity for Theatres and Imaging whilst combining all of the treasures collected up to this depth in to a monster ad hoc data mining tool. One may even find the pearl in the oyster!

The future: atmospheric dives.

The costing marathon... it is not about who wins but how therace is run

Suellen Fletcher, ABF Taskforce,NSW Health

In past years the path to improving the quality of costed data has been a slow and onerous like a never ending marathon. Costing staff have been provided numerous reports regarding costing results submitted up to a year ago. The incentive to change the quality of data is low as the results cannot be resubmitted and some of the errors reported appear meaningless or inappropriate.

We all know without proper training and preparation we can never complete a marathon. We need to provide costing staff the proper tools, training and motivation to complete the never ending rounds.

A new quality program was developed in NSW Health which was designed to motivate costing staff to change the way they run the race. This included:

• Warm up events which test performance of costing setups prior to

the final submission.• Breaking down the marathon into a

number of smaller segments to make the process more manageable

• Providing Measuring tools to measure the performance if we don’t know how far we have been how will we know how far we have to go

• Meaningful Indicators to improve performance. It doesn’t help to have unrealistic targets. We can’t expect every competitor to run at a world record pace

• Benchmarking against similar competitors to assess performance.

The aim is that costing staff achieve realistic personal bests, every time they compete.

Working in partnership with medical staff for activity based management performance

Renee Fortunato, Sydney South West Local Health District

It is increasingly recognised that Activity Based Funding (ABF) will have no impact on health system performance unless there is a change in people’s behaviours. There is a lack of research and understanding about medical staff attitudes and perceptions towards ABF in Australia, and how these are influencing medical behaviours and engagement with ABF.

A study was undertaken at a Sydney metropolitan hospital to explore these attitudes and perceptions to establish the conditions and strategies that will enhance medical engagement with ABF. Medical staff attitudes and perceptions towards the following aspects of ABF were investigated:• Awareness and understanding • Cost consideration • ABF incentives • Unintended consequences of ABF • Coding, data and benchmarking and, • Organisational decoupling.

The study involved an exploratory qualitative design incorporating semi-structured interviews with senior medical staff. Thematic analysis to identify key themes and findings guide the recommendations. The findings highlight the importance of building medical understanding of ABF to address negative medical perceptions, and the role of incentives to influence medical behaviour. The findings provide health service managers with a greater understanding of the conditions under which medical staff will engage with ABF to consider costs, use data and benchmark to improve health system performance.

An essential consideration for health system managers is developing strategies to more closely align the current discrepancy that exists between medical attitudes and expected behaviours with ABF. Ultimately the acceptance of ABF will depend on how successfully hospital executive and medical staff are able to address this discrepancy. If these implementation issues remain unresolved then it is likely that medical staff will be unwilling to participate in efforts to enhance the success ABF, particularly if there is no incentive for them. Given the financial implications of remaining in the current state, significant organisational

investment is required to build the systems, processes and capability to function within an ABF environment.

Recommendations for attention are:• Development and implementation of an

education program with content specific to each departments needs on the ABF model and building cost consideration into medical decision-making. The education should highlight the clinical relevance and benefits of ABF to address the underlying perceptions and knowledge gaps that may be limiting current medical participation.

• To establish relationships between coding and medicine departments to increase the understanding and accuracy of documentation and coding for ABF. This is essential for funding to reflect the complexity of services provided. Coding presence at medical departmental meetings to feedback on documentation and coding accuracy will be an important strategy to optimise data accuracy and credibility that will be essential to ongoing benchmarking and review of performance of ABF data

• Development of meaningful incentives for medical staff will be essential long term to motivate medical staff towards improved performance, increased empowerment and accountability. Altering hospital budgets to a departmental level may be a longer-term strategy to be considered however, a more immediate incentive system may need to be designed and factored into the budgeting process.

The write way is right

Vanessa Gartrell, Mid North Coast Local Health District and Tammy Dowrick,Mid North Coast Local Health District

Accurate reflection of the patient journey through adequate clinical documentation is paramount in an Activity Based Funding (ABF) environment. Appropriate reflectionof the patient journey results in betterclinical outcomes for patients and better information to measure resource intensityfor patients treated.


The Mid North Coast Local Health District (MNCLHD) developed and implemented a project that focused on Cardiology to identify the best approaches locally for improving clinical documentation by Medical staff in a small rural Local Health District where changeover of junior clinical staff is frequent and there is a high level of visiting medical officers. The purpose of the project was to gain insights into why adequate documentation was not occurring, assess the impact of inadequate documentation and identify processes and practices that would sustain documentation standards in accordance with state and national criteria.

The Cardiology documentation project aimed to ensure 100% of medical staff in the Cardiology service at Port Macquarie Base Hospital Coronary Care Unit adequately documented the patient clinical journey in accordance with a locally agreed documentation framework guideline in addition to state and national criteria for clinical documentation. Insights into the key issues that impact on staff completing adequate documentation were gained through brainstorming, a questionnaire and using AIM (accelerating implementation methodology), with a major influencing factor being ‘education’ (expectationand requirements).

This was followed by time (lack of), the system (accepted practice), the culture (historical practice), attitudes (of medical staff), knowledge (of documentation policy as well as knowledge of the patient illness) and communication (breakdown). Issues resulting from poor documentation standards were highlighted through random retrospective chart reviews that did result in Diagnostic Related Group (DRG) changes and a gain of approximately $218,799 specifically in the chest pain DRG. Prospective reviews were also conducted highlighting the breakdown in communication between what doctors think and discuss as a team and what they actually write down. The project’s success was measured pre and post implementation through assessment of documentation of provisional diagnosis, issues lists and plans.

The project saw a 36% point increase in documentation for provisional diagnosis.

To sustain documentation standards and meet state and national criteria for documentation MNCLHD found that clinical champions were critical, education and training for new staff was important, enhanced communication processes between clinical coders and medical staff and executive sponsorship. Following an individual patient journey was integral to this project with an insightful comment by a consultant during a prospective review round; “This will make us think about what is really wrong with our patients and how we document that, it will serve to clarify our thinking and improve our medicine”.

Classifying subacute and non-acute care - Australian National Subacute and Non-Acute Patient version 4 (AN-SNAP)

Janette Green, Australian HealthServices Research Institute andRob Gordon, Australian Health Services Research Institute

Version 4 of the Australian National Subacute and Non-Acute Patient (AN-SNAP V4) classification was developed recently by the Centre for Health Service Development, University of Wollongong. The project was commissioned by the Independent Hospital Pricing Authority and overseen by the Subacute Care Working Group and represents an important element in the infrastructure to support the ongoing implementation of a subacute and non-acute Activity Based Funding model.

AN-SNAP is a casemix classification that includes four subacute care types (rehabilitation, palliative care, geriatric evaluation and management and psychogeriatric care) and one non-acute care type. AN-SNAP classifies care across admitted and non-admitted settings.

An iterative approach to the development process was undertaken in which data analyses and clinical consultation

processes were combined to ensure that the results are both statistically meaningful and clinically sensible. The project also involved a significant level of consultation with jurisdictions, clinicians and other key stakeholders across the subacute sector.

This presentation will outline the methodology used in the project and the main features of the classification. Recommendations relating to the ongoing development of the AN-SNAP classification will also be discussed.

Data matching of hospital activity and Medicare Benefits Scheme (MBS) claims: an unexpected journey

Beth Gubbins, National Health Funding Body, Bob Sendt, National Health Funding Pool, Lynton Norris, National Health Funding Body and Svetlana Angelkoska, National Health Funding Body

Under the National Health Reform Agreement (the Agreement), the Administrator of the National Health Funding Pool (the Administrator) has responsibility for determining the Commonwealths funding contribution for public hospitals based on the actual volume of services provided, a total of approximately $15 billion each year.

To ensure that the Commonwealth does not pay for the same service twice (as per Clause A6 of the Agreement), the Administrator, through the National Health Funding Body (NHFB), undertakes data matching between the patient level activity data provided by states and territories (~30 million hospital records) and MBS and Pharmaceutical Benefits Scheme (PBS) claims data provided by the Commonwealth (~470 million MBS records, ~300 million PBS records).

This task has never been undertaken before and the considerations have been many and varied. The sheer volume and sensitivity of the data require that the processing environment is capable of receiving, storing, linking and analysing the data in a highly secure manner. In addition to this capacity

and capability, an understanding of the data at the data element level is essential how reliable is a data element and what are the relationships between the data elements? Developing business rules to determine what constitutes a match (potential double-billing) has been an integral step to provide transparency and to avoid false positives.

In addition to operational and technical considerations, clinical considerations have also been an important component. To ensure that identified matches are definite instances of double-billing, it has been necessary to understand clinical practices within the hospital and those that give rise to MBS and/or PBS claims.

In order to test the validity of the process and the integrity of the business rules, the matching activities have so far been undertaken on a proof-of-concept basis. This has enabled all parties to follow the process, view the results and provide valuable feedback.

The outcomes of the proof-of-concept have indicated that there appears to be double-billing occurring and that the process developed to identify these instances is sound (specifically the middle days of an acute admitted stay with double-billed MBS claims). The next phase is to confirm the validity of the matches by allowing states and territories to view certain data elements of the MBS claim that pertain to a hospital service. This will enable states and territories to investigate specific instances as well as trends in billing practices.

Further work to enhance and refine the matching process for the day-of-admission and day-of-discharge of acute admitted stays, as well as emergency department and non-admitted services is being progressed. So too, is analysis of these settings with respect to incidences of double-billed PBS claims.

An added benefit of undertaking the proof-of-concept has been the learnings gained. Interrogating the data at the patient level, whilst maintaining the privacy of the patient, has produced insights into trends and an


understanding of patients continuum of care. It is anticipated that sharing these insights can lead to improved practices, more efficient allocation of resources and enable system managers and hospitals alike to improve services planning and delivery.

Activity Based Funding - good in principle but harder in practice in the private sector

Brian Hanning, Australian HealthService Alliance

The advantages of Activity Based Funding (ABF) apply equally in the private and public sectors. These include robust classification systems; payments based on relative cost and Length of Stay (LOS) parameters based on industry norms. There are major differences between the sectors which significantly impact on the ability to introduce and keep up to date private sector ABF models.

The data necessary to derive robust sets of ABF weights and LOS step downs under the most recent classification systems is harder to access in the private sector. The first publicly released private sector clinical costing study based on Australian Refined-Diagnosis Related Groups (AR-DRG) v6 (any version) did not occur until 2014. Accessing private sector data necessary to perform the DRG level Analysis of Variation which underpins LOS parameters in Australian Health Service Alliance’s (AHSA) ABF model has also been difficult.

In the private sector ABF introduction usually must be agreed to by both parties as must any change of classification or model parameters. Some private hospitals remain on contracts predicated on AR-DRG v4 despite attempts to negotiate a move to later DRG versions. Where case payments exist it has often proven difficult to negotiate changes in LOS and relative payment parameters as well as the DRG version from that when such payments were introduced many years ago. AHSA would like to see improved availability of private sector clinical

costing and LOS under the most up to date DRG versions.

We are being bold

Julia Heberle, The Activity Based Funding Taskforce, NSW Health andKylie Hawkins, The Activity Based Funding Taskforce, NSW Health

You may recollect the immortal words spoken at the beginning of the Star Trek movies and TV episodes:

Space: The final frontierThese are the voyages of theStarship, EnterpriseIts 5 year missionTo explore strange new worldsTo seek out new life and new civilisationsTo boldly go where no man hasgone before

Controversial words for two reasons - the implied sexism and the split infinitive in the last line.

The implementation of Activity Based Funding has resulted in an increased focus on patient level costing. This is a verygood thing.

It is has presented the NSW Costing Team with an opportunity to tackle challenges which to date have been difficult to resolve.

One of the changes implemented in the 2013-14 District and Network Return (DNR – the NSW cost data collection) was a standardised built service codes for intermediate products. Resistance to the idea by special parties was futile – ‘it had to be done for ABF’. The standardisation means that reports can be easily written that can be used across all sites.

Standardisation will also facilitate auditing processes that will become more focussed in the coming twelve months in NSW.

More importantly though, it means variations in cost results at a product level (ie a particular Diagnosis Related Group (DRG),

Urgency Related Group (URG), Subacute and Non-Acute Patient (SNAP) or Tier 2) can be more easily analysed at the intermediate product level.

The standard built service codes for 2013-14 encompassed allied health, medical and ward hours, emergency room, operating theatres (anaesthetics, operating room, recovery and prostheses), blood products, cardiac catheter, pharmacy, imaging and pathology feeders.

The standard built service codes have up to 8 components with the first component being the feeder name. Separate built service codes are required for utilisation data based on feeder data as opposed to utilisation data built from coded data.

There is still some work required to standardise the code sets for each of the feeder data systems. This work has already been done for Imaging and pharmacy and is underway for pathology.

Live long and prosperBeam me up ScottyHighly illogical

Analytical insights into the acute admitted pricing model

Sean Heng, IHPA

Over the past three years, IHPA has developed a set of robust and complex pricing models in calculating the National Efficient Price including the headline figures, price weights and adjustments. Behind the scenes there is an array of pricing models that determine these important figures.

This talk will provide a high level overview of the acute admitted methodology, including:

1 Raw input data The acute admitted model uses a

wide variety of data sources to create the most accurate view of hospital costs. To utilise the potential of these sources a number of assumptions and methodologies are employed. Key patient characteristics are considered.

2 Key Cost and cost modifications adopted Our pricing models are not designed

to consider all cost of public hospitals, but instead focus on costs that are considered in scope for pricing purposes. There are a number of stages that are incorporated to remove out of scope costs.

3 Identifying and trimming patient outliers To ensure key statistics are robust and

not influenced by outliers, trimming is required to identify and remove highly unusual costs at a patient and hospital level. A number of trimming methodologies will be outlined.

4 Hierarchy of the model. After the preparation and data

cleansing, calculations of parameters and adjustments are performed. The steps in the model include the calculation of:

• Inlier Bounds/ WIP Weights / Stratification

• Base Diagnosis Related Group parameters

• Paediatric adjustment • Mental health adjustment • Remote and indigenous adjustment • Radiotherapy and Dialysis

adjustments • Intensive Care Unit (ICU) rate

calculation 5 Potential future developments With the evolution of Activity Based

Funding in Australia in full swing, potential future developments in the pricing model are:

• Moving away from the average cost and determining an efficient cost through considering avoidable and unavoidable hospital costs

• Increased flexibility in the model to improve applicability in to

other fields • Incorporation of all streams.


In search of the great Oz: the road to developing the non-admitted services classification through understanding cost and reporting variance

Alix Higgins, Independent Hospital Pricing Authority and Vanessa D’souza, Independent Hospital Pricing Authority

The Tier 2 Non-Admitted Services (Tier 2) classification system was developed to gain an accurate understanding of non-admitted hospital services in Australia and to support the introduction of Activity Based Funding. However, its implementation highlighted extensive discrepancies due to the absence of a nationally consistent classification system. In addition, the lack of infrastructure, reporting capability, nationally consistent definitions and counting rules undermined national data collections.

In 2013, the Independent Hospital Pricing Authority conducted a national costing study to collect patient level cost data from non-admitted and subacute settings to inform the refinement to the national costing standards, and the development of classification systems. Data collection was undertaken at 43 sites across Australia, capturing 500,000 patient service events. A subsequent project coded diagnosis and procedure data from 246,522 service events from the costing study using International Statistical Classification of Diseases and Related Health Problems, Tenth Revision, Australian Modification (ICD-10-AM) and Australian Classification of Health Interventions (ACHI). This was then linked back with the associated staff activity and cost data.

Analysis of the data demonstrated the impact of specific diagnoses or procedures on the cost of a service event. Individual clinic cost data showed a cost differential of between 2 and 74 percent between service events. For example, the presence of ACHI procedure code 9619100 (radiological procedure and radiotherapy) produced a difference of almost $1300 between two service events, and the class with the widest variation in diagnosis data, Class 20.07

General Surgery, had a cost difference of approximately 30 percent.

The 20 most expensive service events ranged in cost from $4,029.97 to $5,245.45. Within these 20 service events, the diagnosis of neoplasm occurred in 58.8 percent of reported diagnosis, and the procedure 9620600 (unspecified administration of pharmacological agent) occurred in 25 percent of service events.

The range of diagnoses and procedures reported against the different clinics were somewhat surprising. In a list identifying the top 10 classes with the widest range of procedures, the 10 series (the procedure classes) only featured once, albeit at the top of the list with 160 different procedures. In relation to the range of diagnoses reported to the classes, the medical consultation classes (the 20 series) featured heavily and Class 20.07 General Surgery had the largest number of different diagnoses (705).

In 35 percent of service events attributed to medical consultation classes in series 20, more than 50 percent of time per service event was provided by nursing and allied health staff. There were five series 20 classes that had more than 50 percent of reported service events where nursing and allied health hours were greater than medical staff hours.

The non-admitted coding project has delivered an extensive source of patient level activity and cost data which can be used to refine the yellow brick road that is the Tier 2 classification system. The data has provided valuable insight into the factors that influence cost differentials and reporting variance, contributing to the quest for a nationally consistent classification system for non-admitted services.

Implications of a simplistic approach to Activity Based Funding in Croatia

Karolina Kalanj, Karol consulting d.o.o. and Karl Karol, Karol consulting d.o.o.

This paper discusses the implications of a simplistic approach to activity based payment in Croatia focusing on the need to consider outlier payments. While Diagnosis Related Groups (DRGs) were introduced in Croatia some eight years ago, little effort was made to institutionalise the system and the program has not been implemented in a systematic manner. Little has been invested in DRG capacity building and costing with the result that current coding practice is poor, the base price has oscillated up and down by some 75% over a period of 5 years, and the cost-weights do not reflect the service cost relativities in Croatia.

In this environment, the Croatian health insurance fund (HZZO) recently brought into effect a new payment model for inpatient care. Under the new approach, hospitals would only be paid in accordance to their historic budget ceiling if they reached the activity level that warranted the payment. If they produced less, their payment would be reduced proportionately. The challenge for hospitals is therefore to make every effort to get their activity reporting to match the level of activity which would warrant payment at the budget ceilings. If they cannot do so, they can increasing activity levels, or alternatively overstate their activity.

HZZOs’ inpatient payment formula simply pays hospitals according to the DRG average price without adjustments for variables such as outliers, ICU, pediatrics, hospital type or rationality.

This study looks at the impact of the new HZZO formula on Croatian tertiary hospitals (clinical centres). Croatia has 33 acute hospitals of which are 5 clinical centres and these account for 46% of the national acute inpatient hospital expenditure. Treating more complicated cases, clinical centres have longer ALOS and thereby are likely to have a greater proportion of patients that stay in hospitals for extended periods of time that would in other systems qualify for additional payments as outliers. As an example of the problem, the study looks at cases grouped in the DRG A06Z. This group includes patients who were mechanically ventilated for 96 hours or more. It was found that while the

ALOS in this group in other acute hospitals was 23 days, the ALOS in clinical centres is on average 33.5 days which is likely to reflect the greater severity of cases in these tertiary hospitals. It was also found that 8% of the A06Z cases stayed in hospitals more than 3 months, with much of that time spent in ICU.

The study also found that on average, costs of A06Z cases in clinical centres are 15% more than the income they receive when the average price of the A06Z group is applied.

Conclusion: Paying hospitals only at the average DRG price in Croatia may not fairly reflect the activity of clinical centres and steps should be taken to make appropriate adjustments in the DRG payment system. The review of the payment formula should be part of a more methodical approach to the implementation of the DRG based payment model in Croatia.

Implementation of the medical imaging coding and costing model of Activity Based Funding- phase 2 of the MICC model

Ingrid Klobasa-egan, NSLHD, Northern Sydney Local Health District andJulia Herbele, ABF Taskforce- NSW Health

PreambleThe NSW ABF Taskforce has designed a single, consistent, data collection strategy for medical imaging activity. This has been achieved by using a state-wide standard PACs-RIS Procedure Code-set and a relative value unit costing methodology, known as the Medical Imaging Coding and Costing (MICC) model.

Many countries are examining statistics on clinical variation in Health. For example, in the USA, $800 billion per year waste has been reported in Health. Unnecessary diagnostic tests were found to be a major component of this. The MICC dataset is a new resource for the analysis of issues such as Medical Imaging over-ordering or provide answers to questions such as; “ is health performing the right test for the right clinical condition …at the right cost. “

The first round of District Level Returns


(DNR) using the MICC model was submitted in October 2014 by 13/18 Local Hospital Districts (LHDs).

AimsThe MICC model aims to engage clinical departments in the accurate allocation of cost for Imaging services and trend activity.

The NSW Medical Imaging ABF data can be utilised to investigate warranted and unwarranted clinical variation. This information will allow health managers to create benchmarks for best practice.

Method1 Standardised naming convention for medical imaging procedures:

NSW Medical Imaging departments have 5 different PACs-RIS providers and 18 different code-sets across NSW. To unify this to one system of coding, a draft standard procedure code-set (2014), was mapped to existing PACs-RIS codes.

2 Costing data uploads:LHD cost oordinators assisted in uploading this patient data extract with the use of an ACCESS script and were able to return the number of cases performed in each modality cost-band to LHD Chief Radiographers and Chief Nuclear Medicine Technologists.

This 12 month ABF extract contained multiple fields including patient demographics, test ordered, referrer, procedure time, time of report release and other fields.

ResultsExtracts from 13 of the 18 NSW LHDS/SHNs were uploaded into the ABM Portal at NSW Ministry of Health in October 2014. This data was further uploaded into a clinicalvariation application.

The number and type of tests done for each patient by day of stay has been analysed via this application. For example, the range of tests for a hip replacement DRG for elective vs emergency patient by hospital can be quantified and examined for best-practice. Initial findings show a large variation in

diagnostic imaging ordering for this DRG. An annual quality review process for the code-sets and modality cost bands is necessary to ensure the integrity of the state ABF dataset.

ConclusionThe MICC provides NSW Health and local managers with the largest collection of imaging activity-cost data. This data can be utilised to analyse variation in service delivery and test ordering.

The relative costs for procedures from different facilities can be benchmarked across NSW and “peer to peer” comparisons made. These comparisons will provide information on warranted and unwarranted clinical variation and allow health managers to effectively review the data for opportunities in efficiency and improved patient outcomes.

Clinician engagement in clinical variation analysis

Friedbert Kohler, Braeside Hospital and Harry Doan, Fairfield Hospital

One of the many challenges of Activity Based Funding (ABF) is to ensure that all aspects of clinical activity are appropriately documented and coded. In view of the many contributors to this process an excellent system of communication and collaboration between all parties involved is required. Developing the right forum for such communication is essential and required an innovative approach.

It was recognised that clinicians have an ongoing keen interest in the quality of care they provide to the patients under their care. This includes ensuring that patients are only admitted if this is a clinical requirement, have no or minimal preventable complications and are discharged at the earliest opportunity when this can be done safely within the parameters of available community support and the risk of readmission is minimised. Furthermore clinicians understand the importance of good clinical documentation in the medical records. All of these form the basis of

good clinical practice. They are also the foundation of appropriate coding and patient classification which underpin Activity Based Funding.

With these objectives in mind Fairfield hospital reviewed its processes and committee structures to ensure that there was an appropriate forum for clinicians, clinical coders and hospital administrators could meet to discuss all issues relating to Activity Based Funding. Clinician engagement was crucial for the success of this process. A clinical quality committee was established to which mainly clinicians were invited. The aim of the committee was to review, monitor and advice on clinical quality issues within Fairfield Hospital including unwarranted clinical variation, avoidable admissions, readmissions within 28 days, length of stay andclinical documentation.

Six months after establishment the committee has already had significant achievements. These include:• A file review for 4 weeks of

“unwarranted” admissions, finding that each of the admissions were

medically justified,• Cooperative work with front line clinician

to gain a better understanding of long stay outliers. Clinicians were able to explain why patients stayed longer for each patient identified as a long length of stay outlier. Further work to establish if some of the factors resulting/contributing to increased length of stay can be modified

• Clinicians and coders could discuss how particular documentation results in a particular coding and the consequences of such coding on the subsequent DRG class allocation. This communications has enabled a clearer understanding of what is the best way to record some conditions to ensure that there would be the most accurate coding possible.

• Administration has confidence in the process and they appreciate the ownership of the process by clinicians.

• The information gained from this process is integrated into the

discussions with the local health district and the ministry of health in

funding/activity allocations and requests for a review of factors influencing funding and activity calculations

where appropriate.

Work to gain a better understanding of patients readmitted within 28 days of discharge is now being carried out.

In conclusion a collaborative approach between administration and clinicians has resulted in a better understanding of the interactions between ABF and clinical/patient factors.

Developments in Teaching, Training and Research (TTR) – an update on work undertaken to develop a TTR classification

Julian Maiolo, Paxton Partners andDean Mckay, Paxton Partners

The importance of TTR within Australian public hospitals is underlined by the increasing number and location of health services across Australia in which TTR is being undertaken. Recent policy interventions aimed at enhancing the capacity and capability of the Australian health workforce have resulted in a substantial increase in the number of training places across all clinical disciplines. Additionally, Australia has long been renowned for the quality and value of its research output, which relies heavily on the resources and supporting infrastructure of the public health system.

Public health services incur a diverse range, and large variation in costs to support TTR based on the setting in which TTR is conducted. However, in most jurisdictions, funding for TTR is currently guided by historical block grant allocations that have no relationship to the factors that drive these variations. These funding allocations may or may not appropriately reflect actual TT and R activity, and therefore pose risks of both over and under-funding, cross-subsidisation of other hospital activities and incentive


distortions that may not support the growth in TT and R required to support future health workforce needs.

Since being commissioned by the Independent Hospital Pricing Authority (IHPA) to define TTR and identify its associated cost drivers for ABF purposes, Paxton Partners has undertaken extensive stakeholder consultations to understand the nature of TTR, how it is delivered and the feasibility of adopting an ABF approach for TTR. This work has highlighted the challenges associated with identifying, unbundling and classifying a range of activities that, in many cases, are inextricably linked with patient care.

Additionally, as a ‘new frontier’ in ABF, it is clear that substantial work will need to be undertaken to improve the consistency and robustness of TTR data capture for an activity-based funding approach to be feasible for TTR.

This presentation provides an overview of the work Paxton Partners has delivered on behalf of IHPA to classify TTR activities delivered by public health services for funding purposes. It will include:• Discussion of the key issues associated

with defining and costing TTR;• The outcomes of stakeholder

consultations to define TTR;• The classification development

framework for TTR;• The methodology currently being

employed to undertake a cost and activity data collection to develop a TTR classification; and

• An update on the current progress of the TTR cost and activity data collection, and next steps once it is completed.

Documentation errorsaffecting funding in drug and alcohol service

Esther Munyisia, Drug andAlcohol Service

AimThe aim of this study is to identify documentation errors affecting Activity Based Funding (ABF) in drug and alcohol (D and A) service. Background

Despite increasing research on ABF, there is inadequate empirical evidence on accuracy of outpatient service data for payment. This information is useful for healthcare managers in deciding on strategies to improve clinicians reporting on clinical activities and in evaluating the effects of change in clinical documentation systems. Methods: An audit was carried out on clinicians’ error report on ABF data for the months of August, September andOctober 2014.

ResultsA total of 443 data errors were identified. 65.5% of the errors were related to selection of a wrong primary activity, 18.7% were due inaccurate information on presence of a patient during service delivery and 15.4% were a result of recording a wrong mode of service contact.

ConclusionThree categories of documentation errors were identified from the clinicians error report. These errors represent poor quality data which under ABF, contributes to over or under allocation of funding to D and A service. To reduce the errors or achieve an error free environment, it is important for the clinicians to have a clear understanding of these errors and the effect they have on ABF. An in-depth understanding of the clinicians’ documentation system isalso important.

Costs of acute admitted patients in Australia’s public hospitals in 2011–12

Dan O’Halloran, National Health Performance Authority

AimThe National Health Performance Authority released a report on April 30 assessing the relative efficiency of Australia’s largest

public hospitals. Hospitals included in the report represented over $16 billion of the $42.1 billion spent on public hospitals for 2011–12.1 The size of the sector means that efforts to improve efficiency, if well targeted, have a potential to yield significant benefits.

MethodData was sourced from the National Hospital Cost Data Collection (NHCDC), 2011–12. This data collection represents approximately 80% of Australia’s public hospital costs.2 The analysis used comparable costs to compare hospitals against their peers. The inclusion and exclusion criteria for comparable costs were informed by the findings of the Independent Financial Reviews of the NHCDC.3,4

The report focuses on the costs of acute admitted patients, those patients that account for the largest portion of hospital costs. Two measures to assess relative efficiency are presented, Cost per National Weighted Activity Unit (NWAU) and Comparable Cost of Care. Comparable Cost of Care includes ED costs of acute admitted patients, as variation exists in the time patients stay in Emergency Department (ED),5 a factor that influences whetherthe cost of care is recorded as part of the ED presentation or as part of thepatient’s admission.

Relative efficiency is assessed by comparing costs against a unit of activity, accounting for the complexity of patients and individual patient characteristics that can lead to legitimate higher costs.

FindingsThe Performance Authority has demonstrated that results for individual hospitals are broadly the same using both measures, providing confidence in the findings, and the relativities in hospital efficiency (Figure 1). The Authority found two-fold variation in the average cost per unit of activity across Australia’s largest public hospitals.

The report provides contextual information on the average cost of 16 common conditions and procedures, and the extent to which a relationship exists between the

cost of an admission and length of stay. This information can assists healthcare professionals to understand how their decisions contribute to a hospital’srelative efficiency.

Potential use of this reportThe report comes at a critical time of nationaldiscussions around the cost and funding of public hospitals. It provides valuable insight into the variation of the relative efficiency of Australia’s largest public hospitals.

AcknowledgementsThe Performance Authority acknowledges the work of its staff, that of the Independent Hospital Pricing Authority and its staff, PricewaterhouseCoopers and the advice provided by the Authority and report specific advisory committees.

Using National Hospital Cost Data Collection data to support the review of the efficiency, effectiveness and operational performance of the state wide clinical support service,SA pathology

Helen Rizzoli, Ernst and Young and Ken Barr, SA Pathology

In 2014 SA Health undertook a review of the efficiency, effectiveness and financial performance of the statewide pathology service. National and international benchmarks were used to provide an evidence based guide to defining the efficiency of current diagnostic service. To optimise the robustness and validity of the benchmarking, the productivity of the diagnostic laboratory was triangulated across three domains:• Comparison of diagnostic Full Time

Equivalent (FTE) numbers to activity volumes (a measure of the relative productivity)

• Comparison of the cost of service provision to Commonwealth Medicare Benefit Schedule (MBS) rebates (a measure of cost to the revenue at test level), and


• Comparison of the total cost of pathology delivery recorded in the National Hospital Cost Data Collection (NHCDC) cost bucket for the major metropolitan hospitals to reported costs for the same activity volumes and mix for their nominated peer hospitals.

The result across all three domainsindicated that SA Pathology diagnostic services were less financially efficient than their nominated peers.

To undertake the NHCDC analysis, the financial year 11-12 dataset was analysed to compare total reported pathology costs to nominated peer hospital in Australia for each site. This data shows a higher than national peer benchmark cost of pathology per acute bed day for all sites except the Women’s and Children’s Hospital (WCH), in the range of 23% to 52%. It is acknowledged that this outcome could be driven by one or a combination of factors; lower productivity; higher consumable costs; higher salary costs; or a higher volume of tests per patient relative to nominated peer hospitals in Australia with the first point having also been proven through the productivity analysis.

A detailed program of work has been identified that includes, amongstother things:• Rationalisation of laboratory locations

with clinically appropriate test consolidation

• Improved utilisation of advanced analytical and ICT technology, and

• A change to the diagnostic service delivery model to allow a safe and patient focussed service whilst delivering a significant reduction in staffing numbers and skill mix to achieve the benchmarks mean FTE and mean cost per test levels.

The project identified $45m of potential savings and outlined a transition program to achieve these savings over a 26 month period. Together with the benefit of triangulating the benchmark analysis, the use of NHCDC data in this instance will be important to support SA Pathology in the next phase of the process.

The inclusion of NHCDC data has supported the design of a described program of work and will be used to inform the key target areas for improvement. For example, by recalculating the reported service cost based on identified projected savings, it is possible to highlight where the degree of variation is likely to be due to differences in ordering practice for acute inpatient conditions. SA Pathology will use this information to inform a third program of work that includes:• Review of ordering practices• Review of test repertoire linked to

agreed clinical protocols and pathways, and • Prioritisation in the development and

implementation of standard order sets for Local Health Networks (LHNs) in SA.

Monitoring Activity Based Funding quality through routine clinical coding audit programs

Jennie Shepheard, Department of Health and Human Services, Vaughn Moore, Department of Health and Human Services and Beata Steinberg, Department of Health and Human Services

BackgroundCasemix funding was introduced in Victoria in 1993 and under the instruction of the Auditor General a clinical coding audit program was developed in the same year. ‘Proof of concept’ audits were conducted in 1993-94 and 1995-96, and in 1998-99 the first three year program was developed.

Since then several three year audit programs have been conducted and state-wide auditing has become a regular feature of the Victorian clinical coding landscape. The program has always been run by external contractors, providing independence in the conduct of the audit.The contractors are responsible for developing an experienced audit team and for implementing a statistically rigorousaudit methodology under the guidance of the department.

MethodologyThe methodology for the program has been fundamentally unchanged throughout this time making the results comparable over time and making possible an assessment of the quality of our clinical coding.

The methodology in simple format is:• Two stage cluster sampling: random

selection of hospitals and random selection of records for audit

• Approximately 1% of separations for the year are audited

• Records are blind coded by auditors and regrouped

• Key indicators for results are rate of DRG change and impact on funding

• Underpinning the key indicators is a range of error calculations for specific coding categories and a variety of administrative items.

• DRG/funding changes are discussed with the hospital daily

• All significant error rates/underlying issues are discussed at an exit meeting

Results State-wide results have always been ‘weighted’ or ‘estimated’ rather than being presented in raw form. The presentation will discuss the overall approach to weighting.

DRG changeThe rate of change in DRGs has been on a general downward trend from a high of 13.50% in 1993/94 to 4.6% in 2012/13.

Funding varianceFunding impact has varied from a high of 1.80% in 1995-96 to .30% in 2012-13. There has been a positive variance, with the audit result being lower than the hospital result (over funding), in 8 of the 12 years for which a result is available, and a negative (underfunding) result in the remaining years, where the audit result was higher than the hospital result.

Clinical coding /administrative itemsClinical coding errors are reported as principal diagnosis, additional diagnosis and procedure code errors. Principal diagnosis error rate ranges from 7% in 2007-08 to 1.9% in 2012/13. Administrative data error rates are also reported.

Condition Onset Flag (COF)The condition onset flag has been audited since 2005-06; current results show compliance ranging from 89.6% to 100%. The presentation will include some analysis of auditing of the COF.

Benefits• Similar methodology each program

allows comparisons to be made• Audit program encourages internal

auditing practices and compliance with coding standards.

• Increased confidence in the quality of coded data

Limitations• Discontinuity between contractor’s

impacts on consistency in application of statistical methods used to select hospitals for audit, in sample sizes and in weighting the overall result.

• Lack of formal qualifications for auditors (notwithstanding department’s insistence on completion of the auditing short course).

Improving documentation and coding of malnutrition - a five ear journey

Natalie Simmance, St Vincent’s Hospital Melbourne, Clara Newsome, St Vincent’s Hospital Melbourne, Sonia Grundy,St Vincent’s Hospital Melbourne andSally Bell, St Vincent’s Hospital Melbourne

Protein-Energy Malnutrition (PEM) is common in hospitals throughout theworld and negatively impacts onmorbidity, mortality, length of stay, and healthcare costs.

An international study identified the highest prevalence of hospital malnutrition in geriatric medicine (52%), oncology (38%) and gastroenterology (33%) units, with an associated 43% increase in length of stay (Pirlich, 2006). In Australian hospitals, PEM prevalence is 3050%, but the identification of malnutrition by medical and nursing staff is not well recognised and documented (Adams, 2008).


Referral to dietitians for specialised treatment is uncommon, yet cost effective nutrition interventions are available. Documentation and clinical coding of PEM can in some cases increase the complexity and comorbidity level for some patient admissions, changing the Diagnosis Related Group (DRG) and increasing the case-mix funding to a Health Service. A pilot study at St Vincents Hospital Melbourne conducted over a five week period in 2011 found the failure to diagnose and document malnutrition on the gastroenterology unit resulted in 6% ($21,500) loss of potential Weighted Inlier Equivalent Separation (WIES) funding.

The St Vincents Nutrition Committee has since led a number of quality improvement initiatives, including establishing early malnutrition risk screening processes, developing PEM diagnosis and documentation guidelines based on International Statistical Classification of Diseases and Related Health Problems, Tenth Revision, Australian Modification (ICD-10-AM) criteria, the use of malnutrition diagnosis stickers for the clinical record, and adding a malnutrition diagnosis prompt on the electronic medical discharge summary.

Liaison with clinical coding staff to build and maintain working relationships has assisted in this process. Overall, documentation and clinical coding of PEM for patients staying for three or more days has increased from 0.9% in 2010 to 7.8% in 2014. Specifically, documentation on higher risk units has improved over the past four years, such as in geriatric medicine (2.4% to 18.5%), oncology (1.2% to 25%) and gastroenterology (2.0% to 25.1%). Prevalence of coded PEM is now included as a performance indicator on the monthly Medical Head of Unit report to increase awareness within each treating unit.

The potential loss of WIES funding has been an important driver to support a number of hospital wide initiatives which have shown improvements in the identification, documentation and coding of malnutrition. Ongoing work is exploring how these quality improvement activities are supporting and

translating to improvements in nutrition care and clinical outcomes for patients.

Are we there yet? The continuing NSW snap data journey

Sharon Smith, The ABF Taskforce,NSW Health

Four years ago the NSW Subacute andNon-Acute Patient (AN-SNAP) data collection was more or less a standalone process with no integration with the admitted patient data collection.

Over the past 4 years the NSW SNAP data collection has evolved significantly from a dragon that needed to be tamed (or possibly slain) to the current scenario where a simple to use app consolidates reporting between the admitted patient and Australian National Subacute and Non-Acute Patient (AN-SNAP) data collections. Solving our integration problems has opened up an enormous opportunity for improving data quality and benchmarking of sub and non-acute services provided in NSW.

The SNAP app and its low tech precursor have yielded significant improvements in SNAP data coverage and quality by allowing services to benchmark their SNAP data coverage against their peers and identify the areas of the organisation where compliance is good and where it is not. Services can simply and conveniently review data quality and identify records in error facilitating timely correction of data issues. NSW can now monitor activity, data coverage and data quality trends over time.

This presentation will demonstrate the NSW Activity Based Management SNAP app and discuss potential future developments.

Embedding Activity Based Management at clinical unit level - the experience of 2 hospitals in NSW

Gowri Sriraman, Prince of Wales and Sydney and Sydney Eye Hospitals and David Mckenzie, Prince of Wales Hospital

It is critical to have a select suite of indicators that provide “at a glance” information of the organisational perform-ance. Such a suite of indicators for Activity Based Management (ABM) has been identified and implemented at Prince of Walesand Sydney and Sydney Eye Hospitals.

The suite of performance indicators include 1) ABF episodes, 2) ABF final National Weighted Activity Units (NWAU), 3) Variance from activity target – monthly and Year to Date (YTD), 4) ABF Base NWAU – measure of complexity, 5) Bedday per NWAU and 6) ABF Private Episodes and Private NWAU.

By viewing the above indicators together, it is easy spot whether the variation in activity is due to changes in the volume of cases, the complexity, the financial grouping (i.e. changes in private episodes) or a combination of the above.

The Clinical Specialty Report (CSR) tracks the above performance indicators across 2 facilities, 3 programs[1] and 55 departments/clinical specialties. This standardisation allows each department to see its own performance and how its performance impacts that of its Program and the facility. This makes the report powerful and useful to a wide range of audience.

The CSR is produced and distributed monthly and this facilitates timely course correction of activity performance. The report tracks the performance of the organisation across the months of the financial year and a previous period comparison is provided to accountfor seasonality.

As the report reveals the common causes of variation, the performance analyst canfocus on the exceptional causes of variation. Several related initiatives are in progress across the organisation, such as improved care type changing, improved private patient identification and improving Relative Stay Index (RSI) based on Health Round Table (HRT) comparisons. It is important to be able to view the overall impact of the various initiatives as well as the contribution

of each initiative to the performance of he organisation.

By incorporating additional indicators such as total episodes and Average Length of Stay (ALOS), we can monitor the progress of the various initiatives across the organisation. Thus the CSR is a single source of intelligence for the organisation.

The CSR is distributed to the facility clinical council with a briefing note highlighting the key issues. It forms the basis of the narrative of activity performance for the monthly meeting with the CEO of the Local Hospital District. It is used to at the program meetings and departmental meetings to inform the discussion on activity performance.

The CSR is formally evaluated in April-May each year. It is also informally evaluated through user feedback.

The distribution of the CSR has transitioned from email distribution to SharePoint. Over the past months, SharePoint access has been rolled out to include all users across both facilities. This facilitates engagement of all staff in the ABM conversation.

The CSR is being transitioned to QlikView (a self-service Business Intelligence tool) to allow each clinical department to dynamically monitor its activity. There has been interest from other LHDs and facilities in adopting this format.[1] A program is group of similar departments/clinical specialties.

Developing a national allied health data set specification

Catherine Stephens, Department of Health, Qld and Jan Erven, AHPA

The National Allied Health eHealth Collaborative (a collaborative of representatives from key allied health groups across Australia) has commenced work on the National Allied Health Dataset Specification (NAHDSS) to enable the consistent collection of allied health activity and clinical data. This project builds on the work of the National Allied Health


Classification Committee (NAHCC) who developed the Health Activity Hierarchy, including the Allied Health Minimum Dataset, in 2001 to support allied health in the move to casemix funding. This dataset consisted primarily of administrative and activity data.

With the current move towards electronic clinical records, the NAHeHC identified the need to refine and expand the dataset to include clinical data items. The value of this work can be seen in improving the availability of data to accurately inform the costing of allied health services as a component of the health care system, to enable benchmarking of allied health services, to improve clinical practice and facilitate communication of clinical information between health providers.

Work to date has included a review of allied health datasets developed by public health sectors across Australia which has informed a common dataset and preliminary stakeholder consultation across both the public and private sectors. This process has identified support for a nationally consistent dataset and agreement that the proposed NAHDSS should be capable of describing allied health activity, including clinical activity, across a range of settings. The consultation also highlighted the need to address inconsistencies across existing datasets and the need to refine definitions, as well as the development of values for the new data elements.

The challenges of creating a dataset to cover the broad range of professions included in the allied health portfolio are not insignificant, however core elements of the patients allied health assessment and intervention journey have been identified and it is anticipated that, as the project progresses, the broad overarching data elements will include a range of profession specific values to meet the needs of the allied health workforce.

The NAHeHC has developed a five phased plan to progress this work with the ultimate aim being endorsement of the NAHDSS by the National Health Information and Performance Principal Committee as a

national standard. These phases include submission of the project to the National Health Information Standards and Statistics Committee (NHISSC) for inclusion on their workplan, widespread consultation to define and finalise the data elements and the underlying metadata and ongoing technical review of the metadata to ensure that it meets the criteria of a national dataset prior to submission for endorsement.

The changing costing picturefor Australian maternity services: Improvements andchallenges ahead

Barbara Vernon, Women’s Healthcare Australasia and Graeme Boardley, Women’s Healthcare Australasia

Maternity care accounts for the single largest use of hospital bed days in Australia each year. It is also a comparatively high cost sector, with an average of 1 in every 3 births occurring via caesarean section surgery. Changes to national classifications and to costing systems within individual maternity services have potentially significant implications.

Women’s Healthcare Australasia (WHA) conducts annual activity and costing and clinical indicator benchmarking for maternity hospitals and has done so for many years. We are working closely with our members to assist them to identify anomalies in their costing data that may warrant investigation. We also work to help members identify opportunities for efficiency improvements through implementing new models of care, changing clinical practice, or reducing length of stay (e.g. through criteria led discharge programs).

This presentation will explore the impact of recent changes to classifications, led by the Independent Hospital Pricing Authority, that directly impact providers of maternity services. It will explore the implications for maternity service providers of Australian Refined-Diagnosis Related Groups (AR-DRG) versions 7.0 and 8.0, as well as

revisions made to the Tier 2 outpatient classifications, to telehealth funding and to funding for perinatal mental health patients.

While significant progress is being made in the development of classifications relevant to maternity services, there remains a key area of concern to all maternity service providers – the lack of funding for medical care for ‘unqualified’ neonates. WHA has recently undertaken a snapshot analysis of the magnitude of this problem. We will share the findings and make the case for national review of the regulations affecting provision of care to ‘unqualified’ babies.

WHA is the peak not for profit body that represents the majority of health services providing specialist care to women. WHA supports over 60 member hospitals that collectively care for over 100,000 women giving birth annually or around one third of all births in Australia each year. WHA works to achieve excellence in women’s healthcare through benchmarking performance, networking to share information and expertise on best practice care, delivering education and trainingand advocacy.

Developing a National Efficient Cost for small rural hospitals

Samuel Webster, IHPA

The Independent Hospital Pricing Authority (IHPA) determines a National Efficient Cost (NEC) for public health services which are not suitable for funding through Activity Based Funding (ABF). These services, collectively referred to as block-funded services, are funded by block grants totalling approximately 14% of Commonwealth funding under the National Health Reform Agreement (NHRA). The NEC cost model determines the level of Commonwealth funding for block-funded hospitals, and has evolved substantially from its first iteration published in 2013. The 2013-14 and 2014-15 NEC cost models assigned each hospital to a remoteness group and a volume group based on their

weighted activity measured in National Weighted Activity Units (NWAU), and calculated an efficient cost for each possible pair of groups. A shortcoming of this style of model is its failure to recognise certain fixed costs of small hospitals, which make up a considerable proportion of their overall cost. This resulted in counter-intuitive modelled costs for many hospitals.

The 2015-16 NEC cost model introduced a hospital type group and a more advanced modelling technique. The new hospital type group is a discrete measure of hospital case-mix used to indicate, for example, if a hospital offers surgical or obstetric services. Hospitals offering more complex services are then recognised as having a higher operating efficient cost.

Cost model and data extraction improvements for the 2015-16 NEC cost model addressed a number of the shortfalls of the earlier NEC cost models. This has resulted in a more intuitive and robust model. In particular, modelled cost increases with volume group and with case-mix complexity. However, some stakeholders still raise the question: does this capture the efficient cost of a small rural hospital?

Streamlining process in preparation for Activity Based Funding

Lucy Whelan, Monash Health

BackgroundThe Department of Health published a Specialist Clinic Access Policy in August 2013. In March 2014, Monash Health performed a high level mapping and gap analysis for the relevant Monash Health Allied Health led outpatient clinics against the relevant Department of Health policy driven processes. Subsequently a project lead was employed in the Workforce Innovation, Strategy, Education and Research (WISER) Allied Health Unit at Monash Health to identify the key gaps for Allied Health in meeting the processes set out by the Department of Health policy. Simultaneously the same project for Medical and Nursing led clinics was allocated to


the Monash Health Director of Performance portfolio. While the earlier gap analysis suggested that Allied Health was generally performing well against these processes, there was clear evidence of the need for improvement in consistent documentation and data collection such that Allied Health would align with the Department of Health processes ahead of June 2015 when these processes are set to become key performance indicators Key performance indicators under the Activity Based Funding (ABF) scheme.

AimsTo map and streamline processes for all allied health led outpatient clinics such that they comply with Department of Health policy and provide a clear and consistent picture of activity. To design a streamlined process such that audit of compliance with the Department of Health processes is clear, simple and sustainable.

MethodologyAll allied health led outpatient clinic processes were mapped and one standardised process was designed. A twelve week trial of this standardised process took place from November 2014 to February 2015.

EvaluationA multipronged approach to evaluation included; administration data entry over the course of a twelve week trial; a medicalrecord audit of 182 patient files; an online staff survey; Monash Health Business Intelligence Unit (MBI) key performance indicator reports; anecdotal GP feedback; analysis of an issues log kept duringthe trial.

AchievementsOne streamlined process for pre-referral information, registration of referrals, acceptance and rejection of referrals and initial appointment bookings; A successful twelve week trial of a single point of administration and access for each site; Standard Referral form (MRI01) and Allied Health letter templates; Medical Record Audit establishing 100% compliance with all administrative based key performance

indicators and 60% compliance with two clinical based key performance indicators around initial and discharge findings letters; Allied Health inclusion in Monash Health MBI generated key performance indicators reports; Business case for ongoing administrative resources required tomeet Department of Health keyperformance indicators.

ConclusionIn order for the Allied Health led outpatient clinics at Monash Health to meet the Department of Health key performance indicators for the purposes of ABF, an increase in administrative resource is required. There is an option as to whether this additional resource is kept internally or placed in a centralised access unit as per medicine and nursing led clinics.

Quantifying the total costs of care for people at risk of or established chronic diseaseto the Queensland publichealth system

Wilf Williams, KPMG and Vickie Scells, Queensland Health

Queensland Health has embarked on an ambitious reform program which seeks to deliver integrated models of care for people at risk of – or who with established chronic disease – through the use of incentives to complement the Queensland Activity Based Funding model. This approach aims to ensure that the Queensland Hospital and Health Services are empowered to innovate and operate as a clinically and fiscally viable network of services. KPMG were engaged by Queensland Department of Health to investigate the service utilisation for chronic care in the public hospital system. The project involved a review of hospital activity data for any patient with a diagnosis code of chronic kidney disease, diabetes, chronic obstructive pulmonary disease and cardiovascular disease over a three year period. This represented an average of

approximately 90,000-95,000 people being admitted to a Queensland public hospital each year or 1.163 million acute separations over the period. The annual costs of care for individuals with chronic conditions reached approximately $772 million (excluding community health) of which $554 million was associated with acute admitted care and $144 million attributed to specialist designed tier 2 non-admitted clinic activity. The high users of chronic care services were also identified, whereby 5 % of patients were linked with 29% of chronic care resources or $583 million in one year. These analyses have important implications for the future model of integrated care for Queensland. There are now indicative measures of the costs of providing care under the current model. The results provide a means to engage with clinical leads, finance and executive on the need for urgent change in the manner in which people with chronic conditions engagewith the Queensland Health system. Importantly, it provides a baseline measure through which to evaluate the future return on investment.

Exploring the clinical opportunities of activity based management: evaluating models of care for improved efficiency and provision of care

Caroline Wraith, Sydney Children’s Hospitals Network and Christine Fan, Sydney Children’s Hospitals Network

The next step in the Activity Based Funding (ABF) journey for the Sydney Children’s Hospitals Network (SCHN) is to apply the principles of ABF to explore the opportunities for improved efficiency and provision of care for the patients and families we serve. As part of a program of clinician education and engagement, we have initiated a process where clinical program leaders, finance partners and performance unit staff come together to analyse selected

patient cohorts in an effort to better understand current models of clinicalcare and their alignment to bestpractice approaches.

The costing aspect of ABF provides a wealth of information in regards to the clinical management of patients. Used in combination with the classification mechanism of ABF, it is possible to analyse service utilisation and costs for similar patient types.

Some considerations of this data use are: What does it mean clinically at the patient and hospital level? How can we gather and synthesise clinical feedback to inform data interpretation? What can it tell us about the opportunities for improving efficiency? How can it be linked to improve patient care?

In collaboration with Clinical Program Directors and Finance Partners we have used national paediatric benchmark data to guide our process through the identification of high volume patient groups with significant variation in either length of stay or average cost.

Following an exhaustive data analysis exercise at service utilisation level using information derived from the PPM2 costing system, we have been able to highlight variation in clinical practice both internally and against our peers. Whilst some variation can be clinically validated, we will explore in this paper the opportunity for better alignment of care demonstrating the optimal patient outcomes for investment. There is still much to learn in terms of identified proven strategies to ensure better variation analysis, efficiency gains and improved patient care.


Glossary

ABB Activity Based Budget ABF Activity Based FundingABM Activity Based ManagementACHI Australian Classification of

Health Interventions AHSA Australian Health Service

AllianceALOS Average Length of StayAN-SNAP Australian National Subacute

and Non-Acute PatientAR-DRG Australian Refined-Diagnosis

Related Groups ARDT Admissions and Readmissions

DischargeCOF Condition Onset Flag CSR Clinical Specialty Report DA Drug and Alcohol DLR District Level ReturnsDNR District and Network Return DRG Diagnostic Related Group ED Emergency DepartmentFTE Full Time Equivalent GCHHS Gold Coast Hospital and

Health Service HIS Health Information Services HITH Hospital in the Home HRT Health Round Table ICU Intensive Care Unit ICD-10-AM International Statistical

Classification of Diseases and Related Health

Problems, Tenth Revision, Australian Modification

IHPA Independent Hospital Pricing Authority

LOS Length of Stay LHD Local Hospital Districts MNCLHD Mid North Coast Local Health

District

MBS Medicare Benefits SchemeMICC Medical Imaging Coding and

CostingNAHDSS National Allied Health Dataset

Specification NAHCC National Allied Health

Classification Committee NAARRP Non-Admitted Activity

Recording and Reporting Policy

NHCDC National Hospital Cost Data Collection

NHISSC National Health Information Standards and Statistics Committee

NHFB National Health Funding Body NWAU National Weighted Activity

UnitsPBS Pharmaceutical Benefits

SchemePEM Protein-Energy Malnutrition TTR Teaching, Training and

Research RSI Relative Stay Index SCHN Sydney Children’s Hospitals

Network SNAP Subacute and Non-Acute

Patient URG Urgency Related Group WAU Weighted Activity Unit WCH Women’s and Children’s

Hospital WHA Women’s Healthcare

Australasia WIES Weighted Inlier Equivalent

Separation WISER Workforce Innovation, Strategy,

Education and Research

Venue map

CENTRAL EASTWEST

CENTRAL EASTWEST

CENTRALWEST

STAIR

STAIR

27/02/2014

FOYER G RECEPTION

FOYER F

FOYER E

FOYER M

FOYER R7

FOYER R6

FOYER R5

FOYER R2

FOYER R3

FOYER R4

FOYER R1

FOYER R8

FOYERL1

FOYERL2

FOYERL3

FOYER L

CITYFOYER

2

CITYFOYER

3

CITYFOYER 4

CITYFOYER

1

PANORAMAFOYER

SKYWAYFOYER

FOYER A FOYER B

PANORAMABALLROOM

PROPOSEDSTAGE 2DEVELOPMENT

PROPOSEDSTAGE 2DEVELOPMENT

CITYROOMS

RIVERBANKOFFICE

RIVERBANKBOARD ROOM

REGATTASBISTRO

FL

L1a

L1b

E1 E2 E3

L2 L3

LINK

R4

S3

S2

S1

C1

CS1CS2

CS3CS4

P1 P2 P3

A B

C D

C2 C3 C4

R5R7R8

R8b

R6

R6b

R3 R2R1

M

N

O

H

I J K

G

FOYER H

ATRIUMFOYER

GROUND LEVEL

UPPER LEVEL

LOWER LEVEL

CITYTERRACE

SKYWAYROOMS

SKYWAY

RIVERBANKROOMS

CITYSUITES

PANORAMAROOMS

PANORAMASUITE

MAINENTRANCE

NORTH TERRACE

FESTIVAL DRIVE

MON

TEFI

ORE

ROAD

HOTE

L IN

TERC

ONTI

NEN

TAL

ATRIUMENTRANCE

ATRIUMENTRANCE

WESTERNENTRANCE

LIFT

LIFT

STAIRSTAIR

STAIR

STAIR

STAIR

STAIR

STAIR

ESCALATOR

ESCALATOR

ESCALATOR

ESCALATOR

ESCALATOR

PLAZAACCESSRAMP

NORTHTERRACECAR PARK

RIVERBANKCAR PARK

RIVERBANKCAR PARK

LOADINGDOCK

STAIR &ESCALATOR

STAIR &ESCALATOR

LIFT

LIFT

LIFT

LIFT

OFFICE F

OFFICEH

OFFICE K

LIFT

LIFT

LIFT

LIFT

LIFT

LIFT

CITYSUITEFOYER

KeyFoyer M: Registration City Suite 1: Speaker’s preparation roomFoyer L: Catering breaks Riverbank Foyers 1,2, 3: Networking event

Plenary, concurrent and workshop session rooms:• L1 • Hall M• L2 • Riverbank Room 5• L3

Independent Hospital Pricing AuthorityLevel 6, 1 Oxford Street, Sydney NSW 2000

www.ihpa.gov.au

activity based funding conference 2015...contents chair’s welcome chair’s welcome it is with...

Documents