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IHPA 2017 and beyond
The Independent Hospital Pricing Authority (IHPA) is committed to transparency and efficiency in hospital pricing, focusing on Activity Based Funding (ABF) and bundled pricing to streamline costs and improve care management. The IHPA consulted stakeholders on implementation for maternity care, proposing that bundled pricing includes all stages and types of maternity services, reflecting average costs across care types while allowing flexibility for hospitals. Key challenges include establishing data consistency for cost comparisons and identifying risk factors that influence service delivery and costs.
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IHPA 2017 and beyond
- 1. IHPA 2017 andbeyond WHA Meeting James Downie CEO Independent Hospital Pricing Authority
- 2. Strategic intent ofABF • Transparency • Value for money • Independence • National comparability • Technical Efficiency 2
- 3. About IHPA • Independentof all governments ‒Can not be directed on pricing • Governed by a 9 member board • 28 member clinical advisory committee ‒Senior medical, nursing and allied health • 40 staff ‒Data management, statistical, classification, policy and comms • Strong consultation and transparency agenda 3
- 4. IHPA’s functions •Set theNational Efficient Price •Classification systems •Data standards •Cross border and cost shifting disputes 4
- 5. Progress so far •ABF ‒Admitted Acute ‒Subacute ‒Emergency ‒Non-admitted • Block Funding ‒Community Mental Health ‒Teaching, training and research ‒Small rural and remote hospitals 5
- 6. Significant slowdown incosts 6 3664 3809 4023 4312 4400 4548 4549 4588 2006-7 2007-8 2008-9 2009-10 2010-11 2011-12 2012-13 2013-14 Cost per NWAU Growth Rate: 4.2% Growth Rate: 1.1%
- 7. Benchmarking portal •ABF generatesmasses of data ‒ Cost data collection >1,000,000,000 records •Used properly this data can help improve the efficiency of hospitals by reducing variation •Have to make it accessible at the hospital level!
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- 11. Bundled pricing • IHPAprices public hospital services on an ‘activity based funding’ (ABF) basis wherever practicable. • ABF separately prices discrete episodes of care. • Public hospitals may receive multiple ABF payments for a single patient in the course of their care. • In contrast, a bundled pricing approach involves a single price per patient which reflects the average cost of care across multiple episodes and settings. 11 www.ihpa.gov.au
- 12. intention of bundledpricing • The intention of a bundled pricing approach: ‒ for resources and funding to be easier for hospitals to manage ‒ to allow financial flexibility to experiment with new models of care ‒ to provide transparency on the total cost of maternity care ‒ to drive a long-term view of good practice. • IHPA does not intend for bundled pricing to: ‒ prescribe a clinical care pathway ‒ reduce clinically necessary maternity care ‒ impact on care which is unrelated to the maternity episode 12 www.ihpa.gov.au Activity based funding Bundled pricing $ $ $ $ $ $ $ $ $ How can each service be delivered more efficiently? What is the most effective way to deliver care to the patient?
- 13. Bundled payment schemes •Governments are experimenting with novel payment systems to drive value. • Bundled payments have been piloted for US Medicare/Medicaid since the 1980s. • Implementation of bundled payments across other care settings is recent. • In England, the Maternity Pathway Payment System provides a single ‘risk-adjusted’ payment per maternity patient for each stage of care. • The US Medicare Bundled Payments for Care Improvement scheme spans the admitted acute, subacute and non-admitted settings for many conditions. • There is weak but consistent evidence that bundled payments are effective in cost containment without a major effect on quality. 13 www.ihpa.gov.au
- 14. Background • IHPA consultswith the public on its proposals through the Consultation Paper on the Pricing Framework for Australian Public Hospital Services which is released in June. • IHPA canvassed bundled pricing in 2015-16, proposing bundled price weights for some non-admitted chronic disease services. • This involved setting a price weight for these services equivalent to 28 days of service delivery. • IHPA received strong support and the weights were included in the National Efficient Price 2015-16. • In the 2016-17 Consultation Paper, IHPA canvassed bundled pricing for a broader range of conditions. 14 www.ihpa.gov.au
- 15. Starting with Maternitycare • In response to the 2016-17 and 2017-18 Consultation Papers, IHPA received stakeholder support for bundled pricing for other conditions. • Maternity care was identified as a good starting point given stakeholder support, its materiality to the public hospital system and as it has a relatively predictable service delivery pathway with clear start and end points to care. • In early 2016, IHPA convened the Bundled Pricing Advisory Group to oversee investigatory work on bundled pricing for maternity care. 15 www.ihpa.gov.au
- 16. So what hasthe advisory group learnt?
- 17. Reviewing Service deliveryto maternity patients • The bundled price for maternity care will reflect the average cost of service delivery for maternity patients. • IHPA has reviewed national public hospital data to identify service delivery patterns for maternity patients. • In the absence of consistent patient identifiers in national data, IHPA has linked patients to services based on patient characteristics which are shared across the admitted and non-admitted data sets. • This is an interim solution for analysis purposes. • Jurisdictions will need to submit patient IDs for implementation. 17 www.ihpa.gov.au
- 18. The Admitted stayfor birth is the costly portion of care • The main cost of maternity care is the admission for birth. • Differences in admitted costs between patient groups (particularly caesarean vs. vaginal birth) are large. • A maternity patient’s Diagnosis Related Group (DRG) for birth was found to be the strongest predictor of their admitted costs. 18 www.ihpa.gov.au Vaginal birth Vaginal birth, with operating room procedures Caesarean birth
- 19. Non-admitted costs are relatively consistent •The main non-admitted maternity clinics have relatively similar costs. • Patients also have a similar number of ante/postnatal visits. • There is significantly less difference in non-admitted costs between the most and least complex patient groupings (using DRG). 19 www.ihpa.gov.au Why do 8.5% of patients have double the average? 35% difference
- 20. Cost Drivers for Non-Admittedcare • The DRG of a patient’s admission for birth appears to offer the greatest explanatory power for differences in non-admitted costs. • IHPA has also found that: ‒ A higher maternal age is associated with higher costs ‒ Greater socio-economic disadvantage, remoteness and being an indigenous patient are not associated with higher costs… underservicing? ‒ Number of clinic visits and the types of clinics which patients access are the strongest predictors, but are not patient-based • IHPA has reviewed the impact on non-admitted costs due to additional diagnoses assigned to patients for birth. The biggest factors were: 20 www.ihpa.gov.au Good for patient loadings!
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- 22. Scope of thematernity bundle Settings of care: • Service delivery to maternity patients spans the non-admitted, admitted and emergency settings of care. • Only some patients have antenatal admissions, emergency presentations or postnatal readmissions. • IHPA does not intend for bundled pricing to financially penalise hospitals for providing these services to complex patients. • The Advisory Group has expressed a preference to include the non-admitted setting for antenatal and postnatal care and the admitted acute setting for birth in the bundle as this covers routine services provided to all patients. 22 www.ihpa.gov.au
- 23. Scope of thematernity bundle Patient groups: • The Advisory Group has considered which maternity patients (grouped by DRG) should be included in a bundled pricing approach. • The Advisory Group has expressed a preference for including all or most maternity patients in a bundled pricing approach if possible. • This increases the overall impact on the hospital system and extend the benefits towards service redesign to all maternity patients. • This increases the importance of risk adjustment! 23 www.ihpa.gov.au
- 24. Scope of thematernity bundle Stages of maternity care: • The Advisory Group has considered what stages of care should be included in the bundled pricing approach. • The Advisory Group considers that including all stages of care appears to offer the greatest opportunity for service redesign. 24 www.ihpa.gov.au Antenatal Birth Postnatal • Opportunity to address variance in the number and type of antenatal visits • Limited value on its own as the price will continue to reflect DRG pricing. • Its inclusion provides transparency on the total cost of patient care and allows for long-term hospital planning. • Opportunity to address underservicing in postnatal care.
- 25. design of thematernity bundle Pricing admitted care: • The Advisory Group has considered whether it is feasible to bundle patients on the basis of patient factors other than the DRG. • The problem with using the DRG is that it splits patients based on whether they had a vaginal or caesarean delivery. • IHPA does not consider that this is technically feasible for 2018-19. • Pricing the admitted portion of care on the basis of a patient’s DRG for birth is preferred, in the first instance. • DRGs have been refined over years and avoids the financial losses which may arise if caesarean and vaginal delivery patients received the same price. 25 www.ihpa.gov.au
- 26. design of thematernity bundle Pricing non-admitted care: • There are two approaches to pricing the non-admitted portion of care: 26 www.ihpa.gov.au Too much cost variation? Too little cost variation?
- 27. design of thematernity bundle Exclusions: • The Advisory Group has a preference for excluding ‘very sick patients’, whereby they would be priced under the existing ABF arrangements. • Factors under consideration for exclusion include: ‒ Maternal Fetal Medicine: Patients accessing this clinic have a very different clinical profile to other patients. Removes ~1% of patients. ‒ Clinic visits: The top 10% of costly patients have at least double the ante/postnatal visits. This may reflect their clinical profile. ‒ Private and ‘shared care’ patients: IHPA cannot include GP or private obstetrician/midwife services in the bundle. IHPA is awaiting MBS data which will identify the materiality of ‘shared care’ arrangements 27 www.ihpa.gov.au
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- 29. Work For theAdvisory Group • At future meetings, the Advisory Group will: ‒ Finalise the design of the bundled pricing approach; ‒ Assess the impact of the bundled pricing options at the state and territory, Local Hospital Network, peer group and hospital levels; ‒ Address implementation issues, including issues arising from: o maternity patients with care spanning multiple financial years o movement of patients between health services o patients who are treated under ‘shared care’ arrangements o patients who leave the pathway. 29 www.ihpa.gov.au
- 30. How would itlook? • Single payment, risk adjusted by DRG, plus other factors: ‒Diabetes ‒Anaemia ‒Multiple births • Single patient identifier critical • Requires good patient level non-admitted data 30
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- 32. Pricing for Safety andQuality 32 Footer appears here
- 33. Premise • Australian andinternational costing studies estimate that adverse events explain between 12.0% and 16.5% of total costs • ICD-10-AM data is a rich source of safety and quality data, currently underutilised • Literature review ‒ Good evidence that the provision of timely clinical information to clinicians & managers leads to improvements in patient outcomes • Pricing signals: ‒ Provide clear sign that government values safety and quality ‒ Promote discussion of safety and quality systems amongst clinicians AND managers 33
- 34. Approach • Three areasof focus: ‒Sentinel Events ‒Hospital Acquired Complications ‒Avoidable readmissions • Data provision to clinicians and managers a critical component of work 34
- 35. Sentinel Events 35 1. Proceduresinvolving the wrong patient or body part resulting in death or major permanent loss of function 2. Suicide of a patient in an inpatient unit 3. Retained instruments or other material after surgery requiring re-operation or further surgical procedure 4. Intravascular gas embolism resulting in death or neurological damage 5. Haemolytic blood transfusion reaction resulting from ABO incompatibility 6. Medication error leading to the death of a patient reasonably believed to be due to incorrect administration of drugs 7. Maternal death associated with pregnancy, birth and the puerperium 8. Infant discharged to the wrong family
- 36. Sentinel Events • From1 July 2017 no funding for episodes of care with a sentinel event • ~100 events per annum (public hospitals) • Funding impact ~$5 million per annum 36
- 37. Hospital Acquired Complications •Coded data differentiates between conditions present on admission, and those arising during admission • Measured using CHADx system: ‒ Too much noise ‒ No measure of preventability • Hospital Acquired Complication: ‒ Developed by clinicians • Clear criteria: ‒ Preventability ‒ Patient Impact ‒ Cost Impact ‒ Clinical priority 37
- 38. 38 Pressure injury Gastrointestinalbleeding Falls resulting in fracture and intracranial injury Medication complications Healthcare associated infection Delirium Surgical complications requiring unplanned return to theatre Persistent incontinence Unplanned Intensive Care Unit admission Malnutrition Respiratory complications Cardiac complications Venous thromboembolism Third and fourth degree perineal laceration during delivery Renal failure Birth trauma Hospital Acquired Complications
- 39. HACs add cost 39 HAC Incremental cost AllHACs 8.6% Pressure injury 13.8% Falls resulting in fracture or other intracranial injury 1.7% Healthcare associated infection 8.8% Surgical complications requiring unplanned return to theatre 10.9% Unplanned intensive care unit admission Respiratory complications 15.9% Venous thromboembolism 12.4% Renal failure 21.7% Gastrointestinal bleeding 10.0% Medication complications 8.2% Delirium 9.8% Persistent incontinence 2.3% Malnutrition 7.4% Cardiac complications 11.3% Perineal laceration 23.2% Neonatal birth trauma 10.8%
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- 41. Principle referral hospitals 41 0 2 4 6 8 10 12 14 frequency RawHAC rate per 100 episodes
- 42. Age is adriver 42
- 43. Risk Adjustment Critical •Patient risk factors: ‒Age ‒DRG ‒Charlson Complexity Score (predicts the one year mortality for a patient with a range of specific comorbidities) ‒ICU admission ‒Emergency admission • Can calculate risk score for every patient 43
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- 47. Preventable Readmissions • Alladmissions are currently paid for • Some evidence of preventable readmissions in system • Currently no nationally agreed, clinically acceptable list of readmission causes • List currently being developed – clinically led, data driven project • Possible inclusions: ‒Preventable hospitalisations ‒Readmission for HACs ‒Constipation 47
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