Moving towards value based funding
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Mr James Downie, CEO, presented on the topic 'Moving towards value based funding' at the Healthcare reform, funding and innovation conference, hosted by AventEdge on 27 June 2017.
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Moving towards value based funding
- 1. MOVING TOWARDS VALUE BASED FUNDING James Downie CEO Independent Hospital Pricing Authority
- 3. Addendum to the NHRA • ABF Continues until 2020 • Commonwealth growth capped at 6.5% (price + volume) • Reforms to improve efficiency of public hospitals: ‒Healthcare homes ‒Safety and quality considerations ‒Avoidable readmissions ‒Potentially preventable admissions • New agreement beyond 2020 agreed by 2018 3 www.ihpa.gov.au
- 4. Strategic intent of ABF • Transparency • Value for money • Independence • National comparability • Technical Efficiency 4
- 5. About IHPA • Independent of 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 5
- 6. IHPA’s functions •Set the National Efficient Price •Classification systems •Data standards •Cross border and cost shifting disputes 6
- 7. Progress so far • ABF ‒Admitted Acute ‒Subacute ‒Emergency ‒Non-admitted • Block Funding ‒Community Mental Health ‒Teaching, training and research ‒Small rural and remote hospitals 7
- 8. Significant slowdown in costs 8 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%
- 9. Benchmarking portal •ABF generates masses 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!
- 13. Pricing for Safety and Quality 13 Footer appears here
- 14. Premise • Australian and international 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 14
- 15. Approach • Three areas of focus: ‒Sentinel Events ‒Hospital Acquired Complications ‒Avoidable readmissions • Data provision to clinicians and managers a critical component of work 15
- 16. Sentinel Events 16 1. Procedures involving 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
- 17. Sentinel Events • From 1 July 2017 no funding for episodes of care with a sentinel event • ~100 events per annum (public hospitals) • Funding impact ~$5 million per annum 17
- 18. 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 Complications: ‒ Developed by clinicians • Clear criteria: ‒ Preventability ‒ Patient Impact ‒ Cost Impact ‒ Clinical priority 18
- 19. 19 Pressure injury Gastrointestinal bleeding 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
- 20. HACs add cost 20 HAC Incremental cost All HACs 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%
- 21. Rates vary 21
- 22. Principle referral hospitals 22 0 2 4 6 8 10 12 14 frequency Raw HAC rate per 100 episodes
- 23. Age is a driver 23
- 24. 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 24
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- 27. Preventable Readmissions • All admissions 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 27