19-20 March 2014, Sydney 4th Annual Hospital Patient Costing Conference
Pa#ent Cos#ng, ABF & Clinical Engagement
Garth Barne* Senior Cos*ng Consultant
Pa#ent Cos#ng, ABF & Clinical Engagement Slide 2
Agenda
Lessons Learnt SA Health PPM Implementa0on
Integra#ng Pa#ent Cos#ng with Health Unit Management NALHN Experience
Sample Repor#ng
Summary & Conclusions
Q&A
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SA Health PPM2 Implementa#on
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Implementa#on Background
w Implementa#on scope § 4 metropolitan LHNs § 6 major country hospitals
w Commonwealth ABF model move away from using State funding model
w Inpa#ent/Outpa#ent/Emergency encounters § Cos0ng OP & ED encounters for the 1st 0me § See the total cost of the pa0ent § Track high users of health system
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1. Centralised One instance of PPM & SAH centralised processing.
2. LHN Setups Separate LHN setups for General Ledger & Cos0ng Dataset, making it easier to engage LHNs.
3. Data Extracts SAH responsible for centralised data extracts. LHNs responsible for site specific data extracts, & reviewing setups & results.
4. Frequent Processing Annual to monthly processing of result leads to more useful & frequently reviewed informa0on, which is likely to increase the quality & comparability.
Configura#on Pre-‐Implementa0on
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Key Principles & Responsibili#es Pre-‐Implementa0on
w Training Provided training to all key par0es so they are familiar with how PPM works/what is required
w Standards Agreed on uniform standards with cos0ng user group to ensure comparability for repor0ng & benchmarking, as well as same look/feel for all involved.
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GL Setup – Cost Centres Pre-‐Implementa0on
SAH standard naming conven0on allows for easier tracking of pa0ent frac0ons & other GL movements:
§ Inpa0ents [Cost Centre]
§ Emergency [Cost Centre]-‐E
§ Outpa0ents [Cost Centre]-‐O § Research [Cost Centre]-‐R
§ Theatre/Surg [Cost Centre]-‐S § Teaching [Cost Centre]-‐T
§ Other [Cost Centre]-‐U
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SAH standard naming conven0on for areas, including overheads & use of NHCDC alloca0on sta0s0c names
GL Setup – Areas Pre-‐Implementa0on
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§ Accounts = Oracle GL L7 chart of account § Cost Output = Internal repor0ng level § Cost Output Rollup = NHCDC repor0ng level
GL Setup – Accounts Pre-‐Implementa0on
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1. Data Extracts — Started discussions months prior. Can’t start earlier enough!
2. Reference Tables — Established standard SAH reference tables
3. Extract Sources — Sourced as many extracts from centralised SAH systems (IP/OP/ED pa0ent, encounter, services, transfers, diagnosis & procedure) for fewer files to load
4. Health Unit Extracts — Sourced & reviewed health unit extracts in advance
5. Transla#on — Formalised transla0on of all data extracts & elements into PPM format by documen0ng in templates
6. DRG — Use DRG field for ED URGs & OP Tier 2 to ensure easy standard & ad hoc repor0ng
Data Load Pre-‐Implementa0on
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Quality Checks During Implementa0on
w Data Load Source file amounts vs GL amounts
w Service to Encounter linking results by encounter type where have source details.
w Unlinked Services
w GL cost centre & account amount summaries vs previous year.
w GL overhead alloca0ons (eg compare wards & clinics).
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Quality Checks Post Implementa0on before distribu*ng informa*on to internal users
High Level Cos#ng Reasonableness Checks § Compare % encounter type expenditure per hospital vs last year ― IP, OP, ED, teaching & research
§ Review low/high cost pa0ents by DRG/Tier 2/URG ― IP cost/day, ED cost/hour, OP cost/encounter ― to iden0fy any major issues eg PFRACs changes with OP costed for the 1st 0me.
§ Compare DRG/Tier 2/URG average costs by hospital ― to iden0fy significant outliers.
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Quality Checks Post Implementa0on before distribu*ng informa*on to internal users
General Ledger & Feeder Checks § Iden0fy nega0ve GL area/cost outputs combina0ons ― to cleanse GL of incorrectly allocated recharges/credits ― to avoid nega0ve costs.
§ Check key GL cost outputs v source system loads ― eg S100/PBS & non-‐PBS/S100 drugs, pathology, imaging
§ Check Service actual charges > maximum norm ― eg pathology tests > $3000.
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Service Date/Time & Dura#on Checks § Match ED admihed encounter end date/0me to IP encounter start date/0me ― as oien an overlap
§ Audit ED non-‐admihed encounters > 1 day where they have no linked services ― expect they would be wai0ng for pathology test results, etc
§ Compare Theatre & Recovery > 6 hours to ward transfer records ― as may iden0fy incorrectly recorded end date/0mes.
§ Audit other service file dura0ons > norm ― eg Allied Health
Quality Checks Post Implementa0on before distribu*ng informa*on to internal users
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Other Considera#ons § Ensure all inpa0ent encounters have a ward/clinic transfer record
§ Audit high cost “dummy” encounters by pa0ent number, which don’t link to legi0mate encounter ― eg discovered numerous $100K+ pa0ents who where pharmacy was providing high cost drugs to another hospital’s pa0ents)
§ Iden0fy weaknesses in the process & look ― to improve feeder data, alloca0on sta0s0cs, etc for future studies (eg lack of prosthesis feeder).
Quality Checks Post Implementa0on before distribu*ng informa*on to internal users
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Integra#ng Pa#ent Cos#ng with Health Unit Management
NALHN Experience
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Casemix Future Direc#ons
Process of integra#ng pa#ent cos#ng with NALHN opera#onal management
§ Stage 1 -‐ Execu0ve § Stage 2 -‐ Finance Workshops
§ Stage 3 -‐ Divisional Workshops
§ Integra0ng cos0ng results with regular & ad hoc Casemix ac0vity reports
§ Benchmarking ac0vity to iden0fy savings strategies & opportuni0es to improve performance
§ Use of cos0ng informa0on in business case development & service planning.
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Casemix Future Direc#ons
Dual role of this process § Audit & improve the quality of Pa0ent Cos0ng
§ Beher educate the business to u0lise Pa0ent Cos0ng results
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Stage 1 – Execu#ve
w Pa0ent Cos0ng needs someone in Execu0ve to champion the cause in any organisa0on.
w Buy-‐in from Execu0ve is crucial. NALHN CEO, COO & CFO all understand the value of pa0ent cos0ng to aid decision making.
w Ini0al 1 hour session with Execu0ve (including clinical directors) & follow-‐up session.
w Provide basics of pa0ent cos0ng & ABF. w Live demonstra0on of PPM with own data. w Summary benchmarking reports by ac0vity of
costs vs funding at Tier 2 & URG level. w Aim to give an apprecia0on of the easy
availability of performance informa0on.
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Stage 2 – Finance Workshops
w Half day workshops with central and divisional finance staff.
w Provide background on the Commonwealth ABF reform, including how the ABF model works and the classifica0on system.
w Detailed the PPM cos0ng process and standard SAH setups, including alloca0on methodology & assump0ons.
w Explained how their role influenced the cos0ng process – par0cularly 2 key areas: § Pa0ent Frac0ons (PFRACs) § Mapping of ac0vi0es to the right cost centres and areas (par0cularly outpa0ent clinics).
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Easier to review & iden*fy low/high outliers when summarising clinic ac*vi*es & costs
Stage 2 – Finance Medical PFRACs H
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Stage 2 – Finance Engagement
w Engaged them as part of audit process to fine tune 2012/13 cos0ng.
w Provided an awareness of the accuracy of pa0ent level costs is dependant on the availability of feeder informa0on.
w Aim to give them an apprecia0on of the informa0on to assist in preparing business cases: § Understanding of direct costs (to Divisions) and overhead costs (to Health Unit).
§ Important for hospital planning where expanding specialised clinical services for pa0ents within their catchment area.
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Stage 3 – Divisions Workshops
w Separate 1 hour workshops with each Division’s senior clinical management
w Also included key Execu0ve and Finance staff w 30 minutes pa0ent cos0ng theory
―describing the methodology & assump0ons behind the numbers & where they can influence the process ―ie PFRACs, ac0vity mappings to GL
w Iden0fied where each division could assist in improving pa0ent cos0ng with feeders ― eg MET (code blue) pa0ents, specialist nurses, security services (especially for mental health pa0ents), mul0-‐disciplinary teams.
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Stage 3 – Divisions Engagement
w Provided a sample of benchmarked performance of their division v other SAH to iden0fy poten0al high & low performing areas: § Theatre 0me per DRG & principal procedure to understand throughput/prac0ce
§ Pathology/imaging cost per DRG/URG/Tier 2 § ALOS per DRG/URG
w Inten0on to use benchmarked informa0on to target efficiency improvement strategies & assist in future budget builds.
w Divisions asked to iden0fy informa0on for future review at performance mee0ngs.
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Sample Reports
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Average LOS vs SA Benchmark
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Cost vs ABF Funding
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Cost vs SA Benchmark
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Pathology Cost vs SA Benchmark
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Radiology Cost vs SA Benchmark
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Theatre Time vs SA Benchmark DRG
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Theatre Time vs SA Benchmark Procedure
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Next Steps For high/low cost outliers, drill-‐down to cost outputs & service level informa*on to benchmark clinical prac*ces
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Summary & Conclusion
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Pa#ent Cos#ng Summary
w Key accountability tool ― to monitor health service costs ― not just for external cos0ng submissions
w Clinicians More useful if cos0ng informa0on is used by clinicians to improve performance
w Timely Informa0on needs to be 0mely
w Consistent Consistent methodologies promotes comparability
w Future funding ABF reforms will put more emphasis on pa0ent cos0ng as basis for future funding.
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Conclusion
For pa0ent cos0ng to be useful & comparable across
Australia under an ABF framework, it is crucial that everyone
is engaged through the process.
Q&A Garth Barne*
Senior Cos*ng Consultant
19-20 March 2014, Sydney 4th Annual Hospital Patient Costing Conference