garth barnett, powerhealth solutions - patient costing, abf & clinical engagement

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


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


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


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.


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


SAH standard naming conven0on for areas, including overheads & use of NHCDC alloca0on sta0s0c names

GL Setup – Areas Pre-‐Implementa0on


§  Accounts = Oracle GL L7 chart of account §  Cost Output = Internal repor0ng level §  Cost Output Rollup = NHCDC repor0ng level

GL Setup – Accounts Pre-‐Implementa0on


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


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).


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.



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.


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



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).



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


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


Average LOS vs SA Benchmark


Cost vs ABF Funding


Cost vs SA Benchmark


Pathology Cost vs SA Benchmark


Radiology Cost vs SA Benchmark


Theatre Time vs SA Benchmark DRG


Theatre Time vs SA Benchmark Procedure


Next Steps For high/low cost outliers, drill-‐down to cost outputs & service level informa*on to benchmark clinical prac*ces


Summary & Conclusion


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.


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

garth barnett, powerhealth solutions - patient costing, abf & clinical engagement

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