Integrating Patient Costing with Health Unit Management Garth Barnett, Senior Costing Consultant
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1 23-25 June 2014, Melbourne IHPA Activity Based Funding Conference Integrating Patient Costing with Health Unit Management Garth Barnett, Senior Costing Consultant
2 Agenda Lessons Learnt SA Health PPM Implementation H Integrating Patient Costing with Health Unit Management NALHN Experience Performance Reporting Conclusion + Q&A Integrating Patient Costing with Health Unit Management Slide 2
3 SAHealth PPM Implementation Integrating Patient Costing with Health Unit Management Slide 3
4 Configuration Setups Commonwealth ABF Model Moved away from SAH model & costing OP & ED encounters in addition to IP encounters Centralised One instance of PPM & SAH centralised processing LHN Setups Separate 5x LHN setups for General Ledger & Costing Dataset, for easier engagement Data Extracts SAH responsible for centralised extracts LHNs responsible for site specific extracts, & reviewing setups results Frequent Processing Annual to monthly processing for more useful & frequently reviewed information. Integrating Patient Costing with Health Unit Management Slide 4
5 Uniform Standards Agreed on uniform standards with costing user group to ensure comparability for reporting & benchmarking, and same look & feel Standard Reference Tables for data load eg Admission Category, Discharge Status, Referral Source, etc Standard naming convention for GL cost centres & areas eg LMH Clinic Cardiology, MPH Patient Administration Standard GL Accounts (RN-Overtime), Cost Outputs for internal reporting (SW RN), Cost Output Rollups for NHCDC reporting (SWNurs) Integrating Patient Costing with Health Unit Management Slide 5
6 Quality Checks During Implementation General Ledger & Feeder Checks Compare starting GL at cost centre & account level vs prevyear to identify significant movements that may require GL configuration & new areas for setup adjustments Review GL overhead allocations eg compare wards & clinic overhead rates Identify negative GL area/cost outputs combinations to cleanse GL of incorrectly allocated recharges/credits & avoid negative costs Compare key GL cost outputs v source system loads eg S100/PBS & non-pbs/s100 drugs, pathology, imaging, prosthesis Check Service actual charges > maximum norm eg pathology tests > $3000. Integrating Patient Costing with Health Unit Management Slide 6
7 Quality Checks During Implementation Feeder Date/Time & Duration Checks Ensure all inpatient encounters have a ward/clinic transfer record Fix missing records or will result in low costs Match ED admitted encounter end date/time to IP encounter start date/time Fix overlapping encounters Audit ED non-admitted encounters > 1 day Review for encounters with no linked services as expect they would be waiting for pathology test results, etc Compare Theatre & Recovery > 6 hours to ward transfer records May identify incorrectly recorded end date/times Audit other service file durations > norm eg Allied Health > 4 hours. Integrating Patient Costing with Health Unit Management Slide 7
8 Quality Checks Post Implementation before distributing information to internal users High Level Costing Reasonableness Checks Compare encounter type expenditure per hospital vs previous year ie IP, OP, ED, teaching& research -% of total expenditure Review low/high cost patients by DRG/Tier 2/URG IP cost/day, ED cost/hour, OP cost/encounter to identify any major issues egpfrac or RVU changes with OP costed for the 1st time Compare DRG/Tier 2/URG average costs by hospital to identify significant outliers Audit high cost dummy encounters by patient number eg discovered $100K+ patients where pharmacy providing high cost drugs to another hospital s patients. Integrating Patient Costing with Health Unit Management Slide 8
9 H Integrating Patient Costing with Health Unit Management NALHN Experience Integrating Patient Costing with Health Unit Management Slide 9
10 H Patient Costing Integration Process Process of integrating patient costing with NALHN operational management Stage 1 -Executive Stage 2 -Finance Workshops Stage 3 -Divisional Workshops Dual role of this process Audit & improve the quality of Patient Costing Better educate the business to utilise Patient Costing results. Integrating Patient Costing with Health Unit Management Slide 10
11 H Stage 1 Executive Patient Costing needs someone in Executive to champion the cause in any organisation NALHN CEO/COO /CFO all understand the value of patient costing to aid decision making Initial 1 hour session with Executive (including clinical directors) & follow-up 1 hour session Educate on the basics of Patient Costing & ABF model Live demonstration of PPM with own data Activity summary reports by DRG/URG/Tier 2 of costs vs funding to understand performance Aim to give an overall appreciation information available. Integrating Patient Costing with Health Unit Management Slide 11
12 H Stage 2 Finance Workshops Half day workshops with central and divisional Finance staff Provide background on the Commonwealth ABF reform, including how the ABF model works and the classification system Detailed the PPM costing process and standard SAH setups, including allocation methodology & assumptions Explained how their role influenced the costing process ie PFRACs & mapping of activities to GL particularly OP Clinics Engaged them as part of audit process to fine tune costing results Provided an awareness of the accuracy of patient level costs is dependant on the availability of feeder information Aim to give them an appreciation of the information to assist in preparing business cases. Integrating Patient Costing with Health Unit Management Slide 12
13 H Stage 2 Finance Medical PFRACs Medical Salaries & Wages Direct Cost Summary to review PFRACs Integrating Patient Costing with Health Unit Management Slide 13
14 H Stage 3 Divisions Workshops Separate 1 hour workshops with each Division s Senior Clinical Management team Also included key Executive and Finance staff 30 minutes patient costing theory describing the methodology & assumptions behind the numbers & where they can influence the process Identified where each division could assist in improving patient costing with feeders &/or improved allocation methodology: eg MET (code blue) patients, ED Mental Health team, specialist nurses, security services (especially for mental health patients), interpreters, multi-disciplinary teams. Integrating Patient Costing with Health Unit Management Slide 14
15 H Stage 3 Divisions Engagement Provided a sample of benchmarked performance of their division v other SAH to identify potential high & low performing areas: Theatre time per DRG & principal procedure to understand throughput/practice Pathology/imaging cost per DRG/URG/Tier 2 ALOS per DRG/URG For high/low cost outliers, drill-down to cost outputs & service level information to benchmark clinical practices Intention to use benchmarked information to target efficiency improvement strategies & assist in future budget builds Summary costing & funding results integrated as part of monthly performance review, with supporting drill-down information for divisions to review Integrating Patient Costing with Health Unit Management Slide 15
16 Performance Reporting Integrating Patient Costing with Health Unit Management Slide 16
17 Inpatient DRG Profitability Integrating Patient Costing with Health Unit Management Slide 17
18 Outpatient Tier 2 Profitability Integrating Patient Costing with Health Unit Management Slide 18
19 Average LOS vs SA Benchmark Integrating Patient Costing with Health Unit Management Slide 19
20 Cost vs ABF Funding Integrating Patient Costing with Health Unit Management Slide 20
21 Cost vs SA Benchmark Integrating Patient Costing with Health Unit Management Slide 21
22 Pathology Cost vs SA Benchmark Integrating Patient Costing with Health Unit Management Slide 22
23 Radiology Cost vs SA Benchmark Integrating Patient Costing with Health Unit Management Slide 23
24 Theatre Time vs SA Benchmark DRG Integrating Patient Costing with Health Unit Management Slide 24
25 Theatre Time vs SA Benchmark Procedure Integrating Patient Costing with Health Unit Management Slide 25
26 Conclusion For patient costing to be useful & comparable across Australia under an ABF framework it is crucial that everyone is engaged through the process Q&A Integrating Patient Costing with Health Unit Management Slide 26
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