Alison Ritter, Jenny Chalmers, Lynda Berends A methodology for estimating health expenditure on drug treatment: the Australian experience Alison Ritter, Jenny Chalmers, Lynda Berends

Part 1: Our approach Lots of methods to collect drug treatment expenditure Need standardised methods (for comparison purposes and international harmonisation) International standards for health expenditure accounting (OECD et al., 2011) = SHA (system of health accounts) Developed with cooperation from the OECD, Eurostat and the WHO The SHA “proposes a framework for the systematic description of the financial flows related to health” (p. 3) We sought to test the applicability of SHA to drug treatment in Australia  

Four Steps Step 1: Define the scope of estimates and identify the financing agents Step 2: Categorise (3 possible axes) Step 3: Collate and count the expenditure Step 4: Document

Step 1: Defining the scope Four criteria for establishing the bounds (SHA, OECD et al., 2011, pp. 55-56): (1) the primary purpose of the activity is health (improving or maintaining health, or preventing ill health); (2) the activity is provided on the basis of qualified medical or healthcare knowledge and skills; (3) the consumption is for the final use of healthcare goods and services of residents; and (4) that some entity, not necessarily the recipient, pays for the healthcare activities (there is a transaction).

Implications for drug treatment Defining drug treatment as a health intervention: “that which is directed towards an individual regarding changing his/her alcohol or other drug use” (UNODC, 2006) Creates a boundary for health interventions provided within healthcare settings, by health practitioners But not all drug treatment is provided by healthcare practitioners, nor funded by health departments (eg prison-based treatment). Consistent with SHA, but ?inconsistent with drug treatment

Treatment types and funding sources Understand the system, the providers, the financing approaches and the treatment types Develop list of all the drug treatment interventions Understand the various funding sources systematic collation of information about drug treatment funding sources literature search (including grey literature) interview experts This step in documenting funding sources will reveal the different types of funds and the different ‘buckets of money’ from which drug treatment expenditure is drawn Challenging – in Australia, more than 20 different health funding sources, across the multiple treatment types

Detoxification/withdrawal TREATMENT TYPES Detoxification/withdrawal Residential rehabilitation/TC Outpatient counselling etc Pharmacotherapy maintenance Chalmers et at DAR, 2016

Step 2: Categorisation Three possible ‘axes’ for categorising health accounts (SHA): healthcare functions - types of drug treatment provision, i.e. withdrawal, rehabilitation, pharmacotherapy maintenance, etc. healthcare providers – practitioner types (eg GP’s, NGO providers etc); financing schemes – block grants, fee-for-service etc..   We explored each of the three axes in relation to the structure of drug treatment provision and expenditure in Australia

In ideal world, select one category systems from the SHA BUT: not one of the 3 axes alone would be suitably straightforward and simple Pragmatic approach We created the following categories: NGOs funded by government (Axis 2) Public and private hospitals (Axis 2) Primary care (community-based) services (Axis 1) Pharmaceutical medication (Pharmaceutical Benefits Scheme) (Axis 3) Made sense in terms of the separate ‘buckets of money’ spent on drug treatment in Australia. (get the ‘buckets’ right; make sure no double-counting; duplication)

Step 3: Collating &counting the expenditure Huge amount of work (12 months) Most researchers focus on this step only Methods may vary depending on what data are available and the extent to which individual client versus total budget costs are available The year of the estimate needs to be consistent within each category and between all categories As one burrows into the actual estimation, there will be many decisions to be made, assumptions to be dealt with and uncertainties to manage

Step 4: Documentation Document clearly all decisions made, no matter how trivial Essential for research transparency and replication

Our results Available at: Chalmers, J., Ritter, A., Berends, L. and Lancaster, K. (2016), 'Following the money: mapping the sources and funding flows of alcohol and other drug treatment in Australia', Drug and Alcohol Review, 35(3), 255-262 doi:10.1111/dar.12337   Ritter, A., Chalmers, J. and Berends, L. (2015), ‘Health expenditure on alcohol and other drug treatment in Australia (2012/2013)’, Drug and Alcohol Review 34(4), 397-403 doi:10.1111/dar.12248

Part 2: Key issues and challenges Why conduct such analyses? To inform the current investment in drug treatment for any one state or nation To monitor changes in expenditure over time To examine investment in drug treatment relative to other areas of health (and overall government expenditure) To conduct cross-national comparisons

Attempt to use an international accounting code system SHA – vital for harmonisation May not be entirely ‘fit-for-purpose’ for drug treatment (eg health only) Defining what is treatment? National consistency, international consistency Aggregate costs – alcohol and other drugs Only way it was feasible in Australia Makes sense clinically Polydrug use is the norm

Using the data Monitoring trends over time Vital to assess whether expenditures are expanding or contracting Cost-effectiveness – having the costs means need only to collect effectiveness measures Care required in matching costs to effectiveness, when costs are bundled up and have exclusions Cross-national comparisons Only if method harmonised (SHA) Need to take into account many other context factors (eg role of health insurance)

Thank-you Professor Alison Ritter Drug Policy Modelling Program, Director National Drug and Alcohol Research Centre E: alison.ritter@unsw.edu.au T: + 61 (2) 9385 0236 DPMP Website: http://www.dpmp.unsw.edu.au

Amount of funding ~ funder? Health expenditure area Amount ($AUD) Percentage State/territory health department AOD treatment $499,561,630 41.2% Public hospitals - admitted patients $181,603,673 15.0% Private hospitals - admitted patients $131,565,699 10.8% Commonwealth AOD treatment grants $130,281,000 10.7% Primary care services $53,650,750 4.4% Medications and pathology (PBS) $98,805,759 8.1% Client co-payments $85,256,739 7.0% Allied health services $32,151,907 2.6% TOTAL $1,212,877,157 100%