Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА Ric Marshall Dec11 With Thanks to Don Hindle Reporting basics of health care institutions in the DRG system

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА Implementing a DRG funding system Activity data – coding accuracy and completeness – don’t wait for perfection. Costing data – from a sample group of hospitals – can import initially. Modeled budgets and phased implementation plan with adjustment period.

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА The reasons why hospitals want to measure what they do? Manage to a budget. Perform to peer benchmark with best value services. –Technical efficiency –Allocative efficiency –Quality Give the best service possible to their community.

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА Measuring efficiency and quality of health services Cost per weighted unit of output Performance indicators on outcomes –Negative – hospital acquired complications –Positive – eg milestone indicators – SF21 – satisfaction … Process compliance with best practice protocols

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА TYPICAL EXPERIENCE WITH DRGS

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА WHAT DO YOU DO WITHOUT CASEMIX?  BEDDAYS …  DISCHARGES …  SHROUD WAVING  GLOBAL BUDGETS AND TOP-UPS  SERVICE AVAILABILITY  QUALITY??  VALUE????

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА “BUT OUR HOSPITAL GETS ALL THE DIFFICULT CASES”  MEASURING EFFICIENCY AND EFFECTIVENESS  HOW MANY HOSPITALS DO YOU NEED - WHERE?  HOW MANY MRI SCANNERS DO YOU NEED - WHERE?

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА ItemJapanGermanyFranceKorea,U.K.U.S.A Rep. Hospital beds (per 1,000pop) Physicians (per 1,000 population) Medical care expenditure/GDP (%) OTHER INDICATORS ARE THESE MEASURES REALLY LIKE WITH LIKE??????????

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА WHERE SHOULD THE BUDGET (GROWTH) MONEY GO?  TO THE REGIONS THAT HAVE THE MOST PEOPLE?  TO THE TOWNS THAT HAVE THE MOST HOSPITALS?  TO THE HOSPITALS THAT DO THE MOST WORK?

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА TYPICAL PROBLEMS Perverse incentives/inefficient resource allocation Lack of transparency Poor clinical data (diagnoses and procedures) Poor measures of expected cost per case type Mistrust between funders and care providers Unclear vision about mid-term goals

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА oHOWEVER - it's hard to agree, because data are never good enough oIt's hard to compare locally or internationally o‘MY CASES ARE HARDER THAN YOURS!’ oWe are arguing about things that could and should be measured NEED TO AGREE ON FAIR MEASUREMENTS

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА THE CASEMIX DEVELOPMENT PROGRAM A TEN YEAR PROGRAM FROM 1989 DRG DEVELOPMENT DATA STANDARDS AND REPORTING –NATIONAL HEALTH INFORMATION AGREEMENT LINKAGES TO –BUDGETS –FUNDING –PAYMENT “1 2 3 – DRG” ?????

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА INDUSTRY EXECUTIVES ACADEMICS POLICY OFFICIALS GOVERNMENT MINISTERS EXPERTS IMPLEMENTATION SUPPORT

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА FROM MEDICARE TO THE AUSTRALIAN HEALTHCARE AGREEMENTS COMMON DATA STANDARDS – CASEMIX AND DATA QUALITY “ONE SIZE FITS ALL” DRGs? – THE CASE FOR LOCALISATION MINIMUM DATASETS – WHERE DID MY DATA ITEM GO? PERFORMANCE FEEDBACK IN USEFUL TIMEFRAMES? EXAMPLES LATER

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА EARLY IMPLEMENTATION THROUGHPUT MORE CASES WITHOUT EXTRA BUDGET – LOWER LOS

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА SOME EXPERIENCE

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА DRGs Applications Impact # of Beds: 500 # of Inpatients: 26,000 Avg. Length of Stay: 6,0 d. Bed Turnover rate: 52 pat. # of Beds: 380 # of Inpatients: 42,800 Avg. Length of Stay:3,23 d. Avg. Length of Stay: 3,23 d. Bed Turnover rate: 113 pat. % 24 % 64 % 46 % 117

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА CLINICAL QUALITY INDICATORS Perforation of the colon following a colonoscopy procedure Anastomotic breakdown –following large bowel resection and anastomosis for cancer of the - colon - rectum Bile duct injury following cholecystectomy requiring operative intervention Mortality following repair of abdominal aortic aneurysm

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА AUSTRALIAN IMPLEMENTATION EXPERIENCE The importance of –Risk management – modelled effects –Transparency of the rules Learning from mistakes Australia still refining models New challenges – solve some, others appear Some basic building blocks

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА National Admitted Patient Care Collection (NAPCC)

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА National Hospital Cost Data Collection (NHCDC) statistics PUBLIC PRIVATE

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА COST WEIGHTS FOR AR-DRG VERSION 5.0, Round 10 ( ) DRG DescriptionCostStandardNumber ALOSAverage Cost per DRG ($)Average Component Cost per DRG ($) WeightErrorof Sepsof Days(Days)TotalDirectOheadWard MedicalWard NursingNon Clinical Salaries Pathology DRG DirectOheadDirectOheadDirectOhead A01Z Liver Transplant , ,70992,92415,78516,7531,75911,1871,6265,3795,4351,592 A03Z Lung Or Heart/Lung Transplant , ,40271,68410,7197,5161,4078,4431,2571,5905,8811,186 A05Z Heart Transplant , ,834104,12216,71214,8123,48810,9041,4981,8577,3581,242 A06Z Tracheostomy Or Ventilation> ,281253, ,92568,09615,8284, ,3281,0851,7333, A07Z Allog Bone Marrow Transplant , ,84964,18313,6674,7991,21215,9152,1534,3559,8011,656 A08A Auto Bone Marrow Transplnt+Ccc , ,36732,6218,7462, ,5422,2171,4983, A08B Auto Bone Marrow Transplnt-Ccc , ,77813,2673, , , A09A Renal Transplant+Pancreas/+Ccc , ,30343,9587,3452, , ,5403, A09B Renal Transplant -Pancreas-Ccc , ,68125,6084,0732, , ,0871, A40Z Ecmo - Cardiac Surgery , ,998111,11224,8868,6531,7876,2761,1141,49610,2022,124 A41A Intubation Age<16+Cc , ,03817,2204,8181, , A41B Intubation Age<16-Cc , ,8086,9551, , B01Z Ventricular Shunt Revision , ,2618,2372,0241, , B02A Craniotomy + Ccc ,77532, ,90925,8306,0792, ,5771,1071,0201, B02B Craniotomy + Smcc ,09521, ,92615,4033,5231, , B02C Craniotomy - Cc ,82819, ,82412,1422,6821, , B03A Spinal Procedures + Cscc , ,76020,4744,2862, , , B03B Spinal Procedures - Cscc , ,7379,5782,1601, , B04A Extracranial Vascular Pr +Cscc , ,18110,5662,6151, , B04B Extracranial Vascular Pr -Cscc ,1183, ,7866,3171, B05Z Carpal Tunnel Release ,66412, ,7461, B06A Cbl Psy,Mus Dysy,Npthy Pr+Cscc , ,29716,4314,8662, , , B06B Cbl Psy,Mus Dysy,Npthy Pr-Cscc ,1023, ,2493, B07A Prphl & Cranl Nerv & Oth Pr+Cc , ,2027,9132,2891, , Public Sector Estm R10 06.xls

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА Mean cost/case Nursing Medical Allied health OR Pathology Imaging Pharmacy Consumables Overhead Other Total Our hospital $2850 Other hospitals $2400 Benchmarking by cost only …

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА But patient was different from normal Look! You spent too much on patient 15644

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА Sorry, I'll try not to do it again I've checked, and patient wasn't different at all!

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА Elements of cPaths Admitted how long before procedure? Post-op hours in CCU Review of discharge plan at admission? Discharge OK delegated? Our hospital 9 hours 6 hours No Other hospitals 6 hours Nil Yes … and benchmarking by clinicians

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА GIVING FEEDBACK TO HOSPITALS ON THE EFFICIENCY AND QUALITY OF THEIR OUTPUTS

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА Feedback mechanisms Payment signals – price vs cost Bonuses for output target achievements Bonuses for performance indicator attainment:- –Waiting lists – ED – Elective surgery – –Capacity improvement Coding statistics Expenditure levels reporting

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА THE 3 KEY COMPONENTS OF A DRG FUNDING SYSTEM

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА Hospital (IP) activity by DRG tabulated to produce a table of hospital by DRG. activity data checked for completeness and accurate DRG assignment.

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА hospital budget data – one years estimate and/or actual expenditure by hosptial inpatient fractions (IFRACS) throughput payment proportion or components (eg if salaries not included need to be taken out of –costweights and –payment model). BUDGET/EXPENDITURE DATA

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА MODELLED BUDGETS Complete allocation of funding Service level agreements Targets for specific services –By period –By service type Caps on discretionary services Conditions of funding/payment - consequences

Serbia Health Project – Additional Financing Training for Trainers on AR-DRG, Република Србија МИНИСТАРСТВО ЗДРАВЉА THE THREE MUSTS OF CSMX START FROM WHERE YOU ARE DECIDE WHERE YOU WANT TO GO TAKE ACHIEVABLE STEPS