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

2. 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

3. 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

4. Step 1: Defining the scope
Four criteria for establishing the bounds (SHA, OECD et al., 2011, pp ):
(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).

5. 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

6. 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

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

8. 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

9. 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)

10. 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

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

12. 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), doi: /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), doi: /dar.12248

13. 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

14. 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

15. 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)

16. Thank-you Professor Alison Ritter
Drug Policy Modelling Program, Director
National Drug and Alcohol Research Centre E:
T: + 61 (2)
DPMP Website:

17. 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%