1. Melbourne 2011 0 Planning Developments in Tasmania Kevin Ratcliffe Health and Human Services Tasmania

2. Melbourne 2011 1 National and State ABF Developments –Significant work around Activity Based Funding (ABF), in particular implications of the Nationally Efficient Price (NEP) and other National Health Reform (NHR) agenda items are the current focus of health policy and planning work in Tasmania –National funding input will be approx. 40% of activity initially –Rising to 50% for increases at nationally efficient price –State funding will still be substantial State Activity funding model will be required to ensure appropriate funding over the regions State will still be responsible for demand management and service planning Funding agreement between state and LHNs will be required on ongoing basis for agreed activity levels and coordination of state-wide services. –The ABF will cause shifts between classes of cases – admitted/ED/IP

3. Melbourne 2011 2 Broad Timelines of the ABF Agenda 3 agreements in 2 years NPA – what was 1 (December 2008) Stage 1 – agreed acute inpatient classification system (DRGv6) and Casemix costing methodology by 30 Jun10 (achieved). –Version 1.0 of the National Costing Standards agreed by all Jurisdictions Feb 2010 Stage 2 – common costing approach for Community Service Obligations (Not fundable by Casemix) and implement funding strategies for T&R by 30 Jun 2011. Stage 3 – common Casemix classification and costing methodology for EDs, subacute, outpatient and community by 30 Jun 13. Stage 4 – complete ABF methodology decision by 30 Jun 14.

4. Melbourne 2011 3 Broad Timelines ABF Agenda -2 NHHN- what was 2 (April 2010) Decision to fund on Casemix already made and Agreed by COAG Payments for acute inpatient services to begin on an ABF basis against state-specific prices from 1 July 2012 Payments for ED, subacute and outpatients to begin to be paid-using nationally consistent activity proxies and state-specific processes from 1 July 2012, moving over time to payment on an ABF basis against state-specific prices and then national “efficient” prices.

5. Melbourne 2011 4 Heads of Agreement National Health Reform The latest part of the ABF agenda is a COAG heads of agreement to be augmented by a final agreement by 1 July 2011 –preservation of NHHN except where varied by the new agreement Signed February 2011 –Substantial number of agreed items including ; Increased Commonwealth Spending $16.4Bn between 2014-5 and 2019-20 Funding for efficient Growth from 45% (July 2014) to 50% (July 2017). Basis of activity - public patients in Public Hospitals Block grants for services best funded (CSO) Public Health programmes –Payment to States then to LHNs (1 July 2012) at the same level SPP based on Efficient Price set by IHPA Volumes based on service agreements agreed by State Govts and LHNs Variations in price to LHNs reflect state cost factors –National Funding body for health reform –Fair and Efficient price for Hospital Services Relies on good costing data - NHCDC –National Performance Authority

6. Melbourne 2011 5 Tasmanian Developments Ongoing implementation of the Tasmanian Health Plan (using current Hardes projections and population data), in conjunction with National Role Delineation and Clinical Services Capability constructs to inform Health service planning The particular Tasmanian context of recent significantly reduced GST receipts, limited population and economic growth, a demographic profile that is ageing and (relatively) socioeconomically disadvantaged, coupled with limited primary care availability, is driving increased health service utilisation and acuity. Within this context Tasmanian health service planners within DHHS Policy, Information & Commissioning (PIC) unit are developing service agreements for Area Health Services (AHS soon to be Local Hospital Networks or LHNs) that –Detail price, volume and quality. –With a policy intent of sustainability, –service agreements are emphasising manageable volume and affordable service models.

7. Melbourne 2011 6 Admitted Activity Projections Most recent Projections now 4 years old. –Policy initiatives have made them redundant –Elective Surgery programmes causing substantial growth in activity and demand Impact of ABF will be to shift cases between streams –Cases as Outpatients may become admitted –ED admitted boundary may change –This will cause current projections to require review Price volumes currently made on basis of last 8 years activity in a simple growth function –Only projecting 2 years into future for funding –Elective surgery targets can be set at flat or low growth with impact costed.

8. Melbourne 2011 7 Emergency Department Activity Activity projected using Hardes methodology and Tasmanian ED classes –Reliable predictions for RHH and NWRH –LGH has increased substantially more than predicted Substantial asymmetry of ED activity across the state No private sector ED in North of State Most growth is in GP type cases at RHH and LGH NW is relatively static –Will be possible to incorporate National Urgency related Groups (URGs) into the ED projection methodology All jurisdictions will be using URGs National consistent projections methods should be possible

9. Melbourne 2011 8 Outpatient Care Previous attempts were thwarted by; –Lack of sensible classification –Clinic based classes exist but no classification rules –Very poor data collection 70% complete New ABF OPD classes have more structure –Broad groups Procedural, Consultation, Diagnostic, Nurse/Allied Heqalth –Will make predictions more reliable –Mandatory data collection –Superior definitions of classes –OPD will be in scope for future Activity projections and planning activities.

10. Melbourne 2011 9 Current projects Tasmania will be going to tender for Demand/Activity projection consultancy in very near future –Open tender will be conducted –All ABF products to be included Admitted Subacute Mental health Emergency department Ambulatory Improved data definitions, boundary definitions and superior classification will improve reliability of projections and analysis Both public and Private sector included in activity estimates

11. Melbourne 2011 10 Thank You Kevin Ratcliffe kevin.ratcliffe@dhhs.tas.gov.au +61 3 6233 3306