Independent Hospital Pricing Authority
ABF PRICE SETTING IN
AN INTERNATIONAL
ENVIRONMENT
Sean Heng
Mathematical / Statistical Analyst
AUSTRALIA & IRELAND
AGENDA
1. General Context
2. ABF Context
3. What this means for Price Setting
4. Wrap Up
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GENERAL
CONTEXT
LANDSCAPE
Australia:
• Area: 7,692 million km2
(5% of the world’s land area)
• Population: 24 million
(~3% Aboriginal & Torres Strait
Islander)
• 1 person every 3,200 hectares
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Ireland:
•
•
•
Area: 70,273 km2
Population: 4.6 million
1 person every 1.5 hectares
GOVERNMENT
STRUCTURES
ABF Functions
Data Collection
Training for Coders
Activity Targets
Activity Monitoring
National Pricing
Funding
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Australia
Ireland
ECONOMIC
ENVIRONMENT
GROSS DOMESTIC PRODUCT
US Dolalrs Per Capita
$55,000
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
Year
Australia
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Ireland
Source: OECD Health Data 2015
ECONOMIC
ENVIRONMENT
UNEMPLOYMENT RATE
% of Labour Force
16%
14%
12%
10%
8%
6%
4%
2%
0%
Year
Australia
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Ireland
Source: OECD Health Data 2015
HEALTH EXPENDITURE
US DOLLAR PER CAPITA
2012 HEALTH EXPENDITURE
$9,000
$8,000
$7,000
Ireland, $2,509
$6,000
$5,000
$4,000
OECD Average,
$3,000
$2,488
$2,000
India, $60
$1,000
$-
Public
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Private
United States,
$4,060
Australia,
$2,614
Source: OECD Health Data 2015
PPP based figures (Price and Volume Adjusted)
HEALTH EXPENDITURE
PUBLIC HEALTH EXPENDITURE
US Dollar Per Capita
$2,900
$2,700
$2,500
$2,300
$2,100
$1,900
$1,700
$1,500
Year
Australia
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Ireland
Source: OECD Health Data 2015
ABF CONTEXT
ACTIVITY DATA
Australia
Ireland
Mechanism
Admitted Patient Care
• Admitted Acute
• Admitted Subacute
Emergency Department
• Patient Level (ED)
• Aggregate (ES)
Non-Admitted Patient Care
• Patient Level (NAP)
• Aggregate (NAA)
Hospital Inpatient Enquiry
(HIPE)
• Inpatients (Admitted)*
• Daycases
# ABF Hospitals
(Acute Admitted)
270
38
# ABF Admitted
Episodes
Over 5 Million
1.7 Million
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ACTIVITY DATA
EXAMPLE: ACUTE ADMITTED VS INPATIENTS
I03A: Hip Replacement with Major Complexity
12.5 days
30 days
30 days
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COST COLLECTION
Australia
Ireland
Mechanism
National Hospital Cost Data
Collection
Patient Level Costing
Purpose
•
•
•
•
Contribute to the NEP and
NEC
Refine and inform
classification
Understanding patient care
path
•
•
Contribute to ABF
Funding and Price Setting
Assist in coding audits
Benchmarking
Date of Implementation
1996-97 (ROUND 1)
2010 (Pilot PLC Study)
2012 (Phase Implementation)
# ABF Admitted Hospitals
237
19
Stream Coverage
Acute; Subacute; Emergency;
Non-admitted
Inpatients; Daycases
Patient Coverage
(Admitted)
Over 90%
60%
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INSCOPE SERVICES
Hospital Budget
Acute Admitted
Subacute
Admitted
Inpatients & Day cases
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ED
NA
Other
ED
NA
Other
DATA AVAILABILITY
ACUTE
ADMITTED
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270
(237 Costed)
38
(19 Costed)
Over 5 million
(4.9 million Costed)
1.7 million
(1 million Costed)
NHCDC Round 19
2014/15 (19 Years)
2015 PLC (3 years)
WHAT THIS
MEANS FOR
PRICE SETTING
PRICE SETTING
Key Factors
Australia
Ireland
Landscape
•
•
Patient Remoteness adjustment
4% Indigenous adjustment
• No remote or indigenous
adjustment required
Economic
Environment
•
Stable growth in public hospital
spending.
Creates relative stability in hospital
cost data
•
•
•
•
Activity Data
•
•
•
Ability to separate admitted acute
and subacute episodes.
Lower variability in ALOS relative
to Ireland
Transparent and simplistic
calculation of Inlier Bounds. (L3H3
method)
•
•
•
•
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The variability in public hospital
spending.
May create fluctuations in price/
cost weights
Adopt a more rigorous stability
criteria
Inpatients capture both the acute
and subacute portion of an
episode.
High variability in ALOS relative
to Australia
More sophisticated statistical
approach is required for inlier
bound calculations
Impact on Pavilion Coding Audit
PRICE SETTING
Key Factors
Australia
Ireland
Cost Collection
•
19 Years experience in patient
level costing
Provides consistent and stable
costing environment
Still required to remove specific
hospitals due to inconsistent
costing and perform hospital level
trimming
Representative sample
•
•
Admitted, ED and OP streams
are priced under ABF
•
•
Able to monitor ABF costs and
activity between Admitted, ED and
OP streams
Able to price consistently across
streams
•
•
•
•
Inscope Services
•
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•
•
May experience variability in
costing while costing processes
and standards evolve
The costed sample currently
represent the larger more
complex hospitals,
May have issues with
representation of the population
Inpatients and Daycases are
funded under ABF
As OP and ED streams are block
funded, hospitals may shift costs
to specific streams to maximise
potential government funding.
PRICE SETTING
Key Factors
Australia
Ireland
Data Availability
•
•
Patient level adjustments
Paediatric
Indigenous
Remoteness
Dialysis
Age*
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Intensive Care Unit
Specialised Psychiatric
Multidisciplinary
Radiotherapy
•
Currently calculate overall
hospital adjustments for tertiary
referral and paediatric hospitals.
Potential to develop patient level
adjustments for paediatric and
ICU patients.
WRAP UP
WRAP UP
Key Learnings are
transferrable
between countries
A price setting model
needs to be tailored to
fit the landscape of the
country and its
objectives
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No “Cookie Cutter”
Approach. One
country’s pricing
model may not be
suitable for another
Difficulty comparing
price weights between
countries
QUESTIONS?