A perfect partnership: improving the financials and delivering
better client outcomes
Liz Cairns, Manager, National Serious Injury Service, ACCDr Maree Dyson, Strategic and Technical Consultant
Darryl Frank, Actuary, PricewaterhouseCoopers
November 2008
Introducing ACC’s serious injury clients
Liz Cairns,Manager, National Serious Injury Service
ACC - unique in the world
– No fault
– Everyone in NZ including workers, non-workers, & tourists
– Any kind of personal injury caused by an accident (including assault, medical mishap, mental injury)
– Funded by everyone through direct levies (workers, employers, car owners) and taxation
ACC’s serious injury clients
• Injury causes– Predominantly motor vehicle
• Permanently disabled after an accident– Brain injuries– Spinal cord injuries– Other e.g. severe burns,
multiple amputations
• ACC fund life long care and support
ACC’s serious injury clients
Severe brain injury19%
Moderate brain injury34%
Spinal cord injury42%
Other5%
• ACC receives 1.5 million + claims per year
• 250 – 300 are serious injury claims
• Currently ACC has 4,172 serious injury clients
• Size of the serious injury client base will continue growing for another 20-25 years
ACC’s serious injury clients
ACC’s serious injury clients
• Currently 4,172 clients with aserious injury:
– 390 are children 0-16 years17 are aged 90+ years
– Average age at injury = 28 years Average age now = 41 years
– 74% male26% female
Serious injury - actuarial perspective
Darryl Frank, Actuary, PricewaterhouseCoopers
Context – overall ACC Scheme
Payment type
Annual payments
$m Liabilities Multiplier
Social rehabilitation (serious) 226 5,131 22.7
Social rehabilitation (non-serious) 182 868 4.8
Weekly compensation 948 5,290 5.6
Medical/ hospital 694 2,150 3.1
Other 223 1,595 7.2
TOTAL 2,274 15,033 6.6
• Ratio of liabilities to annual payments:– About 7 for ACC Scheme as a whole– About 23 for serious injury social rehabilitation costs
Context – overall ACC Scheme
• Serious injury claims are about 10% of payments and over 30% of liabilities
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Annual payments Liabilities
Serious injury claimsAll other claims
Average cost per person
Severe TBI, $2.03m
Moderate TBI, $0.79m
High-level tetra, $3.00m
Low-level tetra, $2.05m
Paraplegic, $0.84m
Incomplete, $0.42m
Comparable, $0.48m
• Over the person’s lifetime, , ACC will fund an average of $1.2m of social rehabilitation (excludes treatment and weekly compensation)
Number of $1million + claims
Distribution of claim liabilities
0%
5%
10%
15%
20%
25%
30%
35%
$0 - 100k $100k -500k
$500k -1m
$1 - 3m $3 - 5m $5 - 10m $10m+
• Nearly half of all claims have liabilities of more than $1m, this represents over 80% total of serious injury liabilities.
A liability overview
Severe TBI, $1,604.21m
Moderate TBI, $1,231.24m
High-level tetra, $931.66m
Low-level tetra, $417.09m
Paraplegic, $526.96m
Incomplete, $239.88m
Comparable, $119.80m
• If ACC stopped business today…– $5.1 billion is needed to fund social rehabilitation for
existing seriously injured clients to the end of their lives
Modelling challenges
• In any scheme these benefits are the most challenging to model…..– Short payment history relative to the volume of future
payments– Changes in provision of care and expectations of
claimants, families and care providers– Changes in broader supply and demand for attendant care
and like services– Changes in claims management approaches
• Challenge is greater in ACC….– Uncertainty relating to care provided by families– Past management of claims not “optimal”. Difficult to
assess ACC portfolio relative to “best practice”
Modelling approach
• Due to small number of claims, and variability in cost per claim, serious injury claims are modelled individually
• Takes into account– Age– Duration since injury– Injury Type (eg high level TBI, paraplegic etc)– Current payments
• Allow for mortality (higher than population mortality)
• Growth in average cost per claim is the greatest challenge……
• Continuation of past trends could lead to significant liability increases– each additional 1% p.a. growth in cost/claim adds about
$700m
Modelling of liabilities
• Past growth in average cost per claim has been significant
Past and projected cost per claim
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
Payment year
Aver
age
cost
per
cla
im
New NSIS has similarities with TAC
• Dedicated staff managing serious injury claims• Focus on liability impact of decision making• Focus also on client outcomes, not just cost• More objective assessment approach (using
measures such as FIM)• Improved data capture• Alternatives to Attendant Care
These should result in greater consistency of decision-making, leading to more predictable payment increases
TAC: pre-New division
New Division established
TAC experience
TAC growth rate in attendant care costs for catastrophically injured clients (delay years 4+)
Service Year ended September
TAC: new Division for severely injured clientsTAC: Lifetime Support established ACC "lagged"
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
TAC changed claims management approach about 8 years ago
Recent ACC experience similar to TAC’s prior to change
Introductionof Lifetime Support
Serious injury - strategy
Dr Maree Dyson, Strategic and Technical Consultant
Situation 30 June 2007
Liability blow-out Isolation & dependence
Accelerating rate of growth in average cost per serious injury claim:
• 4.2% in 2005
• 5.8% in 2006
• 14.3% in 2007
Low participation rates in community activities & employment:
Best Typical NZ
SCI 80% 40% 18%
TBI 56% 35% 9%
Strategy
• Simple objectives:– Stabilise growth rate to
sustainable rate– Improve client outcomes
2003 2004 2005 2006 2007 2008 2009 2010
Cost per claim
Sustainable growth rateSustainable growth rate
Strategic approach
Knowing our clientsManaging theservice gateway
Targeted attendant care & alternatives
Specialist case management
Increased accountability
Knowing our clients
Person-centred planning
Service-basedplanning
Managing the gateway
• Assessment:– Not routine– In response to change in needs
and/or circumstances only
– Evidence based assessment tools
• incorporating FIM & FAM, OBS, Lawton’s IADL measures
– Decision-making tools
• Outcomes:– Use of objective outcome
measures (AusTOMs)
– Closing the ‘service loop’
Targeted Attendant Care
FIM+FAMLawton’s IADLAttendant Care Guidelines for SCI
High medical support needs
Overt Behaviour Scale(OBS)
Human assistance
Exceptional responses
Technological alternatives to attendant care
Life alternatives to attendant care
Facilitating alternatives to attendant care
• New disability support services:
– Supported Living• Focus on independence &
participation goals
– Supported Employment• Focus on finding &
maintaining open, paid employment
– 2009, Transition from School to Work
• Focus on the 16+ group
Increasing accountability
Efficiency and effectiveness reporting & purchasing
InputsClient demographics and complexity indicators (e.g injury profile, age, disability)
OutputsVarious (e.g. ACC decisions, number of episodes of intervention, costs, hours of service, service duration)
OutcomesActual impact on clients’lives (e.g. employment participation, goal achievement, increased participation, stability)
ReportsReportsACC reporting:– Client complexity– Service utilisation– Costs– ACC decisions– Outcomes
Provider monitoring:– Client complexity– Costs– Outputs– Outcomes
Benchmarking
• Can we bring some benchmarks to the use of Attendant Care to:– Assist staff decision making– Provide more information to stakeholders– Improve actuarial modelling
• SCI Guidelines• Functional Independence Measure (FIM)
Improving information, decisions & modelling
FIM™ is directly relevant to the need for attendant care, but…
Can the FIM™ to predict attendant care hours?
FIM™ is an 18-item instrument
• Covering areas such as mobility, transfers, communication
• Item scores range from 1 (indicating complete dependence) to 7 (complete independence)
• Scores of 5 or less indicate the person needs human assistance to complete the task
What is acceptable variance explanation in service modelling?
• Serious injury profile:– SCI 19% variance– 7% for TBI
• Case mix relies on a ~ 15% variance explanation in LOS
• FIM-FRGs explain ~ 31% of the variance inlength of stay in inpatient rehabilitation
• US VA Hospital Based Home Care (HBHC) model explains 20% of the cost variance
• Nursing home Resource Utilization Groups (RUGs)~45% of the variance in patient contact time
Yes ….
• ~47% of the variance in attendant care hours can be explained by a FIM based model
• Strong result in human services modelling
• Unexplained variance
– FIM does not profile challenging behaviours
– Ceiling effects
– Other
Is ageing a risk?
Traumatic brain injury• People injured over the
age of 40 tend to have poorer outcomes than people injured at an earlier age
• Limited international longitudinal data
• Is dementia a risk?• Stability in support needs
likely:– Traumatic Brain Injury
Model Systems (TBIMS) data
– ACC data
Is ageing a risk?
Spinal cord injury• Extensive international
longitudinal data
• Increasing needs more likely if:– Paraplegic
– Injured under 15 years of age
– Injured over 50 years of age
– Now over 50 and > 15 years post accident
• High utilisation and median hours of Attendant Care
• Key strategy– Using a standardised measure (ICAP) that describes the
difference between chronological age and developmental age
This is our risk
Serious injury - delivery and results
Liz CairnsManager, National Serious Injury Service
Support Coordinator
Support Coordinator
Service Coordinator
Service Coordinator
Senior Support
Coordinator
Senior Support
Coordinator
Area Team Manager
Area Team Manager
Support needs yet to be
established or
changing
Support needs well-
established and
stable
Structure
National Service Manager
National Service Manager
Service Delivery Manager
Service Delivery Manager
Area Team Manager
Area Team Manager
Central
Area Team Manager
Area Team Manager
AucklandNorth
Area Team Manager
Area Team Manager
AucklandSouth
Area Team Manager
Area Team Manager
Midlands
Area Team Manager
Area Team Manager
Southern
Structure
• Key elements of this structure:
– Client segmentation into active management versus stable needs
– Job roles differentiated to meet needs of different client segments (active management versus stable needs)
– Case loads matched to the requirements of each role, so staff have time to do the job required
– Mentoring role (Senior Support Coordinator) to support development of specialist skills & knowledge
– Locate staff close to communities where clients reside, so they develop knowledge of local community services & supports
16 months on…
• National service specialising in serious injury
– 100 Support/Service Coordinators handling 4,200 serious injury cases
– Five regional Area Team Managers
– National & regional KPIs specific to serious injury:
• Liability• Client outcomes• Quality
Northland & North Auckland
South Auckland & Waikato
Midlands
Central
Southern
Hours per week
Current situation
Recommended in ACC Spinal
Guidelines
CASE 1: Tetraplegic 168.0 28.5 - 91.5
CASE 2: Tetraplegic 58.0 98.5 - 105.5
CASE 3: Paraplegic 114.0 0.5 - 14.5
CASE 4: Paraplegic 0.0 0.5 - 10.0
Knowing our clients
Hours per week
Current situation
Recommended in ACC Spinal
Guidelines
CASE 1: Tetraplegic 168.0 28.5 - 91.5
CASE 2: Tetraplegic 58.0 98.5 - 105.5
CASE 3: Paraplegic 114.0 0.5 - 14.5
CASE 4: Paraplegic 0.0 0.5 - 10.0
Knowing our clients
Hours per week
Current situation
Recommended in ACC Spinal
Guidelines
CASE 1: Tetraplegic 168.0 28.5 - 91.5
CASE 2: Tetraplegic 58.0 98.5 - 105.5
CASE 3: Paraplegic 114.0 0.5 - 14.5
CASE 4: Paraplegic 0.0 0.5 - 10.0
Knowing our clients
Managing the service gateway
• Pilot results
Support Needs Assessment service trial Oct – Dec 2007
• Newly-injured clients have on average 20 hours less attendant care compared to newly-injured from this time last year
– $4.7m not added to liability
• 6 attendant care costs reduced by 440 hours per week, saving:
– $5380 per week– $270,00 per year– $5.5m liability
• 96 attendant care costs held stable
New clients(20)
Existing clients(102)
Technological alternatives to attendant care
• Assessor advised increasing attendant care hours to enable a 70 year old client to access their community
– Increase in attendant care hours 21.0 hours
– Liability impact $134,000
• Alternative response
Stair lift so client can get out of house& access the community themselves $57,000
• Reduction in ACC $77,000Scheme liability over life of the claim
• Reduction in ACC $77,000Scheme liability over life of the claim
Facilitating alternatives to attendant care
• Supported Living– 11 service providers nationwide
– 123 clients receiving service
– Outcomes → reduced attendant care & increasing participation
• Supported Employment trial(one site)– 40% of referred long term unemployed
clients now in paid employment (6 spinal & 9 brain injury)
• Community participation though Individual Planning– Hemi case study
Financial results Q1
• Total costs:4% lower than expected for the quarter
– Assessment costs $300k less than same period last year
– Housing modifications:$1.5m less than same period last year
– Vehicles:$2.8m less than same period last year
– Attendant caresee next slide….
Financial results Q1
– Attendant care
Age group % of clients
% using attendant
care
Median attendant care hours per week
Baseline: 31 Mar 08 30 Sep 08
0-14 years 8.4 54.0% 27.0 28.0
15-24 years 13.2 38.9% 28.0 25.0
25-44 years 37.3 33.8% 17.0 17.0
45-64 years 32.5 34.3% 17.0 16.0
65+ years 8.7 44.0% 17.0 17.0
Case study: “Hemi”
• History:• 43 year old male with severe brain injury• 5 years post-injury • Currently living with wife & 3 children on family
land in rural South Auckland• 118 hours of attendant care per week
– Includes 87 hours for “supervision”– Hemi socially isolated & not engaged with his local
community– Partner struggling with being Mum to 3 kids & being
Hemi’s full-time carer
Case study: “Hemi”
• Independence:– “Supervision” replaced with
personal alarm for emergencies
• Involved at local marae– Carving– Kapa haka– Hemi & his partner get
some time out from each otherwhile he’s at the marae
Case study: “Hemi”
• Result - stabilised cost growth:
– Reduction in attendant care hours (supervision) - $42,000 per year
– Personal alarm +>$1,000 per year
• Net annual savingsfor NZ taxpayers - $41,000 per year• Reduction in ACC $0.820 million
Scheme liability over life of the claim• Reduction in ACC $0.820 million
Scheme liability over life of the claim
Strategic objectives
• Stabilise liabilities growth rate• Improve client outcomes
2003 2004 2005 2006 2007 2008 2009 2010
Cost per claim
Sustainable growth rateSustainable growth rate
Rebuilding independence……supporting participation…living life !
A perfect partnership: improving the financials and delivering
better client outcomes
Liz Cairns, Manager, National Serious Injury Service, ACCDr Maree Dyson, Strategic and Technical Consultant
Darryl Frank, Actuary, PricewaterhouseCoopers
Questions?