Developing a Population Need Based Funding Allocation Methodology for Manitoba Regional Health Authorities

MANITOBA CENTRE FOR HEALTH POLICYCommunity Health SciencesUniversity of Manitoba

October 17, 2005

Working GroupRHAs

Kevin Beresford – Interlake Paul Kochan – Winnipeg

Brenda Langevin – ChurchillKaren McClelland – Burntwood

Neil Walker – Central

Manitoba HealthJoe Brown Karen Hurd

Winston Maharaj Heather Reichert

Julene Reimer

“Others”Josée Lavoie – Centre for Aboriginal Health Research

Steve Power – Education Harvey Stevens – Family Services and Housing

MCHPGreg FinlaysonEvelyn ForgetOke Ekuma

Shelley Derksen Ruth Bond

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Purpose of this presentation

•To review the scope and purpose of the funding allocation methodology

•To consider various ways that funding allocation may be done

•To describe how the funding allocation methodology works

•To talk about outstanding issues

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Scope and Purpose

•Develop a funding allocation methodology for Hospitals, PCH, Home Care, Community and Mental Health Services, and Emergency Response and Transportation

•Focus on proportional distribution, not absolute amounts

The End Result

Historical/

Budget & Planning

Capitation Risk Adjustment Modelling

Inputs Past experience/ Future plans

Limited number of factors (age, sex, SES)

Past utilization Unlimited number of factors at multiple levels

Outputs Budget Average cost Expected cost Predicted cost

Adjustments None Post Post Post

Approach Policy/ Management Accounting Historical experience Statistical

Unit of analysis Population Population sub-units Individual Individual

Pros Plan driven Straightforward

In use elsewhere

Straightforward Controls for many factors

Can involve multiple levels

Cons Historical basis

Difficult to establish equity

Data intensive

Limited number of factors

No individual SES indicator in Manitoba

Doesn’t directly control for inefficiencies/ unmet need

Uses only past utilization to determine future expected cost

More complex

Data intensive

Data not available for all factors

Limited to modelling past utilization

Funding Allocation Methods

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Need for health services is a function of … age, gender, chronic health conditions, SES, aboriginal status …

The Theoretical Model

Factors theoretically affecting need for or use of health services, and potential level of measurement

Smok

ing

P hysica

lActi

vity

S ub s tan ce

A buseDiet

B ehav

iou ra

l Morb id ity and M

orta lity

Demogra

phics OtherIn fan t

Mo rta lity

P M RP Y LL

L ife

Expectancy

SES

Disability

Environm

ent

L iving in F ir s t N atio ns C o m m unity

HousingGeography/

Remoteness

C anc e rD iabe te s

AgeSe xA

borig

inal

Stat

us G e ne tic s /he re ditySo c ial al lo wanc e s tatus

E duc at io n

Ind iv id u a lR H A C o m m unity

H ype r te ns io n

L o w bir th we ightH igh bir th we ight

Self-rated health

C hro nic H e alth C o ndit io ns

In ju rie s

M e ntal H e alth

Birth rateEmployment

Se xual ly t rans m it te d dis e as e s

S ea t Be lt

U se

Language

A Simple ModelCost of Hospital Care

AGE0 95+

$0

$1,000

Cos

t

Predicted Cost

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Dependent Variables(the “outcomes”)

Hospitals

Personal Care Home

Home Care

Cost = CWC * RIW

Weighted Days of Care

Days of Care

Demographic Predictor VariablesAll Independent Variables Considered for Models Final Models

Individual Variables Community Variables Hospital PCH Home Care

Age ● ● ●

Marital Status ● ●

Sex ● ● ●

Death ● ● ●

Newborn ●

Proximity to major hospital ●

SEFI ● ● ●

AboriginalProportion of aboriginal identityProportion identifying as aboriginal

AgeProportion of population age 65+Proportion of population age 75+

Population Density

Size of Population

SEFISocioeconomic Factor Index

• Age dependency ratio - the ratio of the population aged 65 or older in a region to the population aged 15-64.

• Single Parent households - Percent of single parent households among households with children aged 0-14.

• Female single parent households - Percent of single female parent households among households with children aged 0-14.

• Labour force participation female - Women working or seeking work on census day.

• Unemployment 15-24, 25-34, 35-44, 45-54 - persons during the week prior to the census that were without work, had looked for work in the previous four weeks and were available for work in the week of the census.

• Education 25-34, 35-44, 45-54 - the count of the number of residents on census day reporting attaining a minimum of a high school diploma.

Morbidity/Mortality Predictor VariablesAll Independent Variables Considered for Models Final Models

Individual Variables Community Variables Hospital PCH Home Care

ADG Count/Co-morbidities ● ● ●

Birth Weight (at risk) ●

Chronic Disease ● ●

Injury ●

Infant mortality rate

Injury hospitalization rate

Potential years of life lost (PYLL)

Premature mortality rate (PMR)

Other Predictor Variables

All Independent Variables Considered for Models Final Models

Individual Variables Community Variables Hospital PCH Home Care

Hospital days in fiscal year ●

Panelled for LTC in fiscal year

Home care in fiscal year

LTC resident in fiscal year

HospitalizationAdmitted to hospital in fiscal yearDischarged from hospital in fiscal year

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•Social Allowance Status

•NPHS/CCHS-derived rates (e.g., smoking rate, substance abuse rate, self-rated health)

Predictor Variables Not IncludedDue to Incomplete Data

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Modelling Example- Cost of Hospital Services

•Region A has a history of admitting people to hospital more frequently than most other regions.

•Region B has not historically had the same number of beds available for patients as some other regions, and therefore people have gone without care they might have received elsewhere.

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Modelling Example

After controlling for age, sex, chronic conditions, co-morbidities, major hospital proximity, whether or not they were hospitalized for an injury, whether or not they died and the SEFI of the community where they live, we find the predicted annual hospital cost for 52 year old men in Manitoba is $343.

(simulated values)

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Modelling Example

•Currently, Region A has an actual average cost of $375 for 52 year old men.

•Currently, Region B has an actual average cost of $292 for 52 year old men.Under the funding allocation methodology, Region A will receive less, while Region B will receive more.

(simulated values)

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Modelling

•Moves beyond basing future funding on past practices

•Allows us to address inefficiencies and different practice patterns

•Maximizes equity among individuals and RHAs

2003/04 Distribution

“Actual” based on values reported in 2003/04 Manitoba Health Annual Report

Actual Actual Actual Actual

Assiniboine 3.7% 7.8% 5.4% 4.8%Brandon 7.2% 3.7% 2.6% 5.9%Burntwood 2.1% 0.1% 0.6% 1.4%Central 4.5% 7.5% 7.4% 5.5%Churchill 0.5% 0.0% 0.0% 0.4%Interlake 2.3% 3.4% 5.2% 2.9%Nor-Man 1.7% 1.7% 1.7% 1.7%North Eastman 1.0% 2.2% 2.5% 1.4%Parkland 3.2% 5.1% 4.5% 3.8%South Eastman 1.5% 3.1% 4.7% 2.2%Winnipeg 72.3% 65.5% 65.4% 70.0%

Acute Home Care TotalPCH

Pattern of Inter-Regional Hospital Use2000/01 to 2002/03

(percent of costs for inpatient care in-region, and out-of-region)

Central North Eastman

South Eastman

Interlake Nor-Man Parkland Burntwood Churchill Brandon Assiniboine Winnipeg

Central 56.8 0.0 0.3 0.1 0.0 0.2 0.0 . 1.7 1.2 39.6North Eastman 0.2 31.3 1.5 2.8 0.1 0.1 0.1 0.0 0.1 0.0 63.9South Eastman 1.4 0.1 43.3 0.1 0.0 0.1 0.1 0.0 0.1 0.0 54.7Interlake 0.3 0.5 0.1 31.7 0.0 0.5 0.1 0.0 0.2 0.1 66.6Nor-Man 0.0 0.1 0.0 0.1 51.4 0.4 1.9 0.0 0.6 0.1 45.3Parkland 0.4 0.0 0.0 0.1 0.3 67.3 0.1 0.0 4.4 0.7 26.7Burntwood 0.1 0.0 0.1 0.1 0.5 0.1 38.2 0.2 0.4 0.1 60.3Churchill . 0.0 . . 0.2 0.2 4.3 49.6 0.3 . 45.4Brandon 0.3 0.0 0.0 0.1 0.1 0.3 0.1 0.0 81.2 1.4 16.5Assiniboine 2.1 0.0 0.0 0.0 0.0 0.9 0.0 0.0 24.5 54.1 18.4Winnipeg 0.3 0.1 0.1 0.3 0.1 0.2 0.3 0.0 0.5 0.2 97.9Manitoba 4.8 1.1 1.7 2.1 1.1 3.3 1.7 0.1 6.0 4.3 73.7

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•Out-of-province residents

•Emergency departments/outpatient clinics

•Emergency response and transport

•Community and mental health services

Outstanding Tasks

ManitobaCentre forHealth Policy

MCHP

http://www.umanitoba.ca/centres/mchp