Pricing and funding for safety and quality
James Downie
Chief Executive Officer
Independent Hospital Pricing Authority
Safety and Quality
• IHPA canvassed including safety and quality measures
in the National Efficient Price from inception.
• Worked with Australian Commission on Safety and
Quality in Heath Care to consider:
‒Evidence base
‒Better use of routine data sets to measure safety and
quality
‒Role of best practice pricing
2 www.ihpa.gov.au
Commonwealth directions to IHPA
3 www.ihpa.gov.au
COAG 1 April 2016
All jurisdictions agreed to take action to improve the quality of care in hospitals
and reduce the number of avoidable admissions, by:
• improving hospital pricing mechanisms to reflect the safety and quality of
hospital services by reducing funding for unnecessary or unsafe care –
reducing hospital-acquired complications will improve patient safety; and
• reducing the number of avoidable hospital readmissions.
Sentinel events
www.ihpa.gov.au4
Sentinel Events
5
1. Procedures involving the wrong patient or body part resulting in death or major
permanent loss of function
2. Suicide of a patient in an inpatient unit
3. Retained instruments or other material after surgery requiring re-operation or
further surgical procedure
4. Intravascular gas embolism resulting in death or neurological damage
5. Haemolytic blood transfusion reaction resulting from ABO incompatibility
6. Medication error leading to the death of a patient reasonably believed to be due
to incorrect administration of drugs
7. Maternal death associated with pregnancy, birth and the puerperium
8. Infant discharged to the wrong family
www.ihpa.gov.au
Sentinel Events
• From 1 July 2017 no funding for episodes of care with
a sentinel event
• ~100 events per annum (public hospitals)
• Funding impact ~$5 million per annum
6 www.ihpa.gov.au
www.ihpa.gov.au7
Hospital acquired complications
Australian and international studies estimate that
adverse events explain between 12.0% and 16.5% of
total cost of care in the hospital setting
8 www.ihpa.gov.au
Premise
• ICD-10-AM data is a rich source of safety and quality data, currently
under-utilised at a national level
• Literature review
‒Good evidence that the provision of timely clinical information to
clinicians & managers leads to improvements in patient outcomes
• Pricing signals
‒Provide clear sign that government values safety and quality
‒Promote discussion of safety and quality systems amongst
clinicians and hospital managers
9 www.ihpa.gov.au
Development of list of hospital acquired complications
10 www.ihpa.gov.au
Independent Hospital
Pricing Authority
(IHPA)
Implements national Activity
Based Funding (ABF) for
Australian public hospitals
Australian Commission on
Safety and Quality in Health
Care
(ACSQHC)
Leads and coordinates national
improvements in safety and
quality in health care
Formation of Joint Working Party
(JWP)
List of HACs
preventability cost impact
clinical prioritypatient impact
List of hospital acquired complications
1. Pressure injury
2. Falls resulting in fracture or other intracranial
injury
3. Healthcare associated infection
4. Surgical complications requiring unplanned
return to theatre
5. Unplanned intensive care unit admission
6. Respiratory complications
7. Venous thromboembolism
8. Renal failure
9. Gastrointestinal bleeding
10. Medication complications
11. Delirium
12. Persistent incontinence
13. Malnutrition
14. Cardiac complications
15. Third and fourth degree perineal
laceration during delivery
16. Neonatal birth trauma
11 www.ihpa.gov.au
HAC statistics 2014-15
~100,000 acute admitted episodes
with at least one HAC
2.91 HACs per 100 episodes
12 www.ihpa.gov.au
HAC statistics 2014-15
13 www.ihpa.gov.au
Rates vary
14 www.ihpa.gov.au
15
HAC Incremental
cost
All HACs 8.6%
Pressure injury 13.8%
Falls resulting in fracture or other intracranial injury 1.7%
Healthcare associated infection 8.8%
Surgical complications requiring unplanned return to theatre 10.9%
Unplanned intensive care unit admission
Respiratory complications 15.9%
Venous thromboembolism 12.4%
Renal failure 21.7%
Gastrointestinal bleeding 10.0%
Medication complications 8.2%
Delirium 9.8%
Persistent incontinence 2.3%
Malnutrition 7.4%
Cardiac complications 11.3%
Perineal laceration 23.2%
Neonatal birth trauma 10.8%
www.ihpa.gov.au
www.ihpa.gov.au16
Risk Adjustment
Pricing and funding approaches should
balance the likelihood that some patients
will be at higher risk of experiencing
an adverse event while recognising that
all hospitals have scope to improve safety
and quality
17 www.ihpa.gov.au
Complexity Model
18www.ihpa.gov.au
Risk Factors 01. P
ressu
re in
jury
02. F
all
s r
es
ult
ing
in
fra
ctu
re o
r o
the
r in
tra
cra
nia
l in
jury
03. H
ealt
hca
re a
ss
oc
iate
d
infe
cti
on
04. S
urg
ica
l c
om
pli
cati
on
s
req
uir
ing
un
pla
nn
ed
re
turn
to
th
ea
tre
06. R
esp
ira
tory
co
mp
lic
ati
on
s
07. V
en
ou
s t
hro
mb
oe
mb
oli
sm
08. R
en
al fa
ilu
re
09. G
astr
oin
testi
nal b
lee
din
g
10. M
ed
icati
on
co
mp
lic
ati
on
s
11. D
eli
riu
m
12. P
ers
iste
nt
inco
nti
nen
ce
13. M
aln
utr
itio
n
14. C
ard
iac
co
mp
lic
ati
on
s
Admission Status
Patient Age
MDC
ICU Status
DRG Type
Charlson Score
Gender
Transfer Status
19 www.ihpa.gov.au
Final adjustments
• HAC Group 10: Medical Complications
• Incremental Cost of a HAC10 = 8.1%
20 www.ihpa.gov.au
Complexity
Group
Final Adjustment
Low 1.00 x 8.1% = 8.1%
Moderate 0.46 x 8.1% = 3.7%
High 0.27 x 8.1% = 2.2%
21 www.ihpa.gov.au
Funding impact
• Agreement specifies the funding adjustment will be
back-cast.
• As a result no cut to Commonwealth funding.
• Not yet clear how states and territories will implement.
22 www.ihpa.gov.au
Funding impact
23 www.ihpa.gov.au
Incidence of HACs between years LHN funding impact
stable minimal (slight decrease)
increases decreases
decreases increases
Benchmarking
www.ihpa.gov.au24
National benchmarking portal
• Launched late 2016
• Cost, activity and HAC data
• Available to all public hospital staff
• Access controlled by states and
territories
25 www.ihpa.gov.au
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All HACs – Rate/100 separations
www.ihpa.gov.au
Clinical engagement is key
• Pricing signal important to start conversation
• Providing data back to clinicians and managers will
drive improvement
• IHPA benchmarking portal provides HAC rates at
hospital and DRG level
• Allows comparison across like hospitals
• Accessible by all public hospital staff (access
controlled by states and territories)
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HAI – Rate/100 separations
www.ihpa.gov.au
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HAI – Rate/100 separations
www.ihpa.gov.au
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HAI –COPD – Rate/100 separations
www.ihpa.gov.au
www.ihpa.gov.au
www.ihpa.gov.au30