1

The Ontario Health Based Allocation Model

Presentation to the Central LHIN Board

August 28, 2007

2

Objectives of this Presentation

To review the development of the Health Based Allocation Model (HBAM)

To describe how the model works, including how the HBAM classifies Ontarians according to their estimated resource use

To review HBAM information relevant to the Central LHIN

3

Current Approaches to Operational Funding in Ontario

Sector (Approx Share)

Global / Cost BasedBased on

Standardized Funding Rate

Based on Predicted Services

Based on Predicted Services with

Standardized Funding Rate

Hospital (70%) 87 %2 % PCOP

11 %Priority Programs & Integrated Population-based Allocation

LTC (15%) 12 %88 %Per diems

CCAC (8%) 88% 12%

Community Support Services (1.7%) 100%

Community Mental Health (3%) Global with early population-based approach

Other Community (1.7%) 100 %

4

Limitations in the accuracy and flexibility of funding methods necessitated multiple funding streams that were difficult to reconcile with each otherThe funding models were viewed as complex and unstable from year to yearFunding formulas were not integrated across sectors, thus perpetuating a fragmented systemAvailable health information was not used in determining health needs of the population.

Demographics was the main determinant of share of resources to regions. Sicker populations did not necessarily receive an appropriate funding share

Before HBAM

5

HBAM DevelopmentMMC approved direction for HBAM model development on March 20 & April 5, 2006

In April 2006, intensive development of the HBAM began

By October 2006, the proposed methodologies had been realized for the hospital and CCAC sectors

By December 2006, the methods had been extended to apply to incremental funding for long term care homes, supportive housing and community mental health

Treasury Board approved HBAM in principle on January 17, 2007

The preliminary model is complete. The model will now undergo further refinement and be updated with the latest data

The application of HBAM at the LHIN level has been presented to each individual LHIN

Updating of the model is underway

6

Underlying Principles of The Health Based Allocation Model

Equitable access: Similar communities should have similar use of health servicesEquitable cost: Funding rates are standardized across service providersMoney follows the patient: LHIN funding is responsive to volume of patients treated.

7

Overview: Calculating Fair Share to a LHIN

Efficient provision of outputs (services)

X

LHIN Share Per Health Status

Category

Population-based factorsDemographicsPopulation growth and ageingHealth StatusVulnerable sub-populationsPatient flows

Provider-based factorsEconomies of scaleCase mixSpecialized programs Teaching and research mission

The health-based allocation methodology promotes cost

effectiveness

Effective mix of outputs (services)

Maximizes health gains and optimizes use of health resources

Adjusted for unique characteristic of LHIN

Needs adjusted weighted activity per

health status category

Adjusted for unique characteristic of LHIN

Standard cost benchmarks measured as the average across

service providers

Total LHIN Fair Share

A

B

C...

Sum of LHIN Share by Health Status INPUT

Reference Volume

Reference Cost

8

Overview: HBAM Information Is a Tool for Managers

Expected 1

1. LHIN expense limit as per “fair share” allocations prescribed by the HBAM2. Reference Volume defined as the average volume adjusted for LHIN population characteristics3. Reference Cost defined as the average cost adjusted for characteristics of LHIN’s providers

LHINs can use HBAM to:

Identify service areas that require additional investment (e.g. programs with lower than expected utilization)

Identify target areas for efficiency improvements (e.g. programs or providers with higher than expected costs)

HBAM informs a fair and rational allocation to LHINs and helps LHINs and their providers improve efficiency.

XAdjusted

Reference Volume 2

Adjusted

Reference Cost 3LHIN Share

=Each LHIN’s fair share of total LHIN funding may be used to set the LHIN’s expense limits

Hospital A

Hospital B

Hospital C

.

.

.

Hospitals

CCAC

Long-Term Care

Community Mental Health

Community Support Services

Other Community

Rehab

Acute

Ambulatory

.

.

.

Complex Continuing

Care

Sector Service Type Service Provider

As a management tool, HBAM allows for the analysis of performance, equity and efficiency at the LHIN, health sector, and HSP levels.

9

How Does HBAM Allocate Funding to LHINs ? Step 1. Construct Electronic Health Profile for Each Ontario Resident

Step 5. Apply Provider Cost Adjustors to Convert Weights to Dollars

Step 2. Assign Each Person to a Clinical Group

Step 4. Allocate Resource Weights to Patients’ Chosen Service Providers

Step 6. Add Total Estimated Costs for Providers Within Each LHIN

Step 3. Assign Resource Weight to Each Person*

Step 7. Compile HBAM Components to determine LHIN Allocation

Step 8. Assess each LHIN’s fair share of funding

*Attachment demonstrates this for the home care component of the model

10

HBAM Outcomes

The HBAM is superior to current approaches, based on fundamentalcriteria identified at the outset of development

Allocation simulations use FY 0405 data and apply to all Hospital and CCAC activity

Additional modules allow for distribution of funds to address

LHIN specific pressures in the Long Term Care and Supporting Housing Sectors

LHIN specific pressures in Community Mental Health

The current variance analyses compare actual expenses to the proposed expenses using HBAM

SERVICE PROFILE : Central LHIN

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Hospital Cohort Distribution

3%

0%

95%

2%

0%

5%

35%

50%

3%

6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Chronic/Rehab

Teaching

Community

Small

Specialty

Share of Actual Expenses by Hospital Cohort

08 Central Provincial Average

13

Where do Residents receive Acute Services?

08 Central57%

07 Toronto Central31%

09 Central East7%

05 Central West3%

Other LHINs2%

14

Where Acute Services are Offered

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

08 Central 67.9% 66.2% 36.8% 88.2% 76.7% 19.9% 66.3% 61.5% 68.1%

07 Toronto Central 0.1% 12.7% 24.4% 1.4% 0.6% 14.9% 1.6% 17.0% 8.9%

09 Central East 0.2% 13.3% 24.0% 2.0% 3.7% 12.5% 26.2% 2.0% 7.8%

05 Central West 6.8% 1.5% 2.2% 3.9% 2.0% 5.1% 0.6% 13.0% 5.5%

12 North Simcoe Muskoka 21.8% 0.5% 1.9% 1.3% 13.8% 3.4% 0.8% 0.7% 3.7%

06 Mississauga Halton 0.2% 1.3% 3.8% 0.6% 0.2% 7.0% 1.0% 3.6% 1.8%

Other (Ontario & OOP) 3.1% 4.5% 6.9% 2.7% 3.1% 37.2% 3.6% 2.2% 4.3%

0596 Alliston Stevenson Memorial

0632 Toronto Ny North York

General

0680 Don Mills Surgical Unit Limited

0701 Richmond Hill York Central

0736 Newmarket Southlake

0855 Shouldice Hospital

0905 Markham Stouffville

0941 Toronto Ny Humber Regional

Combined

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08 Central73%

07 Toronto Central13%

09 Central East5%

05 Central West3%

Other LHINs6%

Where do Residents receive Emergency Services?

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Where Emergency Services are Offered

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

08 Central 68.4% 73.0% 89.9% 90.0% 66.9% 65.8% 75.6%

07 Toronto Central 0.4% 10.9% 1.3% 0.7% 1.2% 16.2% 7.1%

09 Central East 0.4% 8.6% 1.3% 2.1% 26.7% 1.2% 6.7%

05 Central West 6.3% 1.0% 2.7% 0.7% 0.5% 10.5% 3.7%

12 North Simcoe Muskoka 19.7% 0.2% 0.6% 3.1% 0.3% 0.4% 1.9%

06 Mississauga Halton 0.4% 0.7% 0.5% 0.3% 0.3% 2.2% 0.9%

Other (Ontario & OOP) 4.4% 5.5% 3.8% 3.2% 4.1% 3.7% 4.2%

0596 Alliston Stevenson Memorial

0632 Toronto Ny North York

General

0701 Richmond Hill York Central

0736 Newmarket Southlake

Regional Health

0905 Markham Stouffville

0941 Toronto Ny Humber Regional Combined

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33 Simcoe CCAC25%

39 York Region CCAC39%

81 North York CCAC33%

98 Etobicoke & York CCAC

3%

Where do Residents receive Homecare Services?

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Where Homecare Services are Offered

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

05 Central West 0% 5% 0% 23%06 Mississauga Halton 0% 0% 0% 22%07 Toronto Central 0% 0% 17% 42%08 Central 11% 95% 83% 13%12 North Simcoe Muskoka 89% 0% 0% 0%

33 Simcoe CCAC 39 York Region CCAC 81 North York CCAC 98 Etobicoke & York

CCAC

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Market Share & Catchment: Summary

Acute Services• 57% of resident volumes are received locally• 68% of acute services are offered locally

Emergency Services• 73% of resident volumes are received locally• 76% of emergency services are offered locally

Homecare Services• 97% of resident volumes are received from three local CCACs• 95% of homecare services are offered locally by one local CCAC, 83% by the

second CCAC and 13% by the third CCAC

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Actual Volumes Per 1000 Population

541

25

78

308

625

29 13 15 2654

0

100

200

300

400

500

600

700

Acute Age 0

Acute Age 1-17

Acute Age 18-

59

Acute Age 60-

79

Acute Age 80+

EmergAge 0

EmergAge 1-17

EmergAge 18-

59

EmergAge 60-

79

EmergAge 80+

Sector & Age Groups

Act

ual W

eigh

ted

Cas

es P

er 1

000

Pop

ulat

ion

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Age Distribution: SummaryThe Central LHIN has a proportionally young population

With the highest share of residents age 18-59 and near the lowest share of residents age 60-79 and 80+

The age distribution of Acute services in the Central LHIN are generally consistent with provincial averages

But with one of the highest shares of patients age 80+

The age distribution of Emergency services in the Central LHIN is generally not consistent with provincial averages

With one of the lowest shares of patients age 18-59

Among the highest shares of patients age 60-79 and 80+

Homecare services are generally dominated by the elderly across all regions

the Central LHIN has the highest share of expenditures to patients in elderly age groups (75-85, 85+)

The Central LHIN has lowest share of expenditures to patients in middle age groups (45-64, 65-74)

22

Actual Service Distribution: SummaryDistribution of Acute Services to Central residents is marginally more concentrated than the provincial distribution (i.e. a lower percentage of residents rely on Acute Services than the provincial average

Ontario : 45% of Acute Services (682,000 weighted cases) are used by 1% of Residents (124,000 people)

Central : 49% of Acute Services (77,000 weighted cases) are used by 1% of Residents (15,800 people)

Distribution of Emergency Services to Central residents is marginally more concentrated than the provincial distribution

Ontario : 22% of Emergency Services (758,500 weighted cases) are used by 1% of Residents

Central : 26% of Emergency Services (81,000 weighted cases) are used by 1% of Residents

Distribution of Homecare Services to Central residents is significantly more concentrated than the provincial distribution

Ontario : 83% of Homecare Services are used by 1% of Residents

Central : 92% of Homecare Services are used by 1% of Residents

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Acute Predicted Volumes Ranking of Weighted Cases Per 10,000 LHIN Population (Predicted Weighted Cases Per 10,000 LHIN Population)

Program 01Erie St. Clair

02South West

03Waterloo

Wellington

04Hamilton Niagara

Haldimand Brant

05Central West

06Mississauga

Halton

07Toronto Central

08Central

09Central East

10South East

11Champlain

12North

Simcoe Muskoka

13North-East

14North-West

01 Infectious/Parasitic Dis

6 (17) 10 (16) 14 (14) 3 (20) 13 (15) 12 (15) 2 (23) 8 (16) 7 (17) 9 (16) 11 (16) 5 (19) 4 (19) 1 (23)

02 Neoplasms 3 (145) 5 (139) 12 (123) 4 (143) 14 (98) 13 (109) 10 (130) 11 (128) 8 (136) 2 (156) 9 (131) 6 (139) 1 (187) 7 (137)

03 Blood and Immune 6 (7) 10 (7) 14 (5) 8 (7) 4 (8) 13 (6) 12 (7) 11 (7) 9 (7) 3 (9) 7 (7) 5 (7) 2 (12) 1 (12)

04 Endocrine, Nutrition, Metabolic

9 (31) 3 (42) 10 (30) 5 (37) 13 (27) 14 (20) 8 (32) 12 (27) 4 (38) 7 (35) 11 (30) 6 (36) 1 (73) 2 (59)

05 Mental and Behavioural

8 (108) 2 (156) 9 (101) 7 (109) 13 (59) 14 (55) 4 (126) 12 (59) 11 (75) 1 (162) 5 (114) 10 (86) 3 (146) 6 (113)

06 Nervous System 8 (24) 6 (25) 11 (21) 7 (25) 13 (19) 14 (17) 5 (25) 12 (20) 9 (23) 1 (37) 10 (23) 4 (27) 2 (34) 3 (30)

07 Eye and Adnexa 4 (21) 2 (23) 9 (17) 8 (18) 12 (13) 11 (14) 13 (13) 10 (15) 6 (18) 3 (22) 7 (18) 5 (19) 1 (25) 14 (13)

08 Ear and Mastoid 8 (5) 9 (5) 5 (6) 10 (5) 7 (5) 12 (4) 14 (3) 11 (4) 6 (6) 1 (7) 13 (3) 4 (7) 2 (7) 3 (7)

09 Circulatory 6 (260) 7 (245) 11 (192) 4 (291) 14 (170) 13 (181) 10 (206) 12 (189) 9 (227) 3 (322) 8 (236) 5 (276) 1 (379) 2 (342)

10 Respiratory 8 (99) 7 (103) 11 (83) 5 (107) 12 (83) 14 (71) 4 (108) 13 (77) 9 (96) 3 (123) 10 (91) 6 (106) 1 (147) 2 (144)

11 Digestive 3 (126) 6 (113) 10 (94) 7 (111) 14 (78) 13 (80) 11 (89) 12 (84) 8 (99) 5 (119) 9 (95) 4 (120) 1 (151) 2 (150)

12 Skin and Subcutaneous Tissue

6 (10) 7 (10) 12 (7) 4 (10) 5 (10) 14 (6) 9 (9) 13 (7) 8 (9) 10 (9) 11 (8) 3 (11) 1 (15) 2 (13)

13 Musculoskeletal and Connective

4 (92) 7 (91) 10 (60) 6 (91) 14 (52) 13 (56) 12 (58) 11 (59) 9 (75) 1 (105) 8 (76) 5 (92) 2 (102) 3 (100)

14 Genitourinary 3 (68) 12 (51) 9 (53) 6 (60) 11 (51) 14 (45) 10 (52) 8 (56) 7 (57) 2 (71) 13 (46) 4 (62) 1 (83) 5 (60)

15 Pregnancy and Childbirth

5 (100) 8 (94) 6 (100) 10 (91) 1 (128) 4 (101) 2 (105) 3 (103) 7 (96) 13 (87) 9 (92) 12 (88) 14 (79) 11 (91)

16 Perinatal Period 11 (23) 9 (26) 4 (27) 10 (26) 1 (42) 6 (26) 5 (27) 3 (28) 2 (30) 8 (26) 13 (22) 7 (26) 14 (20) 12 (22)

17 Congenital and Chromosomal

9 (9) 13 (9) 4 (10) 14 (8) 1 (11) 7 (10) 2 (10) 3 (10) 8 (9) 10 (9) 5 (10) 12 (9) 11 (9) 6 (10)

19 Injury and Poisoning 8 (123) 4 (146) 9 (117) 5 (146) 14 (85) 13 (87) 10 (114) 12 (94) 11 (114) 2 (166) 7 (129) 6 (144) 1 (168) 3 (163)

20 External Causes 9 (46) 5 (58) 10 (40) 8 (49) 14 (32) 11 (39) 12 (37) 13 (35) 6 (55) 4 (67) 7 (51) 3 (68) 1 (114) 2 (111)

OVERALL ACUTE RANKING

7 (1,315) 4 (1,358) 11 (1,100) 5 (1,356) 13 (985) 14 (941) 10 (1,174) 12 (1,020) 9 (1,188) 3 (1,547) 8 (1,197) 6 (1,343) 1 (1,770) 2 (1,601)

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Emergency Predicted Volumes Ranking of Weighted Cases Per 10,000 LHIN Population (Predicted Weighted Cases Per 10,000 LHIN Population)

Program 01Erie St. Clair

02South West

03Waterloo

Wellington

04Hamilton Niagara

Haldimand Brant

05Central West

06Mississauga

Halton

07Toronto Central

08Central

09Central East

10South East

11Champlain

12North

Simcoe Muskoka

13North-East

14North-West

01 Infectious/Parasitic Dis 7 (43) 4 (54) 10 (33) 8 (40) 12 (26) 14 (25) 11 (32) 13 (26) 9 (38) 3 (56) 6 (44) 5 (49) 1 (65) 2 (63)

02 Neoplasms 6 (33) 3 (48) 8 (33) 10 (32) 14 (17) 13 (21) 11 (24) 12 (23) 7 (33) 4 (45) 9 (32) 5 (36) 2 (52) 1 (60)

03 Blood and Immune 6 (28) 9 (24) 13 (22) 7 (25) 12 (22) 14 (18) 11 (23) 10 (23) 8 (25) 3 (30) 4 (28) 5 (28) 1 (38) 2 (32)

04 Endocrine, Nutrition, Metabolic

7 (65) 5 (70) 11 (57) 4 (72) 13 (44) 14 (37) 9 (59) 12 (49) 8 (61) 3 (74) 10 (57) 6 (70) 1 (104) 2 (94)

05 Mental and Behavioural 10 (96) 6 (100) 8 (98) 9 (98) 12 (62) 13 (62) 3 (115) 14 (60) 11 (80) 4 (101) 7 (98) 5 (101) 2 (149) 1 (177)

06 Nervous System 6 (107) 4 (114) 5 (112) 8 (103) 12 (75) 14 (70) 11 (85) 13 (72) 10 (90) 3 (121) 9 (100) 7 (107) 1 (153) 2 (146)

07 Eye and Adnexa 8 (14) 4 (21) 9 (13) 6 (17) 14 (9) 12 (11) 11 (13) 13 (11) 10 (13) 3 (22) 7 (14) 5 (19) 1 (25) 2 (24)

08 Ear and Mastoid 6 (70) 4 (87) 9 (57) 7 (62) 14 (38) 13 (39) 11 (40) 12 (40) 10 (51) 3 (88) 8 (61) 5 (71) 1 (119) 2 (102)

09 Circulatory 4 (497) 7 (453) 8 (440) 6 (475) 14 (300) 13 (314) 11 (342) 12 (323) 10 (405) 3 (578) 9 (411) 5 (487) 1 (638) 2 (595)

10 Respiratory 6 (474) 4 (564) 9 (375) 7 (437) 12 (248) 14 (231) 11 (265) 13 (246) 10 (368) 3 (597) 8 (426) 5 (517) 1 (741) 2 (690)

11 Digestive 7 (285) 6 (292) 5 (298) 8 (283) 13 (187) 14 (177) 11 (220) 12 (191) 10 (248) 3 (334) 9 (269) 4 (318) 2 (382) 1 (394)

12 Skin and Subcutaneous Tissue

7 (53) 4 (71) 6 (53) 8 (52) 13 (30) 12 (32) 11 (37) 14 (29) 10 (42) 3 (73) 9 (51) 5 (61) 2 (94) 1 (105)

13 Musculoskeletal and Connective

7 (59) 5 (69) 9 (52) 8 (54) 14 (34) 13 (35) 11 (40) 12 (37) 10 (46) 3 (80) 6 (59) 4 (71) 1 (101) 2 (94)

14 Genitourinary 6 (173) 5 (174) 9 (152) 8 (155) 13 (113) 14 (110) 11 (130) 12 (115) 10 (140) 3 (192) 7 (157) 4 (185) 1 (248) 2 (234)

15 Pregnancy and Childbirth

1 (80) 12 (38) 3 (56) 14 (34) 4 (52) 13 (36) 6 (45) 10 (43) 9 (44) 8 (44) 11 (38) 7 (45) 5 (50) 2 (63)

16 Perinatal Period 9 (3) 6 (3) 12 (2) 14 (2) 5 (3) 13 (2) 3 (4) 1 (4) 11 (2) 8 (3) 2 (4) 7 (3) 10 (3) 4 (3)

17 Congenital and Chromosomal

12 (1) 6 (1) 13 (1) 7 (1) 11 (1) 9 (1) 14 (1) 10 (1) 8 (1) 2 (2) 4 (2) 5 (1) 1 (2) 3 (2)

19 Injury and Poisoning 8 (697) 4 (877) 9 (676) 6 (790) 13 (519) 14 (512) 11 (542) 12 (525) 10 (657) 2 (975) 7 (697) 5 (875) 3 (969) 1 (1,056)

20 External Causes 6 (381) 4 (407) 7 (375) 8 (344) 11 (268) 12 (259) 14 (245) 13 (252) 10 (296) 3 (426) 9 (321) 5 (395) 1 (617) 2 (580)

OVERALL ACUTE RANKING

6 (3,159) 4 (3,467) 8 (2,904) 7 (3,077) 13 (2,049) 14 (1,991) 11 (2,262) 12 (2,069) 10 (2,642) 3 (3,840) 9 (2,871) 5 (3,439) 1 (4,550) 2 (4,513)

25

Homecare Predicted Volumes

10%

8%

10%

10%

9%

9%

9%

9%

10%

10%

9%

9%

7%

9%

51%

52%

49%

51%

46%

45%

44%

45%

49%

51%

45%

54%

56%

50%

49%

38%

40%

40%

39%

44%

44%

46%

45%

40%

41%

45%

36%

34%

42%

41%

8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

01 Erie St. Clair

02 South West

03 Waterloo Wellington

04 Hamilton Niagara Haldimand Brant

05 Central West

06 Mississauga Halton

07 Toronto Central

08 Central

09 Central East

10 South East

11 Champlain

12 North Simcoe Muskoka

13 North-East

14 North-West

Provincial Average

Cancer IP & DS Non Acute

26

Population Adjustors

0% 5% 10% 15% 20% 25% 30% 35%

01 Erie St. Clair

02 South West

03 Waterloo Wellington

04 Hamilton Niagara Haldimand Brant

05 Central West

06 Mississauga Halton

07 Toronto Central

08 Central

09 Central East

10 South East

11 Champlain

12 North Simcoe Muskoka

13 North-East

14 North-West

Provincial Average

% of Volumes with Population Characteristic

Low SES Rural Both