Definitions
Page contents: Casemix | Cost weights | CRAFT | Diagnoses Related Groups (DRG) | Grouper | ICD-10-AM | Payment method | WIES | WIES price | WIES target | The World Health Organisation (WHO) | Acronyms & abbreviations
Casemix
Casemix refers to the use of classifications that bundle patient care episodes into clinically coherent and resource homogeneous groups. Casemix commonly means the mix of types of patients treated by a hospital.
Casemix is an information tool that allows policy makers to understand the nature and complexity of healthcare delivery and that enables the measurement of hospital performance, aiming to reward initiatives that increase the efficiency of hospitals.
Casemix-based funding is the main funding model currently used in Victorian health care services for reimbursement of the cost of patient care.
Cost weights
Cost weights represent a relative measure of resource use for each episode of care in a DRG, and are calculated as the ratio of: the average cost of all episodes in a DRG to the average cost of all episodes across all DRGs.
Victorian cost weights are developed each year using the costs of treating patients as reported to the Department of Health by Victorian public hospitals.
CRAFT (Casemix Rehabilitation and Funding Tree)
VicRehab is the funding system for Victoria's Designated Rehabilitation Units with 20 beds or more. The Casemix Rehabilitation and Funding Tree (CRAFT) is the classification model that underpins VicRehab. As well as CRAFT funding (episode based), VicRehab also incorporates Level 1 bed-day funding (a higher funding rate for the first post-acute episode of rehabilitation for amputee, spinal and major head injury/trauma patients), and Special Level 2 bed-day funding for amputee, spinal, major head injury/trauma and burns patients where the rehabilitation is not the first post-acute episode. Because these patients are relatively few in number and highly variable in length of stay and cost, they are funded on a bed-day rate rather than an episode based rate to reduce the financial risk to health services.
Diagnoses Related Groups (DRG)
DRG's are a patient classification scheme that provides a clinically meaningful way of relating the types of patients treated in a hospital to the resources required by the hospital.
Australian National Diagnosis Related Groups (AN-DRG)
Australias first national DRG classification was jointly developed by the Australian Commonwealth Government and 3M Australia. Between 1992 and 1996, versions 1.0 to 3.1 have been released.
Australian Refined Diagnosis Related Groups (AR-DRG)
Australias second national DRG classification was developed by the Australian Commonwealth Government. Between 1998 and 2008 AR-DRGs versions 4.0 to 6.0 have been released.
Grouper
The grouper refers to the computer software that assigns episodes of care to DRGs.
ICD-10-AM
International Statistical Classification of Diseases and Related Health Problems, 10th Revision, Australian Modification.
Payment method
Health services receive a target WIES allocation at the beginning of each financial year. They are funded for WIES up to, but not in excess of, that target (i.e. global state budgets are capped). WIES funding is also referred to as variable funding because funding is dependant on the actual number of patients treated.
A hospitals funding for inpatient activity is determined by the combination of all three funding components, viz: DRG cost weights (WIES), WIES targets, and WIES price.
Casemix funding is augmented by the use of WIES co-payments that more closely align funding with the cost of special types of patients, and by specified grants that are not tied to WIES (e.g. Teaching and Research Grants).
Since 1993, casemix funding has expanded to include ambulatory patients in metropolitan hospitals and some large country hospitals (VACS) and rehabilitation inpatients (CRAFT).
Weighted Inlier Equivalent Separation (WIES)
WIES is a cost weight (W) that is adjusted for time spent in hospital (IES), and represents a relative measure of resource use for each episode of care in a DRG.
WIES allocated to an episode depends upon the episodes DRG, the amount of time spent in hospital, and the episodes eligibility for WIES co-payments.
For example:
- 0.19 WIES is allocated to a same day chemotherapy patient
- 7.51 WIES is allocated to a liver transplant patient dying after 3 days
- 30.02 WIES is allocated to a liver transplant patient staying 40 days (no mechanical ventilation)
- 40.21 WIES is allocated to a liver transplant patient staying 40 days (including 10 days of mechanical ventilation)
WIES price
Price paid per unit of WIES by the Department of Health. WIES prices vary by hospital type to account for differences in specialisation, economies of scale, and levels of remoteness. WIES prices also vary to account for different funding mechanisms that encompass state and commonwealth governments, private insurers, and non-government organisations.
WIES target
An agreed fixed amount of WIES allocated to hospitals used for funding acute episodes of care. WIES targets are largely historic, but do vary annually to reflect growth in demand, government priorities (Statement of Priorities), changes in hospital costs, etc.
The World Health Organisation (WHO)
WHO is the directing and coordinating authority for health within the United Nations system. The WHO constitution mandates the production of international classifications on health, such as ICD-10, so that there is a consensual, meaningful and useful framework which governments, providers and consumers can use as a common language.
Acronyms & abbreviations
ACAS Aged Care Assessment Services
AHPACC Aboriginal Health Promotion and Chronic Care
AIMS Agency Information Management System
AMA Australian Medical Association
ANF Australian Nursing Federation
ATS Amphetamine Type Stimulant
COAG Council of Australian Governments
DHS Department of Human Services (Victorian Government)
DH Department of Health (Victorian Government)
DHA Department of Health and Ageing (Commonwealth Government)
DVA Department of Veterans Affairs (Commonwealth Government)
EBA Enterprise Bargaining Agreements
ESIS Elective Surgery Information System
FIM Functional Independence Measure
GEM Geriatric Evaluation and Management
HACC Home and Community Care
HARP Hospital Admission Risk Program
HDSS Health Data Standards and Systems
HITH Hospital in the Home
HIV Human Immune Virus
HRP Health Reform Program
HSUA Health Services Union Association
ICS Integrated Cancer Services
ICU Intensive Care Unit
MBS Medical Benefits Schedule
NAESG Non-admitted Emergency Services Grant
NBCSP National Bowel Cancer Screening Program
NHNDC National Health Cost Data Collection
NICU Neonatal Intensive Care Unit
PAC Post Acute Care
PAV Personal Alert Victoria
PICU Paediatric Intensive Care Unit
RWU Rehabilitation Weighted Units
SACS Sub-acute Services
SRHS Small Rural Health Services
STI Sexually Transmissible Infections
T&D Training & Development
TCP Transition Care Program
VACCDI Victorian Advisory Committee on Casemix Data Integrity
VACS Victorian Ambulatory Classification System
VAED Victorian Admitted Episodes Dataset
WIES Weighted Inlier Equivalent Separation