Definitions/Descriptions
Page contents: WIES | Cost Weights | Standard Rates | Payment Methods | CRAFT
Under the Casemix system, hospitals are paid based upon the numbers and types of patients they treat, not upon the resources they use. Victoria defines a hospital's admitted patient workload in terms of WIES (weighted inlier equivalent separations).
WIES
A patient's WIES value depends upon the amount of time they stay in hospital compared to other patients with similar conditions (inlier equivalence) and the relative cost of treating their condition compared to the cost of other illnesses (cost weight or relativity). For example,
0.19 WIES might be allocated to a same day chemotherapy patient
30.02 WIES might be allocated to a liver transplant patient staying 40 days
7.51 WIES is allocated to a liver transplant patient dying after 3 days.
Cost Weights
Cost weights are developed each year based upon the costs of treating individual patients in Victorian public hospitals. Hospitals report the costs of over half a million patients annually. In addition to new cost weights, DHS often makes changes to the WIES in response to industry concerns. Consequently, casemix funding in Victoria has evolved considerably from the relatively simple model introduced in 1993-1994.
Standard Rates
Hospitals/Health Services are funded at standard rates per WIES. Metropolitan hospitals receive $3279 per WIES while country hospitals receive slightly more in recognition of the higher fixed costs of running small hospitals.
Payment Method
Hospitals/Health Services receive a target WIES allocation at the beginning of each year. They are funded for WIES up to, but not in excess of, that target (ie the system is capped).
Since 1993 casemix has expanded to include ambulatory patients in metropolitan hospitals and some large country hospitals (VACS) and rehab inpatients (CRAFT) which was introduced in 1999.
Casemix is augmented by a series of WIES copayments and specified grants that are not tied to WIES eg Teaching and Research Grants.
CRAFT
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 bedday 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 bedday funding for amputee, spinal, major head injury/trauma and burns patients where the rehabilitation is not the first post-acute episode. These patients continue to be funded on a bedday rate rather than an episode based rate to reduce provider risk since they are relatively few in numbers and have high standard deviations in lengths of stay and costs.
VicRehab: the New Rehabilitation Funding System in Victoria (PDF File 22KB)
Presentation by Terese Barton
Senior Policy Analyst
Funding Policy Unit, MH&ACS Division
Department of Human Services
14 October 2003