Funding

Introduction

Purchasing and payment approaches specific to major trauma cases provide not only appropriate reimbursement for services delivered but can also incorporate a range of incentives to promote appropriate triage and transfer to MTS. These incentives are justified in a trauma system predicated on the following principles:

• Optimal clinical outcomes for patients following time-critical trauma are achieved when time to definitive treatment is minimised.
• Trauma patients should be triaged to a hospital that is best able to provide definitive care.
• Trauma management is considered a specialised activity that should be undertaken in a designated trauma hospital.

Purchasing and payment approaches are a key mechanism in promoting appropriate triage and transfer to MTS. Other mechanisms include:

• Education and training of ambulance, clinical and other emergency staff responsible for the triage, treatment and referral of major trauma cases.
• Prehospital triage guidelines for ASV that will result in major trauma patients bypassing other hospitals within logistical and safety considerations.
• Interhospital transfer guidelines at hospital level to clearly identify those patients requiring referral and/or transfer to a MTS and the associated process.
• Ongoing monitoring of the effectiveness of triage and interhospital transfer guidelines as an integral part of the overall trauma monitoring system.

This section outlines the current approach to funding trauma care and provides options for future consideration in the context of anticipated system changes.

Current Purchasing Strategies and Payment Approach

Prehospital and Interhospital Transfer Payments

The cost of transport to the initial hospital is borne by the patient (under ambulance insurance cover or by the individual concerned) or a specified third party insurer (for example DVA, WorkCover, TAC). The destination decision, however, is made by the ambulance officer based on defined triage and transport guidelines relating to the accessibility of an appropriate service and the patient's condition, rather than on the basis of transport cost.

The issue of whether there would be additional costs incurred by either ASV or, where not covered by insurance, by individual patients arising from the application of such guidelines, needs further consideration. Although the flat fee structure for ambulance transport recently introduced by MAS would meet cost concerns in relation to non-ambulance insured cases in metropolitan Melbourne, ASV's internal administrative mechanisms should be in place to support appropriate prehospital referral and transport based on agreed guidelines.

Interhospital patient transfer costs, including escort and ambulance costs associated with transfer, are currently paid for by the hospital initiating the transfer.

On the assumption that appropriate clinical care is constant, the incentives to admit or transfer patients need to be reviewed not only in terms of likely costs of ambulance transfer, but the total payment likely to be received for the length of stay.

Inpatient Payments

The payment of hospitals for treating trauma patients needs to be considered within the overall funding policy for public hospitals. Hospitals are paid on the basis of State benchmark rates for the care they provide to patients. In general, the payment structure should be as non-specific as practical giving hospitals/regions the ability to substitute different types of services where and when appropriate, consistent with their role and function.

Hospital specialisation, however, provides opportunities for better patient care, increased predictability of hospital workload and increased efficiency. The move to designate specialist trauma hospitals is consistent with the current approach in funding other specialist services such as paediatrics and intensive care. While three MTS are proposed, similar major trauma will continue to be treated at other trauma hospitals. Therefore, the definition of cases must also include the service itself.

Identification of Major Trauma Patients

All of the inpatient payment and casemix funding options on the next page depend on an adequate estimate of major trauma patients. The identification of major trauma patients poses difficulties within the current system. Agreement is required among relevant authorities regarding those Australian injury and poisoning ICD codes which constitute major trauma.

The use of ICD-10 codes to identify major trauma and the suitability of AR-DRG Version 4.1, and/or the possibility of Victorian codes and DRGs, need full assessment in terms of feasibility and cost. Conversion of ICD codes to ISS should be assessed for possible system or hospital level application.

Resource Requirements

Effective implementation of the VSTS will require support with an appropriate level of resources. A tiered strategy for investment would enable Government to prioritise funding for the VSTS and direct available resources at key areas where use or impact is greatest.

Although a number of system features and demands require resource support, the following are key areas for priority investment:

- System coordination mechanisms
- Targeted trauma education and training
- Enhancement of primary transport and secondary retrieval services
- Hospital staffing levels that meet the role delineation specifications.

Future System Funding

Prehospital and Interhospital Transfer PaymentsOptions

Reviewing the current payment system for interhospital transfers to the MTS with a view to moving the responsibility for such costs to the receiving MTS, would reduce any current cost incentive on non-MTS hospitals to retain major trauma patients inappropriately.

However, this would introduce a new precedent into transfer policies and may encourage inappropriate transfer to the MTS or increase the level of patient refusal at other trauma services.

Inpatient Payments and Casemix FundingOptions

Specified or Block Funding

Where costs are largely fixed with respect to output, funding through block or specified grants is required. Currently, non-admitted emergency services are paid by block grants to hospitals in recognition of the relatively fixed costs associated with staffing 24-hour emergency services. These grants were established following a review of all available data by the Emergency Services Categorisation and Funding Taskforce, which comprises representatives of the Victorian Branch of ACEM, the Victorian Ambulatory Classification System Advisory Committee, hospital emergency departments (including a non-metropolitan hospital) and the Emergency Nurses Association. These grants could be adjusted to account for more highly specialised staff/services of MTS.

Classification Refinement

Some clinicians have expressed concern at the ability of AN-DRGs to capture cost differences for patients with multiple problems (as with many trauma patients).
The anticipated move to AR-DRG Version 4.1 in 1999 is expected to improve the classification for trauma patients and enable improved costings for specific groups. The introduction of Version 4.1, plus the possible creation of new Victorian AN-DRGs including new same day/one day DRGs, could possibly provide the appropriate casemix funding structures. Under this system, similar cases will receive the same payment. Attention would need to be given to ensure duplicate payments are not made where existing specialised services currently receive separate grants.

Below Benchmark Pricing

Weights associated with overnight trauma patients could be set below benchmark price with additional co-payments or specified grants to the three MTS hospitals. Such a financial incentive for hospitals to transfer trauma patients is a high-risk strategy, both in terms of the overall integrity of the funding policy and, especially, in terms of patient care.

Paying hospitals at below the benchmark price represents a significant departure from the policy of 'paying a fair average price'. Currently, all inliers are paid at a rate reflecting the cost (or estimated cost) of the care typically provided. Co-payments are used to provide additional funding for patients with atypically high costs. This can be done for specific hospitals with specialised facilities (for example mechanical ventilation co-payment).

Paying less than benchmark prices for trauma at non-MTS hospitals has the potential for encouraging inappropriate care. Faced with the pressure of inadequate funding, there is a potential for trauma services to unnecessarily transfer patients with relatively minor conditions or to inappropriately transfer seriously ill patients before they are fully stabilised. This option is not recommended.

Modifying Weighted Inlier Equivalent Separations (WIES) Targets

The creation of three MTS could result in a redistribution of current health care delivery and consequently requires a review of WIES targets. Transferring the WIES associated with the provision of overnight trauma care to MTS and discounting these WIES when calculating future WIES targets for other hospitals could achieve the same impact as paying below benchmark prices. Most hospitals reach their annual WIES targets. Although any trauma care provided would be fully funded, hospitals would have a significant incentive to preferentially provide other types of care because such an approach could potentially contribute to obtaining more WIES in the following years.

Next Step

Purchasing policy to support the Taskforce's recommendations for system improvements, such as appropriate triage and transfer of major trauma, will be developed. This will occur at implementation planning in conjunction with stakeholders and providers.