Funding Models Forum 2017 - Non-admitted emergency services

The last presentation is really just about ED, I just want to make it clear because often there's a lot of confusion amongst executives, staff, what does the ED model fund and what doesn't it fund because often we're talking cross purposes and there's a bit of confusion in each time the department and health services get in the same room, so hopefully this will give you a bit of clarity. So in 17-18 health services will have two types of patients that present, firstly those that present to the emergency department and then are subsequently admitted either into the short stay, a MAPU, a PAPU or a ward these are patients that we call admitted patients and these patients are funded for their ED component in the WIES model. The other patients are those that present the ED department don't become admitted, they go home, they're transferred out or they're not even seen that they are the do not waits left before or any of the other categories these patients are the patients that are meant to be paid for through the non- admitted emergency services grant. Often when we comparing costs, we talk about the total ED costs and then we compare it to the NAESG grant, which is only paying for a subset of these patients and so the first point is the NAESG only covers non admitted ED patients. in both 15/16 and 16/17 we would we updated the model to try to align these two these two cohorts of patients to go back in a few years prior to that, we've had a few, we've had a funding model that's been based on availability and activity using non same-day WIES as a method to drive your allocation this was pre 2012 , in 2012 we had a key policy change being we removed ED only admissions, we cashed out a huge amount of WIES applied to this into this pool, then relaxed admission policy in subsequent years the equilibrium in the system has kind of been put out of whack and so this model is trying to now realign the funding envelope for the NAEGS with the costs associated those patients once we've got it in alignment and we've got a robust funding model any residual money won't be taken out of the system it will be reinvested into the WIES price and this was something that was attempted in 16/17 put on hold for 17/18.

But effectively the way that the NAESG model works is that we take the submission to the cost data collection, we then work out if you've got any missing rent costs, if you do we compare that to the VAED and then extrapolate out to what the true cost will be if every patient was costed, we then extract it because the cost data is lagged, we then extrapolate out into current year being we get the cost data 15-16 we adjust for all the missing costs we look at the activity change from 15/16 to potentially what we'll see in 17/18 adjusted up and then that potentially forms the NAESG grant. The way that we exactly do that is we look at the costs we assign 80% of those costs to the fixed pool so you automatically get it the residual costs are then put into this variable funding pool which then we then distributed based on your proportionate share of weighted, non-admitted, admitted emergency presentation so that's how the current model works and once it goes through all that a number of services, I've shared the calculation, I'm happy to share it with you to show you what was put in terms of cost into the model, what the extrapolation assumptions were, what the end amount where was. The end amount ended up in your NAESG model and that's what's replicated in your model budget then because we had a policy of nobody wins or loses which is unfair for those that are underfunded, but beneficial for those that they currently notionally underfunded we put it in it in a transition grant, which is makes an adjustment back down to your current funding levels. We want to give you the opportunity to look at your data, refine the data get it right, before we further refine the ED model so I encourage everybody in the room to look at your ED costs in particular your non admitted ED cost so that we can update this model further next year and that just sums it up. So they're the two topics that I've got that I've just covered subacute WIESs and ED and I'm happy to open the floor for any other questions that anyone might have.

And again that was kind of like rapid-fire update, so you know slides will be available and you know we were happy to take questions on kind of notice later as well through different forms either through email to the team members or back through sort of coordinating points that you normally touch base with through performance or others so but I will give people an opportunity and I can see one question right there.

I guess when ED funding evolves is it going to be funded about eighty-five percent as well, well I mean it just worries me that the trend is, and it makes economic sense for why you're setting up each of the services, but when you look at the totality if every services funded at eighty-five percent there has to be a line where something's not working, because, I guess health services grew their non-activity revenue to this extended could cover WIES shortfalls but if every services funded at 85%, I don't it has to be?

The model, the way the model has been capped at 100%, so we're not taking, we not paying.

Ye, but when your listen to mental health, you looked at my ANSTAD and some of these others there most of them are you talked about under full and under, under full cost recovery, underfull cost recovery means what it means doesn't it? I mean it's a loss so is where eventually if every service has funded on that basis there has to be some modeling somewhere?

I think all the models what we're acknowledging is there's being historic cross subsidization across, I mean all the funding streams, and what we're trying to do is I think the department wont fund 100% because there are third-party there's private health revenue etc. so we'll take that into consideration but what we try to do is make it equitable across all the streams so if you're only growing one stream you get a fair share fix it appropriately that's what we're trying to do is recalibrate all the streams.

Equitable, so you make a loss and everything instead of running on two or three things it doesn't...

So I think so I think the basis of discussion if I could just really lift it rather than at the program level and I think we absolutely get your point around kind of if you said every program level under cost recovery, then there is an under cost recovery, but across a global budget you also need to consider what other funding is not attached to sort of programmatic work and as Phuong said what other sort of revenues are coming into the health service so...

There is car parks if you could put the price up.

So, so you know not the intent of this discussion today but you know it's not unheard by the departments around that but again I think from a funding model perspective ideally you know the models would be able to be cost recovery and cost recovery needs to ensure that we're accommodating any other you know revenues coming into the services, now if we had very good data around revenue and we were able to map that better over time we would be able to get closer at the moment part of what we are challenged with is some of that is hidden to us as a department, you know it's a bit unpredictable, it'll be unstable for health service as well and it's quite inequitable in terms of revenue capacities for health services as well, so how we manage that as a system I think is a bigger question but absolutely point taken and I think that's certainly from a funding policy perspective as opposed to the technical applications of them it's an ongoing issue and concern and it's not lost on the department in terms of our conversations and our approach to trying to make our funding policies equitable as well as drive the efficiency that we need in our system to make it sustainable so but yeah thanks for that. One up the back.

Thank you, Phuong we are in year three of the transition funding, is there an end in sight?

I think there will be an end I don't know when it'll be. I think we'll review that as a post-mortem with this the CEO group that we've will be establishing shortly and I think we'll try to let services know. I think as Denise said before there is a limited funding envelope if we simply implement it. I mean it's a fixed envelope somebody's got to win somebody's going to lose we're just trying to make it manageable across the system and we've been trying to use growth monies selectively to support those that have been notionally underfunded, so we're trying to accelerate it as quickly as we can but they're also competing priorities trying to take money off people when we're about to enter a particular phase in a cycle, it's probably just something the minister didn't want to hear. But we're trying to make it sustainable and we will be in for the consultation with you best approach to implement it.

Another one just another question is there just.

Just Onn from Barwon Health, just want to know how I derive the ED component of admitted patient so that's built in how would I derive that?

That's about 6 point something percent the last time we looked at it.

Is it on? Yeah roughly just look at what proportion of ED costs account for the total cost in setting the weight so you've got to actually have a look at the state level.

When we did look at the state level it worked out at 6. Something percent.

It's something of that order ye.

We can get back to you on that.

We do give all services the cost data file at the end of each year after we've done all the processes, which will give you the opportunity to work out the how much each bucket is worth so that is available.