Nicholas Steele, Queensland Health - Purchasing Clinical and Cost Effective Services within an ABF...

Purchasing Clinical and Cost Effective Services within an ABF environment

Nicholas Steele, Executive Director Healthcare Purchasing 11 May 2012

Agenda :

• Overview of healthcare purchasing in Queensland

• Approach to purchasing quality outcomes and methods of incentivising good practice

• Potential future developments

1. Overview of Healthcare Purchasing in Queensland

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QH Purchasing Framework

What is Healthcare Purchasing?

Purchasing is the act of committing resources with the aim of improving health, reducing inequalities and enhancing patient experience. The specific objectives of purchasing are as follows:

• Supporting QH in the intended role of ‘System Manager’ and in the delivery of QH Strategic Objectives.

• Understanding current healthcare provision (including strengths and weaknesses of providers), assessing health care needs in the short and medium term based on clinical evidence and derive a credible and coherent purchasing strategy and investment plan to deliver key priorities.

• Signalling to current and potential providers future QH priorities in order to deliver improvements in clinical effectiveness and efficiency.

• Investing only in health care developments which achieve the greatest health gain.

• Utilising the Activity Based Funding mechanism to drive improvements in health care services via specifying ‘outcomes’ (not inputs) and utilising an appropriate balance of incentives (to achieve stretch targets) and interventions (to address under performance).

• Designing, negotiating and ensuring delivery of contracts (initially one year then three year rolling) that encourage provider modernisation, continued efficiency, quality/innovation and also set out the responsibilities of QH as ‘the purchaser’.

• Growing demand: ageing population, population increase, new knowledge/technology

• Growing costs: e.g. pay costs,

• Growing public expectations: quality, choice, access

• More of the same is not affordable!

Why do we need Healthcare Purchasing?Projections of Australian Government modelled spending

by category

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The journey so far …

• In July 2011 QH introduced its first purchasing framework.

• That framework was derived and implemented within an extremely tight timescale and as such a review of the framework was conducted in the first quarter of that year.

• Findings from this review included a general consensus that the areas targeted were appropriate and that investments in indexed growth areas and a commitment to fully fund enterprise bargaining (EB) costs were a considerable step forward. However there were issues in terms of both the stakeholder consultation process and the detail of some of the purchasing initiatives.

• As part of the review process the Healthcare purchasing team presented at over 40 engagement events to gain clinical feedback and identify areas of potential action for 2012/13.

• This engagement was supplemented with the appointment of Deloitte Access Economics who undertook a detailed literature review to identify clinical change programmes elsewhere (including Queensland, across Australia, New Zealand and the UK) which have led to improvements in clinical and cost effectiveness.

• The result was a draft purchasing Framework which was formally presented and discussed at many key clinical forums (clinical networks, Medical Directors meetings etc) and was also the subject of a detailed provider briefing in December 2011, at which the formal consultation period was launched.

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The purchasing approach for 12-13 Guiding Principles :

• Learn from 2011/12 and the findings of the review process

• Engagement (clinical and corporate)

• Purchasing at LHHN level

• Alignment of purchasing with strategic policy priorities and performance management framework

• Transparency, balance of penalties and incentives

• Efficiencies and investment

• Goals which are challenging but achievable

• Driving best practice (outcomes) not dictating best practice (process)

• Building commitment to purchasing as a concept – it must be evolutionary not revolutionary and get confidence/trust in system

• Informed decision making – making best use of clinical evidence, best practice from other systems, planning data/information, benchmarks (local, national and international)

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Budget adjustmentsBudget adjustments


2012-13 Purchasing framework

Reshape demandReshape demand Reshape supplyReshape supply Pay for qualityPay for quality

Care in the most appropriate setting2

Chronic disease mgt/ admission avoidance3

Purchasing activity on the basis of health need1

Improved clinical and cost effectiveness4 Ensuring Patient Safety

& Quality6

Rewarding best practice7

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Adjustment to purchased volumes to balance to funds available 9

Transitional Funding Adjustment

Aim: The best value services to achieve the maximum health gain for those most in health need

Aim: The best value services to achieve the maximum health gain for those most in health need

Best Practice Models of Care 5

Out of scope

Referral criteria

Incentivising day case surgery

Pre-operative elective bed days

Never events

Adverse events

Hospital in the homeOutpatient accessRenal dialysis

ED attendances

Diabetes

Respiratory (COPD/Asthma)

Quality improvement payment

Aged Care Interface

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2012-13 Purchasing InitiativesQH Purchasing Framework

Driving best value across the care continuum

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Pre-hospital Prevention & Primary Care

Accessing Hospital Hospital Stay Discharge Readmission

Is this admission necessary? - i.e. is the utilisation rate too high?

Purchasing activity on the basis of health need

Is there a primary care/community alternative?

Chronic disease management, aged care interface

Could earlier prevention reduce the likelihood of admission?

Is this referral appropriate?Out of ScopeReferral criteria

Could care be delivered in the patient’s home? Hospital in the Home (HITH)Renal dialysis

Could this condition be handled on a day-only basis? Incentivising day case surgery

Is length of stay clinically appropriate and cost-effective ? Reducing elective pre-op bed days

Is there opportunity to reduce the incidence of adverse events?Adverse events, ‘never’ events, # NoF to theatre

Is there an alternative to continued hospital treatment?

Hospital in the Home (HITH)

OP Reviews

Is discharge planned to minimise readmissions?

Unplanned readmissions

Safety and quality

Best valueMaximum health gain

1. Purchasing activity on the basis of health need


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• Sets activity targets which are based on a methodologically sound and equitable assessment of health need.

• The model has projected for 2012/13, at an LHHN level, what levels and types of activity need to be purchased on the basis of current projections within the Acute Inpatient Modelling tool (Hardes), service planning benchmarks and known areas of under investment.

• The methodology follows an agreed set of *principles, takes account of agreed service plans and targets a more ‘equitable’ distribution of funding.

• *Agreed principles within methodology include:

– Health Need (Activity Targets will take account of population based on health need that has been adjusted for age, socio-economic status, indigeneity and remoteness)

– Relative utilisation (Activity Targets will be adjusted to enhance equity where current levels of access to hospital services, as measured by relative utilisation, differ across the State

– Service planning considerations (Activity Targets will be set based on service planning considerations including Clinical Services Capability Framework and projected cross-LHHN patient flows)

– Available infrastructure and workforce (Activity Targets will take into account the level of existing and planned infrastructure and workforce within LHHNs, to ensure that Activity Targets are achievable in given infrastructure and workforce constraints)

• This approach will not link directly to capacity.

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2/3 Reshape demand

Hospital in the Home & Chronic Disease Management (including aged care interface)

• Aims to reduce emergency medical hospital admissions by incentivising substitution of hospital care with alternative ambulatory models (including 1.5% of all seps to be undertaken as Hospital in the Home), based on evidence of opportunity to prevent/divert hospital admissions, e.g. in Qld in 2010/11 0.4% of all seps were undertaken as HITH, compares with rates in Victoria of 2.5%.

Renal Dialysis

• To promote the delivery of more renal dialysis in the home at the level of best practice benchmarks - 50% of dialysis to be undertaken at the patient’s home. (40% in Northern Queensland). Includes all modalities and excludes out of district activity.

Outpatient Access (new to review ratio)

• Incentivises recall of outpatients for review only when clinically necessary and to explore use of appropriate alternatives including discharging completely or discharging back to primary care, by reducing the purchased volume of review appointments by 20% (of public face to face reviews, with certain specialities excluded including – renal, transplants, cancer, cystic fibrosis) across Queensland. (NB re growth in outpatients)

Emergency Department (ED) attendances

• To deliver improved value through reducing expenditure on activities which do not add value – nil payment for ED patients who do not wait.

2010/2011 2009/2010 Condition Description PPH Category Rank No.

Admitted Patient Days

Rank No. Admitted

Patient Days

COPD Chronic 1 10,858 59,026 2 10,286 62,484 Diabetes Complications*

Chronic 2 10,650 69,659 1 17,266 96,658

Pyelonephritis Acute 3 10,148 36,227 3 9,189 34,453 Cellulitis Acute 4 8,396 33,806 6 7,131 26,930 Dehydration and Gastroenteritis

Acute 5 7,828 17,428 4 8,271 18,093

Angina Chronic 6 7,387 14,915 5 7,138 14,513 Congestive Cardiac Failure

Chronic 7 6,692 41,002 10 6,083 38,625

Ear, Nose and Throat Infections

Acute 8 6,631 9,936 8 6,364 9,728

Convulsions and Epilepsy

Acute 9 6,537 15,657 9 6,307 16,314

Asthma Chronic 10 6,197 11,497 7 6,699 12,253

Frequency of Admission for Potentially Preventable Hospitalisations (PPH)

– Queensland 2009/2010 & 2010/2011

*The decrease in diabetes complications may be due to changes in coding standards for diabetes mellitus from 7th edition of

ICD-10AM which introduced a greater focus on cause and effect.

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Avoidable admissions - the rationale• Avoiding emergency admissions is a major concern , not only

because of cost, but also because of the disruption it causes to elective health care – and to the individuals admitted

• While the principle of avoidable admissions is well established, and there has been considerable effort to deliver interventions in many health systems, the delivery of the co-ordinated and widespread change in service models to deliver sustained reductions continues to be a challenge.

• COPD and Diabetes are the top two reasons for potentially preventable hospitalisation in Queensland. There is also considered to be opportunity to reduce asthma hospitalisations as Queensland has the highest prevalence of all states.

• As well as a disease focus, there is also a focus on avoidable medical admissions for older people (over 70), where there is considered to be the opportunity to prevent/ divert potential admissions (e.g. Aged Care Early Intervention and Management Nurse, advanced care planning, medicines management etc).

• This initiative impacts on 22 admissions per day statewide.

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Case Study 1: The Brisbane South Complex Diabetes Service ‘The Inala Model’

Patients referred to PAH Dept of Diabetes and Endocrinology – i.e. with complex diabetes that has been referred to a specialist

• Managed at Inala Primary Care – a general practice in western suburbs Brisbane

• Model of care consisting of the GP delivering specialist level of care in the community supported by a multi-disciplinary team including an endocrinologist

• This model of care is achieving:

– Significant improvement in disease outcomes and processes of care.

– A more cost-effective model of care: cost per outpatient visit PAH - $774 compared with ICDMS - $150 (seen 2-3x more often).

• Potential to be expanded:

– to other rural and remote centers across the state

– to other complex chronic diseases to both better manage patients and allow tertiary services to concentrate on tertiary-level problems

• Cardiac disease, particularly heart failure

• Chronic kidney disease

• Chronic respiratory disease

(Queensland Clinical Senate 2011)

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Case study 2: Victoria, The Hospital Admission Risk Program (HARP) • Primary focus to reduce the demand on the acute hospital system from patients with chronic disease and complex

needs

• Involves:

– Identification of those at risk (defined as those known to have a high risk of potential health deterioration, of repeated hospitalization at the time of emergency presentation or hospital admission or at discharge from hospital)

– Targeted interventions.

– preventing health deterioration in the community;

– identifying alternative management for those who deteriorate;

– providing different approaches for ‘at risk’ patients who present to hospital; and

– providing more targeted support for ‘at-risk’ patients discharged home.

• HARP Outcomes:

• 35% fewer ED attendances

• 52% fewer ED admissions

• 41% fewer days in hospital

Reduced need for hospital services was equivalent to approximately one ED attendance, 2 ED admissions, and 6 days spent in hospital each year for every HARP patient.

(Victorian Government Department of Human Services 2006)

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Case Study 3: Metro South Aged Care Early Intervention & ManagementEstablished to target ED presentations from Residential Aged Care Facilities (RACFs)

Key interventions:

1. Establishment of formal referral pathway for residential aged care facilities to the ED, with the aim of ensuring that patients referred by RACF are referred to the service which will best be able to meet the individual residents needs

2. Promoting the use of existing community initiatives (e.g. HITH, palliative care in NH, dementia outreach) designed to allow for care of RACF patients in their facility

3. Facilitating involvement of hospital services that may enable admission avoidance (e.g. specialist nurses in continence, stoma/wound care, Older Persons Mental health etc.)

4. Improve communication with general practitioners and the RACF

Outcomes:

32.8% reduction in ED presentations of RACF patients

33.8% reduction in acute admissions of RACF patients via ED = average of 23.8 less acute

hospital admissions via ED per month of patients from RACF = 130.9 inpatient bed-days/ month saved = potential savings $196,350/month

Outpatients: the rationale

• A key strategic objective in Queensland is to reduce waiting times for specialist care.

• Two broad approaches to achieving this objective:

1. Increase capacity and so achieve faster throughput of patients - ie significant outpatient growth funding is being distributed in 2012/13, targeted generally in line with inpatient growth priority areas i.e. high wait list areas and non-discretionary activity.

2. Reduce reviews and increase news outpatient appointments

As of the 2011 March outpatient census there were significant numbers of patients waiting for a new case outpatient appointment. One of the major constraints in increasing supply of outpatient services to new patients has been the volume of existing patients receiving ongoing management and review by specialist outpatient teams. Therefore the second approach is to reduce demand for specialist care by finding alternatives to hospital outpatient treatment. This initiative therefore aims to incentivise Districts to recall patients to hospital outpatient review appointments only when clinically necessary and to explore appropriate alternatives including discharging completely or discharging back to primary care, by reducing the purchased volume of review appointments.

What is contributing to the outpatient problem?

Increased demand, caused by changes in general practice, bulk billed appointment 10 mins, Patients not reassured by their GPs, GPs fearful of litigation/complaints

Reluctance to discharge patients from outpatients, caused by culture (large number of patients equate to a successful practice), don’t trust GPs/patients, patients feel that it will take years to get back into the system, clinicians unwilling to have uncomfortable conversations, lack of a senior decision maker,

Thus – growing number of reviews.esponse to indecision, uncertainty, a feeling of obligation or lack of a senior decision maker

Patients are no longer reassured by their GPs

Fearful of Litigation/Complaints

Case study – What actions have some Hospitals taken?• Ensure consultant presence at all lists• Tighten up discharge processes• Quarantine dressings• Stop “Culling” / cancelling clinics• Get clinics up to realistic numbers • Address template times to reduce waiting• Stop following up certain procedures• Improved visibility of performance

Impact of reforms New: Review ratio

NewOOS

Reviews

Impact of reforms – Outpatient Waiting Times

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4/5 Reshape supplyReferral Criteria

• Reduced activity volume for varicose vein surgery based on the application of criteria within the Policy ‘Scope of Publicly Funded Services’ .

• Work with lead clinical groups to introduce referral criteria for orthopaedics (hip & knee replacements) and ophthalmology (cataract surgery) in order to ensure the most serious patients are seen and overall waiting times are reduced (no financial adjustment).

Incentivising day case surgery

• A range of DRGs will be funded at a price as if they were undertaken as a daycase or an extended day case. Lists have been identified based on current Qld best practice and targets have been set.

Pre-operative elective bed days

• Eliminate unnecessary pre-operative bed days by not funding bed days for elective surgery in the outlier period to a value equivalent to any pre-operative bed days.

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6/7 Pay for qualityNever Events

• ‘Nil payment for an episode of care involving a “ Never event”

• ‘Never events’ must fulfil the following criteria:

– The incident caused severe harm/death.

– The event is preventable.

– There exists an effective preventive action and support is available for implementation.

– Occurrence can be easily defined, identified and measured.

• Queensland has defined a list of six ‘never events’, as follows:

1.Procedures involving the wrong patient or body part resulting in death or major permanent loss of function.

2.Retained instruments or other material after surgery, requiring re-operation or further surgical procedure.

3.Haemolytic blood transfusion reaction resulting from ABO incompatibility.

4.Infant discharged to the wrong family.

5.Intravascular gas embolism resulting in death or neurological damage.

6.Entrapment in bedrails or entrapment in other bed accessories resulting in death or major permanent loss of function.

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6/7 Pay for quality

Adverse Events

Reduction in payment equivalent to impact on LOS for episodes with adverse events due to preventable hospital acquired bloodstream infection ($10k) and stage 3/4 pressure injury ($30-$50k)

Quality Improvement Payment (QIP)

• A non-recurrent uplift on ABF funding (c. $16.8m in total) for those districts who achieve improved performance in three specific areas as follows:

1. To achieve the 2013 NEST targets for elective surgery for patients seen within clinically recommended timescales as follows: Cat 1= 100%, Cat 2=87%, Cat 3 = 94%.

2. To achieve a minimum of 95% of patients admitted as an emergency for repair of fractured neck of femur (#NoF) are taken to theatre within 2 days of admission.

3. To achieve the 2013 NEAT target of 77% of all ED patients having a length of stay of 4hrs or less and that 90% of all ED ambulance patients are off stretcher within 30 minutes.

2. Approach to purchasing quality outcomes and methods of incentivising

good practice

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Purchasing quality and outcomes

Arguments put forward for not doing it

• Its unfair

• A punitive model does not drive good practice and is at odds with a fair blame culture

• People will stop reporting adverse events

• Hospitals will avoid admitting highest risk patients

• Methodological issues e.g. adjusting for differences in severity of patients and attributing differences to quality of care

• Problems with data measurement

• Unintended negative effects due to providers focusing solely on those aspects of care being measured and rewarded and leaving others unattended

• Providers won’t bother to engage- the incentives are not big enough!

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Purchasing quality and outcomes

Why you should do it

• To achieve improved health outcomes, purchasing must focus on improving the quality of health services.

• Including quality expectations in service agreements and purchasing framework sends strong cultural message about value of quality (‘the business of healthcare’).

• Quality is an integral component of efficiency (efficiency defined by ‘value’ as opposed to ‘cost’)

• We know there is opportunity to improve (unexplained variation in practice and outcomes )

• ‘Win – Win’ – poor quality often costs more. Investment to improve quality can make financial sense for providers and purchasers.

• Increases priority of quality on provider agenda (outcomes not just inputs)

• Builds a whole organisation approach to quality (not just a priority for quality/clinical leads – finance and managers take an interest too!) - incentivises the solving of structural and system design problems contributing to poor quality care.

• Is an essential component of an integrated approach to driving quality improvement – purchasing framework as part of an overall system comprising a variety of system levers which aim to improve quality performance. Important that these are all aligned to maximise effectiveness.

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Purchasing quality - how Queensland is doing it

• Clinical quality integrated throughout whole of purchasing framework through application of clinical evidence base. Using the evidence base to identify preferred service models (e.g. stroke unit care, HITH, Home dialysis).

• Collaboration - with clinical experts/networks and with patient safety and quality experts to get the models, indicators, definitions and exclusions ‘right’.

• Use of service agreement to define quality expectations (Specific quality preconditions i.e. professional registration, credentialing, external accreditation, plus; in-contract quality specifications - access targets, comprehensive set of safety and quality and access performance monitoring KPIs )

• Use of financial levers, positive and negative, to incentivise quality improvement.

• Penalties (never events, adverse events) narrow scope and focused only on events which are avoidable and attributable.

• Incentive payments (Quality Improvement Payments, Stroke Unit incentive) targeted to drive best performance and/or address performance variability. A reward large enough to generate interest. Don’t share the reward across too many indicators. Set targets at challenging but achievable levels.

• Data – triangulation from variety of sources, avoid using voluntary incident reporting data, use balancing measures to avoid unintended consequences.

• An integrated approach to ensuring quality, i.e. the purchasing framework is aligned to QH strategic quality priorities.

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Example - Fractured Neck of Femur Rationale:

• Fractured neck of femur is the most serious consequence of falls among older people, with a mortality rate of 10% at one month after a fall, 20% at four months and 30% at one year. Many of these patients are vulnerable as frail elderly and at increased risk of hospital acquired complications including healthcare acquired infections. Preoperative delays results in an increase in mortality and an increase in length of postoperative stay. ‘Every 7.85 hours of delay to surgery after the initial 48 hours equates to an extra day in hospital.’ (Siegmuth et al 2005).

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Opportunity for improvement:

• Variation in performance within Queensland:

• Within Queensland the mean performance in 2010/11 was that 75% of patients received surgery within 2 days (range 64% to 87%, median = 78%).

• There are known and effective solutions

• Purchasing Initiative: Quality Improvement Payment for improvement in performance (95%).

3. Potential future developments

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Potential future developments– More to do re quality - purchasing outcomes not outputs, developing quality to include improving patient

experience, expanding scope to all providers (not just ABF hospitals), referral criteria to be developed with full engagement of Clinical Senate, supporting outreach/telehealth, clinical engagement (how to avoid going to lowest common denominator?)

– Developing a population based funding model

– Models for growth funding - should we buy more of the same or should we fund growth in the form of alternative models? For example should we purchase ‘specialist telephone advice’ instead of more outpatient clinics?

– Understanding what non-hospital based services are currently providing

– Addressing fragmentation of purchasing and current distinct purchasers and funding pools

– Establishing robust monitoring and auditing and not just focus on developing annual purchasing framework

– Moving to longer term more strategic purchasing plans and stronger links with commonwealth funding programs

– Developing contract management function and culture - to nurture long term relationships in which purchaser and providers work together to deliver health system goals

– Strong governance processes and performance management

– Must be backed by accurate counting, coding and costing!!!!

What makes spread of innovation happen?

Contact details• Nicholas Steele – Executive Director – Healthcare Purchasing

• Email:[email protected]

Nicholas Steele, Queensland Health - Purchasing Clinical and Cost Effective Services within an ABF...

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