This document discusses initiatives to improve clinical costing in NSW. It outlines progress made in implementing the ABM Portal to provide benchmarking data across hospitals. It also discusses the policy environment around using costing data to improve healthcare, and initiatives like the Clinical Costing Education Program and continuous improvement projects to refine costing methodologies. The overall aim is to use costing data to identify unwarranted variations, assess models of care, and empower decision-making to improve quality of care.

1. Prepared by Alfa D’Amato
Deputy-Director ABF Taskforce
Ministry of Health- NSW
March 2014
NSW Clinical Costing
and more

2. NSW Clinical Costing
 Policy environment and considerations
 Progressing the implementation of initiatives aimed
at improving the quality of NSW Clinical Costing
 Focus on using the data the ABM Portal
 Clinical Costing Officers Education Program
 Continuous improvement cycle - costing
improvement projects

3. Policy environment and considerations
Knowledge
Understanding
Information
EnableIntuition
Data
Clear
linkages
between
dimensions,
KPIs,
Quality,
outcome,
patient
journey
Facts
Business
Modelling,
forecasting,
system
optimisation,
clinical and
financial
information
Purchasing,
reusable
information,
utilisation
data
Data in
context,
easily
retrievable
data,
benchmarking
Organised
data,
standard
platform,
consistency,
business
rules , PPM2
Disorganise
d Data, no
timely
retrieval, no
reconciliation
- financial
Ladder of Business Intelligence (LOBI)
ABF
ABM
Start
now
2012
2014
Foundations – clinical costing data
Clinical Engagement
Education

4. Policy considerations
“Policy decisions do not wait
for excellent information to
become available; decisions
will be taken even where
‘evidence’ is fragmentary and
uncertain”
Brian W. Head (2013) Evidence-Based Policymaking – Speaking Truth
to Power? - Australian Journal of Public Administration, vol. 00, no. 0, pp.
1–7

5. Policy considerations
‘evidence-informed’ policy-making, on
the basis that decision-making is
typically not derived from objective
science but rather is based on
reasoned argumentation, taking
account of professional
judgements, stakeholder interests
and political contexts.
Brian W. Head (2013) Evidence-Based Policymaking – Speaking Truth
to Power? - Australian Journal of Public Administration, vol. 00, no. 0, pp.
1–7

6. Policy considerations
‘evidence [..] can be improved if
appropriate standards of
transparency and accountability
are followed in the process of
gathering, analysing, interpreting,
and presenting evidence for policy.
Brian W. Head (2013) Evidence-Based Policymaking – Speaking Truth
to Power? - Australian Journal of Public Administration, vol. 00, no. 0, pp.
1–7

7. Health Care Spending per Capita by Source of Funding, 2011
Adjusted for Differences in Cost of Living
* 2010.
Dollars ($US)
8,508
Source: OECD Health Data 2013.
THE
COMMONWEALTH
FUND
5,643
4,522 4,495 4,495
4,118
3,925 3,800
3,2133,405 3,182

8. Improving the quality of NSW
Clinical Costing
 One submission multiple use = reconciliation
One
submission
multiple use
Currently
expanding

9. Improving the quality of NSW
Clinical Costing
01/07/2013 31/12/2013
01/08/2013 01/09/2013 01/10/2013 01/11/2013 01/12/2013
18/10/2013
Draft Results
18/10/2013 - 30/11/2013
QA – data analysis
30/11/2013 - 20/12/2013
Buffer
31/07/2013
GL close for FY
05/10/2013
Annual Audited
Statement to Parliament
01/07/2013 - 18/09/2013
Data acquisition - preparation
Value Add:
- QA pt lv
- QA aggr
- Clinical
input
PPM2
Standard
QA
queries
CE
sign
off

10. “To give the same kind of care to
the same kind of patient, some
hospitals cost two or three times
more than others in the same
state.”

11. “Today, the price paid…includes
costs that can and should be
avoided.”

12. “Setting the right price is crucial,
but it won’t work on its own.
Hospitals need to know a lot
more about where they stand.
They need detailed information
about where their avoidable
costs are and how they compare
to their peers.”

13. “Activity-based funding is a good
pricing system, but cost data can
help us improve it.”

14. The ABM Portal gives you…
A tool to assist in evaluating the efficiency
and efficacy of health service delivery - in
order to review and improve care, leading to
better patient outcomes.
 Comparisons of activity, costs and prices for
 The ability to benchmark costs and LOS performance
LHDs
Facilities
ABF
Workstreams
Patients
Eg. ED, acute, non-admitted

15. ABM Portal Roll Out
 The Portal was first rolled out to LHDs and Pillar in
December 2013, the first being South Eastern Sydney
LHD.
 As of March 2014, the Portal has been rolled out to 14
LHDs, with nominated ‘Champion’ users.
 The remaining LHDs and Pillars are scheduled in the next
few weeks.
 Broader roll out across the health system will occur with
new enhancements .

16. At a State Level…
Enables a comparison of cost and
LOS across LHDs/Facility/Peer
- To assess LHDs cost
performance against the
state efficient price
- To identify signals that may
suggest unwarranted clinical
variation in cost and LOS

17. At a State Level…
Allows comparison of
LHDs
Prompts closer scrutiny
of LHD costs:
QUESTION:
Why did this LHD report
cost above the State
Efficient Price?

18. At a State Level…
QUESTION:
Why did this LHD report
cost above the State
Efficient Price?
ANSWER:
Only this Hospital is
above the average cost
per NWAU
LHD TO INVESTIGATE:
Why does this Hospital
cost more per NWAU?

19. At a District Level…
Enables investigation into
unwarranted clinical variation at
hospitals level within an LHD
when compared to Peers
Why is there such a spread in
cost and LOS?
Investigation should focus
on the cost bucket results in
the table such as prostheses
DRG - I03B Hip Replacement
without complication
Is this
partially
explained
by LOS
variation?

20. At a Clinical Level…
Identifies models of care that
need to be addressed

21. At a Clinical Level…
Identifies opportunity to improve
efficacy of care
Example of a Patient who
attended ED twice a week in 12
months (100 encounters)

22. ABM Portal
 A tool that:
– facilitates transparency and openness
– encourages collaboration between clinical
services around developing and assessing
models of care
– provides the information to empower Local Health
District to manage into the future

23. Cost of Care available to the public

24. Clinical Costing Education
Program – HETI
• Currently identifying and developing education
solutions and resources to support clinical costing.
• UNE Partnerships (UNEP) to map work roles and
functions to national standards for education
• Develop education options that are practical, usable,
flexible and incorporate a range of learning methods
such as:
• Scenarios/case studies using a sample dataset
throughout so that learners engage and develop
their skills and knowledge in context.
• Simulation / Blended learning.

25. Continuous improvement cycle
 Internal Audit Program – Auditor General Recommendation
 OR costing project – to improve costing allocation
methodologies
 Cost of “quality” or lack of..
 Radiotherapy costing study

26. Clinical Costing in NSW
 Focusing on using the data to support local
decision making
 Support clinical analytics and unwarranted
clinical variation investigations
 Education remains a key as well as
continues improvement cycle