Making ABF clinically meaningful

1. National Health Advisory Making ABF clinically meaningful IHPA ABF National Conference 16 May 2013 Draft

2. – Reform is not directed at patient interactions...but there are clues on where patient level care and resource data will be impacted... In determining the national efficient price, the IHPA must: have regard to ensuring reasonable access to public hospital services, clinical safety and quality, efficiency and effectiveness and financial sustainability of the public hospital system; consider the actual cost of delivery of public hospital services in as wide a range of hospitals as practicable; Making ABF clinically meaningful • IHPA ABF National Conference 3

3. – While at hospital and clinical unit level – more immediate factors are at work, driving urgency for change • The gap between revenue and expenditure growth is widening • “Do more with less” • Changing demand profile • Technology • Workforce pressures • Clinical variation Making ABF clinically meaningful • IHPA ABF National Conference 4

4. – As a result – lots of fantastic effort is placed in performance improvement, making data transparent and designing new models of care Making ABF clinically meaningful • IHPA ABF National Conference 5

5. – Develop and prove a concept to bridge these improvement and innovation initiatives with funding reforms and ABF data • Aimed to develop a method that would: • Empower and engage with clinical teams to get ‘bottom up’ change in delivery and to support their ideas for improvement • Respond to the change in funding methodologies • Identify the variation of costs and experience for patients and focus attention • Use the enormous data reserves in hospital systems to provide an evidence-base for change programs • Assess the benefits of improvement initiatives and focus on high impact and high value • Develop internal and repeatable capability Making ABF clinically meaningful • IHPA ABF National Conference 6

6. – 1. Map the selected clinical pathway to identifying key drivers of variation in experience or cost What happens to our patients? Diagnostic tests Pharmaceuticals Days Discharge service Best practice Peer benchmark Current (average) What critical points in the pathway drive different services to be delivered or change the patients outcome or experience? Making ABF clinically meaningful • IHPA ABF National Conference 7

7. – 2. Then collect the ‘in-scope’ cost data to identify distribution and variation Making ABF clinically meaningful • IHPA ABF National Conference 8

8. – 3. Combining drivers of variation with cost data and units to measure impact Unit of Measure Root cause Making ABF clinically meaningful • IHPA ABF National Conference 9

9. – 4. Creating ideas for change engages and also provides opportunity to test dependent statements or claims, and their impact on the drivers... Without affecting access or quality, we can improve productivity and “do more with the same” Making ABF clinically meaningful • IHPA ABF National Conference 10

10. – 5. Simulate the effect of the ideas on the drivers on the patient pathway – determining those ideas that have high impact Improve Invest Making ABF clinically meaningful • IHPA ABF National Conference 11

11. – What does this achieve? Costs are mostly direct at the patient level • An assessment of clinical costing data and its appropriateness and engaging clinicians in improvement ideas • Identify those areas of variation that result from clinical discretion and are meaningful to the clinical pathway • Focus attention on those ideas that will generate high value, high impact benefits • In one DRG of ‘low’ clinical variability, we found cost variations that represented ~6% of total ‘within range’ expenditure: replicated for the whole service line this is ~ $1.3m in productivity (> 5.5% total expenditure). The most addressable through clinical decision making Costs are mostly allocated Costs are mostly fixed Costs are mostly variable Making ABF clinically meaningful • IHPA ABF National Conference 12

12. – Data must systematically improve to make ABF even more meaningful • In the absence of full eMR capability or workforce–patient interactions, the costing system is likely to be the single most valuable data repository in most hospitals • The outputs from costing systems and data structures should be consistently developed to take advantage of the enormous untapped potential of the data they contain, one example being “Intermediate Products” Making ABF clinically meaningful • IHPA ABF National Conference 13

13. – Understanding the data output is to understand the clinical workflow • Intermediate product level data can represent that workflow and some of the patient experience Pre-admission clinic Post op consultation (Specialist & AH) Theatre & surgery Recovery Transfer to ward Perioperative prep Post operative medication ELoS = 1-2 days Making ABF clinically meaningful • IHPA ABF National Conference 14

14. The role of costing • Get out of the basement • Costing and clinical service delivery are on the same team • Focus attention on those areas of high value and disprove the claims • Don’t produce reports – drive and support improvement