Victoria—Public Hospitals and Mental Health Services Policy and Funding Guidelines 2002—2003

June 2002

Section A

Acknowledgments Victoria – Public Hospitals and Mental Health Services Policy and Funding Guidelines 2002- 2003,Victorian Government Department of Human Services Melbourne Victoria

June 2002 Available on the Metropolitan Health and Aged Care Services Division website at: http://www.health.vic.gov.au/pfg2002 © Copyright State of Victoria 2002.

(0120501)

Section A Message from the Minister

The rebuilding of Victoria’s public health system will continue in 2002-2003 with a $960 million increase over four years to treat more patients, employ more nurses, reduce hospital waiting lists and improve mental health services, and upgrade hospital buildings and equipment.

The 2002-2003 State Budget has increased recurrent funding for public hospitals by 8.2 per cent while funding for mental health services has increased by 11.6 per cent over 2001-2002. The Budget builds on the successful Hospital Demand Management Strategy introduced last year that has more than halved ambulance bypass and reduced waiting lists.

Over the next four years the Hospital Demand Management Strategy will be enhanced by a further $464 million. Medical equipment and hospital infrastructure will be significantly upgraded through additional funding of $65 million and Victoria’s medical research institutes will receive $35 million to maintain their leading role in medical research. Hospitals will be assisted to fund superannuation and purchase medical supplies through additional funding of $169 million. Community mental health services such as mobile support and treatment teams and supported housing services will receive additional funding of $36 million, $25 million (included in the Hospital Demand Management Strategy) will be provided to open more mental health hospital beds, and for new diversionary services.

Major capital works will be undertaken in metropolitan and rural and regional Victoria to continue the redevelopment and expansion of Victoria’s health facilities, part of a $900 million commitment to health capital works in the Bracks Government’s first three budgets.

This Budget continues the turn around of Victoria’s public hospital and mental health systems, with better facilities, new approaches and more health workers to give Victorians the highest possible quality of care.

Hon John Thwaites MP Minister for Health

Section A Table of Contents Section A — Policy

1 Highlights of the 2002–2003 Policy...... 1

2 Strategic Directions and Policy Outcomes ...... 3 2.1 Policy Outcomes...... 3 2.2 Activity Trends ...... 5 2.3 Victorian Budget Details...... 6 2.4 Funding Intensive Care...... 7 2.5 Quality of Care...... 7 2.6 Mental Health Services...... 7 2.7 Nursing Workforce ...... 8 2.8 Pharmaceutical Reform...... 9 2.9 Capital, Equipment and New Technology...... 9 2.10 Metropolitan Health Strategy ...... 12 2.11 Rural Human Services Strategy...... 12 2.12 Occupational Health & Safety Improvement Strategy for the Victorian Budget Sector..13 2.13 TAC Patients ...... 13 3 Managing Demand and Improving Access ...... 14 3.1 Metropolitan Hospital Demand Management and Access ...... 14 3.2 Prevention and Continuity of Care...... 18 4 Major Rural and Regional Initiatives ...... 21 4.1 A Strengthened Policy Focus ...... 21 4.2 Self-Sufficient, Sustainable Services...... 21 4.3 Supporting Service Innovation...... 23 4.4 Filling Service Gaps ...... 24 5 Summary of 2002 – 2003 Public Hospital Payment Rates...... 26

6 Hospital Activity and Throughput Targets ...... 27 6.1 Hospital Activity Targets...... 27 6.2 Recall Adjustment...... 28 6.3 Metropolitan and Rural Inpatient Activity Targets...... 28 6.4 Same Day Caps...... 30 6.5 Published Rates...... 30 6.6 Service Agreements ...... 30 7 Mental Health Services...... 31 7.1 Mental Health Policy and Planning...... 31 7.2 Funding and Budget Overview...... 34 7.3 Future Directions...... 36 8 Quality of Care ...... 38 8.1 Quality Framework...... 38 8.2 Clinical Governance...... 38 8.3 Performance Reporting ...... 39

Section A

8.4 Best Practice...... 41 8.5 Consumer Involvement and Information...... 43 9 Service Development...... 47 9.1 Breast Care...... 47 9.2 Trauma ...... 48 9.3 Maternity Services...... 49 10 Sub-Acute Services ...... 50 10.1 Service Profile...... 50 10.2 Funding of Sub-Acute Services: Inpatients...... 51 10.3 Funding of Sub-Acute Services: In Home and Community...... 52 10.4 Palliative Care Services ...... 53 10.5 Interim Care ...... 54 11 Emergency Services and Non-Admitted Patients Funding...... 56 11.1 Non-Admitted Emergency Patient Funding...... 56 11.2 Outpatients – Victorian Ambulatory Classification System...... 57 11.3 Non-Admitted Patient Radiotherapy...... 57 12 Research/Training & Development...... 59 12.1 Research Funding...... 59 12.2 Training and Development ...... 59 13 Special Grants...... 62 13.1 Continuous Positive Airways Pressure, Home Enteral Nutrition and the Victorian Artificial Limbs Programs ...... 62 13.2 Higher Payments for Aboriginal & Torres Strait Islander Patients ...... 62 13.3 Mechanical Ventilation Co-Payment...... 63 13.4 Colonoscopy Co-payment ...... 63 13.5 Aortic Abdominal Aneurism (AAA) Stent Co-payment ...... 64 13.6 Atrial Septal Defect (ASD) Closure Devices Co-payment ...... 64 13.7 Thalassaemia...... 64 13.8 Victorian Maintenance Dialysis Program...... 64 13.9 Cystic Fibrosis...... 65 14 Development of the Cost Weights and WIES...... 66 14.1 AR-DRG Version 4.2...... 66 14.2 Development of Cost Weights ...... 66 14.3 Calculation of Inlier Boundaries: Trim Points ...... 66 14.4 Calculation of Inlier Boundaries: Impact on costs...... 67 14.5 Same Day DRGs ...... 67 14.6 Calculation of Inlier Weights ...... 67 14.7 High Outliers...... 69 14.8 Prostheses Adjustments ...... 69 14.9 Private Patient Adjustments...... 70 15 Hospital Activity Data Standards and Quality...... 71 15.1 PRS2 and related monitoring systems...... 71 15.2 Activity monitoring and standard reporting ...... 72 15.3 Victorian Admitted Episodes Dataset (VAED) Audit...... 73

Section A

Modelled Budgets

Targets

Appendices

Appendix 1 - Consultation and Liaison Appendix 2 - Activity Trends Appendix 3 – Identified Savings Appendix 4 – Mental Health Funded Activities By Output Appendix 5 – Clinical Risk Management Appendix 6 – Non Admitted Emergency Services Grant Appendix 7 – Training and Development Grant Appendix 8 – Cost Weight Modelling (Nurses EBA) Appendix 9 – Clinical Indicators Section B — Conditions of Funding Section C — Supplementary Information

Current Cost Weights – Admitted Patients Current Cost Weights – Victorian Ambulatory Classification and Funding System (VACS) Current Cost Weights – VicRehab Calculation of WIES Mechanical Ventilation Severity Co-payment Eligibility Calculation of Rehabilitation Weighted Units (CRAFT) Hospital Activity and WIES Report CRAFT Funded Hospitals Rehabilitation Report Regional Contacts

Section A Policy Context

The Government’s Policy Framework

In November 2001, the Government released Growing Victoria Together, a statement about its priorities for the next ten years. This statement expresses the Government’s broad vision for the future and balances economic, social and environmental goals.

Victoria 2010: A Vision for Victoria

The Government’s vision for Victoria is that by 2010 we will be a State where innovation leads to thriving industries generating high quality jobs, protecting the environment for future generations is built into everything we do, we have caring, safe communities in which opportunities are fairly shared, and all Victorians have access to the highest quality health and education services all through their lives.

To make this vision a reality the Government has identified strategic issues that are important to Victorians, along with key priority actions needed to address them.

The issues and priority actions for health are:

• high quality, accessible health and community services • sound financial management • growing and linking Victoria • building cohesive communities and reducing inequalities • protecting the environment for future generations • promoting rights and respecting diversity For more information about Growing Victoria Together go to www.growingvictoria.vic.gov.au

Department of Human Services

The mission of the Department of Human Services is to protect and enhance the health and wellbeing of all Victorians, emphasising vulnerable groups and those most in need.

To assist the Department achieve its mission and to address the strategic issues identified by Government, six organisational objectives have been developed.

These are:

• achieving benchmark waiting times • improving service quality • building sustainable and efficient services • building strong communities and primary services • increasing the proportion of family or community based service responses • reducing inequalities in health and wellbeing and improving access to services This document provides an overview of the Government’s overall policy for health including mental health services for 2002-2003. It details the Government’s funding initiatives, programs and budget allocations to individual public hospitals, together with expected outputs and reporting requirements. This enables agencies to have a clear understanding of the Government’s health policies and the detail of the Department’s funding programs to enable them to formulate timely budgets and harness resources to implement the program.

Section A Section A — Policy

Section A 1 Highlights of the 2002–2003 Policy

Funding • The total funding to Victoria’s hospitals and mental health services is $5 billion in 2002-2003, an increase of $398 million from 2001-2002, with $202 million of additional funding allocated in this year’s Budget. The additional funding will be allocated to the Hospital Demand Management Strategy ($113 million), financial sustainability ($60 million), upgrading biomedical equipment ($20 million), and improving and expanding mental health services ($15 million, of which $6 million is included in the Hospital Demand Management Strategy).

Hospital Demand Management Strategy ($113 million) • The new approach to the management of hospital demand emphasising changes in clinical practices will continue in 2002-2003. The key elements are: • Funding growth with an additional 19,360 WIES for agreed hospital initiatives. • Extra funding of $20 million for improved clinical practices that divert patients from acute to sub-acute, interim care, short stay, palliative care and community based options where appropriate. • Preventing admissions by improving the management of people with chronic conditions, the elderly and frequent users of emergency services, under the Hospital Admission Risk Program. • This year elective surgery will be targeted with additional funding provided for initiatives to reduce elective surgery patient waiting times and waiting lists. Further clinical innovations will increase the rate of day surgery and day of surgery admissions (DOSA) to free capacity to treat additional patients. A new model of referral for rural and metropolitan health services will be implemented with particular emphasis on ophthalmology, orthopaedic and plastic surgery patients. • As a result of the Hospital Demand Management Strategy there will be 30,000 extra patients treated, an increase of 2.9 per cent. • In 2002-2003 extra funding of $6 million will be provided for strategies that improve patient management practices in emergency departments, taking into account best practice developments in overseas emergency care. These may include streamed emergency care, improved discharge practices (for example better access to allied health or a focus on weekend discharge) and fast track multidisciplinary triage.

Capital and Equipment • A significant commitment has been made to continuing the renewal, expansion and refurbishment of the health services asset base of the State. Funding has been allocated to redevelopment of a number of major metropolitan hospitals to expand services, better manage emergency demand and ensure facilities meet current standards of operating and functional efficiency. The extensive program of refurbishment and redevelopment of rural health and aged care facilities will continue with a major funding injection in this budget.

Financial sustainability • The Government will also support the ongoing viability of the public hospital system with funding of $60 million in 2002-2003 to meet increased costs associated with medical and pharmaceutical supplies and consumables ($12 million), and employer superannuation costs ($48 million). The Department will undertake a targeted review

Section A 1 of four selected metropolitan health services. Target B has been eliminated and one full price WIES introduced with rural adjustments.

Mental Health • The Budget provides new funding of $15 million in 2002-2003 ($6 million of which is included in the Hospital Demand Management Strategy) for growth in Mental Health Services including: • $4 million to re-open approximately thirty acute inpatient psychiatric beds to address projected demand growth in 2002-2003. • An additional $6.32 million is provided to expand elements of the non-acute mental health system. This will provide growth for adult clinical community services, aged clinical services and Psychiatric Disability Support Services. • $2.76 million for pilot projects to trial models of sub-acute service provision in metropolitan areas. A total thirty short-stay sub-acute places will be involved in the pilot projects. • $1.16 million to provide additional clinical and support services to fifty clients living in Office of Housing properties and to assist the implementation of the Supported Rooming House Project. • $0.76 million for rural workforce initiatives and Dual Diagnosis services for young people with a drug abuse problem.

Rural and Regional Health Services • Initiatives in 2002-2003 will include $5 million in growth funds for rural and regional hospitals. Greater flexibility will be introduced in funding and purchasing for small rural hospitals and $4.5 million will be allocated to enhance access of rural patients to elective surgery and for other rural initiatives. • Services in rural and regional Victoria, employing innovative models of service delivery, will be funded to a total of $3 million. New programs will include new clinical programs for asthma sufferers in Geelong, the establishment of a rural allied health team operating from Warrnambool, expanded community rehabilitation centres in Wodonga and Seymour and a new oncology service in Kilmore.

Breast Disease Strategy • In 2002-2003, $3 million will be provided for the continued implementation of the Breast Disease Service Redevelopment Strategy. The nine statewide breast care demonstration projects will continue to promote and implement best practice, with a focus on evaluation and sustainability. A consumer focused Breast Cancer Resource Centre will also be established.

Improving Quality • Quality Framework funding will be provided to health services in anticipation of their participation and contribution to agreed quality activities, timely and accurate data provision and continuing support for performance indicator development and implementation. • Working with health services to improve the safety and quality of care will continue to be a strong focus of the Department. The Victorian Quality Council has been established and a three year strategic plan has been developed. The Council will be working on six specific areas over the next year. • Annual Quality of Care Reports will continue to provide consumers and community members with information about the quality activities and outcomes of the health service.

Section A 2 2 Strategic Directions and Policy Outcomes 2.1 Policy Outcomes

2002-2003 continues the commitment of funding to ensure access to high quality public hospitals and to better manage increased patient demand. The major policy outcomes will be: • Managing emergency and elective demand; • Financial sustainability of hospitals and funded agencies; • Improving quality of services; • Implementing the new Mental Health Strategy; and • Nurse recruitment and retention. 2.1.1 Managing Emergency and Elective Demand

The Hospital Demand Management Strategy introduced in 2001-2002 has changed clinical practices in the assessment and treatment of patients admitted through emergency departments. The introduction of diversionary and prevention measures, such as greater use of sub-acute, interim care and community care options, have enhanced patient flows and prevented unnecessary admissions. The primary policy outcomes expected for 2002-2003 will build on this base and include: • A target of no more than 1,800 ambulance bypasses system-wide • 95 per cent of emergency patients requiring admission being admitted within 12 hours • All triage Category 1 emergency patients seen immediately • All Category 1 elective patients admitted within 30 days • 5 per cent reduction in the percentage of Category 2 patients waiting more than 90 days • 10 per cent reduction in the average waiting time of Category 2 patients • The number of patients on the elective surgery waiting list to be at or below 40,000 by 30 June 2003 • The percentage of elective surgery admissions treated as same day as agreed with hospitals

For elective surgery, prioritisation techniques for selected specialties are being developed and a possible new four category system will be assessed this year.

The monthly targets set for each of these indicators, and the bonuses payable upon their achievement, are contained in the Hospital Demand Management Strategy Business Rules 2002-2003. In addition a range of key activity indicators will be monitored on a monthly basis and these, in conjunction with monthly performance indicators, will form the basis of regular monitoring and review meetings involving Metropolitan Health Services and the Department.

2.1.2 Financial Sustainability

Sound financial management is essential to the viability of hospitals and health services. In 2002-2003 the major initiatives in this priority area will be: • Creation of a Financial Management and Review Unit to assist selected Metropolitan Health Services to improve their financial performance.

Section A 3 • Reduced use of agency nurses in conjunction with greater employment of full time and hospital “bank” staff. • Centralised purchasing by Health Purchasing Victoria. • The funding of WIES at full rates rather than rates based on marginal cost of additional throughput. • Initiatives to encourage the maximum collection of revenue from private patients. • Additional funding for superannuation and increased costs of medical and pharmaceutical supplies due to the low Australian dollar. • Development of commonality in the definitions and use of the chart of accounts across hospitals in order to facilitate cost comparison and benchmarking across hospitals and to identify system-wide cost pressures. • Continuation of clinical practice changes such as those implemented as part of the Hospital Demand Management Strategy. • Optimum use of Commonwealth funding, including the joint pharmaceutical reform. 2.1.3 Quality

The Victorian Quality Council (VQC) was established in October 2001 to undertake a statewide role in fostering quality and safety in health services in Victoria. It aims to work with stakeholders to identify and act on opportunities for improvement.

Working Groups have been set up to review current strategies and provide advice on falls prevention, pressure wounds, infection control, appropriateness of care, blood and blood product safety and appropriateness, and medication safety.

The 2002-2003 Clinical Indicator Program will focus on progressing the work already undertaken by the Department, Professional Colleges and hospitals in developing and trialling clinical indicators to support a comprehensive system of quality monitoring, analysis and action. The Department will continue to collect clinical indicators to provide benchmarking opportunities and statewide comparisons for Metropolitan Health Services and public hospitals.

2.1.4 Mental Health

Hospital Demand Management Strategy funding for hospital-based mental health services includes $6 million to meet the increased need for acute inpatient services for the mentally ill and to assist people being treated in the community through better diversion, prevention and early intervention programs. The release of a new Mental Health Strategy in mid 2002 will give further direction to new services and programs including increased collaboration between services to better treat people with complex needs.

2.1.5 Nurses

2002-2003 will see the full implementation of the Nurses (Victorian Health Services) Award 2000 improving nurse-patient ratios, wages and conditions for the nursing workforce. The Government’s recruitment and retention initiatives will result in a further seven hundred nurses and other health workers being employed in Victoria’s hospitals.

Section A 4 2.2 Activity Trends

Demand for public hospital services continues to grow, with an estimated 35,000 more admitted patients in 2001-2002 than in the previous year. Emergency admissions account for more than half the increase in patients in Victoria’s public hospitals with an estimated increase of 5.3 per cent in 2001-2002. Emergency admissions to the major metropolitan hospitals grew by an estimated 8.4 per cent in 2001-2002 and account for 97 per cent of the total increase in emergency patients across the state. This concentration of demand requires specific initiatives to increase capacity and manage demand through innovative substitution and prevention programs. The Hospital Demand Management Strategy introduced in 2001-2002 is progressively implementing strategies to redesign patient processes and relieve emergency inpatient pressure.

Between 1999-2000 and 2000-2001 the total number of registered clients in the public mental health system rose by 6.6 per cent. The area of greatest growth has been in adult services where the numbers of registered clients rose by 9.3 per cent between 1999-2000 and 2000-2001. Similar increases in demand are reflected in the Psychiatric Disability Support Services, which also focus on adult clients.

Table 1: Activity Trends 1999-2000 to 2001-2002 (estimated) Victoria 1999-2000 2000-2001 2001-2002 (estimated) WIES Fundable Separations 977,527 1,002,932 1,037,978 Increase over previous year (no.) 41,879 25,405 35,046 Increase over previous year (%) 4.3% 2.5% 3.4%

Emergency Separations 320,092 341,633 360,855 Increase over previous year (no.) 12,534 21,541 19,222 Increase over previous year (%) 3.9% 6.3% 5.3%

WIES 9 769,089 768,507 785,972 Increase over previous year (no.) 19,087 -581 17,464 Increase over previous year (%) 2.5% -0.1% 2.2%

Source: Victorian Admitted Episodes Dataset (VAED), Department of Human Services. Activity refers to WIES fundable separations only. Data for 2001-2002 based on annualisation of data to February 2002. Note: This table excludes WIES equivalent activity in specialised inpatient services such as the Alfred Road Trauma Unit, AIDS units and healthstreams conversions. In 2000-2001, WIES numbers including WIES equivalent were 788,800.

Table 2: Activity Trends - Major metropolitan hospitals 1999-2000 to 2001-2002 (estimated) 1999-2000 2000-2001 2001-2002 (estimated) WIES Fundable Separations 500,054 516,275 546,747 Increase over previous year (no.) 23,837 16,221 30,472 Increase over previous year (%) 4.8% 3.1% 5.6%

Emergency Separations 189,421 204,549 223,221 Increase over previous year (no.) 12,504 15,128 18,672 Increase over previous year (%) 6.6% 7.4% 8.4%

WIES 9 420,484 419,400 436,794 Increase over previous year (no.) 14,782 -1,084 17,393 Increase over previous year (%) 3.5% -0.3% 4.0%

Source: Victorian Admitted Episodes Dataset (VAED), Department of Human Services. Activity refers to WIES fundable separations only. Data for 2001-2002 based on annualisation of data to February 2002. The major metropolitan hospitals are: The Alfred, Angliss Health Services, Austin & Repatriation Medical Centre, Box Hill Hospital, Dandenong Hospital, Frankston Hospital, Maroondah Hospital, Monash Medical Centre, Northern Hospital, Royal Melbourne Hospital, St Vincent’s Hospital, Sunshine Hospital, Western Hospital.

Section A 5 Table 3: Activity Trends Mental Health Services, 1999-2000 to 2001-2002 (estimated) Total Victoria 1999-2000 2000-2001 2001-2002 (estimated) Total Number of Registered Clients 50,154 53,443 56,600 Increase over previous year (no.) 2,002 3,289 3,157 Increase over previous year (%) 4.2% 6.6% 5.9% Child & Adolescent 10,188 10,381 10,600 Increase over previous year (no.) 899 193 219 Increase over previous year (%) 9.7% 1.9% 2.1% Adult 31,722 34,658 37,400 Increase over previous year (no.) 929 2,936 2,742 Increase over previous year (%) 3.0% 9.3% 7.9% Aged 8,244 8,404 8,600 Increase over previous year (no.) 174 160 196 Increase over previous year (%) 2.2% 1.9% 2.3% Number of PDSS clients 8,265 9,097 9,200 Increase over previous year (no.) 1,050 823 103 Increase over previous year (%) 14.5% 10.1% 1.1% Data sources: Prism Records Information System Manager (PRISM) 1999-2000 Redevelopment of Acute and Psychiatric Information Directions (RAPID) 2000-2002 Victorian Psychiatric Disability Support Services Minimum Dataset 1999-2000 to 2001-2002

2.3 Victorian Budget Details

In 2002-2003, the total operating budget for acute, sub-acute and mental health services has increased by $398.3 million over the 2001-2002 budget, to a total of $5,055.8 million. The budgets for acute, sub-acute and mental health services are given in Table 4.

Table 4: Victorian Budget Details 2001-2002 2001-2002 2002-2003 Variation (b) $m $m $m $m % Budget (a) Revised Budget

Acute Health Services 4130.2 4249.6 4467.3 337.1 8.2 (Including Sub-Acute Services)

Mental Health 527.3 563.4 588.5 61.2 11.6

Total 4657.5 4813.0 5055.8 398.3 7.5

Source: Department of Treasury and Finance, Budget paper No. 3, p.61

(a) 2001-2002 Output Budget incorporates changes to Output structure and organisational restructuring and therefore may differ from figures published in the 2001-2002 Budget. (b) Variation between 2001-2002 and 2002-2003 Budget.

The Government’s budget process provides an allowance for CPI and wage increases agreed prior to the time of the budget, and requires an annual productivity saving of 1.5 per cent from all Government sectors including the hospital sector of $36 million. Wage EBAs not yet agreed, such as the AMA and HSUA No.1 and No.5, are not included. The budget figures provided in Table 4 include all these items and represent the net outcome.

Section A 6 2.4 Funding Intensive Care

Subsequent to the publication of the 2001-2002 policy a new mechanical ventilation co-payment was introduced. All patients eligible for a mechanical ventilation co-payment received an additional “one time” payment of 0.6980 WIES to enable flexibility to respond to peak periods. This additional payment shall continue to apply in 2002-2003.

A review of mechanical ventilation co-payment arrangements undertaken in 2001–2002 found that while co-payment rates were adequate, small reductions were required to weights in DRGs with significant ICU costs to prevent double payment through the cost weights and the mechanical ventilation co-payment.

The Neonatal Intensive Care Unit (NICU) mechanical ventilation payments were introduced in 2001-2002 as a temporary measure until better measures of complexity among neonates were identified. Discussions during 2001-2002 indicated some support for the introduction of a CPAP (Continuous Positive Airways Pressure) based severity measure. CPAP hours will be introduced as a mandatory field in the VAED for major NICU hospitals in 2002-2003. This will allow the Department to model various funding options prior to the introduction of the 2003-2004 policy.

2.5 Quality of Care

Funding for a number of quality and safety programs has been incorporated into the Quality Framework in 2002-2003, which has been revised in light of the strategic focus on hospital demand and waiting list management. Improving quality of care will be furthered by reporting back to health services on their performance to enable benchmarking. There will also be a focus on disseminating information learnt through the quality improvement projects. Innovating service delivery will continue to be encouraged through supporting and extending proven initiatives and through Breakthrough Collaboratives.

2.6 Mental Health Services

The overall objectives of mental health services are to lessen the impact of mental illness on individuals and the community, to manage the growing demand for mental health services, to reduce relapse and readmission amongst people with mental illness, and to provide community based alternatives to inpatient services.

Initiatives funded in the 2002-2003 State Budget represent the first stage of implementing new directions for mental health services in metropolitan and rural Victoria and provide for: • Growth in key aspects of the service system, including acute inpatient beds, community based services, specialised aged services and services for women. • Additional support to mental health clinicians in rural areas. • Development of lower cost bed-based and other service alternatives as substitutes for high cost inpatient beds. These services will incorporate improved models of care for people with complex conditions, aiming to prevent crisis/relapse and provide pathways out of acute inpatient care. • Piloting of innovative early intervention and prevention services for young people who have both substance abuse and mental health problems.

Section A 7 2.7 Nursing Workforce

2.7.1 Nurse Recruitment and Retention

Funding has been provided for more than 3,300 additional EFT nursing positions in the public hospital system since July 2000. Growth funding will enable the employment of an additional seven hundred EFT nurses and other health workers in 2002-2003. A second advertising campaign began in March 2002. Nursing courses at both universities and TAFE colleges have been over-subscribed and a wide range of measures have been put in place to improve retention.

In 2002-2003 funds will be provided to universities and hospitals to implement key strategies and to implement certain provisions of the Nurses (Victorian Health Services) Award 2000. Initiatives include: • HECS scholarships for two hundred university postgraduate courses; • postgraduate specialist study assistance for 1,000 nurses; • a postgraduate qualification allowance for nurses in recognition of the specialised study they have undertaken; • refresher courses to assist nurses wishing to re-enter nursing specialties; • resources to support clinical placements of up to five weeks in rural hospitals for 400 undergraduate nursing students. 2.7.2 Funding outcomes of the Nurses (Victorian Health Services) Award 2000

The outcomes of the Nurses (Victorian Health Services) Award 2000 (and the additional funding for medical practitioners to achieve interstate parity) were funded in 2001-2002 on a line item basis. With the exception of funding for Directors of Nursing the remaining funding has for 2002-2003 been included in cost weights and prices. For 2002-2003, the effects of the award have been modelled as part of the cost weight calculations to ensure that the current costs are accurately recorded. This was necessary as the cost weight data are collected from the previous year. Comparisons were then undertaken between the actual daily nursing costs in 1999-2000 (prior to the nurses’ EBA), the modelled nursing costs for 1999-2000 (actual rates + EBA adjustment) and the actual 2000-2001 daily nursing costs (EBA partly included). The results were incorporated into the 2002-2003 cost weights. The methodology is set out in Appendix 8.

The impact of this and other cost weight changes on individual hospitals (i.e. WIES9-WIES10) has been separately modelled and identified. An adjustment factor will be applied in 2002-2003 in order to smooth the impact of this change. Where the impact is less then $100,000, negative amounts will be compensated fully but no adjustment will be made to positive changes. Where the impact is greater than $100,000, hospitals other than major providers will receive 66 per cent compensation for negative changes and retain 66 per cent for positive changes. For major providers, hospitals will receive 33 per cent compensation for negative changes and forego 33 per cent of positive changes. The differential treatment between major providers and others reflects the greater contribution to WIES10 cost weights by major providers as well as the greater variability of impact of the nurses EBA on smaller providers. The NICU EBA nurse-patient ratio has been excluded and funded separately because of the higher increase in NICU nurses.

2.7.3 Nurse Agency Services

In March 2002 the Department directed public hospitals to restrict the price and volume of nurse agency services, with the intention of capping rapidly rising costs. The impact of this measure is

Section A 8 being monitored closely in all metropolitan health services and the three largest non- metropolitan health services.

In the second half of 2002 a major study of nurse supply and demand will be undertaken as part of an overall strategy to help ensure adequate numbers of nurses are available to meet community expectations about healthcare services.

2.8 Pharmaceutical Reform

Commonwealth and State Ministers agreed a variation to the Australian Health Care Agreement in October 2001. The variation allows participating hospitals to gain access to a list of subsidised chemotherapy pharmaceuticals for outpatients and day-admitted patients, and to the Pharmaceutical Benefits Scheme (PBS) for patients on discharge and for outpatients.

The aim of the reform is to provide a better continuum of care for patients moving from hospitals to the community setting. Essentially, there are three elements: • provision of thirty days’ supply (or clinically appropriate quantity) of pharmaceuticals to patients on discharge and to outpatients. This includes PBS, RPBS and non-PBS items; • listing of a number of cytotoxic chemotherapy and antiemetic drugs under Section 100, allowing public hospitals to be funded for the pharmaceuticals supplied to same- day patients and non-admitted patients; and • implementation of the Australian Pharmaceutical Advisory Council’s (APAC) guidelines on continuum of pharmaceutical care.

Seven hospitals began implementing the reforms during January and February 2002: The Geelong Hospital, Grace McKellar Centre, The Alfred Hospital, Monash Medical Centre Clayton, Monash Medical Centre Moorabbin, The Kingston Centre and Dandenong Hospital. The Mercy Hospital for Women will implement the reforms in April 2002. It is expected that other hospitals will participate in these reforms in 2002-2003.

During 2002-2003 at full operation, Victorian public hospitals will be able to access approximately $20 million for chemotherapy pharmaceuticals and $48 million for PBS pharmaceuticals, funded directly by the Commonwealth. Victoria is providing grants totalling $4 million to enable hospital pharmacies to upgrade their software and hardware in preparation for the reforms.

2.9 Capital, Equipment and New Technology

A significant commitment has been made to continuing the renewal, expansion and refurbishment of the health services asset base of the State. Funding has been allocated to redevelopment of a number of major metropolitan hospitals to expand services, better manage emergency demand and ensure facilities meet current standards of operating and functional efficiency. The extensive program of refurbishment and redevelopment of rural health and aged care facilities will continue with a major funding injection in this budget.

Section A 9 2.9.1 Royal Melbourne Hospital Stage 3 Redevelopment – $32 million

A major redevelopment has been funded to enable full commissioning of the integrated trauma services and provide new ward accommodation to replace existing inadequate and substandard accommodation. The redevelopment will enable the extension of the front entry building by replacement of ward accommodation on three new floors and fit out of two floors to provide 120 beds. A new high-speed patient lift to service the helipad will be installed. Construction of the new floors is planned to commence later in 2002.

2.9.2 Angliss Hospital Redevelopment Stage 2A – $18.5 million

Funding has been allocated for the next stage of redevelopment of the Angliss Hospital and will enable an increase in the capacity of the hospital to deal with emergency demand and improve access to emergency services and acute care for the residents of outer eastern Melbourne. The redevelopment will provide a new and expanded Emergency Department with an increase of eleven treatment bays, a new eight-bed Short Stay Unit, a new Critical Care/High Dependency Unit and a new General X-Ray facility to support increased demand.

2.9.3 Dandenong Hospital Redevelopment Stage 2 - $10 million

Initial funding has been allocated to commence the next stage of the Dandenong Hospital Redevelopment. This will involve the development of a new and expanded intensive care unit, additional sub-acute beds and support services.

2.9.4 Stawell District Hospital Stage 2 - $3 million

The funding of Stage two works will complete the redevelopment of Stawell District Hospital, and ensure the facility meets required operating standards and is able to continue to deliver specialist services to the sub-region. This Stage of redevelopment provides for a combination of major refurbishment and new construction to provide an enhanced Operating Theatre/Sterile Supply suite, redeveloped Radiology Unit and new Accident and Emergency facilities. Construction of Stage two will commence in 2003 upon completion of Stage one works.

2.9.5 Lorne Community Hospital - $3 million

Additional funding has been provided to enable redevelopment of the Lorne Community Hospital on the current hospital site. The redevelopment will provide a total of thirty acute and residential aged care beds and community health facilities. Construction of the hospital will commence early in 2003.

2.9.6 Redevelopment of Rural Health Facilities – Stage Three

This strategy will continue to address upgrade and redevelop works required to enable residential aged care facilities to meet Commonwealth accreditation and certification requirements, to address poor physical infrastructure and to undertake associated upgrade and redevelopment in linked rural health facilities.

Funding under Stage three will address: • Stage two redevelopment of the Beechworth Hospital and Nursing Home constructing a new thirteen bed acute ward, accident and emergency services, allied health day procedures, food services, administrative support services and associated engineering works. • Stage two redevelopment of the Omeo Multi Purpose Service including

Section A 10 redevelopment of four acute beds and a range of primary care, dialysis and district nursing services. • Redevelopment of ten palliative care beds and other support services at the Grace McKellar Centre, Barwon Health Geelong.

Redevelopment of a forty-five bed high care aged care facility, medical imaging services and support services for Stage one of the redevelopment of the Maryborough Campus of the Maryborough District Health Service.

2.9.7 Biomedical Equipment - $20 million

An additional $20 million will be provided in 2002-2003 to allow the upgrade of biomedical equipment in a range of metropolitan and rural health facilities including acute hospitals.

2.9.8 New Technology: Clinical Practice Program

Funding is available for the New Technology/Clinical Practice Program for 2002-2003 at a similar level to that at 2001-2002. Submissions were sought in May 2002, and agencies will be notified of outcomes by September 2002. Submission criteria are set out in Section B - Conditions of Funding.

Examples of new technologies that have been funded over the previous years include prostheses, new surgical procedures (e.g. lung reduction surgery), diagnostic techniques (e.g. new test to detect viral load and drug susceptibility for HIV patients) and drugs (e.g. cardiac and oncology drugs). This funding is not applicable for items such as service enhancements, equipment, research, or pharmaceuticals covered by S100 arrangements.

2.9.9 Statewide infrastructure Renewal - $20 million

Funding has been provided to continue the program of works addressing critical infrastructure investment requirements across health facilities. This program is targeted at ensuring the continuing operational viability of existing health facilities and ensuring compliance with current legislative and regulatory standards and requirements. The works are targeted at upgrading of infrastructure in ageing tertiary referral hospitals, ambulance services, regional community hospitals and rural sites with poor infrastructure.

2.9.10 Fire Risk Management Strategy - $10 million

Continuation of the Fire Risk Management Strategy will address the upgrade of metropolitan, rural acute and aged care facilities to meet fire risk standards.

2.9.11 Hospital IT Systems Replacement - $1million

Funding will be used to contribute to the replacement of core hospital patient management and financial systems. Funding will enable the planning and assessment phase for replacement of core information technology that manages patient activity and services in hospitals.

2.9.12 Preston Integrated Care Centre

The new Preston Integrated Care Centre will be operational in January 2003. The new Centre has been named the Panch Health Centre and will provide public dental services, renal dialysis, specialist outpatient clinics including general surgery, orthopaedics, urology, general medicine, antenatal clinics, cardiology, family planning and midwifery, and allied heath services such as physiotherapy, podiatry and drug and alcohol services.

Section A 11 2.10 Metropolitan Health Strategy

The Department’s Policy and Strategic Projects Division is developing the Metropolitan Health Strategy. The Strategy will provide a policy and planning framework for the provision of health care services in and across metropolitan Melbourne for the period 2002 to 2006. It is being developed using a system-wide health program approach and will encompass the full range of health services. The Strategy will cover both local and statewide services that are situated in the Melbourne metropolitan area. Interrelations and impacts on services beyond the metropolitan fringe will be considered as appropriate.

The Metropolitan Health Strategy will: • Guide the future level, mix, distribution and quality of health services across metropolitan Melbourne. • Provide a metropolitan-wide health-planning framework in which local planning and implementation can occur. • Identify and promote emerging models of care for managing demand and improving health outcomes.

Initial work tasks are due for completion by October 2002 to comply with the Government’s integrated management cycle. These initial projects include ambulatory care service provision, elective surgery and mental health services and reviews of particular acute specialties. These, and related Departmental projects, will help inform development of a forward capital plan. All projects will be strongly underpinned by detailed data work, including the scoping of current and projected demand for health services.

A range of consultation processes are being used to develop the Strategy. A Project Advisory Group is being convened to facilitate development of the Strategy and to advise the Department on key priorities and implementation of recommendations arising from the Metropolitan Health Strategy. In addition, workshops and individual meetings with the health services sector and health programs have helped to scope challenges and directions for the Strategy.

2.11 Rural Human Services Strategy

The Victorian Rural Human Services Strategy is being developed by the Department’s Policy and Strategic Projects Division. The Strategy will provide a framework to plan the delivery of sustainable high quality human services in rural and regional Victoria from 2002–2007, reflecting the Government's ongoing commitment to investing in rural and regional communities.

To highlight the importance of the Strategy and to demonstrate commitment to integrated service delivery for rural and regional Victoria, a cross-portfolio approach has been adopted. An expert Project Advisory Board has been appointed to ensure detailed oversight of the Strategy. A number of papers will be released for public consultation commencing with an Issues Paper in 2002. A Stage Two Recommendations Paper for the next phase will be presented to the Minister for Health in October 2002.

Section A 12 2.12 Occupational Health & Safety Improvement Strategy for the Victorian Budget Sector

In 2001 the Economic Review Committee (ERC) of Cabinet introduced an Occupational Health and Safety improvement strategy for the Victorian Budget. Under the strategy a number of defined Work Cover performance indicators must be reduced by 20 per cent over three years. Departments have the flexibility to identify annual improvement targets to achieve the 20 per cent improvement over three years. Hospitals are included in the Department targets. The Victorian Work Cover Authority will use 2000-2001 performance data as the baseline for improvement targets.

Advice on the strategy and proformas for notifying targets, gap analysis and action plans were supplied to all hospitals in October 2001. For the purpose of providing a sector return, the Department has focused on the submissions from the fourteen major providers and fifteen large regional base hospitals. A mechanism has been established for hospitals to report at least quarterly against the initiatives set out in their action plans and results achieved against certain key performance indicators.

2.13 TAC Patients

New funding arrangements will be introduced in 2002-2003 for the admitted patient treatment of Transport Accident Commission (TAC) patients in public hospitals funded through WIES. Please see refer to Circular No 13/2002 for further details.

TAC WIES throughput will be uncapped. The arrangements are detailed in the Section B— Conditions of Funding.

Section A 13 3 Managing Demand and Improving Access

3.1 Metropolitan Hospital Demand Management and Access

Hospital systems around Australia are experiencing demand pressures which, when combined with a shortage of aged residential and community care options for people being discharged, place great pressure on hospitals’ capacity to provide timely access for emergency and elective patients.

The new approach to the management of hospital demand emphasising changes in clinical practices will continue in 2002-2003. The key elements are: • Funding growth with an additional 19,360 WIES for agreed hospital initiatives • Extra funding of $20 million for improved clinical practices that divert patients from acute to sub-acute, interim care, short stay, palliative care and community based options where appropriate • Preventing admissions by improving the management of people with chronic conditions, the elderly and frequent users of emergency services, under the Hospital Admission Risk Program

This year elective surgery will be targeted with additional funding provided for initiatives to reduce elective surgery patient waiting times and waiting lists. A new Elective Surgery Access Strategy will increase hospitals’ capacity to respond to the increased demand for elective surgery. Further clinical innovations will increase the rate of day surgery and day of surgery admissions (DOSA) to free capacity to treat additional patients. A new model of referral for rural and metropolitan health services will be implemented with particular emphasis on ophthalmology, orthopaedic and plastic surgery patients.

As a result of the Hospital Demand Management Strategy there will be 30,000 extra patients treated, an increase of 2.9 per cent.

The Hospital Demand Management Strategy will be implemented in close collaboration with clinicians and hospital management. Hospitals will be provided with the capacity to improve access and the quality of care for emergency patients through an individually tailored package of capacity growth, substitution and emergency department initiatives funded under the Strategy.

Under the Hospital Admission Risk Program, funds will be allocated to specific projects that aim to improve the management of chronic conditions both in hospitals and in the community. Under HARP, Health Services will be encouraged to form closer collaborative working relationships with primary care and community providers in their local areas to ensure that where possible, people receive the appropriate care in the most appropriate place and avoid unnecessary hospital admissions.

3.1.1 Access to Emergency Services

Access to emergency services will be improved through funding extra capacity to treat 14,000 more emergency patients, substitution services to provide more appropriate care options for some people currently in acute beds and improvements to emergency department processes. Substitution services include post-acute care, short stay units, interim care, medical assessment

Section A 14 and planning units, mobile assessment teams, care coordination and home-based alternatives. Many of these services were funded in 2001-2002 and will be extended to more sites in 2002-2003.

In 2002-2003 extra funding of $6 million will be provided for strategies that improve patient management practices in emergency departments, taking into account best practice developments in overseas emergency care. These may include streamed emergency care, improved discharge practices (for example better access to allied health or a focus on weekend discharge) and fast track multidisciplinary triage. This is the second year special project funding has been provided. It should be noted that emergency department services are funded by the non-admitted patient availability grant, WIES payments and Training and Development payments. Project funds will be consolidated after two years.

In determining specific allocations for Metropolitan Health Services, consideration has been given to a package of programs and funding sources which best suits each service according to its own nominated priorities. As in 2001-2002, the negotiated package of initiatives will be the subject of agreements between the Minister for Health and Chairs of the Metropolitan Health Service Boards and between CEOs of Metropolitan Health Services and the Secretary of the Department. These agreements identify key performance indicators and associated targets and milestones. Funding allocated to date is provided in the following table:

Table 5: Hospital Demand Management Strategy – Budget 2002-2003 (excluding growth funds) Health Service Diversion ED Prevention $ (a) $ $ (b) ARMC 1,040,373 581,934 1,188,683 Barwon 300,000 14,593 640,981 Bayside 1,006,375 288,000 1,526,890 Eastern Health 2,835,272 791,430 1,466,204 Melbourne Health 824,781 11,319 1,166,987 Northern Health 1,200,837 524,690 1,706,494 Peninsula Health 2,640,636 793,083 833,780 Southern Health 1,223,492 1,262,313 St Vincent’s 726,428 1,864,766 Western Health 1,031,738 418,217 MHS & Major Indep Sub Total 12,829,932 3,005,048 12,075,315 Ballarat Health Service 254,494 Bendigo Health Care Group 133,980 Latrobe Regional Hospital 350,953 Other Agencies 1,222,714 Statewide Projects and ED funding adjustments 2,994,952 3,006,374 Palliative Care 4,000,000 Primary and Aged Care 4,000,000 TOTAL 20,829,932 6,000,000 17,150,000

(a) Total funds include $20 million budget allocation and an additional $0.83 million carried over from 2001-2002. (b) Total funds include $16 million budget allocation and an additional $1.15 million carried over from 2001-2002. 3.1.2 Elective Surgery Access Strategy

An Elective Surgery Access Strategy will commence in 2002-2003, building on hospital demand management initiatives commenced in recent years. The aim of this strategy is to improve waiting times for elective surgery, stabilise waiting lists and to enhance the experience of elective surgery patients.

Key features of the strategy will be: • Reducing average waiting times for Category 2 patients; • Reducing the total waiting list number;

Section A 15 • Improving the management of patient episodes of care; • Improving the management of patients on the waiting list; and • Developing and validating referral and management guidelines for high volume and low priority conditions.

This strategy presents a package of initiatives which will improve the elective surgery experience for patients. In many cases these initiatives will target high volume procedures, for example, cataracts and hip and knee joint replacements. • Reducing Average and Maximum Waiting Times

Whilst the majority of patients are admitted within desirable waiting times, some patients wait for lengthy periods prior to being admitted from the waiting list.

An Elective Surgery Access Service (ESAS) will be piloted in 2002-2003 to coordinate access for semi urgent Category 2 patients in selected specialties. These patients will be treated at designated elective surgery centres at Western Hospital (general surgery), St Vincent’s Hospital (orthopaedics, general and plastic surgery) and Southern Health (ophthalmology).

Elective surgery targets will focus on the reduction of average waiting times for Category 2 patients. Maximum waiting times will be monitored and work will commence to introduce the concept for 2003-2004 for certain conditions, for example, hip and knee replacement and cataract patients.

The introduction of maximum waiting times will be trialled in six health services through the implementation of Checklist, a waiting list management tool which assists health services to better understand the characteristics of the queue for elective surgery. Checklist is being evaluated in 2002-2003 to gauge its ability to ensure patients on the list are equitably treated and to reduce waiting times. • Reducing the Total Waiting List Number

Waiting list targets have been set for individual health services/hospitals to ensure the reduction in waiting list numbers experienced in 2001-2002 is replicated in 2002-2003 across the system. • Management of Elective Episodes of Care

The Department will continue to focus on improving the efficient management of patient episodes of care through improving day of surgery admission (DOSA) and same day surgery rates.

The aim of the same day surgery indicator is to encourage health services/hospitals to treat more multi-day patients as same day, where opportunities exist to do so without compromising quality of care. Same day surgery targets are set to encourage long- term practice change in the way procedures are performed and patients are managed. Health service/hospital targets will apply to an overall ‘basket’ of procedures, which have wide variation in same day rates across the sector and significant same day throughput at the majority of hospitals. The basket of procedures will be tailored for specialist hospitals.

Admission on the day of surgery improves bed utilisation and therefore access to inpatient treatment, with evidence showing that it does not delay discharge or increase morbidity or mortality for selected groups of patients. DOSA targets are set at

Section A 16 specialty level in order to identify where practice change is required. Targets for 2002- 2003 are either 85 per cent or 95 per cent dependent on the specialty.

DOSA and same day surgery targets are set as six-monthly targets to ensure that any natural variation in the mix of patients within health services/hospitals is able to be accommodated. • Hospital Initiated Postponements

Attention continues on reducing the number of hospital-initiated postponements for patients waiting for elective surgery, particularly in rural areas. Benchmarks have been set and hospitals improving their performance in this area will attract bonus payments in 2002-2003. • Management of Waiting List Patients

Whilst improvements in waiting times for patients are expected, issues related to the management of patients whilst on waiting lists will also be targeted for improvement. Patients can be more actively managed whilst waiting for surgery, and areas such as pain relief and exercise to increase fitness for surgery have been highlighted as areas for improvement. In addition, there are patients on waiting lists who may benefit from being offered medical alternatives to surgery.

A total of $400,000 will be allocated and submissions sought in September 2002 for one-off projects which demonstrate best practice in managing patients whilst on waiting lists for surgery. • Categorisation of Elective Surgery Patients

Clearer guidelines for the assignment of priority to patients on elective surgery waiting lists need to be developed. Prioritisation tools have been developed in other countries and for some specialties. With the support of clinicians, Victoria is currently assessing the value and feasibility of introducing categorisation tools for hip and knee replacement surgery and prostatectomy. Cataract prioritisation tools already available will be assessed for their validity in Victoria. Surgical sub-specialty groups will be asked to contribute to the process by developing specialty-specific prioritisation guidelines for common conditions.

The present three-category system of categorisation for elective surgery is being reviewed. It has been proposed that a four category system would allow clinicians to better discriminate between the urgency of patients. Revised definitions for all categories will be the subject of consultation and the Elective Surgery Information System will be modified to give effect to the change for 2003-2004. • Referral and Management Guidelines

Intervention rates for surgery and thresholds for treatment vary between health services in Victoria and internationally. The development of referral and management guidelines for high volume surgical procedures, such as cataract surgery, varicose vein ligation and stripping and hysterectomy will assist general practitioners, health services and surgeons to ensure treatment is provided to those who will most benefit from it, and in managing waiting list patients.

New Zealand has developed expertise in the field of prioritisation and the development of referral and management guidelines. In 2002-2003, the New Zealand approach to guideline development will be further examined and trialled to determine applicability to the Victorian system.

Section A 17 • Elective Surgery Indicators and Targets

Table 6 outlines system wide targets for the range of elective surgery indicators in 2002-2003. The targets for the total waiting list, the percentage of Category 2 patients waiting more than ninety days and the average waiting time of Category 2 patients on the waiting list are expressed as a system-wide expectation. Individual health service/hospital targets will be based on the latest ESIS data. Targets will take into account any growth funds received for elective surgery in 2002-2003 and the growth trend being experienced at different health services/hospitals in 2001-2002. Further detail is provided in the Hospital Demand Management Strategy Business Rules 2002-2003.

Table 6: Targets for Elective Surgery Indicators 2002-2003

Indicator Assessment Target

Percentage of Category 1 patients admitted Quarterly 100% within 30 days. A 5% reduction in the percentage of Category Percentage of Category 2 patients waiting Quarterly 2 patients waiting more than 90 days as at 30 more than 90 days. June 2002. Average waiting time of Category 2 patients A 10% reduction in the average waiting time of Quarterly on the waiting list Category 2 patients as at 30 June 2002. The number of hospital-initiated Targeted reduction or maintenance of postponements (HiPS) per 100 waiting list Quarterly performance based on 2001-2002 benchmark admissions set for hospital groupings. 95% for ear, nose and throat, ophthalmology, The percentage of planned overnight orthopaedics, plastic surgery and urology. elective surgery admissions on the day of Six-monthly surgery (DOSA) 85% for cardiothoracic, general, gynaecology, neurosurgery and vascular. Tailored for specialist hospitals; 80% for The percentage of elective surgery Six-monthly selected procedures for non-specialist admissions treated as same day hospitals.

The number of patients on the elective Quarterly At or below 40,000 patients by 30 June 2003. surgery waiting list

3.2 Prevention and Continuity of Care

3.2.1 Hospital Admission Risk Program (HARP)

The Hospital Admission Risk Program (HARP) includes those programs funded in 2001-2002 that focused on developing models of care to prevent the need for emergency presentations or hospital admission/readmission. In 2002-2003, an additional $16 million will be allocated under HARP to further develop new models of care in this area. $7 million was also allocated last year for prevention.

A HARP Reference Group has been established that brings together a range of stakeholders with an interest and relevant expertise in the area. The Reference Group provides strategic advice and monitor the implementation and evaluation of HARP. It is chaired by Professor John Funder.

New initiatives funded under HARP in 2002-2003 have been selected on the basis of a competitive selection process overseen by the HARP Reference Group. Hospitals and primary

Section A 18 care agencies were invited to submit Expressions of Interest for funding; successful EoIs were then asked to submit full proposals before the final selection was made. Selection panels comprised Reference Group members and other co-opted experts. Where funding for successful HARP submission is to be paid to Health Services, these strategies will be incorporated into the HDM agreements between Health Services and the Department.

3.2.2 Post Acute Care

The objectives of the Post Acute Care (PAC) program are to: • provide additional home-based services to assist individuals to recuperate after hospitalisation; • improve continuity of care for patients following their discharge from hospital; • work collaboratively with hospitals to provide support to patients as an alternative to inpatient admission from the emergency department, where appropriate; and • assist hospitals and sub-acute services to maximise use of beds for patients who require hospital services.

The Post Acute Care Program will continue to be funded as a separate program throughout Victoria. The budget for the program has increased from $15.5 million to $19.5 million in 2002- 2003. All eligible patients discharged from acute public hospitals and sub-acute services across the state can gain access to the service. In addition, services can be provided to patients presenting to emergency departments to prevent their admission to hospital.

All PAC Services are required to have an Advisory Committee with representatives of major referring hospitals and community providers.

As in 2001-2002, additional funds will be available for PAC Services for DVA clients. Details are available in Section B - Conditions of Funding. Further negotiations will be undertaken with TAC and WorkCover for coverage of their clients.

3.2.3 Hospital In The Home (HITH)

Hospital In The Home (HITH) is provided to patients in their own home, whether that be a private residence, a community residential unit, a nursing home or supported residential service. Since its introduction into Victorian public hospitals, demand has grown and there are now 43 acute hospitals with HITH programs. The Department will continue to encourage the use of HITH by hospitals and quality improvement in HITH services.

In 2002-2003 casemix payments for patients treated in HITH will continue. Extra funding for HITH has also been incorporated in the Quality Framework.

In 2002-2003, the following recommendations from the Patient Management Taskforce will be implemented: • Establishment of performance benchmarks for commonly treated conditions in HITH; and • Support for the development of direct referral from emergency departments where appropriate.

Funds will continue to be made available for the Victorian Centre for Ambulatory Care Innovation in 2002-2003 for the development and dissemination of information to facilitate good practice and innovation in HITH services.

Section A 19 For further information refer to Section B - Conditions of Funding and the Quality Framework Business Rules 2002-2003.

3.2.4 Patient Flow

The Effective Discharge Strategy commenced in 1998-1999 for health services (acute hospitals, sub-acute services and Multi Purpose Services).

Health services are expected to report on their performance against the four performance indicators using the database supplied by the Department. An audit will be conducted in July 2002-2003. A random sample will be drawn for each health service from the VAED for this purpose. Health services will be provided with both individual and comparative results. It is expected that health services will use these indicators on an ongoing basis for internal reporting.

To improve links between health services and general practitioners and coordination of care, four demonstration projects commenced in 2001-2002 and completed in October 2003. Findings will be disseminated via a final report and a good practice guide. It will bring together existing knowledge in good practice in patient flow with examples in a range of settings and patient groups, to assist hospitals in improving practices.

Section A 20 4 Major Rural and Regional Initiatives

This section highlights those special initiatives for rural and regional hospitals (The total document sets out the policy and funding conditions for public hospitals in metropolitan, regional and rural areas and this section must be viewed in that context). Key initiatives include: • $5 million in growth funds for rural and regional hospitals • Greater flexibility in funding and purchasing for small rural hospitals • $4.5 million to enhance access to elective surgery and for other rural initiatives

4.1 A Strengthened Policy Focus

The creation of the Rural and Regional Health Services Division in December 2001 brings a renewed focus on health provision in rural and regional Victoria. The Rural and Regional Health Services Division will provide advice across the range of programs with the aim of achieving: • accessible, quality, effective health services for all rural Victorians; • greater understanding and consideration of rural health issues in policy formulation and decision making; and • a stable, viable rural health service system that supports and encourages flexible health services models.

During 2002-2003, the Rural and Regional Health Services Branch of the Division will: • establish revised agency financial monitoring systems; • commission a new board of management development program; • develop and disseminate a new service planning framework; • develop new funding and accountability requirements for small rural health services; and • undertake specific service development initiatives.

For further information about the role of the Rural and Regional Health and Aged Care Services Division, please refer to http://www.dhs.vic.gov.au/rrhacs/

In addition, the Victorian Rural Human Services Strategy is being developed as a flagship project under the Policy and Strategic Projects Division within the Department (see Section 2.13).

4.2 Self-Sufficient, Sustainable Services

4.2.1 Growth

In 2002-2003 $5 million has been allocated for growth in inpatient services at rural and regional hospitals (equivalent to 2000 WIES). Growth funds will target areas where significant levels of unmet demand for hospital services have been demonstrated.

Section A 21 Table 7: Individual hospital allocations for growth funds 2002-2003 Hospital No. of WIES Barwon South Western Region Barwon Health 1,000 Loddon-Mallee Region Bendigo Health Care Group 250 Echuca Regional Health 50 Maryborough District Health Service 20 Swan Hill District Hospital 50 Grampians Region Djerriwarrh Health Service 100 East Grampians Health Service 60 Stawell Regional Health 20 Hume Region Wangaratta District Base Hospital 150 Wodonga Regional Health Service 70 Benalla and District Memorial Hospital 30 Gippsland Region West Gippsland Health Care Group 100 Gippsland Southern 50 Wonthaggi and District Hospital 50 TOTAL 2,000

4.2.2 Rural Grant

The Rural Grant compromises two previously separated streams. The first is a consolidation of special purpose funding previously distributed through a range of funds, totalling $37.5 million. These special funding arrangements have accumulated over a period of years and include: • Rural Specialty Core Services • AMA Rural Enhancement Package • Conversion Stabilisation reserve • Rural Isolated Grant • Rural Public Target A premiums • Price Maintenance Grant

The variety of allocation methodologies has led to wide variations between similar agencies in the individual total amounts received. The Rural Grant simplifies these grants and distributes monies on a more equitable basis.

In 2002-2003, Rural grant amounts payable to each hospital have been adjusted to ensure that each hospital’s Rural Grant is greater than or equal to the sum of the amounts allocated through these sources in 2001-2002.

In addition to the above the Rural Grant provides $2 million for maternity services funding, and has been consolidated with other grant funds.

The Rural Grant will be paid according to the number of WIES generated by each hospital (in the year 2000-2001), according to the following rates:

Section A 22 Table 8: Rural Grant Rates 2002-2003 Total Annual WIES Generated (2001-2002) Rural Grant Rate (per WIES) Rural Group B Greater than 13,000 WIES $114 Rural Group B 7,500 – 13,000 WIES $192 Rural Group B 5,000 – 7,500 WIES $258 Rural Group B Less than 5,000 WIES $273 Rural Group C $110 Rural Group D and E $144 4.2.3 Rural Initiatives Pool

In 2001-2002 an amount of $4.5 million was made available for targeted reduction of rural waiting lists. Fourteen regional and two metropolitan health services were funded to treat patients under the initiative. Similar amounts will be available in 2002-2003, for waiting list reductions and other rural initiatives.

Funding allocations for these hospitals, as listed in modelled budgets for 2002-2003, are based on 2001-2002 activity, are notional and subject to change.

Further information on unspent funds will be given to hospitals in 2002-2003 (see Section B – Conditions of Funding).

4.2.4 Support for the Rural and Regional Workforce

The Continuing Medical Education (CME) Program for General Practitioners was established in 1996 as a targeted educational activity to improve the quality of medical practice in rural locations. A long term objective of the program was to ensure that GPs appointed to undertake practice in designated rural clinical areas were supported in undertaking regular CME appropriate to the area of practice. A review of the program is underway and will be finalised over the next few months. Subsidies will continue to be provided as per current guidelines until that time.

Professional Improvement Assistance Fund Scholarships will also continue to be available to assist those involved in rural health in Victoria to participate in conferences of relevance to the development and provision of rural health services in 2002-2003. The scholarship budget was increased to $75,000 per annum in 2001-2002.

4.3 Supporting Service Innovation

4.3.1 Flexible Funding Models

The Healthstreams program enables smaller rural hospitals to participate in more flexible funding arrangements. The program follows an extensive evaluation, conducted by KPMG Consulting during 2002 that found that the program had been of benefit to participating agencies.

To date, Healthstream agencies have received Implementation Grants totalling almost $0.66 million. Approximately $1.8 million was provided in 2001-2002 in specified grants of reallocated funds to provide services such as community health nursing and allied health services, palliative care and health education programs.

The conversion of small hospitals to MPS agencies enables considerable and desirable flexibility to these agencies in choosing service delivery mechanisms appropriate to local circumstances.

Section A 23 As with Healthstreams, monies provided previously for hospital patient services have been converted to a net grant (i.e. net of private patient and other revenue). Commonwealth aged care funding has also been cashed out in the MPS model.

The opportunity to make these service and viability improvements will be provided to all Group D & E hospitals (and some group C hospitals) from 2002-2003. These hospitals will be encouraged to ensure that service provision meets local requirements and is delivered in accordance with local planning processes. Although total Acute Program allocations for these hospitals will reflect historical casemix-based funding there will be no cap on the extent to which WIES or other health and aged care program funding can be converted. Conversions will be subject to the approval of the Department Regional Director in consultation with the Director, Rural and Regional Health Services. Reporting requirements are unchanged.

Further work will be carried out during 2002-2003 to develop appropriate alternative funding models for small rural agencies. These models will replace the use of casemix for Group D and E hospitals in 2003-2004, and will inform future directions of the Healthstreams program.

The Healthstreams and MPS agencies (as well as other Group D and E hospitals that choose to convert State health and aged care program funds) will continue to be subject to Acute Program policies in respect of further funding, and entitled to an appropriate share of additional growth and capital expenditure allocation. Similarly, the agencies will be subject to the same policy decisions regarding private patient revenue and productivity requirements as other hospitals, which remain in the Acute Program. Monitoring will be continued to ascertain whether acute throughput has been shifted from a flexible funded agency to another hospital and if so an appropriate funding adjustment may be made.

4.3.2 Innovative Service Delivery

The development of innovative service delivery models is further supported through the expenditure of $0.6 million to fund new services in regional and rural Victoria. Projects funded in 2002-2003 are: • New clinical programs for asthma suffers in the Barwon-South Western Region ($200,000) • Rural allied health team operating from Warrnambool ($100,000) • Expanded community rehabilitation in Wodonga and Seymour, ($100,000) • New patient oncology service in Kilmore, ($130,000) • New ED care co-ordination service at the Latrobe Regional Hospital ($100,000)

Innovative service delivery models will also be developed and funded under the auspices of the Victorian Rural Human Services Strategy. Relevant projects include the Integrated Service Delivery Project and the Rural Health Innovative Practice Fund, which has been established to improve support, education, training and research opportunities in rural and remote Victoria through innovative models of practice.

4.4 Filling Service Gaps

Ongoing development of health services in rural and regional areas continues through the expansion of other health services. Additional services to rural hospitals are described in other sections. Highlights include:

Section A 24 • $1 million have been allocated to expand Community Rehabilitation Centres in fifteen rural locations:

Table 9: Community Rehabilitation Centres Funding Allocation 2002-2003 Regional Agency Total Additional Funding 2002-2003 Colac Community Health Services CRC 34,569 South West Health Services – Warrnambool CRC 64,614 Wimmera Base Hospital CRC 95,880 Echuca Regional Health CRC 85,656 Mt Alexander Hospital CRC 51,937 Swan Hill District Hospital CRC 59,474 Ramsay Health Care Mildura CRC 58,194 Goulburn Valley Health CRC 78,176 Wangaratta District Base Hospital CRC 45,840 Wodonga District Hospitals CRC 22,206 Bairnsdale Regional Health Service CRC 84,663 Wonthaggi District Hospital CRC 75,696 Yarram & District Health Service CRC 79,000 West Gippsland Health Care CRC 79,112 Latrobe Regional Hospital CRC 84,688 Total 999,978

• $865,000 has been provided for additional palliative care services at eleven rural locations. • $850,000 has been provided for community-based palliative care at eleven rural locations. • An additional $2.75 million recurrent funding has been provided for radiotherapy services in Ballarat and Bendigo. • $0.4 million has been allocated for the Rural Workforce Initiative, aimed at enhancing professional support to clinical staff in rural mental health services. This initiative will not only help retain valuable qualified staff, but also enhance the quality of services available to those in regional Victoria (see Section 7). • Sub-acute mental health services for people requiring pre-crisis post-acute treatment and support will be piloted in a regional centre. • New ambulance stations at Mildura and Shepparton will be established to be operational by 2003-2004. $0.7 million has also been provided to commence the training of paramedics to staff these new stations. • $1.4 million will be provided to co-locate ambulance stations and Hopetoun, Ararat, Colac and Kyneton will be rebuilt as part of the redevelopment of other health services.

Section A 25 5 Summary of 2002 – 2003 Public Hospital Payment Rates

Table 10: Payment Rates, 2002-2003 Payment All Major Rural Rural Rural Rural Rural Rural Hospitals Providers Group B Group B Group B Group B Group C Group D >13000 7500- 5000- <5000 & E WIES 13000 7500 WIES Inpatients • Public WIES 10 $2,515 $2,629 $2,707 $2,773 $2,788 $2,625 $2,659 • Private WIES 10 $2,058 $2,151 $2,215 $2,270 $2,282 $2,155 $2,187 • Rural/Isolated Hospital $17/$42 Payment per WIES 10 • Nursing Home Type $154 Patient per Day 4 5 • DVA per WIES 10 $2,603 $2,632 $2,662 $2,702 $2,736 Sub-acute • CRAFT (episode) $10,226 • Rehabilitation Level 1 $470 (per diem rate) • Rehabilitation Level 2 $390 (per diem rate) • Geriatric Evaluation & Management (per $390 diem) • Interim Care Beds (per $269 diem rate) Non-Admitted Patients • VACS Payment per $125 Weighted Encounter • Allied Health per $45 Occasion of Service • See Emergency Services Grant Ch.11 • See VACS Base Grant Ch.11 • See VACS Teaching Grant Ch.11 Training and Development Grants See • Training and Ch.12 Development Payments • See Research Grants Ch.12 Specified Grants

1. The rural and isolated hospital payment will apply to those hospitals as designated. 2. Ballarat Health Services and Bendigo Health Care Group are the only Rural Group B hospitals funded through VACS. 3. The above rates do not include savings required from embedded taxes and network review savings. 4. Rural Group B over 10,000 WIES. 5. Rural Group B under 10,000 WIES.

Section A 26 6 Hospital Activity and Throughput Targets

6.1 Hospital Activity Targets

This section describes the throughput targets for each metropolitan health service and each rural region. In 2002–2003, the unit of measure for casemix adjusted throughput will be known as WIES10 with the total number of WIES10 for hospitals in 2002-2003 being 835,160. Full details of WIES10 are given in Section C—Calculation of WIES.

6.1.1 Cost Weight Study - Grouper

The Cost Weight Study was based on data from the 2000-2001 year modified for the impact of the Australian Nursing Federation Enterprise Bargaining Agreement. All hospital admissions have been coded using ICD-10-AM, 2nd edition and grouper according to AR-DRG Version 4.2.

6.1.2 Targets

In 2002-2003 WIES targets will be one full price. The public WIES rate will vary in accordance with the size and nature of the provider between $2,515 and $2,788.

Table 11: Components of Target, 2002–2003 Standard Rate Rural Grant Rurally Adjusted Rate Major Providers $2,515 - $2,515

Rural Group B > 13,000 WIES $2,515 $114 $2,629 Rural Group B 7,500-13,000 WIES $2,515 $192 $2,707 Rural Group B 5,000-7,500 WIES $2,515 $258 $2,773 Rural Group B < 5,000 WIES $2,515 $273 $2,788 Rural Group C $2,515 $110 $2,625 Rural Group D and E $2,515 $144 $2,659 Prices per WIES will continue without separate fixed and variable components. It was recognized that these separate components in the past had led to inequalities, with the same types of agency doing the same types of work but with some being paid a significantly different price.

6.1.3 Price Adjustments

Prices for all providers have been adjusted to reflect agreed wage increases and an indexation factor of 2.5 per cent on non-wage costs. For major providers and Group B hospitals the price will also be adjusted to reflect the 1.5 per cent productivity savings requirement. WIES prices for Group C, D and E hospitals will not be adjusted for this requirement, however it should be noted that this is not an acknowledgment that further productivity gains within these hospitals are unachievable. Ongoing continuous improvement is expected and the benefits from improved efficiencies are expected to further improve their financial position and/or increase the range of services provided. Admitted patient revenue targets have also been increased by 2.5 per cent. Hospitals will be advised shortly of revised bedday rates to be charged.

6.1.4 Under-utilisation of WIES

Hospitals are required to advise the Department by 15 January 2003 of any impending under- utilisation of their WIES target allocations. Rural hospitals should advise their relevant rural Regional Office. Metropolitan hospitals and the Rural Health and Aged Care Division should

Section A 27 advise the Metropolitan Health and Aged Care Division at the Department Head Office. New annual targets will be subsequently set, and any under-utilisation will be made available to other providers at a price agreed by agencies and the relevant DHS Division. The price for WIES so identified will recognize some component of fixed cost to the hospital unable to undertake their target WIES. Otherwise the normal recall adjustment (below) will apply.

6.2 Recall Adjustment

Given the demand pressure on available inpatient services, it is the responsibility of hospital management to manage throughput to target levels. This year there will be the opportunity for revision in February 2003, so that hospitals’ ability to operate at target level is increased. Shortfalls will be recalled at a progressively increasing rate as outlined below.

Table 12: Recall Adjustment Rates, 2002–2003 Metropolitan Health Services and Recall Adjustment Rural Group B Hospitals 0 — 2 per cent below target $1,000 per WIES 2 — 3 per cent below target $1,600 per WIES 3 — 5 per cent below target $2,100 per WIES 5 per cent + below target Full WIES rate Rural Group C/D/E Hospitals Recall Adjustment All recall $1,000 per WIES

Throughput in excess of target of up to 2 per cent will be paid at $1,000 per WIES. This provides recognition of the difficulty of achieving absolute precision in demand management.

6.3 Metropolitan and Rural Inpatient Activity Targets

Table 13 sets out the targets for 2002–2003 for the Metropolitan Health Services (MHS) and the rural regions. Detailed rural hospital allocations are in Section A – Targets.

Section A 28

Table 13: Targets, 2002–2003 Target DVA WIES10 TAC Total WIES10 WIES10 (ex. DVA) Austin & Repatriation Medical Centre 47,435 4,266 1,349 53,050 Bayside Health 60,675 2,010 5,314 67,999 Eastern Health 61,495 2,141 645 64,281 Melbourne Health 55,297 752 862 56,911 Northern Health 25,094 280 512 25,886 Peninsula Health 36,945 1,601 350 38,896 Peter MacCallum Cancer Institute 11,204 714 - 11,918 Royal Victorian Eye and Ear Hospital 8,906 366 11 9,283 Southern Health 86,870 1,251 1,626 89,747 Western Health 55,420 1,178 694 57,292 Women’s & Children’s Health 52,950 - 492 53,442 Mercy 17,326 25 1 17,352 Werribee Mercy 9,542 232 14 9,788 St Vincent’s 39,354 852 420 40,626 Total Metropolitan 568,513 15,668 12,290 596,471 Barwon-South Western 60,861 3,509 559 64,929 Grampians 36,275 2,064 386 38,725 Loddon Mallee 43,431 3,252 366 47,049 Hume 42,081 2,744 339 45,164 Gippsland 40,150 2,361 313 42,824 Total Non-Metropolitan 222,798 13,930 1,963 238,691 Grand Total 791,311 29,598 14,253 835,162 6.3.1 Metropolitan Targets

Priority has been given for growth funding to meet emergency demand of an estimated additional 14,000 patients admitted from emergency departments and an increase of 10,000 elective surgery patients. This approach recognises that each hospital’s strategy will comprise a range of measures to meet particular demand pressures at individual hospitals. The package includes WIES growth to meet increases in emergency inpatient demand and to decrease waiting lists in a targeted manner. Detailed discussions have been held with senior management and clinicians at the major health services, and the WIES targets above are one part of each health service’s overall package.

Quarterly targets at the Metropolitan Health Service (MHS) and campus level will be nominated by each Metropolitan Health Service no later than 31 July 2002, and be included in the Health Service Agreement (HSA). Significant departures from these targets (greater than 2.5 per cent) after consultation with the hospital, may result in financial penalties. Campus level activity will be monitored and any significant departure from the agreed service plans or indicative levels will be assessed by the Department. Same day caps will operate within overall WIES10 targets. Non-admitted patients will have a budget ceiling for each hospital campus.

6.3.2 Rural Targets

Some limited growth in inpatient targets has been allocated to large regional hospitals to meet significant increases in demand pressures, particularly increases in emergency demand. The approach is consistent with the criteria noted above for metropolitan health services in that individual demand pressures have been assessed. Additional activity to be undertaken through the Waiting List reduction package has been notionally allocated to individual hospitals.

It should be noted that where agencies have performed under target in 2001-2002 and entered into sub-contracts, their targets including any allocated growth are notional only. Full

Section A 29 discussions must be held with the rural Regional Director regarding the appropriateness of the WIES level.

Smaller rural hospitals have not faced the same increase in demand – particularly emergency demand - as other hospitals, and there has been no general increase in inpatient activity to those hospitals. Instead the smaller Group D and E hospitals have been given increased flexibility to provide a range of services appropriate to smaller rural communities.

Quarterly targets will be nominated by each rural hospital by 31 July 2002 and included in the relevant Health Service Agreement. This will assist monitoring of throughput and scheduling of cash flows. Significant departures from these targets (greater than 2.5 per cent) after consultation with the hospital and the Regional Office may result in financial penalties. Same day caps will operate within the overall WIES10 targets.

6.4 Same Day Caps

Same day caps currently apply at the aggregate level for metropolitan hospitals and the hospital level for rural hospitals as a disincentive for unnecessary statistical inpatient admissions. During 2001-2002 the same day cap was at the level of 6.5 per cent of total WIES.

Some of the growth in same day cases has been as a direct result of substitution of multi-day stays with same day care. Under the Hospital Demand Management Strategy, a number of hospitals have established short stay/observation units and/or medical ambulatory care centres. These are WIES funded.

During 2002-2003 there will be continuing evaluation of the impact of initiatives funded under the Hospital Demand Management Strategy on same day caps. Penalties will not be applied automatically if it can be demonstrated at a mid-year review that same day changes have occurred in accordance with practices that improve emergency patient flow.

6.5 Published Rates

The rates presented in this document and its attachments, including modelled budgets, do not include ongoing savings required from embedded taxes, or network review savings as listed in Appendix 3. The savings amounts remain identical to those in 2001-2002. These rates do not reflect the “published rates” as referred to in contract arrangements with the privately operated Mildura hospital. The official published rate for services reflects adjustments for the above items, as outlined in Section B - Conditions of Funding.

6.6 Service Agreements

Service Agreements with the Department are to be signed as soon as possible in the financial year. In particular, the Acute, Sub-Acute and Mental Health Schedules to the Service Agreement must be concluded by 30 September 2002. The Metropolitan and Rural Health and Aged Care Divisions will provide assistance to resolve any outstanding issues in that period. However, agencies that do not sign the Schedules will not be eligible to receive bonus payments under the Quality Improvement Fund.

Section A 30 7 Mental Health Services

7.1 Mental Health Policy and Planning

Between 1999-2000 and 2000-2001, the total number of registered mental health clients in the public system rose by 3,290 clients (6.6 per cent). Demand for adult services rose by 2,940 clients (9.3 per cent) between 1999-2000 and 2000-2001.

Service developments for specialist mental health services in 2002-2003 emphasise the need to reduce relapse and readmission amongst people with mental illness. These developments will also begin to address the increased demand for mental health services, including: • Increasing prevalence of co-existing mental illness and problematic substance use. • Increasing numbers of people who have severe and complex psychological and social problems. • The growth in an ageing population and corresponding increase in age related psychiatric disorders. 7.1.1 The Mental Health Service System

Mental Health Services in Victoria are provided on an area basis. All clinical area services have been mainstreamed with general hospitals and each area provides a range of services.

Service delivery within Area Mental Health Services across Victoria includes: • twenty-one Adult Mental Health Services, which assess and treat adults (aged sixteen to sixty-four) with serious mental illness. • seventeen Aged Persons Mental Health Services, which assess and treat older people (aged sixty-five and over). • thirteen Child and Adolescent Mental Health Services, which assess and treat children and adolescents (up to eighteen years of age) who have a serious mental disturbance or who are known to be at risk of such disturbance.

All areas have access to a range of inpatient, community residential and ambulatory services. Service providers also have access to a range of specialist and statewide services such as mother and baby units, eating disorder units and neuropsychiatry services.

In addition, forensic mental health services are provided for people who have both a mental disorder and a history of criminal offending or who present a serious risk of such behavior. Inpatient forensic services are now consolidated at the Thomas Embling Hospital in Fairfield and managed by a statutory authority, the Victorian Institute of Forensic Mental Health. Forensic mental health services are also provided by VIFMH at the Melbourne Assessment Prison and in community programs for the assessment and treatment of offenders with a serious mental illness.

Complementing clinical services are a range of psychiatric disability support services delivered by non-Government organisations. These services provide support and rehabilitation services to people who have a disability resulting from mental illness.

Section A 31 7.1.2 Growth and New Initiative Funding in the 2002-2003 State Budget

New funding in the 2002-2003 State Budget will provide: • Growth in key aspects of the service system, including acute inpatient beds, community based services, specialised aged and women’s services. • Additional support to mental health clinicians in rural areas. • Development of lower cost bed-based and service alternatives as substitutes for high cost inpatient beds. These services will incorporate improved models of care for people with complex conditions, aiming to prevent crises and relapse and provide pathways out of acute inpatient care. • Piloting of innovative services for young people who have both substance abuse and mental health problems.

Specific funding commitments for 2002-2003 are: • Re-opening of Acute Inpatient Beds – $4 million

Despite population increases and the growing number of admissions into the public mental health system, the overall number of general adult acute inpatient beds has remained relatively constant since 1996-1997.

Funding has been provided for re-opening approximately thirty acute inpatient psychiatric beds that were closed in previous years. This initiative aims to relieve the considerable pressure on inpatient services and the consequent effect on the general hospital system. This will occur within existing capital infrastructure and mainly in metropolitan areas with some provision for regional centres where pressure on inpatient services is also significant. Beds are targeted to be opened at St Vincent’s, The Alfred, Royal Melbourne and Frankston Hospitals and the Broadmeadows Health Service. Further locations will be determined during the first quarter of 2002-2003.

There will be further examination of inpatient bed distribution, and ways of managing demand for inpatient services, during 2002-2003. • Community Mental Health Growth – $6.32 Million New funding has been provided for expansion of aged and adult clinical community services and adult Psychiatric Disability Support Services (PDSS) in response to growing waiting lists for PDSS and increasing client registrations to clinical community services. Growth in Adult Clinical Community Services Funding will provide forty additional mobile intensive treatment and support staff and crisis assessment and treatment staff. This will include intensive home-based clinical treatment and enhanced residential rehabilitation services for people with co- existing substance abuse. It will also provide fourteen additional continuing care positions.

Funding will also be provided for forums and awards to recognise initiatives to prevent sexual abuse of women in inpatient services.

Growth in Aged Clinical Community Services

This funding will provide fifteen additional psychogeriatic assessment and treatment staff to provide clinical services to older people living at home or in residential aged care.

Section A 32 Growth in Adult Psychiatric Disability Support Services (PDSS)

This funding will provide fourteen additional psychiatric disability support staff for day programs, home-based outreach services, including home-based support services for women with a mental illness living with dependent children, and enhanced residential rehabilitation for people with co-existing substance abuse. • Sub-Acute Service Pilots – $2.76 million

In 2002-2003, the Mental Health Branch will develop and trial sub-acute service models in metropolitan areas of Victoria and one regional centre. The pilots will offer approximately thirty new sub-acute places which include bed based services and, if needed, home support. The pilots will aim to manage demand for inpatient services by providing: • treatment and support to people experiencing a crisis that, if unmanaged, may lead to an inpatient admission; • post-acute treatment and support for clients recovering from an acute phase of illness but not yet ready to return to their usual accommodation; and • short-term flexible funding packages for clients requiring support on return to home.

Each service will be assisted and managed by the Crisis Assessment and Treatment Service of the area mental health service/s where the places are located. However, access to bed based services may be shared across areas. Staffing includes nurses, psychiatrists, allied health professionals and support staff. • Supported Housing Services – $1.16 million

Closure of large mental health institutions during the 1990s and declining availability of low cost housing, including Supported Residential Services, has increased the need for supported housing for clients with ongoing mental health problems and associated disabilities. There is evidence that stable and supported housing reduces relapse and readmission rates for people with chronic mental illness.

In 2002-2003 funding is provided for intensive treatment and support services to an additional fifty clients with high needs prioritised for placement in Office of Housing properties and to assist the implementation of the Supported Rooming House Project, including: • ten additional psychiatric disability staff to provide intensive home-based support in collaboration with other clinical services, • thirty flexible funding packages ($5,000 each) for the purchase of required practical supports and services. • Intensive clinical support • Youth Dual Diagnosis Services – $360,000

Funding has been provided for two pilot ‘dual diagnosis’ services for young people. The pilot projects will extend two existing dual diagnosis services currently providing services to metropolitan and rural areas by providing two additional staff and sessional psychiatry for each pilot to: • Strengthen the capacity of local Child and Adolescent Mental Health Services (CAMHS) to work in partnership with youth drug treatment services. • Provide support and resources to existing youth substance abuse services and

Section A 33 CAMHS in the selected areas. • Provide consultation and training to staff of CAMHS and youth drug treatment services, as well as some direct service provision to young clients. • Rural Clinical Workforce Development – $400,000

Service demand pressures are exacerbated by a declining skilled and aging mental health workforce, particularly in rural areas.

New funding will be provided for the provision of expert clinical opinion and supervision by metropolitan services to the eight rural area mental health services (AMHS). This support will be provided through teleconferencing and other media, and will focus particularly on aged and child/adolescent issues. The initiative will target medical and allied health staff to complement the nursing workforce initiatives implemented in 2001.

7.2 Funding and Budget Overview

7.2.1 Mental Health Output Streams

For budget and reporting purposes, there are four mental health output streams: • Clinical Inpatient Care, which includes hospital inpatient treatment programs for people with serious mental illness. • Clinical Community Care, which provide initial screening and consultancy for people requesting public mental health services, as well as assessment, treatment, continuing care, clinical case management and support and residential care for people with serious mental illness. • Psychiatric Disability Support Services which provide support and rehabilitation services to people who have a disability resulting from mental illness. • Service System Capacity Development, covering activities such as research, training and education.

Appendix 4 provides information about funded activities that contribute to each of these outputs

7.2.2 Mental Health Budget

The table below provides an overview of the mental health budget in 2002-2003. Further details are in Section A – Modelled Budgets.

Section A 34 Table 14: Mental Health Budget Allocations, 2002-2003 Budget Item 2002–2003 Budget % Total Allocation Allocation ($ Million)

Adult 263.8 56.5 Aged 63.5 13.6 Child and Adolescent 40.5 8.7 Psychiatric Disability Support Services (PDSS) 47.6 10.2 Mental Health Service System Development & Resourcing 13.1 2.8 Specialist 38.1 8.2

Total Mental Health Budget 466.7 100

These figures provided are correct as at June 2002. However, there may be some minor changes to the budget allocation during the financial year.

7.2.3 Funding and Prices

In 2002-2003 the Mental Health Branch has distributed funds among the Department regions using a weighted population formula, numbers of registered clients and other statistical information. The weighted population formula uses population weightings to estimate morbidity levels in mental health service areas and to account for the higher service costs of some consumers due to their geographic location or particular circumstances. This formula has been recently updated to incorporate new population and demographic data. In addition, specific initiatives may be funded according to local (rather than statewide) demand or an assessment of existing infrastructure and capacity.

Mental health services are funded through four main mechanisms: block funding/historical allocations, bedday rates—EFT, and submissions. There will be a pricing review undertaken during 2002-2003 to examine current pricing arrangements. The current bedday rates of the clinical mental health output streams are as follows:

Table 15: Bedday Rates Applicable to Clinical Bed Based Services* Output Service element Funded unit 2002-2003 2002-2003 Metro unit price Rural unit price Clinical Adult Acute Available Bed Day $372 $375 Inpatient Aged Acute Available Bed Day $372 $375 Care CAMHS Acute Available Bed Day $441 $444

Acute Specialist Available Bed Day $489 $492

Extended Care Adult Available Bed Day $356 $359 Clinical Community Care Unit Available Bed Day $244 $247 Community Psychgeriatric Nursing Available Bed Day $63 $63 Care Home Supplement Available Bed Day $56 $56 Psychogeriatric Hostel Supplement Inpatient services are funded at the prevailing benchmark daily bed rates, less a revenue target in adult and psychogeriatric units. The bedday rates are based on 100 per cent availability of the funded beds, regardless of actual occupancy. * EFT prices for clinical ambulatory and PDSS services outputs vary depending on historical funding allocations adjusted for consumer price index and award increases. Unit prices for these outputs will be clarified in the pricing review. The Service System Capacity Development output will continue to be funded through historical funding allocation and submissions pending the outcome of the pricing review. Area Mental Health Services are required to allocate a minimum of 55 per cent of their budget to community based services and are encouraged to increase this allocation by redirecting any budget savings, under-utilized inpatient resources and revenue from resident fees and Commonwealth nursing home funding to community based services.

Section A 35 7.3 Future Directions

7.3.1 Future Service Development

The continued development of an accessible, integrated range of mental health services remains a high priority. With a strong policy commitment to support people to live in the normal community environment wherever possible, there is ongoing planning to increase the range of services that facilitate movement of people out of inpatient beds and help prevent crisis and relapse.

Alternatives to inpatient care including new sub acute services and intensive supported accommodation services introduced in 2002-2003 will be evaluated and further developed based on the outcome of the evaluations. Simultaneously, there will be a renewed emphasis on the quality and effectiveness of inpatient services for people who need this level of care.

Mental Health in the Community

Public specialist mental health services are – and will remain – targeted to people who are seriously affected by mental illness. However, the future development of these and related services must take into account the mental health needs of the wider community.

A focus on mental health prevention and early intervention is necessary to address the increasing incidence of some forms of mental illness (such as depression) and reduce future demand on mental health and other community services.

To prevent escalating problems in people with serious mental illness it is planned to build the capacity of existing community based services, including the expansion of primary mental health, clinical and disability support services, and other relevant services through training and consultation.

Another priority area is the development of improved responses to early signs of mental illness, such as early psychosis in young people.

Service Linkages

In 2002-2003, the Department will begin to examine ways of improving linkages between Area Mental Health Services as a basis for more co-operative approaches to the use of local resources, particularly inpatient beds and new sub-acute services. In this context an examination of the size and purpose of catchments, including the application of boundaries, will be undertaken to identify ways to improve client access and enable better service management.

7.3.2 Quality, Performance Management and Accountability

A comprehensive performance management framework will be developed to underpin a stronger role for the Mental Health Branch in monitoring and evaluating mental health services. This will be based on existing national and departmental quality frameworks, supporting a system of performance measurement, accreditation, and regular reviews and audits.

Key performance indicators and performance benchmarks are being developed during 2002-2003 to enhance performance management. As part of this work, comparative data on agency performance will be published, in line with the public hospital system data.

Concurrently, further development and implementation of client outcome measurement will occur over 2002-2003.

Section A 36 7.3.3 Technology and Infrastructure

A capital asset investment strategy and management plan for mental health services, including IT infrastructure, will be initiated in 2002-2003. The aim of this work is to align the availability and functional design of buildings and technological systems with information about future service requirements.

The developments described in this section will be undertaken during 2003-2003 with some developments continuing over a number of years. These service and infrastructure initiatives will contribute to the creation of a more robust and responsive mental health system for all Victorians.

Section A 37 8 Quality of Care

8.1 Quality Framework

2001-2002 Quality funding of $75.5 million has been restructured to better focus on hospital access and quality improvement. In 2002-2003 Quality Framework funding will total $43.8 million and $31.6 million will be subject to health services access performance as Hospital Demand Management bonus funding which is outlined in 2.1.1. The Quality Framework has been revised to focus on clinical governance, performance indicators, extending and maintaining best practice initiatives, and improving consumer involvement and information.

The Quality Framework includes a number of quality and safety programs and initiatives: accreditation; infection control; cleaning, clinical risk management, effective discharge and funding for programs for people from non-English speaking backgrounds.

Collaboration with health services will underpin the Quality Framework in 2002-2003. Funding will be provided to health services participating in quality initiatives and quality improvement activities as measured by performance in relation to targets and benchmarks. Funding will also be dependent on timely and accurate provision of data to enable health service performance monitoring and reporting of performance indicators as outlined in the Quality Framework Business Rules 2002-2003.

There will continue to be an expectation that health services will actively utilise quality performance data, maintain and implement internal clinical monitoring and review processes and implement evidence based health care across the continuum of patient care. Hospitals are also excepted to achieve and maintain accreditation.

8.2 Clinical Governance

Health Services and Hospital Boards are responsible for having systems within their institutions to assure and improve quality and to address any quality problems in a timely manner. The system of internal reporting to the Board needs to provide members with the information necessary to monitor performance and undertake action as necessary. Boards are responsible for ensuring that effective and accountable systems are in place to provide accurate data for external performance monitoring and reporting, both to the Department and to the community.

In 2002–2003 all Victorian hospitals and Metropolitan Health Services are required to: • Report regularly to their Board on safety and quality of care delivered and to take action to improve quality; • Report to the public on quality of care by means of an annual Quality of Care Report; • Report regularly to the Department on specified performance indicators as outlined in the Quality Framework Business Rules 2002–2003.

It is expected that health services will have in place clear mechanisms for reviewing quality data, in particular, all sentinel events and associated root cause analysis findings and actions, and routinely reported clinical indicators.

Section A 38 8.2.1 Victorian Quality Council

The Victorian Quality Council (VQC) was established in October 2001 to undertake a statewide role in fostering quality and safety in health services in Victoria. It aims to work with stakeholders to identify and act on opportunities for improvement.

Its Terms of Reference are available on the website http://qualitycouncil.health.vic.gov.au.

The VQC has undertaken a planning process, and developed a strategic plan which is available on its website. Working Groups have been set up to review current strategies and provide advice on falls prevention, pressure wounds, infection control, appropriateness of care, blood and blood product safety and appropriateness, and medication safety.

8.2.2 Consultative Councils

The Surgical Consultative Council was established in November 2001 to systematically review safety and quality issues in surgical care, in particular preventable morbidity and mortality. It is based on the successes of the Consultative Council on Anaesthetic Mortality and Morbidity (CCAMM), and the Consultative Council on Obstetric and Paediatric Mortality and Morbidity (CCOPMM) which have reviewed cases for over twenty-five years, and provided reports to the system. A Physicians’ Consultative Council will be established in 2002-2003.

8.3 Performance Reporting

During 2001-2002 a sentinel event reporting program was implemented by the Department as part of the Clinical Risk Management Strategy. A group of clinical indicators was reported by health services and a number of databases established. This program has been reviewed and refined to improve outcomes.

8.3.1 Sentinel Events

The 2001-2002 sentinel events list has been refined to comply with the agreed national set. It is expected that all hospitals and health services will report all such events, undertake a root cause analysis (RCA), which will be considered by the appropriate health service/hospital Quality Committee, and signed off by executive prior to submission to the Department. In addition to the national list, an “others” category has been included to encourage reporting and RCA for rare events as a result of system failure. A summary of the event and health service recommendations will be forwarded to the relevant Consultative Council who will advise both the health service of the outcome, and the Department.

8.3.2 Consultative Council Reporting

The establishment of the Surgical Consultative Council in 2001-2002, and the plans for the Physicians’ Consultative Council in 2002-2003 will enhance the vehicles for hospitals/health services and individual clinicians to report adverse events and complications to a group of expert peers. For example it is expected that the following events will be reported to the relevant Council: • Unexpected/unexplained serious neurological damage which is likely to be permanent following spinal procedures (anaesthetic/surgical/medical); and • Hypoxic brain damage, which may be attributable to anaesthesia, airway

Section A 39 management or ventilation techniques. 8.3.3 Clinical Indicators

The 2002-2003 Clinical Indicator Program will focus on progressing the work already undertaken by the Department, Professional Colleges and hospitals in developing and trialling clinical indicators to support a comprehensive system of quality monitoring, analysis and action. The Department will continue to collect clinical indicators to provide benchmarking opportunities and statewide comparisons for Metropolitan Health Services and public hospitals. In addition, it is expected that hospitals will routinely review their own clinical indicators for data trends that may require action. Clinical indicators collected by the Department will also be reported to the Victorian Quality Council on a six monthly basis for trend analysis and review.

In 2002-2003 the Department will consult with clinicians and hospital personnel for advice and assistance in the selection, development and piloting of new indicators in key clinical areas.

Work will be undertaken to develop further indicators relevant to the rural sector and to build on the data being sourced from databases in Intensive Care, Vascular Surgery and cardiothoracic surgery.

A protected web site will be established allowing hospitals to enter the clinical indicator data required by the Department. This website will also provide information and reporting proformas on the indicator program, and will be progressively improved to develop a common platform for collecting and reporting clinical indicators.

It is expected that health services will report indicators to their appropriate Quality Committee and report to the Victorian Quality Council on a six monthly basis (definitions and details of reporting are in the Quality Framework Business Rules 2002-2003).

8.3.4 Clinical Risk Management Strategy

The Clinical Risk Management Program aims to reduce the incidence and impact of adverse patient events through a series of measures aimed at identifying system errors which contribute to adverse events, enhancing structures and processes that support treatment and care of patients, and improving communication with patients and families when unexpected events occur.

The components of the Clinical Risk Management Program are: • Limited Adverse Occurrence Screening (LAOS) and incident reporting (see Quality Framework Business Rules 2002–2003 for reporting requirements). • Sentinel event reporting and root cause analysis (see Appendix 5 for details). As a result of the first year of collection, changes have been made to the list of sentinel events to reflect a more precise focus, and to be consistent with the national list agreed by the Australian Council for Quality and Safety in Health Care. • Responding to the Coroner’s findings and recommendations in relation to deaths occurring in hospitals. • Improving communication with patients and families following adverse patient events, in accordance with national standards being developed by the Australian Council for Safety and Quality in Health Care and which will be circulated to all Victorian Health Services when available.

Section A 40 In May 2002 the Department of Epidemiology & Preventive Medicine, Monash University, commenced an education program in a systems approach to the management of preventable adverse patient events.

Funding will continue to be provided to health services, hospitals and rural divisions of general practice throughout the State to implement, and further consolidate existing clinical risk management programs.

8.4 Best Practice

8.4.1 Evidence-Based Practice

Support will continue to be provided in 2002-2003 to centres to assist health services to implement evidence into clinical and hospital practices. These centres include: • Clinical Epidemiology and Health Service Evaluation Unit: www.mh.org.au/clinicalepidemiology/ • Centre for Clinical Effectiveness: http://www.med.monash.edu.au/healthservices/cce • Cochrane Collaboration Consumer and Communication Review Group based at La Trobe University: http://www.cochrane.org • Victorian Centre for Ambulatory Care Innovation (VCACI): http://vcaci.health.vic.gov.au/ • National Ageing Research Institute (NARI): http://www.nari.unimelb.edu.au/ 8.4.2 Quality Improvement Funding Program

In 2002-2003, $2.2 million will be allocated through the Quality Improvement Funding Program for projects approved in previous funding rounds for periods of one to three years’ duration. The projects aim to improve the quality and safety of practices in hospitals and sub-acute facilities through the application of research evidence into systems and practice change.

Of the forty-three currently funded projects, the majority address the six priority areas of the Victorian Quality Council.

During 2002-2003, the Quality Improvement Funding (QIF) program will focus on activities that will inform future policy development in improving healthcare practices in health services and sub-acute facilities across the whole of the state: • An evaluation of the overall QIF program & individual projects funded under QIF. This review will provide direction for policy development and inform possible dissemination of successful healthcare guidelines and practices across the state. • A series of workshops will be organised for project members and other interested parties that will encourage and facilitate sharing knowledge across health services and facilities. Projects will be expected to contribute to these workshops. • A conference to be held in 2003 to showcase and promote the QIF projects, and to celebrate the achievements of the individual project teams involved. The conference will provide health services and sub-acute facilities with a forum to network and promote successes and positive outcomes.

Section A 41 8.4.3 Breakthrough Projects

Victoria is leading Australia in adapting the Institute for Healthcare Improvement (IHI) Breakthrough Collaborative methodology to improve the systematic approach to delivery of health care services. The Breakthrough methodology brings clinical teams together to work on common aims and to adapt and implement existing knowledge to improve patient care.

The Victorian Emergency Department Breakthrough Collaborative undertaken in 2000-2001 was a first in Australia. The success of this Collaborative succeeded in reducing clinical cycle times, operational cycle times and improving patient satisfaction. The National Institute of Clinical Studies has extended this project to fifty-one emergency departments across Australia.

In 2002, the Department is supporting two further Breakthrough Collaboratives, in adult intensive care and in the flow of patients from acute to sub-acute care.

The Intensive Care Breakthrough Collaborative involves fifteen Victorian and three South Australian intensive care teams aiming to improve the timely delivery of appropriate, safe patient care whilst increasing family and staff satisfaction.

The Acute to Sub-Acute Patient Flow Breakthrough Collaborative involves twenty-eight health service teams aiming to improve the transfer of care from acute hospitals to sub acute care facilities.

A Collaborative to improve the safe and appropriate use of blood and blood products is planned for 2003.

8.4.4 Designing Care

Launched in March 2001, Designing Care is an eighteen month innovative program aiming to improve health care delivery and continually improve patient’s experience of the Victorian health care system. It is the first Victorian program to target health and ambulance services’ process redesign, and to actively involve multi-disciplinary teams and consumers in improving processes across the whole health system. The program has funded fifty-three process redesign projects in twenty-nine health and ambulance services across the Victorian health care system. The projects include improving the process of care for older patients, improving access to care and improving the safety of patient care. The program has provided training for project teams to increase the capability in health services to continually improve health care processes.

For further information see: http://designingcare.health.vic.gov.au

8.4.5 Infection Control Initiatives

Effective prevention, monitoring and control of infection are an integral part of the day-to-day quality and safety operations of any health service.

Funding of $6 million will continue to be provided to Victorian health services and hospitals for the implementation of their infection control strategic management plans; for infection control infrastructure and equipment to ensure compliance with key Australian Standards and Infection Control Guidelines; and for operational support. For metropolitan, rural and regional health services, this funding has been included in the Quality Framework funding.

Health services and hospitals will be required to submit a progress implementation report as detailed in the Quality Framework Business Rules 2002-2003. This report should cover each of the five key priority areas contained in the strategic management Plan: management commitment,

Section A 42 leadership and accountability; monitoring infection control and reducing infection rates; prevention of adverse events; protecting health care workers and visitors; and surveillance.

Infection Control Re-Survey

The Department will report on the 2001 Infection Control Re-Survey in September 2002. The aim of the re-survey is to evaluate the effectiveness of current infection control programs, policies and procedures in all acute Victorian public hospitals (and multipurpose centres), and to allow comparisons with key findings of the initial survey conducted in 1996-1997. Individual health service survey reports will inform health services of specific strategies that will allow continuous improvement of their programs.

During 2002-2003, there will be consultation with the sector to enable this approach to be extended to sub-acute services.

Victorian Nosocomial Infection Surveillance Centre

In 2001-2002 the Department established a Coordinating Centre to provide advice and support for the Victorian Nosocomial Infection Surveillance System (VICNISS). The Centre will receive data and report on public hospital infection rates for all hospitals with more than one hundred beds. The system will initially be piloted in ten hospitals commencing in August 2002, using NISS definitions. Benchmarked, risk adjusted, aggregated data (for all hospitals with more than one hundred beds) will be available within two years of the Centre’s inception and be released within three years. This will provide the first reliable and meaningful information about Victorian hospital infection rates. A surveillance system for smaller hospitals will be developed and piloted during the first two years of the Centre’s operation.

Improved Cleaning Standards

The Cleaning Standards for Victorian Public Hospitals have been distributed to all hospitals and will be reviewed in 2002. These are mandatory for public hospitals. $3 million will continue to be distributed to health services and hospitals across the State for ongoing monitoring of cleaning standards. For metropolitan, rural and regional health services this funding has been included in the Quality Framework funding. All acute and sub-acute health services and hospitals are required to undertake regular audits of cleaning standards outcomes. This includes external audits as outlined in the Cleaning Standards for Victorian Public Hospitals. All acute and sub-acute health services and hospitals will be required to submit cleaning standards performance indicator data as detailed in the Quality Framework Business Rules 2002-2003.

8.5 Consumer Involvement and Information

8.5.1 Reporting to the Community on Quality of Care

Health Service and Hospital Boards are required to report annually to their communities on the quality of care delivered within their institutions. The annual Quality of Care Report for the 2002-2003 year should be available to the Department in draft form for rural health services submitting reports for the first time, by 31 August 2002 for awards assessment and must be published by October 2002, although it is expected that metropolitan health services, regional and rural hospitals will aim to publish these reports earlier in the year to coincide with publication of their general annual report.

Section A 43 The reports should provide the results and outcomes of quality monitoring and quality improvement initiatives. Relevant performance indicators and other information on each of the key areas within the Quality Framework should be included. All performance indicators should be accompanied by a commentary, understandable to a lay reader, which explains what the indicator measures, how any figures should be interpreted, and how the indicator is used by the health service. Information must be published in a form that protects patient confidentiality. Clinicians, consumers and community groups should be involved in the process of developing appropriate content and presentation of information within the reports.

In late 2002, the Minister will again present Public Reporting Awards for the best annual report in three categories based on the size of the organisation. The groups will be: metropolitan and large regional health services and B and C rural hospitals.

Guidelines are available at http://www.dhs.vic.gov.au/ahs/quality/effect.htm and mandatory areas for reporting will be notified in January 2003.

8.5.2 Patient Experience

The Patient Satisfaction Monitor will continue in 2002-2003.

Each hospital participating in the survey will receive reports that provide survey results for their hospital benchmarked against other hospitals in the same category. All data is risk adjusted for age, overnight/same day status and public/private status. Category A/B/C hospitals will receive reports 6 monthly and Category D/E/F and MPS annually.

Hospitals will be required to report annually on what action has been taken in response to the results of the Monitor, in particular, whether the result enabled hospitals to identify trends in particular areas of service provision and to implement strategies to improve the quality of care and services provided in their hospital.

8.5.3 Patient Charter

The Public Hospital Patient Charter launched by the Minister in June 2002, provides a clear set of principles on the rights and responsibilities of patients in public hospitals. The principles of the Charter seek to promote a partnership between the patient and health service staff.

All hospitals are expected to promote patients’ rights and responsibilities, inclusive of the statewide principles. Health Services and public hospitals are required to adopt the principles of the Charter, where appropriate, into their own patient information and documentation as part of the Board’s clinical governance framework.

An extensive range of resources are available to hospitals to assist with the implementation of the Charter including a poster, a pamphlet in English, fact sheets in English and sixteen community languages and a comprehensive web site.

The Public Hospital Patient Charter and all the resources are available on the patient charter website: http://patientcharter.health.vic.gov.au/

8.5.4 Metropolitan Health Services Community Advisory Committees

Health services are required to continue to work with their Community Advisory Committees to ensure that consumer and community participation is integrated in service development and quality improvement planning and activities at all levels of their health service and in strategic planning and priority setting for the future.

Section A 44 In 2002-2003, Metropolitan Health Services Boards will need to revise their strategic Community Participation Plans. These plans should outline the role of the Community Advisory Committee, Health Service Board and Executive Management in ensuring that consumers and community members are involved in service development and quality improvement within the health service. It should provide information on how the Metropolitan Health Services will communicate with and integrate the views of their consumers and communities into all levels of governance, planning and service delivery in their health services. The plans should include some form of measurement of whether policies, processes and actions that have been identified as necessary for effective participation are in place and useful. Metropolitan Health Services Boards should also consider how to integrate and support the work of Community Advisory Committees, both financially and administratively.

Metropolitan Health Services Boards should seek the views of their Community Advisory Committees when compiling their Annual Quality of Care Reports, and when designing their dissemination strategy, and evaluating the 2001-2002 Report.

Ongoing training and support for Health Services and Community Advisory Committees will be funded by the Department to assist with the implementation of Community Advisory Committees, in accordance with the non-statutory guidelines published by the Department in November 2000. The form that this training and support will take will be decided in consultation with Health Services.

8.5.5 Services for people from non-English speaking backgrounds

The Victorian Government recognises the importance of ensuring that Victorians from culturally and linguistically diverse backgrounds have full and fair access to health services. This requires the provision of quality interpreting services and greater sensitivity to the specific needs in the delivery of services.

In 2002-2003, a total of $4 million will be provided to health services through Quality Framework funding to assist provision of culturally and linguistically diverse services.

The Department has provided funding to the Centre for Ethnicity and Health (CEH) for a two- year period, which is undertaking a review, on behalf of the Department, on the provision of culturally appropriate services in hospitals. It will develop and recommend strategies to improve the capacity and infrastructure of services to cultural and linguistically diverse patients in the acute health sector.

A review of the way funding is provided to hospitals for culturally and linguistically diverse services will be conducted during 2002-2003, in consultation with hospitals, CEH, and other Departmental Divisions. In addition, work will be undertaken to develop a minimum data set to be used by all hospitals to collect data about culturally and linguistically diverse consumer needs and services. Once this data set is established, Metropolitan Health Services and public hospitals will be required to report annually to the Department.

Health services should continue to report on their language services and culturally appropriate service provision in their Quality of Care reports.

8.5.6 Primary Care and Population Health Advisory Committees

In 2002-2003 Primary Care and Population Health Advisory Committees to Metropolitan Health Services Boards will be working to enhance hospital integration with the primary care service system and to support hospital engagement in population health initiatives. The aim is to

Section A 45 improve the experiences of consumers using acute and primary care services, as well as improving the health and wellbeing of the broader community.

To achieve this, the Primary Care and Population Health Advisory Committees should support initiatives occurring to improve the primary care – acute care interface and have a key role in facilitating the coordination of these initiatives to build on each other.

Metropolitan Health Services Boards should be informed by the work of the Primary Care and Population Health Advisory Committee in developing their Health Services Strategic Plan and should report on the work of the committee in this plan.

The Department will work with Metropolitan Health Services to review the need for and nature of guidelines for these committees as well as defining their links with Community Advisory Committees.

8.5.7 Patient Complaints

Complaints made by consumers of health services are an important source of information that, with continued monitoring and evaluation, can yield information not otherwise available.

A project to develop and implement best practice guidelines for complaint handling in hospitals and promote effective complaints management processes and reporting by hospitals will be funded in 2002-2003. The project is auspiced by the Health Services Review Council and will undertake an extensive consultative process with relevant hospital personnel.

Regulations are being developed pursuant to the Health Services (Conciliation & Review) Amendment Act 2001. The Regulations, to be implemented by late 2002-2003, will require all public hospitals to report a minimum dataset of complaint information to the Health Services Comissions on a regular basis.

8.5.8 Provision of Consumer Information

Informing consumers and involving them in decisions about their care is integral to good quality health care, and should be a high priority for all health services. Policies promoting patient involvement in treatment decision making need to be flexible enough to ensure that they are appropriate across the range of contexts in which health care decisions are made and acceptable to people with diverse preferences and abilities. During 2002-2003 the Department will fund work, building on the assessing the quality of consumer Information Project undertaken in 2000- 2001, to identify structures and processes that support the timely and effective provision of quality health information for consumers.

Section A 46 9 Service Development

9.1 Breast Care

The Breast Disease Service Redevelopment Strategy (Victorian Government in 1999) was developed by the Department and the Breast Care Implementation Advisory Committee to provide a framework to improve breast care services in Victoria.

The Strategy aims to achieve a sustainable integrated statewide system, which delivers equity of access to the highest quality breast services for all Victorians, and which meets the needs of women with breast cancer and benign disease at all stages of their care. The overall direction involves recognition of breast disease as an area requiring a level of specialisation, implementation of best practice, improving access to services, particularly in rural areas, and facilitating a coordinated approach to service delivery.

A dedicated unit, the BreastCare Victoria Coordination Unit, oversees the implementation, monitoring and evaluation of the Strategy.

9.1.1 Breast Services Enhancement Program

The Breast Services Enhancement Program (BSEP) is a quality improvement initiative that funds nine demonstration models to develop, trial and evaluate best practice models of service provision. The Program commenced in 1999 and is currently funded until December 2003. Four consortia of public and private providers in metropolitan areas, and a regionally coordinated collaboration of service providers in each of the five rural regions are participating in the program.

A broad range of strategies has been successfully implemented, including the establishment of new multi-disciplinary review processes in both metropolitan and rural settings, the piloting of breast care nurse coordinators, the development of clinical pathways and treatment protocols, and the development of mechanisms to enhance information, communication and continuity of care.

In 2002-2003 an evaluation will be undertaken of best practice initiatives and the development of ways in which the Department and local services can work collaboratively to ensure the long- term sustainability of current achievements.

In 2002-2003 an additional $1.5 million will be allocated to continuing the Breast Services Enhancement Program, and to implementing a range of projects, including: • service development to inform the statewide performance indicator project, particularly in the areas of protocol development, information provision and linkages with general practitioners; • piloting performance indicators and associated quality improvement mechanisms; • evaluating multidisciplinary care strategies, and developing protocols and criteria for assessment; • further development of the Breast Care Nurse role, in both community and acute settings; • development and evaluation of strategies to address psychosocial issues, including clinical depression;

Section A 47 • development of an information and support service for women diagnosed with benign breast disease; and • trialling successful initiatives in other areas and consolidating initiatives common to a number of BSEP areas. 9.1.2 Strengthening Support for Women with Breast Cancer

BreastCare Victoria is working collaboratively with the Commonwealth Government to improve supportive care for rural and remote women diagnosed with breast cancer. The Strengthening Support for Women with Breast Cancer (SSWBC) Program has an emphasis on developing sustainable improvements for women living in rural and remote areas. Victoria has been funded $530, 000 over a period of four years (until 2004), and is implementing a program with a primary focus on e-health. Initiatives developed for the SSWBC program build on current strategies being implemented in rural and regional Victoria through the Breast Services Enhancement Program.

9.2 Trauma

The Victorian state trauma system covers three Major Trauma Services (MTSs) – these are the Alfred Hospital, the Royal Melbourne Hospital and the Royal Children’s Hospital - and is supported by two levels of trauma and injury treatment services in metropolitan Melbourne and three levels in regional Victoria.

It is overseen by the State Trauma Committee (STC) which reports to the Ministerial Emergency and Critical Care Committee.

Five Regional Consultative Committees on Emergency and Critical Care Services, each supported by a Regional Trauma Coordinator, manage the development of the emergency, critical care and trauma systems in regional Victoria.

9.2.1 Funding Initiatives

WIES utilised in the treatment of Transport Accident Commission (TAC) patients is uncapped.

Separate payment arrangements will be made with the three MTSs following negotiations with the TAC regarding the composition of the funding streams for the financial year. Further guidelines for Trauma Appropriateness Payments will be issued during the year.

9.2.2 Service Initiatives

A dedicated trauma telephone service has been established for the provision of clinical advice, transfer and referral assistance.

The Department and the STC will continue during 2002-2003 to enhance work already undertaken in monitoring and evaluation of the trauma system, the coordination of targeted trauma education and trauma system development in regional Victoria.

Section A 48 9.3 Maternity Services

9.3.1 Provision of Maternity Services

Safe, effective, consumer-focused maternity care continues to be a high priority of the Government. The momentum will be maintained with selected initiatives, with the current method of distribution of the recurrent component of the funding maintained for a further twelve months, while additional costing and modelling work is undertaken on an episode of care, extended DRG funding model.

The 2002-2003 maternity services funding will total $14.3 million, of which $0.55 million will be allocated to specific statewide initiatives.

9.3.2 Statewide Initiatives for 2002-2003

During 2002-2003: • Consultation and development work will commence on a statewide maternity care record incorporating the best features of existing records and linked to the Three Centres Consensus Antenatal Guidelines. The record will facilitate better integration of primary and acute services, rural, regional and tertiary health services, and assist consumers in decisions regarding their own care. • Support for implementation of evidence-based consensus antenatal guidelines beyond the three teaching hospitals will enable level 2 and level 1 hospitals to consider local implementation in collaboration with general practitioners, obstetricians and community midwives. • There will be further development and improvement of performance monitoring and maternity services information systems. • The Having A Baby in Victoria Website (http://maternity.health.vic.gov.au), which provides definitions and locations of models of care, will be developed. Work will continue to develop consumer information and decision tools, including small scale specific improvements for women without proficiency in English, with or without literacy skills in their own language. • Funding for the Koori Maternity Services Strategy will be extended to respond to the expanding needs in metropolitan and rural areas. Health services are expected to ensure that maternity care for Koori women is provided in collaboration with their community based carers in a manner that is sensitive and appropriate. • The second set of Maternity Services Performance Indicators, piloted in 2001-2002, will be included in reporting requirements as outlined in the Quality Framework Business Rules 2002-2003. Measuring Maternity Care II: A trial of Performance Indicators (Royal Women’s Hospital, 2002) will be launched early in 2002-2003.

Section A 49 10 Sub-Acute Services

10.1 Service Profile

Victoria’s sub-acute service system has both an inpatient and community focus on rehabilitation and clinical treatment. Sub-acute services comprise inpatient care in sub-acute facilities and in dedicated sub-acute units within acute hospitals, together with a range of specialist ambulatory care and home-based services.

Sub-acute care provides goal oriented (and in most instances, time-limited) interventions aimed at assessing and managing often complex conditions to maximise independence.

Timely access to high quality sub-acute care plays a critical role in the optimal flow of patients through the health system.

Sub-acute inpatient services include rehabilitation; geriatric evaluation and management (GEM); and palliative care. Non-acute/nursing home type care may also be delivered to patients who are awaiting longer-term placement either in residential care or home base settings. To optimise the appropriate use of limited sub-acute beds, Health Services need to ensure that good management and communication processes are in place across their entire system. Good internal processes and discharge planning and the use of programs such as Post Acute Care minimise the proportion of inpatient services being utilised by people who have already completed their acute and/or sub-acute episode of care. Another key element in facilitating appropriate patient care and resource management is working with general practitioners and community services in care planning.

Sub-acute ambulatory care services, which include specialist clinics, community rehabilitation centres, and some home-based therapy services, extend and complement the inpatient services. Specialist ambulatory services include forty-six community rehabilitation centres and specialist clinics for continence; falls and mobility; cognitive, dementia and memory; and pain management. A significant proportion of palliative care services are provided outside inpatient settings.

10.1.1 Policy Directions for Service Planning

During 2001-2002 the Department commissioned the “Sub-Acute Services Strategic Directions, Victoria” project to review the sub-acute system in Victoria and make recommendations for future service system development. The Department is considering these recommendations and will recommend a new policy directions framework. The key recommendations revolve around the central aim of increasing the responsiveness of the sub-acute service system to benefit patients and for anticipated growth in service demand.

10.1.2 Interaction of Acute and Sub Acute services for Older People

There is a strong correlation between age and demand for medical and hospital services. Currently 55 per cent of public hospital beddays are utilised by older people. The expansion of the sub-acute service system has enabled older people to be admitted directly to sub-acute care, or to be transferred to sub-acute care from either emergency departments or inpatient acute settings. Increasingly, the provision of sub-acute care is also instrumental in deferring entry to residential care for older people with chronic illness or severe disability.

Section A 50 While older people are significant users of sub-acute acute services, sub-acute services - in particular rehabilitation and palliative care - need to be accessible to people of all ages.

10.2 Funding of Sub-Acute Services: Inpatients

Over recent years the funding of sub-acute services has been moving towards output based funding where appropriate. This work will continue in 2002-2003 with: • a feasibility study to scope capacity to determine existing costs for GEM inpatients • the costing component of the interim care evaluation

Progress in sub-acute ambulatory funding model development work will continue in 2002-2003 with the further development of a new funding model for Community Rehabilitation Centres.

In 2001-2002 the new VicRehab funding model was fully implemented. Data to date shows that this model has been successful in all agencies and will continue in 2002-2003. An evaluation report will be provided in 2002-2003.

10.2.1 Rehabilitation Funding – Vic Rehab

In 2002-2003 funding for specialised designated sub-acute VicRehab units with twenty or more beds will continue on an inpatient episode basis in the following hospitals: • Austin and Repatriation Medical Centre • Latrobe Regional Hospital • Ballarat Health Services-Queen Elizabeth Centre • Mount Eliza Aged Care & R.S • Barwon Health-Grace McKellar • Melbourne Extended Care & Rehabilitation Service • Bendigo Health Care Group-Anne Caudle Campus • Peter James Centre • Bundoora Extended Care Centre • Royal Talbot Rehabilitation Centre • Caulfield General Medical Centre • St George’s Health Service • Goulburn Valley Health • St Vincent’s Hospital • Kingston Centre, including Hampton Rehabilitation • Sunshine Hospital. Hospital This model categorises Level 2 rehabilitation patients into sixteen groups according to clinical and functional levels (CRAFT). Categories cover the major clinical groupings in rehabilitation services (stroke/neurological, orthopaedic, cardiopulmonary, amputee, major head injury, spinal, burns and other rehabilitation). Given the statistical variability in episode length, amputee, major head injury, spinal and burns patients, these categories (Special Level 2) are funded on a per diem basis. For all other categories, payments are provided for weighted units, short stay patients (overnight stays from one to three days), and same day patients. Payments are also provided for Level 1 services (first post-acute rehabilitation episode for spinal, amputee and major head injury patients) on a per diem basis.

To minimise provider risk for smaller units, funding for designated sub-acute rehabilitation units with less than twenty beds is on a per diem basis. The Department provides a spreadsheet for use in calculating CRAFT Rehabilitation Weighted Units at http://casemix.health.vic.gov.au

Details of budgets and targets at the agency level are provided in Section A and in Section B – Conditions of Funding.

Section A 51 10.2.2 Sub-Acute Bedday Rates (non-CRAFT)

The bedday per diem rates for 2002-2003 are:

Table 16: Sub-Acute Bedday Rates, 2002-2003 Stream of Care Per Diem Rate 2002-2003 Rehabilitation Level 1 $470 Rehabilitation Level 2 $390 Geriatric Evaluation & Management $390 Geriatric Respite/Nursing Home Type $154 Inpatient Palliative Care - Metro $390 Inpatient Palliative Care - Rural $393 CRAFT Rehabilitation Weighted Unit $10,226 Bedday targets for 2002–2003 have been established for each stream of care and the summary is provided in Section B - Conditions of Funding. Targets are established for both DVA (estimates) and non-DVA services. Funding for DVA activity is uncapped while non-DVA activity is capped and cannot be substituted. Further details are provided in Section B - Conditions of Funding.

The rehabilitation bed day rates outlined above apply to those hospitals (i.e. less than twenty rehabilitation beds) that are not covered by the VicRehab CRAFT Funding system.

General rehabilitation services in acute hospitals continue to be funded through the DRG casemix funding arrangements.

10.3 Funding of Sub-Acute Services: In Home and Community

Sub-acute services must be responsive to needs of patients, carers and family, so a number of flexible funding arrangements have been established to meet needs in the community or at home.

The sub-acute ambulatory programs that are available in all regions include: • community rehabilitation centres; and • specialist sub-acute clinics (Falls and Mobility, continence, and CDAMS)

There are also a small number of specialist sub-acute pain management clinics.

In addition to these established programs, there are currently a number of smaller services and flexible funding arrangements that have developed in recent years. These include – unassigned GEM, continuum of care and various rehabilitation in the home or therapy in the home programs. During 2002-2003 these programs will be reviewed in consultation with the field as part of a new sub-acute ambulatory care service framework. Reporting arrangements for unassigned GEM, continuum of care and therapy in the home programs remain unchanged for 2002-2003.

Until the framework is in place, the Sub-Acute unit in the Metropolitan Health and Aged Care Services Division must be consulted about and approve any proposals to establish new sub- acute ambulatory services or convert inpatient services to ambulatory services.

Section A 52 10.3.1 Community Rehabilitation Clinics

The 2002–2003 budgets for Community Rehabilitation Centres (CRC) have been determined based on the 2001–2002 budget. Additional funds were made available to some metropolitan and rural CRC in the Hospital Demand Management Strategy. Service activity targets for 2002– 2003 are measured by ‘CRC place’. A place is considered to represent a full day place or a full day of treatment. A full day place may be utilised by more that one individual, depending on the operating style of the centre.

CRC places are calculated on the assumption that one full day client utilises one full day place, two sessional clients utilise one full day place and six single therapy clients utilise one full day place.

Throughput targets for DVA clients of CRCs were initially developed in 2001-2002 and have been reviewed for 2002-2003.

The Department is currently developing an episode based funding model for Ambulatory Rehabilitation that will be piloted for CRC’s. This needs to be supported by further collaborative work with the field to better define service practice in certain areas and establish costings.

10.3.2 Specialist Clinics

Sub-acute specialist clinics comprise: continence clinics, falls and mobility clinics, cognitive dementia and memory clinics and pain management clinics. They are funded by a block- funding grant or unit prices as determined at the commencement of each financial year (see Section B - Conditions of Funding).

10.4 Palliative Care Services

The primary objectives of the palliative care program in Victoria are to meet the needs of the individuals requiring palliation during the terminal phase of illness, and to provide support to the clients’ family members and carers while care is being provided and following death.

The palliative care services include inpatient services located in a health service or hospice environment, community-based palliative care services and a number of statewide services that provide specialised consultancy and other services. The consultancy services provide specialised advice related to palliative care in the areas of motor neurone disease, paediatrics and HIV/AIDS.

In 2002-2003, additional funding of $4 million will be allocated to palliative care, providing a total budget of $49 million. This will allow the expansion and improvement in palliative care services.

$17.75 million will be allocated for community based palliative care services in 2002-2003 including an additional $2.25 million.

$28.75 million will be allocated for inpatient services, including an additional $1.25 million (for 3,125 beddays) for health services where there are demand pressures. Allocations are based on expected beddays and health services or hospices will have funds recalled if significantly under used.

Section A 53 $2.9 million will be allocated to statewide services and activities, which include an increase of $0.25 million in 2002-2003.

There is also the facility to optimize flexibility through unassigned bed funds. See Section B – Conditions of Funding for details.

10.4.1 Range of Services

Inpatient palliative care services provide services within a hospital based or hospice environment to patients who are in the terminal phase of illness. Generally this is when active treatment for the patient’s diagnosed illness ceases.

Community based palliative care services provide a range of services to clients in their home and may include nursing, liaison with medical practitioners, counselling for the client and their family, other allied health services, complementary therapies such as massage, and co-ordination with other services. Services are also required to provide palliative care support to clients 24 hours a day, seven days a week.

Community based services are required to meet the Standards for Palliative Care Provision, Palliative Care Australia October 1999.

10.4.2 Data Collection and Reporting Requirements

As a requirement of the service agreements signed with the Department, all services are required to provide data to the Department during specific periods.

Inpatient services are required to provide data through the Victorian Admitted Episodes Dataset.

Community based palliative care services are required to provide data to the Department through the VicPCRS on a quarterly basis. Details are in Section B – Condition of Funding.

10.4.3 Future Directions

The Department will be reviewing various aspects of the program in 2002-2003. The focus will be on strengthening the relationships between the various components of the palliative care network, to provide services with a strong client focus in particular, the distribution and funding of services. To achieve this, the Department will work with palliative care services and other relevant stakeholders.

10.5 Interim Care

During 2001-2002 the Department supported pilot interim care projects in five Metropolitan Health Services. The target group for these projects are people who: • have completed their acute or sub-acute episode of care; • have been recently assessed by an Aged Care Assessment Service (ACAS) and recommended for high or low level aged residential care; and • are suitable for immediate placement in a residential care facility if a place were available.

Section A 54 While most people separating from interim care pilots are placed in long-term residential care, a proportion are ultimately able to be supported at home by other existing programs such as Commonwealth Community Care Packages or HACC Linkages.

These projects will continue in 2002-2003 with funding rates set at $269 per bed day. A formal evaluation of the Interim Care pilots is scheduled for completion in October 2002.

While the details of the service models utilised by the five metropolitan health services differ, all people participating in the interim care projects must have access to an appropriate mix of nursing, personal care and allied health care to maintain function to the extent possible.

Consideration can also be given to flexible use of available funding to enable people waiting for residential care to be managed either as an inpatient, or through appropriate care and accommodation services, or in cases where it is appropriate, by providing extra support services in a person’s home.

It is expected that people will access the flexible program funding for a limited period of time and that there is a flow of patients to either community or residential care.

Section A 55 11 Emergency Services and Non-Admitted Patients Funding

11.1 Non-Admitted Emergency Patient Funding

11.1.1 Non-Admitted Patient Emergency Services Grant

Funding for the non-admitted component of emergency departments has been provided on a block grant basis in recognition of the importance of availability of emergency services. Funding for these services overall is provided through a variety of sources including multi-day and same day WIES, the Training and Development Grant, the Hospital Demand Management Strategy, bonus funding in the Quality Fund and specific purpose grants.

During 2001-2002 work was undertaken to gain a better understanding of the factors that influence emergency department cost structures and to develop a new funding model. The results of the costing studies will be published in September 2002. The Emergency Services Categorisation and Funding Taskforce has considered various funding models in terms of their capacity to provide acceptable measures of emergency department availability and workload. It has been recognised that: • Availability operates at hospital and ED level. Hospital availability comprises services provided by the hospital but not necessarily by the Emergency Department (ED) that must be available to the ED on-call regardless of the actual level of activity. At the ED level, availability comprises the minimum level of staff and resources required to be able to treat complex emergency cases whether they arrive or not. • While ‘availability’ serves both admitted and non-admitted patients, the activity associated with admitted patients is costed and recompensed through WIES payments, based on cost weights, in which the actual costs of receiving and treating admitted patients through 24-hour emergency departments are diluted. This extra- cost component has been extremely difficult to isolate, as data quality issues and widely varying costing practices across hospitals present considerable barriers to costing emergency services accurately.

The Taskforce will continue its investigation into measures of activity and availability (including role delineation) in 2002-2003. Over the next five years it is also likely that work will progress on a national patient classification for patients in emergency departments.

As an interim step, the Taskforce has agreed that the funding formula for the non-admitted emergency services grant should be changed to more explicitly recognise actual workloads associated with non-admitted patients and the additional costs of a hospital providing a 24-hour ED service that are not provided in the WIES payment. The non-admitted patient component will be provided on the basis of non-admitted patient attendances weighted by triage category. The availability component will be distributed on the basis of each hospital’s share of the total number of multi-day WIES admitted through emergency departments. While it is accepted that this measure is only a proxy for availability, it is considered the best available indicator of a hospital’s ability to receive complex cases through its emergency department.

The interim model will be introduced over two years. In 2002-2003 compensatory grants will be paid and adjustments made to ameliorate the difference between the modelled distribution and the amount actually paid in 2001-2002 to each hospital for its non-admitted emergency services.

Section A 56 Funding will be a block grant based on general activity categories. Additional activity within the year will not lead to additional funding.

Appendix 6 sets out the 2001-2002 allocation and the allocation based on the interim funding model for each hospital which will total $132 million in 2002-2003. The former categorisation of E1 to E7 for emergency services no longer applies, as each service will be funded on an individual basis. In most cases the new model provides higher levels of funding to the former E2 hospitals.

11.2 Outpatients – Victorian Ambulatory Classification System

General and specialist services in outpatient and emergency departments play a key role in the health care system and represent a vital service and interface between inpatient and community care. The Victorian Ambulatory Classification System (VACS) covers all Group A hospitals, and Ballarat Health Services and the Bendigo Health Care Group. The total number of unweighted medical and surgical encounters for the calendar year was 1,022,704 (excluding DVA) plus 488,292 (excluding DVA) allied health occasions of service. In 2002-2003 the total outpatient budget for Victoria (excluding DVA) will be $423 million.

VACS targets including DVA targets and reporting details are given in Section A – Targets. Budgets are capped as outlined in Section A – Modelled Budgets. For 2002–2003, the VACS cost weights have again been determined on the basis of a ‘four year rolling average cost’, smoothing fluctuations in average cost, which have been noted in some VACS categories, and ensuring greater stability in the system.

The components of the non-admitted patient grant for 2002–2003 are outlined in Chapter 5 Summary of 2001–2002 Payment Rates. Further details on the development of VACS, the definition of the ‘encounter’ and the ambulatory funding model, including the base grant and teaching component, are outlined in the publication Victorian Ambulatory Classification and Funding System — VACS, September 1998 (http://www.dhs.vic.gov.au/ahs/vacs/index.htm).

The VACS Clinical Panel has evaluated all new and reviewed clinics notified by hospitals to the Department during 2001-2002. Hospital specific clinic schedules for 2002-2003 have been set and hospitals will be advised of changes to their individual clinic schedule by August 2002. The current process of notification of clinic changes will continue during 2002–2003. The closing date for notification of clinic changes, to be considered for the 2003–2004 funding year, is 26 March 2003. In 2002-2003, aspects of VACS will be reviewed. It is also anticipated that an audit will commence in the later part of the year.

11.3 Non-Admitted Patient Radiotherapy

Early in 2002 the Industry Finance Committee Radiotherapy Funding Working Group was established to address a number of funding matters, raised by the industry, around the funding of non-admitted patient radiotherapy services in Victoria. The first outcome of the review is a change in the funding model in a move towards achieving funding equality across providers. Unequal funding per unit of activity has existed due to historical arrangements by which some hospitals attracted additional payments from the Commonwealth. This has been corrected in 2002-2003 to provide the equity sought by the industry.

Section A 57 The funding model has been modified in two ways.

1. Agencies will retain 30 per cent of their total estimated private revenue, as provided during the review process. Previously, the targets were fixed at low historic levels that were not reflective of actual revenue, contributing to inequality of income.

2. Activity growth, up to a maximum target will be funded for all account types.

The Non-Admitted Patient Radiotherapy funding model will comprise:

a) A variable payment per WAU; b) An associated department cost payment c) A DVA premium (where applicable) d) A specified grant (for SXRT, DXRT, Brachytherapy, Stereotactic Radiosurgery and IMRT) e) A growth payment on targets set for each patient account type. This is to be funded at the full variable rate.

The prices per WAU and the Specified Grants are adjusted for CPI, awards and productivity savings.

Base targets for each provider have been set at the estimated 2002-2003 full year activity level. This has amounted to a 10 per cent increase in base targets. In addition, growth of up to 4 per cent for public and private patients will be funded. Data collection requirements are outlined in Section B - Conditions of Funding.

11.3.1 National Radiotherapy Single Machine Unit Trial

The National Radiotherapy Single Machine Unit Trial, that was agreed to by the Commonwealth Department of Health & Family Services and the Department during 1999-2000, aims to assess whether Single Machine Units can improve access to, and utilisation of radiotherapy services for Victorian rural patients, whilst maintaining standards of care which are clinically and socially acceptable. Until now, there have been no Radiotherapy services available locally in these areas.

The Bendigo Single Machine Unit, located at Bendigo hospital and operated by the Peter MacCallum Cancer Institute, commenced operating on 2 April 2002.

The Ballarat Single Machine Unit is located at the St John of God Hospital (Ballarat) site, and will be operated by the Austin & Repatriation Medical Centre. The unit commenced operating on 1 June 2002.

It is anticipated that the third Trial site at Latrobe Hospital will come into operation in 2003-2004.

11.3.2 Ballarat and Bendigo Radiotherapy

New recurrent funding has been provided for radiotherapy treatment at Bendigo Hospital ($1.4 million) and at Ballarat Hospital ($1.6 million).

Section A 58 12 Research/Training & Development

12.1 Research Funding

Victoria has the largest concentration of leading health and medical research institutes in Australia. Victoria’s universities and health and medical research institutes win 40 per cent of the national competitive medical research grants annually.

To consolidate Victoria’s position at the forefront of international medical research the Government is providing additional funding of $35 million over the next four years for operational infrastructure support for Victoria’s medical research institutes. Funding for 2002- 2003 will increase to $17 million and by 2005-2006 operational infrastructure funding support for institutes will reach $25 million, double the allocation for 2001-2002.

Further recurrent funding in excess of $2 million continues to be provided for Public Health and Health Services Research initiatives. In addition, $3 million per annum is provided for the Victorian Breast Cancer Research Consortium. This payment is part of $30 million allocated to the Consortium over ten years, commencing in 1997. The infrastructure funding to research institutes, the Breast Cancer Consortium and public health and health service research are administered by the Biomedical Health Research Section, Disease Control and Research Branch of the Department.

Capital funding for medical research institutes will continue to be considered on an annual basis as part of the Department’s overall capital program, in the context of the Government’s Science, Technology and Innovation initiative.

Research infrastructure grants are also provided to the major teaching hospitals as part of the Training and Development Grants and in excess of $15 million will be allocated in 2002-2003.

12.2 Training and Development

Training and Development Grants are paid to hospitals to recognise the additional costs of hospitals, which conduct teaching, training and research activities. Training and research activities are linked inextricably to clinical hospital services. The funding program also represents a compensatory payment for the greater case complexity of teaching hospitals.

A review of the Training and Development Grant commenced in February 2001. Appendix 7 outlines the issues and the major findings of the Review draft report. The identification of costs associated with patient complexity, clinical training and research is a long-standing, theoretical problem due to its interrelationship with patient care, and further consideration of the proposed complexity measure will be required. The formal conclusion of the Review will be considered by the Reference Group later this year for implementation in 2002-2003.

The Training and Development Grant funding provided to hospitals for 2002-2003 will see increases in both subsidised staff numbers and in some rates. The increased numbers of subsidised staff are in the following categories – graduate and postgraduate nurses, medical Postgraduate Year 1, medical radiation trainees, and medical laboratory scientists and entry level

Section A 59 allied health graduates in rural areas. The increases are being applied to staff categories currently receiving the lowest percentage subsidy.

Following finalisation of the Review, the Department will provide advice regarding the future directions for the Grant. As occurred in 2001-2002, funding will also be directed to a number of strategically significant workforce initiatives. These initiatives include: the Rural Clinical Schools, the Postgraduate Medical Council of Victoria, the Victorian Universities Rural Health Consortium, an expanded program of support for medical specialist trainees in rural areas, continuing education and mentoring for allied health professionals, support for overseas trained doctors working in the public hospital system who are in the process of completing the Australian Medical Council examination and nursing projects.

For 2002–2003, payments will continue to be made only for positions and staffing approved or otherwise recognised by the Department. Detailed definitions of the payment conditions for Training and Development Grants are included in Section B - Conditions of Funding.

Table 17: Training and Development Grant Payments, 2002–2003 Training and Development Grant Rate per EFT Medical Postgraduate Years 1, 2 and 3 $34,500 Accredited Registrars $34,500 Clinical Academic Staff $40,200 Grade 1 Registered Nurses $12,600 Postgraduate Certificate Nurses $ 7,600 Postgraduate Diploma Nurses $15,300 Postgraduate Midwifery Nurses $15,300 Midwifery Nurses $ 3,000 Pharmacy Trainees $24,700 Medical Radiation Interns $24,400 Medical Biophysics Trainees $13,800 Physiotherapists Grade 1, Year 2 $14,400 Occupational Therapists Grade 1, Year 2 $14,400 Speech Pathologists Grade 1, Year 2 $14,400 OT, SP & PT Grade 1, Year 3 (entry level, rural) $14,700 Medical Laboratory Scientists $11,900

12.2.1 Medical

The Grant provides subsidisation for pre-vocational positions for Postgraduate Years 1, 2 and 3, Registrar positions and Clinical Academic staff. Pending the outcomes of the Review, the number and distribution of positions funded under the Grant will generally remain the same as in 2001-2002. The number of Intern (Postgraduate Year 1) positions funded will continue to be based on the number of Victorian medical graduates seeking places in Victorian hospitals and included in the computer matching process administered by the Postgraduate Medical Council of Victoria, but additional positions have also been created to allow some other appointments including interstate graduates.

Pending the Review’s recommendations regarding the degree of importance of linkages between the funding, accreditation and processes for allocation of Postgraduate Year 2 (PGY2) positions, funding for the PGY2 positions in 2002-2003 will be distributed to positions included in the computer matching process and based on 2001-2002 numbers.

Section A 60 12.2.2 Nursing

This component of the Training and Development Grant covers Graduate Nurse Programs, Postgraduate Nurse Programs, Student Midwives, continuing nurse education and rural supplements. For Graduate Nurse Programs, Student Midwife and Postgraduate Programs, approval must be sought from the Department for any increase in numbers over and above approved numbers submitted at the start of the 2002 academic year.

In 2003, funding rates for Postgraduate training will differentiate between Postgraduate diplomas and Postgraduate certificates.

A supplement of $250 per nurse is available upon application to rural hospitals that offer specialist nursing courses in collaboration with a university to support costs incurred by nurses who must undertake a clinical placement a significant distance from the hospital where they are employed. Due to consistently low uptake the provision of this supplement is under review by the Nurse Policy Branch.

12.2.3 Allied Health

The Grant currently subsidises, to varying degrees depending on the professional group, positions filled by entry level allied health graduates, as well as providing a small amount of support for undergraduate placements. Undergraduate placements supported include audiology, dietetics, health information management, orthoptics, occupational therapy, pharmacy, physiotherapy, podiatry, prosthetics, radiation science, social work and speech pathology. The industry based learning scheme, which encompasses medical biophysics and medical laboratory sciences, continues as in previous years and is not included within the allied health undergraduate component. The total amount allocated will remain unchanged from 2001-2002.

Section A 61 13 Special Grants

In 2002–2003 specified grants will continue to be paid to compensate hospitals for services which do not fall neatly into inpatient or outpatient service arrangements, and for classes of hospital care which DRGs do not measure well. The following specified grants will be retained with some modifications in 2002–2003: • Heart and Liver Transplants; • Neonatal Intensive Care Unit (NICU); • Spinal Injuries; • Neonatal Cardiac Surgery; • Paediatric Cardiac Investigations; • Paediatric Weights; • Intensive Care Complexity (DRG A06Z); and • Cystic Fibrosis.

For many small hospitals annual variations in casemix and cost weights resulted in significant fluctuations in WIES Targets. This is an effect that a relatively small number of patients can have on hospitals with very low WIES numbers.

13.1 Continuous Positive Airways Pressure, Home Enteral Nutrition and the Victorian Artificial Limbs Programs

As in 2001-2002 funding for each of the Home Enteral Nutrition and Continuous Positive Airways Pressure programs will be provided as part of the VACS base grant which has been adjusted accordingly.

In 2001-2002 the previous agency budgets for the Victorian Artificial Limbs program were rolled into and added to individual agencies budgets. The effect of this policy change, which will be continued in 2002-2003, is to eliminate the caps on expenditure, enable the payment to be competitive to providers and to ensure that treatment priorities are determined at the clinical level.

Further details are given in Section B - Conditions of Funding.

13.2 Higher Payments for Aboriginal & Torres Strait Islander Patients

In 2002–2003, the WIES10 formula will continue to provide an additional payment for Aboriginal and Torres Strait Islander (ATSI) patients. All ATSI patients will be funded at 10 per cent higher than the usual WIES9 payment.

The introduction of additional funding provides an added incentive for hospitals to provide appropriate, high quality care and to ensure that these patients are identified in reporting to the VAED. The Department is committed to improving the recording of Aboriginality in its health data collections. In accordance with this commitment, the Department will monitor the accuracy

Section A 62 of recording Aboriginality in the VAED and any increases in the reporting of Aboriginal and Torres Strait Islander admissions following the provision of increased funding.

In 2001-2002, the number of ATSI patients comprised 0.75 per cent of total hospital admissions compared with 0.5 per cent in 2000-2001 and 0.64 per cent in 1998–1999.

13.3 Mechanical Ventilation Co-Payment

The mechanical ventilation co-payment was first introduced in 1996-1997 as a sound and clinically valid surrogate for patient severity. Payments were made based upon the number of days ventilated, provided that at least six hours of continuous ventilation were provided.

Mechanical ventilation co-payments were further extended in 2001-2002 to include a one-off payment of 0.6980 WIES to all patients eligible for a per diem payment. This additional payment was made to allow hospitals to run intensive care units at slightly lower occupancy levels than in 2000-2001, but was conditional on hospitals opening ICU beds.

The 2001-2002 mechanical ventilation co-payments will continue to apply for 2002-2003. There are: • 0.6980 WIES10 per patient, plus • 0.7729 WIES10 per eligible day

To be eligible for a co-payment a patient must: • have been ventilated for more than 6 hours (or 96 hours for DRG A06Z); • be admitted to a hospital with a recognised intensive care unit (ICU) for non-neonates or a recognised neonatal intensive care unit (NICU) for neonates; and • be allocated to a DRG which is eligible for the co-payment.

During 2001-2002 the co-payment rates were reviewed and found to be appropriate when compared to the daily ICU costs. However, given the extension of mechanical ventilation co- payments it was necessary to slightly reduce the weights of ICU DRGs to prevent double payment in the DRG weight and in the co-payment.

13.4 Colonoscopy Co-payment

It is becoming routine practice in some instances for patients to undergo both a gastroscope and an endoscope during the same theatre session. Such patients typically group to gastroscopy DRGs. However, uncomplicated gastroscope DRGs undertaking an additional colonoscopy, represent a significant additional cost. As a consequence, in 2002-2003 such patients will receive a WIES co-payment of 0.1765 WIES10 per episode.

Section A 63 13.5 Aortic Abdominal Aneurism (AAA) Stent Co-payment

In recent years the Department has provided additional assistance to hospitals for the provision of AAA stents through new technology grants. It is expected that these procedures are now regularly reported and costs allocated to patients.

Given the high costs of AAA stents and their relative frequency within two DRGs a co-payment of 3.1421 WIES10 will be made to patients with a ICD10 procedure code of 33116.00.

13.6 Atrial Septal Defect (ASD) Closure Devices Co- payment

In recent years the Department has provided additional assistance to hospitals for the provision of ASD closure devices through new technology grants. It is expected that these procedures are now regularly reported and costs allocated to patients.

Given the high costs of ASDs and their relative infrequency within the DRG a co-payment of 2.4713 WIES10 will be made to patients with a ICD10 procedure code of 38742.00.

13.7 Thalassaemia

Costing data has shown that thalassaemia cases require more resources than other patients within relevant DRGs. For 2002–2003 each thalassaemia case in DRGs Q61A, Q61B and Q61C will continue to receive a co-payment of 0.2648 WIES.

13.8 Victorian Maintenance Dialysis Program

During 2001-2002 the average number of patients receiving maintenance dialysis treatment in Victoria is estimated to have grown by nearly 7 per cent. Satellite dialysis patient numbers grew significantly more than In-Centre dialysis and Home Haemodialysis remained constant. Continuous Ambulatory Peritoneal Dialysis also grew, while Intermittent Peritoneal Dialysis fell slightly. Consideration will be given in the 2002-2003 to removing the latter treatment modality as it nears obsolescence.

Victorian maintenance dialysis services will continue to be funded under the two-tier payment model – comprising a WIES Payment for In-Centre and Satellite patients and a Program Grant for all treatment modalities.

The policy of funding In-centre and Satellite dialysis WIES to actual, introduced in 2001-2002, will be continued in 2002-2003. The policy removes WIES constraints enabling the funding to follow the patients so they may undertake ongoing dialysis treatments within reasonable distances from their home or workplace. Industry feedback indicates that this policy is achieving its objective.

Targets for each parent (and its satellite network) have been based on the number of patients last reported to the Agency Information Management System plus 4 per cent growth in average

Section A 64 number of patients. The impact is a 6 per cent increase in targets and an 8 per cent increase in the dialysis budget. All providers’ budgets will increase.

Section B – Conditions of Funding lists the per patient annual Program Grant amounts for each treatment modality and approximate WIES payments for In-centre and Satellite Patients.

Parents and satellites will continue to report to the Victorian Admitted Episodes Dataset (VAED) for In-Centre and Satellite services. Parent hospital report patient numbers in all modalities to the Agency Information Management System (AIMS).

13.9 Cystic Fibrosis

Cystic Fibrosis (CF) is a lifelong chronic illness that requires high levels of individual care on an outpatient and inpatient basis. There are three specialist providers of care in Victoria: Royal Children’s Hospital, Alfred Hospital, and Monash Medical Centre. The additional specified grant for allied health services at the Alfred, Royal Children’s Hospital and Monash Medical Centre, which was introduced for the 1999–2000 financial year, will be continued in 2002–2003. Payments will continue to be made on the basis of outpatient allied health activity levels and subject to the submission of quarterly activity reports.

Details are provided in Section B – Conditions of Funding.

Section A 65 14 Development of the Cost Weights and WIES

14.1 AR-DRG Version 4.2

The AR-DRG Version 4.2, the latest national grouper, will continue to be used in 2002-2003. However, during 2002-2003 Victoria will move to collecting hospital data using ICD10 Version 3. Cost weights have been calculated using Version 4.2 DRGs with data collected under ICD10 Version 2 standards. Consequently data collected in 2002-2003 will require mapping back to ICD10 Version 2 prior to grouping and WIES10 allocation.

14.2 Development of Cost Weights

The 2001-2002 cost study used for developing the 2002-2003 funding policy was conducted internally by the Department, rather than by external consultants, resulting in a much greater level of consultation with hospitals. Cost information relating to 2000-2001 was collected for inpatients, outpatients and rehabilitation patients. Data were predominately from large hospitals with clinical costing capabilities, although for the first time cost modelled data from ten small rural hospitals were also used to develop the 2002-2003 cost weights. During 2002-2003 the Department will continue to work with small hospitals that are undertaking costing studies. As the amount of information available from small hospitals increases the Department will examine the effect of hospital size DRGs.

Detailed costing information was made available to participating hospitals, members of the Victorian Advisory Committee on Casemix Data Integrity and Victorian (VACCDI) members of the Clinical Costing Standards Association of Australia (CCSAA) prior to the completion of the study. Comments based upon this information and results from an extensive statistical review of all DRGs resulted in a number of adjustments to the data supplied by hospitals, and in some cases re-supply of all data from individual hospitals. Draft weights were submitted to the Victorian Clinical Casemix Committee.

In order to facilitate increased clinical consultation and to allow for increased modelling of policy changes it is proposed that the 2002-2003 cost study will be conducted between September 2002 and November 2002, allowing an additional five months for consultation and analysis.

14.3 Calculation of Inlier Boundaries: Trim Points

To reduce the level of variation between WIES versions, WIES10 inlier boundaries were set at the 2001-2002 values (WIES9). This means that inlier boundaries have been largely unchanged since WIES8. The method of calculating inlier boundaries is described in Section C—Supplementary Information.

Section A 66 14.4 Calculation of Inlier Boundaries: Impact on costs

For most DRGs inlier boundaries are set at one third the average length of stay (low boundary) and three times the average length of stay (high boundary). However, for some complex DRGs boundaries are set at two thirds (low boundary) and one and a half times the average length of stay (high boundary). These revised boundaries enable high outlier payments to apply earlier in the hospital stay of long stay patients, thereby reducing the financial risk to hospitals associated with these patients. However, the revised boundaries can result in a much higher proportion of outliers, particularly high outliers. In such DRGs long stay, possibly high cost cases are excluded. This can reduce the weights so that the resulting loss in WIES is greater than the increased WIES through high outlier payments. To prevent this from occurring WIES were first calculated for all DRGs using inlier boundaries set at one third and three times the ALOS, and for specific DRGs, weights were adjusted, where boundary policy was found to inappropriately reduce WIES.

14.5 Same Day DRGs

DRGs that were categorised as same day DRGs last year will continue. Statistical review of the 2001-2002 cost data suggested that for a small number of DRGs the proportion of same day cases was a major source of variation in average inlier costs. Consequently the following DRGs are reclassified as same day DRGs for 2002-2003: • G08Z Abdominal, Umbilical & Oth Hernia Procs>0 • K60B Diabetes W/O Catastrophic or Severe CC • K62C Misc Metabolic Dis W/O Cat/Sev CC < 75 • L60B Renal Failure W Sev CC or >69 W/O Sev CC • L60C Renal Failure <70 W/O Catast/Severe CC • O61Z Postpartum & Post Abortion W/O O.R. Proc • P66D Neo 2000-2499G W/O Sign ORP W/O Problem • P67D Neonate>2499G W/O Sign ORP W/O Problem

Statistical analysis also suggested that G09Z Inguinal & Femoral Hernia Procedures >0 be made a same day DRG. However, the Victorian Clinical Casemix Committee advised that G09Z should not be change to a same day DRG as this could discourage the move to same day care.

For designated same day DRGs the same day weight is based on the actual average cost of same day patients rather than costs modelled from the inlier weight. The same day and one day DRGs are listed in Section C—Supplementary Information.

14.6 Calculation of Inlier Weights

As in previous years, the weights were calculated from the average costs of inliers. Trimming was undertaken according to the criteria used for the 2000–2001 Victorian Cost Weights Study. In calculating weights, the following additional adjustments were made: • The Victorian Cost Weight Study provided data for patients receiving acute care. In the few instances where there were no cases in AR-DRG4.2 within the 2001-2002 cost study, the weights were based on the costs reported for patients with similar DRGs, for

Section A 67 example the weight for V61A was set based on V61B; • The average costs of some DRGs were increased to adjust for prosthetic costs. The list of DRGs for which prosthesis adjustments are made was expanded to include all DRGs with a significant prosthesis contribution. Adjustments for prostheses are necessary because not all participating hospitals are able to allocate prostheses costs appropriately, resulting in an underweighting of DRG where prostheses are commonly used and an overweighting of other DRGs. Prosthesis adjustments were made available to the Victorian Clinical Casemix Committee and participating hospitals prior to setting of the 2002-2003 weights. Prosthesis costs were based upon either: a) Last year’s assumed price (eg cardiology where problems in the feeder systems for prosthesis in one hospital resulted in reductions in average prosthesis costs), or b) The greater of either the average cost for patients with a non-zero prosthesis cost or the median average hospital cost for non-zero cases and c) The estimated proportion of patients requiring a prosthesis. Last year’s policy of inflating prosthesis costs by 10 per cent to adjust for falls in the Australian dollar was continued for a second year. • As in earlier years a number of strategies were undertaken to increase the statistical reliability of the weights and to reduce the impact of unexplained cost variations. These included using multiple years data to calculate average costs and/or average lengths of stay for inlier boundary calculations and also increasing or decreasing specific DRG weights based on financial modelling; • Two years data were used to calculate average costs for the purposes of weight calculations where there were fewer than 150 inliers and the average inlier cost for 1999–2000 differed by more than 20 per cent from the 1998–1999 average cost. For a small number of DRGs three years data were used to calculate average costs. • Weights were adjusted to half the effect for adjacent DRGs: WIES10 differed by more than 10 per cent from WIES9 and where that difference represented at least $1 million (using WIES9 price); or where WIES10 differed by more than 20 per cent from WIES9 (and that difference represents at least $0.5 million (using WIES9 price). • For complicated craniotomy (DRGs B02A, B02B) the average cost from the 2000-2001 Cost Weight Study was increased by 20 per cent. • Six DRGs attracting specific co-payments were adjusted to prevent double payment (A06Z, F08A, F08B, F19Z, G42A, G42B). • A review of chemotherapy costs in the Cost Weight Study data demonstrated major inter-hospital variations in average costs. In consultation with the hospitals concerned the preference was to base a weight on minimum drug and staffing costs in specific hospitals and conduct a more extensive review during 2002-2003. The Department adopted this approach and calculated chemotherapy assuming minimum costs for drugs and medical care in each hospital. • All weights were subjected to rebasing to maintain statewide WIES equivalence between WIES versions. This was done by calculating both WIES9 and WIES10 on the same twelve months’ VAED dataset and then scaling all WIES10 weights by the ratio of total WIES9 to total WIES10. Agreed target WIES9 levels were adjusted by similar hospital specific indices to derive WIES10 targets. • In 2001-2002 multiple organ transplants were scaled up by 1.80 to maintain funding equivalence with other organ transplant DRGs as recommended by the Victorian Casemix Clinical Committee. This was not done for 2002-2003, where costs represented only about 50 per cent of heart or lung transplants, similar to length of

Section A 68 stay. Funding for A02Z will be reviewed during 2002-2003.

14.7 High Outliers

As the costs associated with prostheses, theatre and procedural room costs are usually incurred early in a patient’s stay, these costs are excluded when calculating high outlier WIES for DRGs with significant theatre and prosthesis costs. Details of the calculation of high outlier per diems are given in Section C—Supplementary Information.

With the exception of dialysis, DRGs paid under contractual arrangements and error DRGs high outlier were set with a minimum cost weight of 0.0949 WIES and a maximum of 0.3648 WIES.

14.8 Prostheses Adjustments

Historically, prostheses costs have been poorly allocated to patients within hospital information systems. In many cases, costs associated with prosthetic devices are recorded and allocated across all DRGs as operating room costs. Consequently, since WIES4, adjustments have been made to increase the reported average price for a number of DRGs where prosthesis costs were known to be significant. Data collected from the National Costing Study, Service Weight Study and data from two Victorian Hospitals were used as a basis for making these adjustments. Extra costs were partly balanced by reducing theatre costs across most surgical DRGs.

For 2002-2003 the methodology used to adjust prosthesis cost was similar to that used in 2001- 2002. This methodology is based on an estimate of the proportion of patients receiving a prosthesis and the average prosthesis cost for public patients with reported prosthesis costs in hospitals with appropriate prosthesis costing modules. The number of patients requiring a prostheses was typically estimated using the higher of: • the proportion of patients with non-zero prosthesis costs in the cost study data, or • the proportion of patients with a non-zero prosthesis cost of the median hospital.

Similarly the average prosthesis cost was calculated using the maximum of the average prosthesis cost for patients with a non-zero prosthesis cost or the results for the median hospital.

Exceptions to the general rules included: • AICD and Cochlear Implants where an assumed price was used • A number of cardiology DRGs were last year’s price was used, due to potential data anomalies in this year’s results.

During 2000-2001 hospitals had raised issues relating to the rapid increase in prostheses costs, in part due to large movements in the value Australian dollar. VACCDI members supplied the Department with document evidence of prostheses manufacture’s increasing prices by between five and twenty per cent. Consequently, the Department inflated prostheses costs by 10 per cent prior to calculating the 2001-2002 cost weights and continued this policy in 2002-2003.

Section A 69 14.9 Private Patient Adjustments

The Department assessed the average costs of the DRGs for public patients only not public and private patients. Where there was reliable evidence (as statistically defined by 85 per cent confidence levels) private patients would reduce the average DRG cost, the weight was based on public patients only.

Section A 70 15 Hospital Activity Data Standards and Quality

15.1 PRS2 and related monitoring systems

The core element of the hospital funding and activity monitoring systems are the data reporting and analysis functions of the hospitals and department. Since the 1980s a system known as the Patient Reporting System (PRS2) has been used to deliver the Victorian Admitted Episodes Dataset (VAED). These data contain the core set of clinical, demographic, administrative and financial data about every admitted patient episode occurring in Victorian hospitals. The accuracy of the VAED is critical as it is used for: • DRG classification and WIES construction; • Monitoring of hospital activity and funding against performance targets; • Service planning and coordination; • Epidemiology and clinical research; and • Performance benchmarking and evaluation.

Other data collections that are critical to hospital funding and monitoring of the system performance are the Victorian Emergency Minimum Dataset (VEMD) Elective Surgery Information System (ESIS) and the Victorian Ambulatory Classification System (VACS).

The annual reporting cycle for these collections is aimed at ensuring that they are kept relevant to monitoring performance against current operational priorities as well as providing up to date indicators of ongoing clinical activity trends.

Coding standards are applied by qualified health information managers in accordance with the relevant edition of the Australian Coding Standards. Reporting and coding staff are regularly updated on coding instructions produced by the Department and the National Centre for Classification in Health. Coding practices are subjected to regular internal audit and data quality software products developed by the National Centre for Classification in Health are utilised. To assist with this, the Department has purchased Statewide licences for both the Performance Indicators for Coding Quality (PICQ) and Australian Coding Benchmark Audit (ACBA) products.

Data quality is ensured by a series of edits and formal checks. Data are corrected by the hospital before transmission to Allegiance Systems and after data have been processed. Hospitals reconcile their data against reports produced by PRS/2. Hospitals correct and re-transmit records that have been rejected to ensure quality and integrity of the information on which their funding and activity monitoring is based. Transmission of monthly reports in accordance with the timelines specified in Section B - Conditions of Funding ensures that funding accurately reflects the activity of the hospital and variations from predicted activity levels and patterns is apparent while appropriate management responses can be taken.

To ensure currency, an annual review is conducted of definitions, codesets and input edits for PRS/2, detailed in the PRS/2 Manual. PRS/2 edits provide a backup to any edits that may exist in a hospital’s individual patient information system.

New hospitals or hospitals changing their software supplier are assisted in meeting data transmission standards by a special testing process before commencing or resuming live transmission to PRS/2. Edits are also conducted on aggregate data to identify data quality

Section A 71 issues and the results are fed back to the hospitals involved for explanation, confirmation and correction. If necessary input edits are newly specified or amended and further guidance on data policies and standards is provided.

The Victorian Advisory Committee on Casemix Data Integrity (VACCDI), which comprises representatives of hospitals, networks, Regional Offices, the Department, and the Victorian Healthcare Association, is responsible for reviewing and making recommendations regarding casemix data quality issues. VACCDI oversees the VAED audits which have been conducted on separations in Victorian public hospitals for 1993-1994 and 1995-1996 and annually from 1998-1999 onwards.

The Victorian ICD Coding Committee comprises expert coders and is responsible for answering coding queries. It liaises with hospitals, health information managers, clinical coders and VACCDI to provide advice on specific coding issues. The Committee works with the National Centre for Classification in Health in the ongoing development of the Australian coding system and standards.

A quarterly ICD Coding Newsletter provides information on clinical coding and data quality issues and coding advice to Victorian clinical coders. The HDSS Bulletin, provides advice on PRS2 data quality issues to agencies that contribute to the VAED (and also reports on other data quality issues that arise in collections). Much of the input for these reports come from issues raised by hospitals with the VAED helpdesk service, which operates by telephone and email.

15.2 Activity monitoring and standard reporting

Each month hospitals receive reconciliation statement from the PRS2 system that reports hospital throughput by month for admitted patients. This allows hospitals to quickly check their activity measures against their agreed WIES targets as registered by the Department’s monitoring systems.

Monthly reports provided to particular program areas assist in the monitoring of special areas of concern. These include quality framework indicators, emergency department activity, elective surgery access levels and various public health issues.

The PRS2 system also provides extracts of activity by episode for Department of Veterans Affairs and Transport Accident Commission so that funding from those sources can be acquitted on a regular basis according to the actual activity of hospitals.

Statistics and data on service utilisation by patients from other States and Territories are produced on a regular basis so that interstate-funding adjustments can be accessed as close as possible to the time services are provided. Analyses and consolidated activity data are also provided to a range of national data collections and research institutes on an annual and year to date basis.

These data collection systems and reporting functions form the basis for development of a more integrated and automated information and reporting system as the systems infrastructure capability is improved. In 2002/2003, hospitals will have the opportunity to further automate their reporting systems as the capability of the PRS2 and related systems is upgraded to receive generic messaging to standards such as HL7.

Section A 72 15.3 Victorian Admitted Episodes Dataset (VAED) Audit

The success and fairness of casemix funding is based on accurate and honest reporting of clinical information. Earlier VAED Audits (previously called Coding Audits) were conducted on 1993- 1994, 1995-1996, 1998-1999 and 1999-2000 data.

The 2000-2001 VAED Audit, divided into random, follow-up and supplementary components, involved re-coding by external auditors of clinical, administrative and demographic data items from just over 10,000 records selected from 65 hospitals. Results for the random component showed that 90.2 per cent of the audited episodes were allocated to the same AR-DRGs and that overall, hospitals’ original WIES8 values were about 0.9 per cent lower than the level achieved with the audited codes.

Most of the WIES8 differences are due to differences in AR-DRG. However differences in WIES8 can also occur because of differences in dates, mechanical ventilation hours and indigenous status. Importantly, assessment of those episodes resulting in a different WIES8 value indicated that they were evenly balanced between ‘overcodes’ (4.9 per cent) and ‘undercodes’ (5.9 per cent). These results compare more than favourably with the outcomes of previous Victorian studies, and recent audits conducted in other States, and substantiate the Department’s very positive view of the validity of coding in Victorian public hospitals.

Follow-up and supplementary audits were conducted in addition to the annual random audit. Follow-up audits were conducted where the 1999-2000 audit identified possible coding anomalies, that is where the hospital’s change in WIES8 exceeded plus or minus 2 per cent and/or the change in AR-DRGs exceeded 15 per cent. Supplementary audits were conducted where both the hospital’s 1998-1999 random and 1999-2000 follow-up audit results were outside the accepted parameters. The cost of supplementary audits was borne by the hospital.

The follow-up component of the 2000-2001 audit re-examined 1,830 separations from 4 sites, and the supplementary audit 700 separations from 7 sites. Results for the follow-up component showed that 84.0 per cent of the audited episodes were allocated to the same AR-DRGs and that overall, hospitals’ original WIES8 values were about 0.9 per cent higher than the level achieved with the audited codes.

Results for the supplementary component showed that 88.9 per cent of the audited episodes were allocated to the same AR-DRGs and that overall, hospitals’ original WIES8 values were about 0.7 per cent lower than the level achieved with the audited codes. Significantly the results for majority of hospitals participating in follow-up and supplementary audits indicated substantial improvement in coding accuracy, although a small number continue to be of concern.

The Department has commenced planning for the next round of VAED audits. Whilst in the first year there will be an emphasis on admitted episode issues (short stay admissions, care type changes, hospital in the home, mechanical ventilation, etc.), the audit will still contain random, follow-up and supplementary coding elements. It is planned to obtain statewide coding accuracy measures every second year.

Section A 73 Appendix 1 – Consultation and Liaison

The development of the proposals and processes outlined in this document have been undertaken with industry support and advice. The Department has had regular liaison with Metropolitan Health Services, country hospitals and the Victorian Healthcare Association on matters relating to casemix development. The AR-DRG weights have been refined after discussions with representatives of the Casemix Clinical Sub-Committee. Major consultative groups have included the following in addition to industry or specialty specific consultations: • The Ministerial Advisory Committee on Mental Health comprises members from clinical and consumer advocacy groups and carers, and provides advice to the Minister on mental health issues. • The Victorian Community Advisory Group on Mental Health (VICCAG) comprises representatives of consumers and carers and provides advice to the Department. • The Hospital Admission Risk Program (HARP) Reference Group brings together experts from across the continuum of care to provide advice and assist with implementation of preventive medicine initiatives targeted at avoiding emergency use of hospitals participating in the Hospital Demand Management Strategy. Professor John Funder is the chair of the Reference Group. • The Victorian Casemix Clinical Committee, chaired by Associate Professor John Wilson, has provided advice and support in the development of general policy initiatives, classification and implementation issues. • The Victorian Ambulatory Classification System (VACS) Clinical Panel chaired by Associate Professor Collin Russell, has provided advice and has overseen the assignment of hospital clinics. • The Emergency Services Categorisation and Funding Taskforce undertook a review of the non-admitted emergency services grant and its method of calculation. • The Rehabilitation Monitoring and Review Committee provided advice on the implementation of the new rehabilitation classification and funding system. • The Advisory Committee on Access to Elective Surgery, provides advice on elective surgery performance indicators and advises on public hospital waiting lists. • The Ministerial Emergency and Critical Care Committee, and its sub-committee the State Trauma Committee, provide advice to Government on critical care, acute emergency services and the state trauma system. The Private Hospital Review Committee is another sub-committee which advises on private hospital standards and the management of public patient overflow transfers from public hospitals to private hospitals. • The Industry Finance Committee provides a forum to discuss and resolve industry wide financial issues including directions for funding policy. Sub-groups were established during the year to examine private patient revenue and radiotherapy. • The Victorian Advisory Committee on Casemix Data Integrity examines data issues related to casemix funding and includes departmental and industry representation. • The Critical Care Interhospital Transfer Monitoring and Advisory Group assists in the ongoing development of the critical care interhospital transfer performance indicator. • A Reference Group for the Patient Satisfaction Monitor provides advice on the implementation of the project and ensure that it is managed in accordance with key objectives. • External assessors have provided expert advice and referees reports on projects and programs submitted for the Quality Improvement and Best Practice Program and projects funded as part of the quality improvement Funding for the Maternity Services Program. • The Neonatal Services Advisory Committee advises the Department on the development of neonatal services and comprises members from neonatal nursing and medical staff, rural and metropolitan hospitals. • An Intensive Care Advisory Committee advises on intensive care policy and issues affecting service availability. Appendix 2 – Activity Trends

Table 1 Activity Trends Victorian Public Hospitals 1999-2002 1999-2000 2000-2001 2001-2002 Metro Rural Metro Rural Metro Rural Total Public Hospital 707,713 334,122 724,431 341,141 753,158 349,283 Separations WIES Fundable Separations 656,774 320,753 675,153 327,779 703,329 334,649 Same day – Medical 246,887 83,857 267,339 92,703 292,391 102,519 Same day – Surgical 57,622 32,611 56,488 33,241 56,453 33,116 Same day – Other 38,465 26,349 39,533 27,145 39,701 27,456 Non–same day – Medical 209,051 129,953 210,555 127,834 214,583 125,160 Non–same day – Surgical 93,365 43,403 89,960 42,314 88,770 41,997 Non–same day – Other 11,384 4,580 11,278 4,542 11,433 4,401 WIES 9 539,692 229,397 538,548 229,959 553,873 232,098

Source: Victorian Admitted Episodes Dataset (VAED), Department of Human Services. Breakdown between Medical, Surgical & Other are WIES fundable separations only. Data for 2001-2002 based simply annualisation of data to February 2002. (17 April, 2002 download) Appendix 3 – Identified Savings

Appendix 4 – Mental Health Activities and Performance Measures

Table 1: Mental Health Output Performance Measures: Relationship Between Output Performance Measures and Agency Activities. Output & Activities Output Measure & Definition

Clinical Inpatient Care Quantity Adult Acute Separations (number)- refers to the number of clients discharged from Adult SECU mental health inpatient services Aged Acute CAMHS Acute Quality Forensic Acute Clients readmitted (unplanned) within 28 days (percent) – refers to Forensic SECU clients admitted to any Mental Health inpatient service within 28 days of Forensic Rehabilitation being discharged from any Mental Health inpatient service. Unplanned Specialist/Statewide Acute refers to there being no plan to readmit the client to a Mental Health inpatient service within those 28 days at the time of that discharge. The measure is a proportion of all direct inpatient admissions and excludes transfers from one inpatient service to another.

Clinical Community Care Quantity Ambulatory Continuing clients (number)- refers to “active” clients of clinical community CATT mental health services - that is registered clients who have had a registered CCT contact with a clinical community mental health service and those who are Integrated Care either resident in or move from mental health clinical community residential MSTS services. Primary Mental Health Dual Diagnosis Quality Consultation & Liaison Clinical inpatient clients who have contact with clinical community CAMHS Assessment, care service providers during the 7 days prior to admission (percent)– Treatment &Liaison refers to the percentage of clients with direct admissions to mental health Intensive Youth Support inpatient services who have had a registered contact with any mental health PGAT clinical community service in the seven days prior to admission as a Forensic Community proportion of all direct admissions. (Excludes transfers from one inpatient Specialist & Statewide service to another) The target for this performance measure is set at Community agency level. Residential CCUs Clinical inpatient clients who have contact with clinical community Sub Acute care service providers within 7 days of post-discharge (percent) - refers Psychogeriatric NH to the percentage of all clients with direct discharges from mental health Psychogeriatric Hostel inpatient services who have had a registered contact with any mental health clinical community service in the seven days following discharge as a proportion of all direct discharges. (Excludes transfers from one inpatient service to another) The target for this performance measure is set at agency level.

Psychiatric Disability Quantity Support Services Clients receiving disability support services (number) – refers to the Day Program And Other number clients of a PDSS who have received direct assistance from /or are Support participating in a PDSS service. Day Programs Planned Respite Quality Outreach Individual program plans completed in 2 months (percent) – refers to Home Based Outreach the percentage of individual program plans (IPP) completed in 2 months. An Supported Accommodation IPP is the agreed written result of an engagement between a participant of Residential a PDSS services and her/his key worker. It sets out what the participant Residential Rehabilitation wishes to achieve in the short, medium to long term, by participating in the PDSS.

Output & Activities Output Measure & Definition

Service System Capacity Quantity Development Number of clinical staff training hours (number) – refers to the total Carer Support hours that clinical staff receive training that enhance their work skills. Ethnic Consultants Training Quality Prevention& Promotion Clinical staff successfully completing courses (percent) – refers to the Consumer Participation percentage of all clinical staff employed who successfully complete training. Statewide Support Research/Academic Support Training course refers to courses which enhance skills relevant to the work Information Development Plan area and may be provided by an external agency or through a training Quality Incentive Strategy program by the agency where the person works. Productivity Investment Fund Minor Capital Rural Workforce

Table2: Activities by Clinical Inpatient Output Activity Activity Name Description Number 15012 Acute Care—Adult Acute inpatient units provide for the short-term assessment, treatment and management of mentally ill adults aged 16-64. The focus is on intervention designed to reduce symptoms and promote recovery from mental illness. 15014 Secure Extended Long-term inpatient treatment and support for adults (aged 16-64) who Care—Adult have unremitting and severe symptoms, together with an associated significant disturbance in behaviour that inhibits the client’s capacity to live in the community. 15022 Acute Care—Aged Inpatient units providing short-term assessment and treatment for older people (aged 65 and over) with acute symptoms of mental illness who cannot safely be cared for within the community. 15031 Acute Care—Child & Inpatient units provide short-term psychiatric assessment and/or Adolescent treatment for children and adolescents with severe psychological disturbance who cannot be effectively assessed or treated in a less restrictive community based setting. 15041 Acute Care—Forensic Inpatient services for the assessment, diagnosis and treatment of the crisis and acute phases of mentally disturbed offenders referred by the courts, prison system, police and general mental health services. 15044 Secure Extended Inpatient services for the assessment, diagnosis and long term Care—Forensic treatment of mentally disturbed offenders referred by the courts, prison system, police and general mental health services. 15255 Short term Inpatient services for the assessment, diagnosis and treatment that Rehabilitation— supports rehabilitation of mentally disturbed offenders referred by the Forensic courts, prison system, police and general mental health services. 15030 Specialist/Statewide A range of specialist clinical inpatient mental health assessment, Services—Inpatient treatment or consultancy services which support specific and/or general target groups on a statewide, inter regional or specific catchment area basis. The focus of these inpatient services is on clinical service provision to people with a mental illness.

Table 3: Activities by Clinical Community Output Activity Activity Name Description Number 15005 Crisis Assessment 24 hour 7 days per week mobile crisis services which provide effective & Treatment assessment and treatment throughout the community to individuals in crisis due to a mental illness. This includes assessing the most effective and least restrictive client service options and screening all inpatient bed admissions. 15006 Community Care Community Care Units are purpose-built units of up to 20 beds located in Units community settings with 24 hour staffing. They are designed for adults who require longer-term support, on-site clinical services and individualized rehabilitation. 15007 Adult Continuing A range of community-based services that provide assessment, treatment Care and additional continuing care and case management for adults with a mental illness. 15008 Adult Integrated An integrated range of services that meet the client’s treatment needs, Community Service ensuring the efficient and effective provision of community based mental health services. 15009 Mobile Support & Mobile extended hours 7 day per week long-term intensive community Treatment Service support and treatment to adults with substantial and prolonged severe mental illness and associated disability. The service aims to reduce the likelihood of a client’s need for hospitalisation. 15251 Consultation & Consultation liaison psychiatry is the diagnosis, treatment and prevention Liaison of psychiatric morbidity among physically ill patients who are patients of an acute general hospital. This activity includes the provision of psychiatric assessment, consultation, liaison and education services to non- psychiatric health professionals and their clients/patients. 15252 Primary Mental Primary Mental Health Teams provide short-term treatment, and Health assessment services to people with high prevalence disorders, especially depression and anxiety. They also provide early intervention to young people with emerging psychosis and significant psychological disorders. Consultation and liaison, education and training (including crisis prevention) are provided to primary care providers. Clinical mental health services provide day-to-day management and clinical support to teams whilst the strategic management is carried out by a partnership of clinical services, Community Health services, divisions of General Practice and Psychiatric Disability Support Services. 15019 Psychogeriatric Mobile services which provide assessment, treatment, rehabilitation and Assessment & case management for people with a mental illness primarily over 65 years Treatment of age. 15049 Psychogeriatric Community residential services for aged clients who cannot be managed in Nursing Home the general residential system due to their level of persistent cognitive, Supplement emotional or behavioural disturbances. Services include long-term accommodation; on going assessment, treatment and care of residents, rehabilitation and respite care. 15250 Psychogeriatric Hostel-based community residential services for aged clients who cannot Hostel Supplement be managed in the general residential system due to their level of persistent cognitive, emotional or behavioural disturbances. Services include long-term accommodation, on going assessment, treatment and care of residents, lowlevel nursing home or hostel care, rehabilitation and respite care. 15026 Child & Adolescent A range of services including crisis assessment, case management, Assessment individual or group therapy, family therapy, parent support inter-agency Treatment & liaison and medication-based treatments for children and adolescents Liaison experiencing significant psychological distress and/or mental illness. Services support a timely response to referrals, including crises, delivered on an outreach basis where appropriate. 15028 Intensive Youth Provision of mobile intensive mental health case management and support Support and inter-agency liaison to adolescents who display substantial and prolonged psychological disturbance, have complex needs which may include challenging, at risk and suicidal behaviours, and who have been difficult to engage utilising less intensive treatment approaches. Activity Activity Name Description Number 15032 Forensic Provides community based assessment and multi-disciplinary treatment Community Care services to high-risk clients referred from a range of criminal justice Service agencies, mental health services and private practitioners. Also provides secondary consultations and specialist training to area mental health services. 15200 Specialist/Statewide A range of specialist clinical community mental health assessment, Services— treatment or consultancy services which support specific and/or general Community target groups on a statewide, inter regional or specific catchment area basis. The focus of these community services is on clinical service provision to people with a mental illness. 15056 Dual Diagnosis Dual Diagnosis Teams provide training, education and consultation to New Activity organizations delivering mental health or drug and alcohol services to improve the health outcomes of people with a mental illness and substance use issues 15057 Sub Acute 24-hour community based services (including bed based services and New Activity home support) which provide intensive treatment and support for clients who are: i) experiencing an escalation of symptoms that, if unmanaged, may lead to an inpatient admission, or ii) recovering from an acute illness but not yet well enough to return to their usual accommodation without significant additional support.

Table 4: Activities by Psychiatric Disability Support Output Activity Activity Name Description Number 15034 Home Based Home-based outreach support is a Psychiatric Disability Support Service Outreach Support providing support to clients living in their own homes, whether the home is a Rooming House, Supported Residential Service, or public or private housing. Agencies delivering housing and support programs are also included. 15035 Psycho Social Psychosocial Rehabilitation Day Programs are usually centre based Rehabilitation Day Psychiatric Disability Support Services which assist people with severe Program psychiatric disabilities improve their quality of life, participate to their maximum extent in social, recreational, educational and vocational activities and live successfully at an optimal level of independent functioning in the community. Programs also provide community access/community development and outreach support. 15036 Mutual Support/ Self Information and peer support to people with a mental illness and/or their Help/Information/ carers through shared experiences and coping strategies, providing Advocacy information and referral services, and promoting community awareness.

15037 Planned Respite Planned respite care is a Psychiatric Disability Support Service that assists in sustaining existing relationships between people with a mental illness and their families or carers. It provides a short-term substitute for usual care on an individual or group basis, depending on the needs of the consumer and carer. The range of service options includes residential, non-residential community activities, in-home, and individually tailored additional services. 15038 Residential Residential rehabilitation provides medium to long-term transitional Rehabilitation accommodation with rehabilitation support prior to a client living independently in his or her own accommodation. Support is provided at the facility and may or may not be available 24 hours a day or seven days a week.

15055 Supported On site support linked to long term permanent accommodation. Support Accommodation may or may not be available 24 hours a day or seven days a week' New Activity

Table 5: Activities by Service System Capacity Development Output Activity Activity Name Description Number 15054 Training All activities associated with training and staff development. 15262 Prevention & The development and delivery of mental health promotion and the Promotion prevention of mental health problems and disorders.

15263 Carer Support Carer support includes those services and programs which have as their primary client the carer of a person with a mental illness, and which do not fit into the components ‘planned respite’ or ‘mutual support self help’, such as the Carer Crisis Support Program. 15264 Consumer Participation of consumers which may include the employment of Participation consumer consultants to provide input into service planning, development and evaluation; establish consumer networks and become involved in consumer participation plans for area mental health services.

15265 Ethnic Consultants Strategies that increase the accessibility of mental health services for people from culturally and linguistically diverse backgrounds such as the development and implementation of strategic plans for the provision of culturally sensitive services, and the establishment and maintenance of partnerships with ethnic community groups and bilingual health workers. 15266 Statewide Support A range of services including systemic advocacy, peak body support or resourcing to the mental health service system on a statewide, interregional or specific purpose basis.

15267 Research/Academic All activities associated with academic appointments, research and Support evaluation. 15268 Annual Provisions/ This activity provides minor capital funds for Mental Health funded Minor Works organizations and includes vehicles, minor building modifications and repairs and furniture and equipment expenses. 15269 Information Coordination and implementation of information development initiatives Development Plan and priorities associated with the Second National Mental Health Plan. 15270 ICT Development (Note this activity is mainly for DHS internal use with some funding being provided to agencies only in specific notified circumstances.) This activity includes project funding committed annually by the Mental Health Branch and allocated to business systems projects targeted to meet business priorities. Also includes capital funding for the provision of computer hardware, networks and communications for use by both the Mental Health Branch and funded agencies. 15271 ICT Maintenance & (Note this activity is mainly for DHS internal use.) Support Recurrent funding for systems maintenance, support and licences. 15272 Quality Incentive Financial incentives for service quality in adult, aged persons and child Strategy and adolescent mental health services. The QIS includes measures of consumer and carer satisfaction, service responsiveness and timeliness of data reporting.

15273 Human Services (Note this activity is for use by Policy and Strategic Projects Division.) Productivity Financial assistance to DHS funded agencies and internal programs to Investment Fund develop and implement productivity improvement projects. Funding is provided for one off projects that will improve the efficiency of service delivery or improve the financial viability of human services organizations; or Feasibility funding to develop and pilot projects that aim to improve the efficiency of DHS funded service delivery. 15058 Rural Workforce Funding to be utilised to access specialist opinion, particularly on Aged and New Activity Child & Adolescent related issues and to access professional supervision for senior clinical staff all of which is unavailable within the area mental health service

Table 6: Performance reporting required in Schedule 3 of Service Agreements Performance Measure Type Data System Relevant Activities

Number of Inpatient Separations Output RAPID/VAED Adult Acute Adult SECU Aged Acute CAMHS Acute Forensic Acute Forensic SECU Forensic Rehabilitation Specialist/Statewide Acute Percent of clients readmitted Output RAPID/VAED Adult Acute (unplanned) within 28 days Adult SECU Aged Acute CAMHS Acute Forensic Acute Forensic SECU Forensic Rehabilitation Specialist/Statewide Acute Number of continuing clients Output RAPID CATT CCT Integrated Care MSTS Primary Mental Health Dual Diagnosis CAMHS Assessment, Treatment &Liaison Intensive Youth Support PGAT Forensic Community Specialist & Statewide Community CCUs Sub Acute Psychogeriatric NH Psychogeriatric Hostel Percent of clinical inpatient Output RAPID CATT clients who have contact with CCT clinical community care services Integrated Care during the 7 days prior to MSTS admission Primary Mental Health Dual Diagnosis NB: The target for this CAMHS Assessment, Treatment performance measure is set at &Liaison agency level. Although individual Intensive Youth Support activity targets will not be set for PGAT this measure, performance of Forensic Community each of the relevant activities will Specialist & Statewide Community contribute to the achievement of CCUs the agency target. Sub Acute Psychogeriatric NH Psychogeriatric Hostel Percent of clinical inpatient Output RAPID CATT clients who have contact with CCT clinical community care services Integrated Care within 7 days of discharge. MSTS Primary Mental Health NB: The target for this Dual Diagnosis performance measure is set at CAMHS Assessment, Treatment agency level. Although individual &Liaison activity targets will not be set for Intensive Youth Support this measure, performance of PGAT each of the relevant activities will Forensic Community contribute to the achievement of Specialist & Statewide Community the agency target. CCUs Sub Acute Psychogeriatric NH Psychogeriatric Hostel

Performance Measure Type Data System Relevant Activities

Number of clients receiving Output Minimum Data Day Programs PDSS services Set Planned Respite Home Based Outreach Supported Accommodation Residential Rehabilitation Number of PDSS clients Output Minimum Data Day Programs completing IPPs within 2 months Set Planned Respite Home Based Outreach Supported Accommodation Residential Rehabilitation Number of clinical staff training Output AIMS Adult Acute hours Adult SECU Aged Acute CAMHS Acute Forensic Acute Forensic SECU Forensic Rehabilitation Specialist/Statewide Acute CATT CCT Integrated Care MSTS Primary Mental Health Dual Diagnosis CAMHS Assessment, Treatment &Liaison Intensive Youth Support PGAT Forensic Community Specialist & Statewide Community CCUs Sub Acute Psychogeriatric NH Psychogeriatric Hostel Percent of clinical staff Output AIMS Adult Acute successfully completing training Adult SECU Aged Acute CAMHS Acute Forensic Acute Forensic SECU Forensic Rehabilitation Specialist/Statewide Acute CATT CCT Integrated Care MSTS Primary Mental Health Dual Diagnosis CAMHS Assessment, Treatment &Liaison Intensive Youth Support PGAT Forensic Community Specialist & Statewide Community CCUs Sub Acute Psychogeriatric NH Psychogeriatric Hostel

Performance Measure Type Data System Relevant Activities

Number of Occupied Bed Days Standard RAPID Adult Acute Adult SECU Aged Acute CAMHS Acute Forensic Acute Forensic SECU Forensic Rehabilitation Specialist/Statewide Acute CCUs Sub Acute Psychogeriatric NH Psychogeriatric Hostel Number of client contacts Standard RAPID CATT (registered and unregistered) CCT Integrated Care MSTS Primary Mental Health Dual Diagnosis CAMHS Assessment, Treatment &Liaison Intensive Youth Support PGAT Forensic Community Specialist & Statewide Community Number of Activities Standard Periodic Data Statewide Support Collection Research/Academic Number Of Carer Contacts Standard Periodic Data Carer Support Collection Number Of Contacts Standard Periodic Data Mutual Support Collection Number Of Respite Hours Standard Periodic Data Planned Respite Collection Hours of consumer participation Standard Periodic Data Consumer Participation Collection Number of Consumer Networks Standard Periodic Data Consumer participation Established Collection

Table 7: Service Standards and Guidelines Service Standards and Guidelines Activities Accreditation Standards and Outcomes for Residential Aged Psycho Geriatric Nursing Homes Care Services Psycho Geriatric Hostels Dementia—Behavioral Support Program, Program Psycho Geriatric Assessment and Treatment Statement, December 2000 DHS Fire Risk Management Standard Community Care Units All Inpatient Care All Secure Extended Care Psycho Geriatric Nursing Homes Psycho Geriatric Hostels Evaluation of Consumer Participation in Victoria’s Mental Consumer Participation Health Services, April 1999 General Adult Community Mental Health Services Guidelines Adult Continuing Care for Service Provision 1996 Adult Integrated Community Service Primary Mental Health ‘In Partnership’—Families, Other Carers and Public Mental Carer Support Health Services 1996 Mobile Support and Treatment Services Guidelines for Mobile Support and Treatment Service Provision 95/0003 Adult Integrated Community Service National Action Plan for Promotion, Prevention, Early Prevention and Promotion Intervention 2000 National Disability Service Standards All PDSS Activities National Standards for Mental Health Services December All Activities 1996 Psychiatric Crisis Assessment and Treatment Services Crisis Assessment and Treatment Guidelines for Service Provision 1994 Adult Integrated Community Service Psychiatric Disability Support Services: Service All PDSS Activities Specifications 1998 Relevant Authorities Fire Standard Residential Rehabilitation Standards for Psychiatric Disability Support Services, All PDSS Activities November 2000 Veterans Hospital Circular 17/1998 Aged Acute Care Adult Acute Care Forensic Acute Care Victoria’s Mental Health Service—Improved Access Through Training Coordinated Care 1995 Community Care Units Adult Integrated Community Service Adult Continuing Care Victoria’s Mental Health Service The Framework for Service Aged Acute Care Delivery—Aged Persons Services, May 1998 PsychoGeriatric Assessment and Treatment 95/0179 Psycho Geriatric Nursing Homes Psycho Geriatric Hostels Victoria’s Mental Health Service The Framework for Service Adult Integrated Community Service Delivery—Better Health Outcomes Through Community Care Units Area Mental Health Services 1996 Adult Continuing Care Adult Acute Care Crisis Assessment and Treatment Mobile Support and Treatment Secure Extended Care Specialist and Statewide Activities Forensic Activities Training Consultation and Liaison Victoria’s Mental Health Service The Framework for Service Child And Adolescent Acute Care Delivery—Child & Adolescent Services 1996 Child and Adolescent Treatment and Liaison Intensive Youth Support Victoria’s Mental Health Services: The Framework For All Clinical Services Service Delivery March 1994 Training Consultation and Liaison Victorian Guidelines for Consumer Participation in Mental Consumer Participation Health Services, March 1996 Residential Rehabilitation Guidelines 2001 Residential Rehabilitation

Appendix 5 – Clinical Risk Management Sentinel Events Sentinel Events1 are relatively infrequent, clear-cut events that occur independently of a patient’s condition; commonly reflect hospital system and process deficiencies; and result in unnecessary outcomes for patients. The frequency of Sentinel Events is likely to be reduced by examining the settings in which they occur, and identifying system changes required. Accumulating reports of similar events from different institutions, and examining them for common underlying contributing causes, assists in collective preventive efforts to improve patient safety. There is also the need for hospitals to closely examine current practice in particular areas. This approach focuses on the organisation of health care, rather than the assignment of individual blame, and is therefore likely to promote a serious approach to error reduction at all hospital levels. The Sentinel Event list 2002 should be widely distributed throughout hospitals. Sentinel Events to be reported to the Department are: 1. Procedures involving the wrong patient or body part 2. Intravascular gas embolism resulting in serious neurological damage, which is likely to be permanent, or mortality 3. Haemolytic blood transfusion reaction resulting from ABO incompatibility 4. Patient suicide in hospital (to chief psychiatrist) 5. Retained instruments or other material after surgery requiring re-operation or further surgical procedure 6. Medication error leading to the death of patient reasonably believed to be due to incorrect administration of drugs. 7. Maternal death or serious disability associated with labour or delivery. 8. Infant discharged to wrong family. If there are other significant events that occur, which reflect system and process deficiencies, then health services may report these and conduct a root cause analyses. Reporting Requirements for Hospitals All hospitals are required to report Sentinel Events as specified to the Department within fifteen working days of occurring. The initial reporting form is attached, and is also available at: http://clinicalrisk.health.vic.gov.au. The initial reporting form is to include: • Hospital Identification Code • Sentinel Event that occurred

1 The Department of Humans Services (DHS) definition of Sentinel Events has been developed in part for the purposes of a statewide reporting system, and differs from the definition provided by the Joint Commission on Accreditation of Healthcare Outcomes. The Joint Commission defines a Sentinel Event as an unexpected occurrence or variation involving death or serious physical or psychological injury, or the risk thereof. • Date of notification to the Department The completed form is to be forwarded to the Department by email: [email protected] The Department will acknowledge receipt of the initial reporting form, and provide hospitals with a Sentinel Event Reference Number. This number is to be indicated on the root cause analysis report and all other correspondence regarding the particular sentinel event. Root Cause Analyses are expected to be considered by the Quality Committee of the Health Service Board and signed off by a member at the Executive. The Department will acknowledge receipt of the Root Cause Analysis (RCA), and indicate when it is likely to be considered by the relevant consultative Council. Their comments will be conveyed back to the Health Service, when received.

Root Cause Analyses (RCA) A RCA is a generic tool used as a method of ‘drilling down’ to assist in the identification of hospital system and process deficiencies that may not be immediately apparent, and which may have contributed to the occurrence of a Sentinel Event. General characteristics of RCA are that they: • Focus on systems and processes, not individual performance • Include review of relevant literature or evidence • Examine extensively for underlying contributing causes • Potentially lead to procedure and system modifications Normally a RCA is conducted by a small group of individuals, comprising: • Clinical representatives including: both the clinician involved directly with the incident and/or senior clinician overseeing junior medical staff involved with the care of the patient, and a senior nurse involved directly with the incident and/or a senior nurse overseeing junior nursing staff involved with the care of the patient. • An individual with managerial responsibility for the area involved. • An individual with experience in, or responsibility for, clinical risk management and/or quality assurance. Some members of the team may be appropriately qualified or experienced to assume more than one of the above roles. Depending on the specific Sentinel Event, it may also be appropriate to consult other members of staff. The RCA form is a modified version of the Joint Commission on Accreditation of Healthcare Organizations RCA provided in Root Cause Analysis in Health Care: Tools and Techniques©. The form is a guide only. Health Services should use it to identify relevant issues, and provide a summary report which focuses on the issues identified as relevant to the particular sentinel event and actions taken in response.

Responding to Adverse Events Responding to adverse events should include: • providing support for health care professionals involved in adverse patient outcomes; • ensuring that direct communication occurs with patients and/or relatives and carers affected by serious adverse outcomes, and that appropriate support is offered and/or provided to patients and/or relatives and carers; • developing systems for feedback to appropriate hospital staff and implementation of the findings of investigations; and • evaluating the impact and outcome of policy and protocol change.

Clinical Risk Management for Rural Hospitals Rural hospitals are required to participate in a formal system of ongoing inpatient medical record review coordinated through rural Divisions of General Practice. Rural hospitals are required to analyse adverse events, potential adverse events and near misses reported through incident reporting systems. Strategies implemented to reduce the number of adverse events, potential adverse events and near misses are to be reported in their first annual Quality of Care Report 2001-2002.

Reporting Requirements for Rural Hospitals Establishment of LAOS in rural hospitals commenced in 2001-2002 with the assistance of Rural Divisions of General Practice. The West Vic Division of General Practice has been successfully delivering this program to rural hospitals within the Grampians Health Region for the past seven years. The program accommodates the following requirements: • Divisions will engage visiting medical officers to participate in the program • Hospitals will be reimbursed for the associated administration costs • Divisions will provide hospitals with aggregate data to contribute to hospital Annual Quality of Care Reports 2002 and the clinical component of ACHS accreditation. Rural hospitals should be able to begin inpatient medical record screening using all the screening criteria, given their lower activity levels and patient complexity

Role of Consultative Councils and Quality Assurance Committees The Department distributes a summary of sentinel events and related RCA’s to relevant Consultative Councils and quality assurance committees. Consultative Councils consider the RCA’s and where appropriate, make recommendations for statewide system changes to the Victorian Quality Council. The Department is developing effective feedback mechanisms for timely dissemination of this information.

Reporting Episodes of Suicide While all Sentinel Events are to be reported to the Department within fifteen working days of occurrence, episodes of suicide that are reportable under the Mental Health Act (1986) should also continue to be reported to the Chief Psychiatrist. Information sent to the Office of the Chief Psychiatrist regarding patient suicide in hospital must now also address the criteria as specified in the RCA framework and include a Risk Reduction Action Plan summary developed as a result of the process. RCA and a summary of the Risk Reduction Action Plan completed against all other episodes of suicide in hospital, where the patient is not a mental health client, are also to be forwarded to the Office of the Chief Psychiatrist, 555 Collins Street, Melbourne 3000. The Chief Psychiatrist’s Quality Assurance Committee will review these.

Appendix 6 – Non Admitted Emergency Services Grant

Table 1: Distribution of Non-Admitted Emergency Services Grant 2002-2003 Hospital Funding Level Non-admitted Non- NSD 24 Hour Total P&FG 2001-02 patients Admitted WIES9 premium allocation weighted by Distribution (8 component (before triage months (% NSD compensation (8 months data) emerg grants/ data) WEIS9) adjustments) The Alfred ** $9,036,600 35,867 $2,063,162 31,038 $7,380,330 $9,443,492 ARMC* $9,036,600 38,300 $2,203,145 20,697 $4,921,409 $7,124,554 Monash* $9,036,600 50,603 $2,910,839 23,256 $5,529,897 $8,440,736 RMH* $9,036,600 47,634 $2,740,070 26,111 $6,208,770 $8,948,840

Box Hill* $5,625,200 37,930 $2,181,873 17,835 $4,240,872 $6,422,744 Dandenong* $5,625,200 42,603 $2,450,633 14,819 $3,523,716 $5,974,349 Frankston* $5,625,200 40,595 $2,335,172 17,642 $4,194,980 $6,530,152 Barwon Health* $5,625,200 41,447 $2,384,159 15,819 $3,761,500 $6,145,659 Northern* $5,625,200 45,642 $2,625,464 12,496 $2,971,345 $5,596,809 St Vincent's* $5,625,200 32,302 $1,858,089 18,556 $4,412,314 $6,270,403 Western* $5,625,200 32,382 $1,862,719 18,122 $4,309,116 $6,171,835

Ballarat* $3,930,900 33,649 $1,935,595 8,632 $2,052,549 $3,988,144 Bendigo* $3,930,900 33,528 $1,928,607 8,442 $2,007,370 $3,935,976 Maroondah* $3,930,900 32,158 $1,849,808 9,661 $2,297,228 $4,147,036

Sunshine* $3,162,900 46,575 $2,679,110 6,056 $1,440,018 $4,119,128 Angliss* $2,259,000 35,692 $2,053,133 5,317 $1,264,296 $3,317,429 Goulburn Valley $2,259,000 26,445 $1,521,186 5,785 $1,375,579 $2,896,765

Latrobe $2,259,000 27,443 $1,578,594 5,326 $1,266,436 $2,845,030 Regional*

Mildura * $1,694,400 24,515 $1,410,187 3,364 $799,904 $2,210,091 Wangaratta $1,694,400 15,467 $889,731 4,493 $1,068,362 $1,958,093 Warrnambool $1,694,400 19,202 $1,104,579 4,386 $1,042,919 $2,147,499

Central Wellington $1,129,600 10,000 $575,230 3,490 $829,865 $1,405,095 Western District $1,129,600 10,000 $575,230 2,403 $571,394 $1,146,624 Sandringham $1,129,600 10,000 $575,230 3,207 $762,572 $1,337,802 Swan Hill $1,129,600 10,000 $575,230 1,793 $426,346 $1,001,576 West Gippsland $1,129,600 10,000 $575,230 3,215 $764,475 $1,339,704 Williamstown $1,129,600 17,826 $1,025,417 1,874 $445,607 $1,471,024 Wodonga $1,129,600 10,000 $575,230 2,252 $535,489 $1,110,718 Rosebud Hospital $1,129,600 12,049 $693,082 927 $220,425 $913,507 Wimmera $1,129,600 13,141 $755,925 2,485 $590,892 $1,346,818

Bairnsdale $564,800 10,000 $575,230 2,927 $695,993 $1,271,222 Echuca* $564,800 11,222 $645,516 1,046 $248,722 $894,238

Mercy (East Melb) $790,900 7,015 $403,505 576 $136,963 $540,468 RCH* $4,518,200 53,141 $3,056,832 12,210 $2,903,339 $5,960,170 Royal Women's $1,129,600 23,888 $1,374,098 875 $208,061 $1,582,159 RVEEH $2,259,000 27,415 $1,577,002 1,349 $320,770 $1,897,772 Mercy (Werribee)* $1,040,900 30,814 $1,772,519 2,300 $547,019 $2,319,539 Total $123,373,200 $57,896,360 $76,276,840 $134,173,200

The non-admitted Emergency Services Grant was reviewed in 2001-2002 and a new method of allocation introduced. This process and method has been outlined in Section A, 11.1.1. The above

* These hospitals received additional funding in 2001-2002 for their emergency departments through the Emergency Demand Strategy or special grants (a total of $34m). table shows funding to hospitals for non-admitted Emergency Services in 2001-2002 and the two components of funding under the new model (weighted non-admitted patients based on triage category and 24 hour availability based on the proportion of non same day emergency WIES) before compensation grants or adjustments. Those hospitals which do not submit data to the VEMD have been allocated a flag fall weighted non-admitted patient number of 10,000.

Appendix 7 – Training and Development Grant

Background The Training and Development Grant (T&D Grant) was introduced into the original casemix formula to recognise the additional costs inherent in the teaching, training and research activities of teaching hospitals. It covers direct and indirect costs. The activities funded under the T&D Grant have been inextricably linked to clinical hospital services. It is accepted that teaching hospitals generally have a more complex and hence more expensive patient mix than other hospitals. Given that the initial DRG grouper was not considered a good measure of complexity, the T&D Grant was introduced to compensate for the complexity of workload as well as teaching, training and research activities. Since then, there have been a number of attempts to improve the methodology of the allocation, including a workshop in 1994 to review the T&D Grant and a jointly commissioned study in 1995 by State Health Departments and the Commonwealth. In 1997-1998, with changes to DRGs to better reflect complexity, some T&D funds were transferred back to the general casemix pool. The multiple functions of the T&D Grant has led to differing perceptions of the purpose and application of the Grant. While the Grant was introduced to recognise the indivisible costs of teaching resource and complexity, it is based on actual medical and nursing and allied health staff categories and numbers. Specific proportions are allocated for undergraduate and postgraduate training. The staff data have been viewed as critical to workforce management and planning purposes as well as reflecting the hospital workload. In 1999 the Ministerial Review of Health Care Networks recommended that the current arrangements for payments of T&D Grant should be reviewed for 2000-2001 with the objective of maintaining the identity of these grants while reducing the acquittal and reporting burden on Metropolitan Health Services. In November 2000 the Department invited tenders to conduct a Review of the T&D Grant. MA International Pty Ltd were appointed as the consultants for this project. The Policy and Strategic Projects Division of the Department, managed the operational aspects of this project with oversight from the Training and Development Review Steering Committee and input from the Training and Development Grant Review Reference Group. The Reference Group included senior university academics, senior hospital managers, representatives of professional health provider groups, and the Department.

Recommendations of the Review Solving the issues outlined above has proved particularly complex. The Draft Report of the Review proposes a conceptual framework for the T&D Grants that comprises four streams of funding: • Tertiary complexity; • Early graduates; • Workforce priorities and strategy; and • Research. The intent of the Tertiary Compensation stream is to identify the amount of funding from the Grant deemed to be compensation for complex cases. The Review draft report identified this funding to be the amount currently provided for clinical academic, registrar and HMO 3 positions, on the grounds that these positions contribute directly to patient care and the generation of WIES. This funding would be redistributed to the hospitals currently in receipt of a T&D Grant in proportion to each individual hospital’s share of the total tertiary WIES of this group of hospitals. The Early Graduate stream is intended to provide incentive payments, based on a proportion of the graduate medical, nursing and allied health salaries, to ensure that educational objectives are realised. The funding would assist health services with the cost of supervision and on-the-job training in the first year for nursing and allied health professions, and the first two years for medical graduates. The Review draft report argued that the same proportion of salary should be paid for each discipline and that the proportion should be 50 per cent. This would enable the rate paid to keep pace with salary movements. While this provides simplicity it could be argued that levels of supervision and hospital responsibility differ for graduates from different disciplines. The restructuring of the Grant would enable a Workforce Priorities and Strategy stream of funding to become available for the implementation of workforce priorities and strategies identified by the Department. Currently, the undergraduate teaching allowance and postgraduate nursing programs are funded from this stream, but this may be reviewed as part of the Department’s development of a set of comprehensive workforce priorities and strategies. The Research Grant would be maintained as a separate stream of funding following the same method of allocation as is currently used. This model has not been implemented in 2002-2003 as it requires more detailed consideration by the Reference Group; improved definition of tertiary WIES especially for obstetric cases; and the development of the Workforce Strategy against which funding can be allocated. The basic data sets also require updating. It is proposed to implement the model in July 2003 and discussions will occur with stakeholders in preparation for that implementation. Appendix 8 – Cost Weight Modelling (Nurses EBA)

The Effect of the Nurses Enterprise Bargaining Agreement During 2000-2001 the conditions associated with the Nurses Enterprise Bargaining Agreement (EBA) were progressively introduced. The cost data for 2000-2001 is used for 2002-2003 weights. This means that the data used to construct the 2002-2003 weights includes only part of the full year additional costs, and consequently the weights based upon these data would only partly reflect the nursing relativities of individual DRGs. In order to ensure that the full effects were included in the 2002-2003 weights the Department undertook a series of calculations to estimate the full year effect and change in relative DRGs. This is only necessary for this year. (For 2003-2004 the data from 2001-2002 will automatically include the full costs). The effect of the nurses EBA on cost data for 1999-2000 (prior to EBA and therefore unaffected by the EBA) was modelled and compared with the results of nursing costs for 2000-2001. Where the results were greater than the reported rise in the average DRG nursing cost for inliers in 2000- 2001 the DRG average cost used to calculate weights was increased. This approach of rescaling nursing costs to fully incorporate the additional costs of the nurses EBA into the cost weights, allowed the additional funds to be distributed within the WIES price. It should be noted the setting of WIES prices and hospital budget adjustments are made for the differences between size of hospital groups. The method used to model the additional costs associated with the nurses EBA into the 2002-2003 cost weights is summarised Diagram 1. The process included five separate steps:- • Determining the proportion of the $240 million additional funding associated with the nurses EBA that could be reasonably allocated to hospitals that provided cost data for 1999-2000 (Boxes 1 to 7). The total available funds ($240m- Box 1) was divided into increased salaries and conditions ($140M – Box 2) and funds associated with employing new nurses ($100M – Box3). Of the $140M for salaries 44 per cent (Box 4) or $62M (Box5) were distributed between patients in the 1999-2000 cost data. This was based upon the total reported cost of treating the patients in the cost study as a proportion of the total acute hospital budget for 1999-2000. • As the staffing rations related to inpatient staffing requirements, rather than all nurses regardless of where they were employed within the hospital, a different algorithm was used for new nurses. Of the $100M for extra nurses $50 (Box 7) were distributed to patients in the 1999-2000 cost data, based upon the proportion of 1999- 2000 separations in the cost data. • Distributing the estimated $112M ($62M + $50M) allocated to patients in the 1999- 2000 cost study to individual patients (Boxes 8 to 12). The nursing cost for each patient by taking a proportion (Box 8) of each of the component costs of each patient (Boxes 10 and 11). These proportions were based upon information provided from three hospitals. The $62M associated with salaries and conditions were then allocated proportionally to the estimated nursing requirements. For example, if a hypothetical patient had a total cost of $10,000 of which $5,000 was for ward nursing, $2,000 was for emergency department, and $3,000 was for pharmacy (as defined in the cost components) then the nursing cost would have been estimated as $4,300 (0.7×5000 + 0.4×2000 + 0.0×3000). If, when this calculation was repeated for all patients in the cost study, $4,300 was found to represent 0.0009 per cent of the total nursing cost the additional EBA cost for nursing salaries for that patient would have been $567 (0.0009% × $62M). As the $50M for new nurses related to additional staff in wards and to a lesser extent emergency departments, only nursing costs in associated areas were used to distribute the EBA funds associated with new staff. This was done by taking 100 per cent of the ward nursing costs and 50 per cent of the emergency department nursing costs (Box 9). For the hypothetical example above the nursing cost used to distribute the funds for additional nurses would have been $3,900 (1.0×0.7×5000 + 0.5×0.4×2000 + 0.0×0.0×3000). • DRG average daily nursing costs were calculated for: • actual 1999-2000 cost data (Box 13) , • modelled 1999-2000 Actual 2000 + EBA costs (Box 13) and • Actual 2000-2001 (Boxes 8,14,15,16) Separate calculations were done for same day and multi-day patients. • The estimated EBA daily shortfall was calculated for same day and multiday patients in each DRG by comparing the daily rates (Box 17): • Where Actual 2000-2001 daily nursing cost was higher than the Modelled 1999- 2000 daily nursing cost the increase was already higher than expected and no adjustment was made for the DRG. • Where the Actual 2000-2001 daily nursing cost was between the modelled 1999- 2000 daily nursing cost and the actual 1999-2000 daily nursing cost, part of the EBA effect was likely to already be included. The daily adjustment for the DRG therefore was set at the difference between the modelled 1999-2000 daily nursing cost and the actual 2000-2001 nursing cost. • Where the actual 2000-2001 nursing cost was below the actual 1999-2000 nursing cost, other factors were resulting in a lowering of the cost in excess of any EBA effect. The daily adjustment therefore was set at the difference between the modelled 1999-2000 daily nursing cost and the actual 1999-2000 daily nursing cost. • The average costs used to calculate the 2002-2003 weights were adjusted by: • adding the estimated daily adjustment for same day patients in the DRG to the reported cost for each same day patient (Box 18) • multiplying the estimated daily adjustment for multiday patients by the multiday inlier ALOS and adding to the average cost for multiday inliers (Box 18). • All adjustments were capped at 20 per cent of the average DRG cost Modelling of the Nurses EBA on Inlier Average Costs for the Calculation of the 2002-2003 Cost Weights

Appendix 9 – Clinical Indicators As outlined in the Policy and Funding Guidelines, the 2002-2003 clinical indicator work program will continue to collect the indicators trialled in 2001-2002, and expand the program to include the trialling of new clinical indicators across a range of clinical areas. For 2001-2002 reporting of the four current clinical indicators has been refined and two clinical indicators have been expanded to capture data previously monitored through sentinel event reporting. The clinical indicators for continued collection in 2002-2003 are: 1. The number of patients having a colonoscopy that results in perforation of the colon as a proportion of the total number of patients having a colonoscopy, during the time period under study. This clinical indicator has been refined to include: 1a. A separate collection of the total number of post-colonoscopy perforations of the colon treated within the health facility during the time period under study, irrespective of the facility in which the colonoscopy was performed. 1b. A separate collection of visceral perforations resulting from endoscopic procedures other than colonoscopy including bronchoscopy, oesophagoscopy, gastroscopy, duodenoscopy, hysteroscopy and uretoscopy. Additional procedure areas may be added to this indicator. Hospitals will be notified of proposed changes. 2. The number of patients having a laparoscopic cholecystectomy that results in bile duct leakage as a proportion of the total number of patients having a laparoscopic cholecystectomy, during the time period under study. This clinical indicator has been refined to also include: 2a. A separate collection of the number of laparoscopic procedures that result in a perforation or ligation of a duct, major vessel or viscus as a proportion of the total number of laparoscopic procedures undertaken during the time period. 3. The number of patients having a large bowel resection and anastomosis for cancer of the colon, with anastomotic breakdown as a proportion of the total number of patients having a large bowel resection and anastomosis for cancer of the colon, during the time period under study. 4. The number of patients presenting with acute myocardial infarction requiring thrombolytic therapy who receive it within one hour of presentation to the hospital at which they receive thrombolytic therapy, as a proportion of the total number of patients presenting with acute myocardial infarction who receive thrombolytic therapy during the time period under study. A range of new clinical indicators will be trialled from 1 July 2002. They include: • The number of patients having a post-partum haemorrhage as a proportion of patients delivering at twenty-five weeks gestation or more. Please note that this clinical indicator was reported as a sentinel event in 2002-2003. • The number of patients sustaining a fractured neck or femur as an inpatient or day patient in an acute (or sub-acute) facility. Two new cardiothoracic surgical clinical indicators will be trialled from 1 October 2002. They are: • The number of patients who return to the operating room for cardiac tamponade as a proportion of all patients undergoing open heart surgery. • The number of patients requiring treatment for deep sternal infection following open heart surgery. All hospitals equipped to undertake these procedures are required to report quarterly to the Department. Please refer to the Quality Framework–Business Rules 2002-2003 for detailed definitions of these indicators. During 2002-2003, additional clinical indicators will be identified and trialled in the following areas: • Intensive care • Vascular surgery • Cardiothoracic Surgery (if those listed require further addition) • Medical specialties including respiratory and diabetes medicine • Safety indicators including falls, pressure injury and medication errors • Indicators relevant to specialist rural hospitals Section B — Conditions of Funding

1 Australian Health Care Agreement (AHCA)...... 1

1.1 Hospitals to work within the Framework of the AHCA...... 1

1.2 Admission of Patients ...... 2

1.3 Claims for Medicare Benefits ...... 2

1.4 Pharmaceutical Benefits...... 2

1.5 Commonwealth-State Programs ...... 3

2 Basis For Determining Government Funding...... 3

2.1 Components of Funding...... 3

2.2 Published Rates...... 4

2.3 Calculation of the Payment for Admitted Patient Services ...... 4

2.4 Department of Veteran Affairs (DVA) Patients ...... 5

2.5 Non-Admitted Patients Grant ...... 7

2.6 Training and Development (T&D) Grants...... 8

2.7 Payments for Specified Purposes...... 9

2.8 Victorian Maintenance Dialysis (VMD) Program...... 9

2.9 Sub - Acute Services...... 10

2.10 Hospital Accreditation ...... 14

2.11 Patient Flow ...... 14

2.12 Post Acute Care...... 15

2.13 Hospital In The Home (HITH) Program...... 17

2.14 Specific Purpose Grants for Services to Persons from Non-English Speaking Backgrounds...... 19

2.15 Maternity Services ...... 19

2.16 Payment For Non-Admitted Radiotherapy ...... 20

Section B 2.17 Quality Fund ...... 21

2.18 New Technology/Clinical Practice Program ...... 21

2.19 Co-ordinated Care Trials...... 22

2.20 Rural Patients Initiative...... 22

2.21 Rural Hospital Specialist Service Grants...... 24

2.22 Redirection of Funds...... 26

2.23 Privacy ...... 26

2.24 Decentralised Programs ...... 27

2.25 Cystic Fibrosis ...... 27

2.26 Transport Accident Commission (TAC) Patients...... 28

3 Mental Health Services...... 28

3.1 Preamble ...... 28

3.2 Performance Requirements...... 29

3.3 Revenue...... 30

3.4 Minor Capital and Equipment...... 30

3.5 Varying Targets ...... 31

3.6 Other Conditions of Funding ...... 31

4 Fire Risk Management...... 31

4.1 Health and Safety...... 31

4.2 Operational Readiness ...... 31

4.3 Client Placement ...... 32

4.4 Certificate of Fire Safety Compliance ...... 32

5 Revenue...... 32

5.1 Requirement to Raise Fees and Charges...... 32

Section B 5.2 Payments and Revenue from Treating Private Patients...... 32

5.3 Arrangements for 2002-2003...... 33

6 Goods and Services Tax...... 34

7 Long Service Leave ...... 34

7.1 Accounting for Long Service Leave (LSL) ...... 34

8 Cash Flow to Hospitals ...... 34

9 Force Majeure ...... 34

10 Risk Management...... 35

11 Reporting...... 35

11.1 Supply of Statistics and Information...... 35

11.2 Financial Information...... 36

11.3 Specific Data Requirements...... 36

11.4 Transmission of Minimum Employment Dataset...... 37

11.5 Transmission of Admitted Patient Data...... 37

11.6 VAED Audits...... 38

11.7 Access to Hospital Patient Level Data...... 38

12 Health Service Agreement ...... 38

Section B

Conditions of Funding

The conditions below apply to the Acute Health Program¸ which includes sub-acute services (Sections 1 and 2), with a special section for Mental Health (Section 3). Reference throughout these sections to a hospital(s) is a reference to a public hospital(s), and metropolitan and rural health service(s). Sections 4 and 6 apply to acute and mental health services in hospitals and mental health agencies. Sections 5, 7, 8 9, 10, 11 and 12 refer to hospitals only. The standard conditions of funding, which apply to all acute programs, are detailed in Schedule 1 of the Health Service Agreement (HSA) 2002–2003. This is located at http://www.dhs.vic.gov.au/ahs and all hospitals will be required to abide by these standard conditions. Hospitals should make themselves aware of the conditions in the 2002-2003 Health Service Agreement. Many mental health services are provided through hospitals and the associated conditions are formally decided through service plans attached to the relevant Health Service Agreement. Other mental health services, particularly psychiatric disability support services, are provided by funded agencies subject to the conditions outlined in individual service agreements.

1 Australian Health Care Agreement (AHCA) The Australian Health Care Agreement (AHCA) is an agreement between the Commonwealth of Australia and the State of Victoria, to provide and jointly fund health care for eligible persons who choose to use State funded health services for the five years from 1 July 1998 to 30 June 2003. It outlines the principles that are to guide the delivery of public hospital services. Public hospitals in Victoria must ensure that public hospital services are provided in accordance with the terms of the AHCA, and that eligible persons are able to access public hospital services as public patients. An electronic version of the AHCA between Victoria and the Commonwealth is available on the Internet at http://www.dhs.vic.gov.au/ahs/index.html Acute Health Circular 3/99 (as amended from time to time) provides further State Government advice on the AHCA.

1.1 Hospitals to work within the Framework of the AHCA The AHCA commits the Commonwealth and Victoria to the following principles: 1. Eligible persons must be given the choice to receive public hospital services free of charge as public patients; 2. Access to public hospital services by public patients is to be on the basis of clinical need and within a clinically appropriate period; and 3. Eligible persons should have equitable access to public hospital services, regardless of their geographical location. The Commonwealth and Victoria agree that principles 2 and 3 are met if Victoria is using its best endeavours to achieve the outcomes sought in those principles to the greatest extent practicable. Under principle 2, it is Victorian Government policy that both public and private patients should receive access to public hospital services on the basis of clinical need. The Victorian Government allows preferential access for eligible veterans to public hospitals, but only so long as care of

Section B 1 public patients is not impaired, consistent with principle 2. Greater detail is given in the Department of Human Services’ Victoria Hospital Circular 17/1998. The AHCA provides that where an eligible person receives public hospital services as a public admitted patient, no charges will be raised for medical or hospital services. Under the AHCA, a nursing home type patient is excluded from being an eligible person in relation to public hospital services. State Government policy for charging non-admitted patients is set out in the State’s Fees Manual, Fees and Charges for Acute Health Services in Victoria: A Handbook for Public Hospitals. This information is available at the Department Internet website: http://www.dhs.vic.gov.au/ahs/feesman/index.htm

1.2 Admission of Patients None of the following factors are to be a determinant of an eligible person's priority for receiving hospital services: (a) whether or not an eligible person has health insurance; (b) an eligible person's financial status or place of residence; or (c) whether or not an eligible person intends to elect or elects to be treated as a public or private patient. 1.2.1 The hospital will ensure that: (a) an eligible person, at the time of admission, or as soon as practicable thereafter, elects or confirms whether he or she wishes to be treated as a public patient or a private patient and this election process conforms to the ‘National Standards for Public Hospitals Admitted Patient Election Processes’ and; (b) any ineligible person is appropriately identified as such in the Victorian Admitted Episodes Dataset (VAED). 1.2.2 The Hospital will only admit patients in accordance with the Minimum Criteria for Admission as specified in the PRS/2 Manual Version 12.0 and shall provide documented justification for the admission of all Type C Professional Attention Procedures (exclusion list) patients or those admitted overnight for designated Band 1 procedures of the Health Insurance Basic Table as defined by subsection 4(1) of the National Health Act 1953 (Commonwealth) (See Hospital Circular 15/1998). 1.2.3 The Hospital will make every effort to verify the place of residence of interstate patients. 1.2.4 The Hospital will ensure that all patients admitted to hospital are asked whether they are of Aboriginal or Torres Strait Islander descent. The identification of Aboriginality is a mandatory data item to be reported by hospitals to the VAED. Aboriginal and Torres Straight Islander patients identified on the VAED will be funded at 10 per cent higher than the nominated payment for WIES10.

1.3 Claims for Medicare Benefits The Hospital will ensure that aftercare services for public patients and funded outpatients and accident and emergency services do not attract claims for Medicare benefits or claims for benefits under Veterans' Affairs Legislation.

1.4 Pharmaceutical Benefits In October 2001 a variation to the AHCA was made to reform the supply of pharmaceuticals from public hospitals. The reform made it possible for hospitals to participate in the Pharmaceutical

Section B 2 Benefits Scheme (PBS) and Repatriation Pharmaceutical Benefits Scheme (RPBS) for non-admitted patients and admitted patients on discharge. The reform also makes it possible for participating hospitals to access a list of chemotherapy pharmaceuticals, funded by the Commonwealth, for non-admitted and day admitted patients. A list of participating hospitals and further information regarding the reform is available at http://www.health.vic.gov.au/pbsreform Any hospital not participating in the reform will ensure that, except in an emergency, it will not issue a prescription to an admitted patient on discharge, an outpatient or an accident and emergency patient, that would attract pharmaceutical benefits as defined in the National Health Act 1953 or Veterans’ Affairs Legislation. Pharmaceutical services to public and private patients, while they receive services as admitted patients, will be provided free of charge in all hospitals, whether participating or not participating in the reform, and cannot be claimed against the PBS or RPBS.

1.5 Commonwealth-State Programs Hospitals may receive specific purpose payments arising from Commonwealth-State Agreements. Funding received under such arrangements is subject to each program’s specific conditions.

2 Basis For Determining Government Funding 2.1 Components of Funding Public targets will comprise: • Target A volumes, paid at the relevant rate; • Sub-acute services paid at the relevant rate; • Non-Admitted Patient Grants; • T&D Grants; • Other specified grants, and • Payments for Eligible Veterans. These grants and admitted patient and outpatient target volumes are shown in Section A and shown in the Hospital’s HSA. Funding is provided to Hospitals on the basis that the current range of services provided are continued. Before Hospitals undertake a significant change in the range or scope of services, the planning implications of such a move must be discussed and agreed with the Department. In rural areas, the appropriate discussion should be held with the Regional Partnerships and Service Planning Manager. In the metropolitan area discussions should be held with the relevant officer in the Metropolitan Health and Aged Care Division. In all cases, the Executive Director of Metropolitan Health and Aged Care Services Division or Rural and Regional Health and Aged Care Services Division must provide the final approval. Hospitals will also receive revenue from private patients. Government grant payments to Hospitals will consist of the hospital’s entitlements as specified in the Policy and Funding Guidelines, the HSA and Conditions of Funding, net of the relevant patient revenue target (see clause 5.3).

Section B 3 2.2 Published Rates The rates presented in this document and its attachments, including modelled budgets, do not include savings required from embedded taxes/specific network savings/network supplies and consumable savings. These rates do not reflect the “published rates” as referred to in contract arrangements with the privately operated Mildura hospital. The official published rate for services reflects adjustments for the above items. The official published rate for non-metropolitan hospitals is: (a) For WIES10: $10.50 less than the rates per unit described in Section A. (b) For other items including sub-acute bedday rates; CRC funding rates; emergency services categorisation; radiation oncology units; T&D grant payments; dialysis program payment rates; VACS unit rate; DVA sub-acute rates: 0.4 of one per cent less than the rate described in Section A.

2.3 Calculation of the Payment for Admitted Patient Services 2.3.1 The term “weighted inlier equivalent separation” means the measure of the activity calculated by multiplying the DRG weight by the number of Inlier Equivalent Separations in the DRG and summing over all DRGs. For 2002-2003 this statistic will be abbreviated as WIES10. The method and calculation of WIES10 is shown in Section C - Supplementary Information. 2.3.2 For Hospital patient throughput for public patients up to the level included in targets, the

case payment is: Major Providers (Metropolitan Health Service & Barwon Health) $2,515 Rural Group B > 13,000 WIES $2,629 Rural Group B 7,500-13,000 WIES) $2,707 Rural Group B 5,000-7,500 WIES $2,773 Rural Group B < 5,000 WIES $2,788 Rural Group C $2,625 Rural Group D and E $2,659 Throughput Above Target 2.3.4 Throughput above target will in general not be paid. In ongoing recognition, however, of the difficulty of precise demand management, throughput in excess of target of up to 2 per cent will be paid at $1,000 per WIES. 2.3.5 Same day "medical" targets are specified in each Hospital’s HSA as a percentage of total actual throughput. Sameday medical throughput in excess of the specified target will not be funded by the Department. The targets have been set at 6.5 per cent (excluding “exempt” hospitals). Throughput in sameday units within emergency departments will be considered as part of the mid-year review. Quarterly Targets 2.3.6 Quarterly targets will be nominated by the agency. Actual throughput against target will be reviewed at the end of the second, third and fourth quarters. Funding adjustments may be made where actual performance varies significantly (more than 2 per cent) from the nominated quarterly targets. 2.3.7 Nursing Home Type Patient Payment

Section B 4 The Hospital will receive $154 for each nursing home type bed day as reported in the VAED. This component of funding will be subject to increased scrutiny to ensure that WIES outlier payments are not used inappropriately to fund nursing home equivalent care. 2.3.8 Rural/Isolated Payment This payment provides a contribution for rural hospitals, rural health services, isolated hospitals and isolated health services, for additional costs incurred in transferring some patients in non-metropolitan areas. This payment is supplementary to the higher WIES payment received by non-metropolitan hospitals and does not purport to represent a payment for total ambulance transfer costs in any individual patient case. The payment, which applies to all WIES, not just those with an ambulance component, is as follows: • For isolated hospitals the additional ambulance transfer payment is $42 for each weighted inlier equivalent separation up to the agreed contract volume; • For other rural hospitals the additional payment is $17 for each weighted inlier equivalent separation up to the agreed contract volume.

2.4 Department of Veteran Affairs (DVA) Patients 2.4.1 New funding arrangements for eligible DVA patients/clients have operated since 1 July 1998. In accordance with these arrangements, separate capped public targets and uncapped veterans’ estimates were incorporated into hospital and mental health service provider budgets as applicable. In the first year of the agreement these targets applied to WIES and sub-acute, nursing home type, psychiatric admitted patient, psychogeriatric nursing home and psychogeriatric aged care extended beddays. For 2002–2003 WIES estimates have again been adjusted, based on throughput reported on the VAED. For a few hospitals, adjustments have also been made to VACS, interim care, continence clinics, Community Rehabilitation Centres (CRCs), palliative care, GEM, rehabilitation targets and non admitted radiotherapy weighted activity unit targets. 2.4.2 The agreement with DVA funds a majority of public hospital services and mental health service providers for veterans on the basis of outputs at prices that allow the Department to pay providers to cover costs of training, research and other items. The State Government is reimbursed for actual work done after confirmation of eligibility by DVA. This means veteran throughput is uncapped. DVA funding cannot be substituted for other services for the general public, for example DVA WIES cannot be substituted or converted into public WIES. 2.4.3 Hospitals and mental health service providers will continue to receive payment at a premium for the following services to eligible veterans: WIES; dialysis and haemodialysis cases; weighted VACS encounters; allied health occasions of service; nursing home type, rehabilitation; interim care, palliative care, GEM, mental health admitted patient, psychogeriatric nursing home and psychogeriatric aged care extended beddays; PAC patient days; and non admitted radiotherapy weighted activity units. 2.4.4 In addition, in 2002-2003 the premium will also be paid for CRC attendances (in 2001-2002 CRC funding was based on places) and continence clinic attendances. The recall policy will not apply for 2002-2003 for these two services. 2.4.5 Payment requires an exact match of hospital and mental health service provider veteran data with DVA records. The rate of rejection of records submitted by hospitals is generally between 1 to 2 per cent, however, for mental health service providers the rejection rate is much higher. Many of these rejections are due to agencies not collecting sufficient information from the eligible veteran to allow for a matching of veteran data by DVA. It is imperative that agencies ensure that they collect and provide to the Department the

Section B 5 eligible veteran’s unique identifier. The Department will not accept any risk for the ‘assumed’ revenue lost by not meeting the DVA requirements. 2.4.6 For each hospital, the Department will estimate DVA patient/client/attendee throughput for the following services: • WIES • Sub-Acute Services. • VACS encounters • Allied health occasions of service • Non admitted radiotherapy weighted activity units • PAC • Victorian Maintenance Dialysis Program • Nursing Home Type • Mental Health Services 2.4.7 The Department will pay a premium rate applicable for all eligible DVA patients matched with DVA records (as reported in the VAED, RAPID or where appropriate AIMS) including numbers in excess of the estimate. If hospitals do not achieve the DVA target, any funding which has been cash flowed will be recalled at the full DVA rate. It is imperative that hospitals ensure that their own records and reporting to the Department are complete, comprehensive and timely. 2.4.8 If the hospitalisation of an eligible veteran is likely to exceed a continuous period of thirty- five days, hospitals shall ensure that the veteran’s status is reviewed and that either: a) certificate under Section 3B of the Health Insurance Act 1973 is completed by a medical practitioner and forwarded to the Department’s DVA Contract Manager forthwith; or b) the Beneficiary is reclassified to a Nursing Home Type patient. 2.4.9 Where an admitted veteran’s length of stay is greater than thirty-five days and no acute care certificate in accordance with the above has been forwarded to DVA by the Department, hospitals will only be reimbursed at the Nursing Home Type patient payment rate. 2.4.10 For all the services included in this Section (other than CRC and Continence Clinic attendances), final payment for treatment of veterans will only be authorised after: • The veteran’s eligibility has been confirmed by DVA; and • The veteran’s unique number and veteran details reported to the Department exactly match those held by the DVA for each eligible patient/resident/attendee. 2.4.11 If hospitals do not pay sufficient attention to these requirements and make assumptions about eligibility for patients who are rejected or amended by DVA those hospitals will need to retrospectively reclassify these patients to reflect any changes in care type and the preferences indicated by the patient on the form of election for admission. It should be noted that to date the Department has borne the risk for ineligible veteran records. This will be strictly enforced in 2002–2003 and hospital funding adjusted where the forms are not provided. The Department will not accept any risk for “assumed” revenue. 2.4.12 Principles and clauses in the Australian Health Care Agreement mean public hospitals may provide preferential access for veterans, provided care of public patients is not impaired. This will ensure the ability of public providers to compete on an equitable basis with the private sector in terms of access. The premium price paid for treating veterans will ensure the ability of public providers to compete on a level approaching equitable

Section B 6 basis with the private sector in terms of quality. 2.4.13 Eligible veterans will not be covered under the DVA arrangement if they: • Elect to be public patients under the Australian Health Care Agreement • Are compensable patients, such as TAC and workcover • Elect to use their private health insurance. 2.4.14 The DVA Agreement prohibits agencies from raising any charges directly on an eligible veteran except where provided for under Commonwealth legislation. This prohibition does not, however, prevent agencies from charging a cost for the provision of personal services such as for access to television and/or telephone services at the facility. One of the purposes of the DVA premium is to cover the loss of revenue to agencies through restricting their capacity to levy charges on eligible veterans for services provided. 2.4.15 Veterans who are reclassified to nursing home type patients may be charged a patient contribution, in line with the provisions of the Health Insurance Act 1973. 2.4.16 Experience has shown that those hospitals that actively develop service quality and marketing plans and employ Veteran Liaison Officers, utilising DVA premiums, to attract and retain veterans are more likely to in fact retain such patients. Hospitals are therefore strongly advised to develop and market such plans and consider employment of a VLO. 2.4.17 Eligible Veterans and War Widow(er)s have access to a wide range of benefits and services through the DVA. These include (but are not limited to) hospital, medical and allied health services, respite and convalescent care, rehabilitation aids and appliances, assistance with transport and accommodation allowance. Further details can be obtained under DVA Facts or Health from the Internet at: http://www.dva.gov.au/health/vets_info.htm

2.5 Non-Admitted Patients Grant 2.5.1 The Victorian Ambulatory Classification System (VACS) operates in major hospitals. For details of the VACS system and funding allocations including emergency department allocations for 2002–2003 refer to Section A. 2.5.2 For non-VACS funded hospitals, the non-admitted patients grant is for the provision of services reported on the AIMS S2/111. 2.5.3 Hospitals are required to provide reports on occasions of service as part of State responsibilities under the existing AHCA. The AIMS S2 is used for reporting this data. 2.5.4 VACS funded hospitals are required to report clinic level data via the AIMS S9/111 and the AIMS S2. In the case of a new clinic commencing during the year, or changes to existing clinics, assignment to a VACS category will be made by the hospital. The hospital is required to advise the Department of any changes occurring during the year by submitting details on the Notification of Clinic Changes form by 26 March 2003. 2.5.5 Where VACS and allied health output targets are not met under normal circumstances, grants for the year will be adjusted to the output levels actually achieved. If there is a significant reduction in services to non-admitted patients in non-VACS funded hospitals the grant may be reduced during the course of the financial year. (A significant change for the purpose of this clause is defined as one which involves a reduction in the service levels of more than 10 per cent). 2.5.6 Hospitals are responsible for providing such ambulance transport as is necessary, on clinical grounds, to ensure access for outpatients without charge to these patients. 2.5.7 The VACS patient payments are calculated as follows:

Section B 7 • VACS rate per weighted encounter $125 • Allied health per occasion of service $45 2.5.8 For VACS funded hospitals, targets for 2002-2003 are based on target levels for 2000-2001. Where VACS funded hospitals reported activity in the calendar year 2001 of 10 per cent or more over target levels, these targets have been adjusted by 5 per cent.

2.6 Training and Development (T&D) Grants Training and Development grants are paid to hospitals to recognise the additional costs of those hospitals with teaching, training and research activities. Training and research activities are linked inextricably to clinical hospital services. This funding program also represents a historic compensatory payment to accommodate case complexity of teaching hospitals. 2.6.1 Research Support The research and development component of the T&D grant is designed to fund research infrastructure for the hospital (including support for institutional ethics committees) together with support for academic units based at the Hospital, including units funded by universities and independent research institutes. Additional funding for research in Victorian public hospitals is provided through the AHCA. Hospitals in receipt of these grants will need to demonstrate that at least the amounts allocated have been expended for these purposes. 2.6.2 Training and Development For 2002-2003, payments will continue to be made only for positions and staffing approved or otherwise recognised by the Department. 2.6.3 The Training and Development grant is allocated to fund the specific programs and positions specified in the Health Service Agreement supplementary tables. The grant will be paid to the employer of the funded position. The number of Intern (Postgraduate Year 1) positions funded will continue to be based on the number of Victorian medical graduates seeking places in Victorian hospitals and included in the computer matching process administered by the Postgraduate Medical Council of Victoria. Pending the Review’s recommendations regarding the degree of importance of linkages between the funding, accreditation and processes of allocation of Postgraduate Year 2(PGY2) positions, funding for the PGY2 positions in 2002 will be distributed to positions included in the computer matching process and based on 2000-2001 numbers. Where training positions include a period of rotating placements, participating agencies are required to ensure that the host agency receives a portion of the grant equal to the length of the rotation. Where positions remain unfilled by staff with credentials approved by the Department or programs offered by the hospital are not operated at budget levels, the Training and Development grant will be adjusted to reflect actual performance. 2.6.4 Funding for all nursing programs is based on the academic year and is dependant on adequate financial acquittals being provided to the Department regarding expenditure of the grant. For the Graduate Nurse, Student Midwife and Postgraduate Programs, approval must be sought from the Department for any increase in numbers over and above projected numbers submitted at the start of the 2002 academic year. Funding rates for postgraduate training differentiate between Postgraduate diplomas and postgraduate certificates.

2.6.5 Graduate Nurse Programs must meet the following criteria:

Section B 8 (a) hospitals must participate in the Nursing Computer Match Service in order to attract funding for Graduate Nurse positions; (b) no fees are to be charged to nurses applying for, undertaking, or exiting from Graduate Nurse positions; and (c) the positions offered must be full time. Under exceptional circumstances exceptions may be made following consultation with the Department. In addition, the programs should conform to the Department’s Graduate Nurse Program Guidelines (September 1997). 2.6.6 Student Midwives (a) Funding is at the level of $3,000 per student midwife undertaking clinical experience for a minimum total of fifty days during the academic year. (b) Adjustment may be made to the amount of funding to those hospitals, which accommodate a large number of students undertaking clinical placement for periods of less than fifty days. Pro rata funding for these students may be provided after discussion with the Department. 2.6.7 Rural Supplement A supplement of $250 per nurse is available upon application to rural hospitals that offer specialist nursing courses in collaboration with a university to support costs incurred by nurses who must undertake a clinical placement a significant distance from the hospital where they are employed. Due to consistently low uptake the provision of this supplement is under review by the Nurse Policy Branch. 2.6.8 The Training and Development grant also includes a component designed to fund the cost associated with clinical placements of undergraduate students including medical, nursing and allied health students. The total amount allocated will remain unchanged from 2001- 2002.

2.7 Payments for Specified Purposes 2.7.1 Additional payments will be provided to the Hospital for specific agreed services. 2.7.2 Where the grant is based on a particular level of service, and there is a significant reduction in such services, the grant may be reduced during the course of the financial year. (A significant change for the purpose of this clause is defined as one which involves a reduction in the service levels of more than 10 per cent.). Where an increase in the particular level of service is agreed with the Acute Health Division, an increase in funding may also be agreed.

2.8 Victorian Maintenance Dialysis (VMD) Program (See also Part A - Special Grants) 2.8.1 The payment rates for 2002-2003, adjusted for award increases, CPI and productivity savings are as follows:

Section B 9 Table 1: VMDP Payment Rates Treatment Modality 2002-2003 WIES Payment 2002-2003 Program Grant Per Patient Per Annum (Approx) Per Patient Per Annum In-Centre $20,088 $24,017 Home N/A $31,681 CAPD N/A $39,863 IPD N/A $28,686 Satellite Hospital Category:

B (> 13,000 wies): $20,998 $24,017 B (7,500 – 13,000 wies): $21,621 B (5,000 – 7,500 wies): $22,149 C: $20,966 D & E: $21,238 2.8.2 The program grant will be received by parent hospitals. Parent hospitals are required to negotiate with satellite centres arrangements for the provision of satellite dialysis services to be funded by the program grant. Parent hospitals have a responsibility to ensure that adequate compensation is made to satellite hospitals for services provided. 2.8.3 Reporting will continue to occur through the Victorian Admitted Episodes Dataset (VAED) and the Agency Information Management System (AIMS). Where dialysis WIES (included in the overall WIES target) have not been utilised, prior year adjustments will be made. 2.8.4 Where dialysis targets are exceeded, the additional activity will be funded on the basis of activity coded in AIMS. In the case of In-Centre, Satellite and IPD, AIMS data will be compared to that reported in the VAED. Where there is any discrepancy, the budget adjustment will be made on the basis of the activity reported in the VAED.

2.9 Sub - Acute Services Sub-acute services are managed and funded by the Metropolitan Health and Aged Care Services Division. These services include rehabilitation, geriatric evaluation and management, geriatric respite inpatient services, palliative care and non-admitted services including identified specialist clinics and community rehabilitation centres.

Calculation of the Payment for Inpatient/admitted Sub-Acute Services 2.9.1 Designated rehabilitation services with twenty beds or more are funded via VicRehab. These services include: • Austin and Repatriation Medical Centre • Latrobe Regional Hospital • Ballarat Health Services-Queen Elizabeth Centre • Mount Eliza Aged Care & R.S • Barwon Health-Grace McKellar • Melbourne Extended Care & Rehabilitation Service • Bendigo Health Care Group-Anne Caudle • Peter James Centre Campus • Bundoora Extended Care Centre • Royal Talbot Rehabilitation Centre • Caulfield General Medical Centre • St George’s Health Service • Goulburn Valley Health • St Vincent’s Hospital • Kingston Centre, (including Hampton and • Sunshine Hospital. Dandenong hospitals)

Funding for these rehabilitation units is based on weighted units for Level 2 patients using the CRAFT classification. It includes specified grants for Level 1 and Special Level 2

Section B 10 categories (amputees, spinal, head injury and burns cases). Level 1 rehabilitation is for use by designated speciality programs providing rehabilitation following spinal cord injury, head injury or amputation and only where the rehabilitation episode follows the acute care episode in which the injury was the principle diagnosis. Subsequent episodes of care following the initial rehabilitation episode are not classified as Level 1. GEM patients within these agencies will continue to be funded on a bedday basis. A budget/activity cap will be allocated to VicRehab agencies. Rehabilitation weighted units and beddays will be calculated by the Department from data reported to the VAED. Agencies are required to ensure the sub-acute record includes admission barthel, separation barthel and clinical sub-program. Failure to do so may result in an inappropriate classification and a reduced payment for that record. For 2002-2003 DVA rehabilitation funding in VicRehab agencies will continue to be shadowed as CRAFT weighted units and evaluated for future funding at the end of the financial year. 2.9.2 Services with recognised GEM services and/or designated rehabilitation services of up to nineteen beds (non VicRehab) are funded with capped bedday targets for non-DVA patients. 2.9.3 For those agencies in receipt of the Victorian Artifical Limb Program funding prior to 2001- 2002, funding for artificial limbs continues to be provided to the relevant Health Services/Agencies through WIES equivalent payments. Agencies are required to submit an annual report on artificial limb expenditure, which includes a 10 per cent administration cost. The equivalent in WIES is then calculated by the Department and added to normal WIES throughput. 2.9.4 Calendar year VAED data (or most recent year of completed record data, (i.e. February 2001 to 31 January 2003) is used in evaluating sub-acute throughput when deriving targets. This allows for more recent changes in agency services to be included in the evaluation. (The recall process uses financial year activity measured against targets provided in the Policy & Funding Guidelines). The Department provides a Casemix Calculator for CRAFT weighted units which can be downloaded from the Departmental website on http://casemix.health.vic.gov.au The calculator provides the CRAFT weights for 2002-2003 and previous years. When using the calculator to compare throughput (for both calendar and financial year), DVA and Level 1 activity and should be excluded and calculated separately. A monthly separations activity report is provided to all VicRehab agencies outlining rehabilitation activity reported for CRAFT weighted units, and Level 1 and special Level 2 bedday reported activity. DVA bedday activity is also reported. (See CRAFT Report, Section C - Supplementary Information) 2.9.5 Interim Care Any externally contracted bed-based interim care service must have 24 hour on-site access to Division 1 Registered Nurses. Projects are expected to include access to additional social work services to assist people to move to appropriate long-term care. The focus of activity for the interim care services is on providing additional time and assistance for families/carers to arrange longer term placements for each person. Consideration can also be given to flexible use of available funding to enable people waiting for residential care to be managed either as an inpatient, or through appropriate care and accommodation services, or in cases where it is appropriate, by providing extra support services in a person’s home. Effective assessment to determine which patients may benefit from a trial at home; which patients could be safely managed at home for a

Section B 11 limited period with more significant support resources (even if in the longer term residential care is needed), and which would need to have 24 hour support as an inpatient or through other accommodation and care services would be an essential feature. The purpose of any approved flexible funding component in interim care is to provide the eligible person with appropriate support while they endeavour to secure a residential care place. It is expected that people will access the flexible program funding for a limited period of time and that there is a flow of patients to either community or residential care. Where a person is able to continue to manage in the community on a longer-term basis, transfer to community services within ninety days would be expected. In the event that the person experiencing a trial at home is unable to manage despite additional assistance, residential care should be sought. There are examples of Health Services developing interim care style services that are not specifically funded by the Department. However, to maximise the chances of success they should utilise any Departmental Guidelines developed for Interim Care. 2.9.6 DVA patients in all sub-acute services are funded separately by the Department of Veterans Affairs, and activity is not capped. Shortfalls in DVA throughput cannot be substituted by above target public patient throughput. For DVA patients it is essential that the DVA number for non-admitted patients be accurately recorded in the Minimum Data Set. This will enable the Department to clearly identify attendances for DVA patients and account for this service to DVA. If the DVA number is not recorded or recorded incorrectly the premium payment for associated attendances cannot be made.

Reporting arrangements for inpatient services 2.9.7 All sub-acute service providers will need to report patient activity and throughput to both the VAED and AIMS data collections. For PRS/2 all admitted sub-acute patient records must include transmission of the completed s2 Sub-Acute Record on separation. Inpatient GEM and rehabilitation activity and throughput are calculated from data reported to the VAED. This is based on separated bed-days in each financial year. Only NHT activity and payments are calculated from AIMS. AIMS data collection is applicable to all funded sub-acute services. All sub-acute services are to be reported on the following two returns: • 111 S1 Admitted Patients • 305 S4 Admitted Patients by Sub-Acute Stream of Care Standard definitions and reporting arrangements are specified in current versions of the PRS/2 Manual, AIMS Public Hospital User Manual and other amending documentation prepared by the Department. Patients admitted to a designated interim care pilot will be identified as Care Type G or E. Only hospitals that have an interim care pilot approved by the Metropolitan Health and Aged Care Division should use these two care types.

Reporting arrangements for Non-Admitted Patients 2.9.8 Community Rehabilitation Centres will report patient activity and throughput to both the Community Rehabilitation Centres Minimum Data Set (MDS) and Performance Indicators (Oct 1998) and AIMS data collections on 305 S2: Non-Admitted Patients. For DVA clients only service activity targets will be measured by “attendance” rather than “CRC place”. This change has been made due to accountability requirements for DVA. For 2002-2003, DVA targets have been updated to reflect individual attendances. DVA

Section B 12 “attendances” are currently reported via the AIMS data collections on 305 S2: Non- Admitted Patients. No change in this reporting process is required. Non DVA activity will continue to be measured by CRC place. Specialist Clinics, including continence, falls and mobility, and pain management clinics funded through the sub-acute program, will report patient activity and throughput to both the Specialist Clinics MDS and Performance Indicators (July 1999) and AIMS data collections on 305 S2: Non-Admitted Patients.

Recall arrangements 2.9.9 The Department recognises that health services may find it difficult to precisely meet the annual CRAFT targets or GEM or rehabilitation bed days. Therefore, the following approach to recall will apply to all sub-acute agencies in 2002-2003: Where total public GEM and/or rehabilitation activity is between 0 and 2 per cent below target, funding associated with the below target portion will be recalled at half the relevant rate (i.e. If total public activity falls between 98 per cent and 100 per cent of target, recall will apply to 50 per cent of the gap between actual activity and target activity). Similarly, throughput between 0 and 2 per cent above target will be paid at half the relevant rate. Where actual public throughput is below 98 per cent of target, payments will be adjusted to reflect work actually done (i.e. If throughput is 95 per cent of target, 5 per cent of funding will be recalled) When determining whether recall applies, the Department will consider throughput across both the rehabilitation and GEM funding streams within a health service. DVA activity in all designated rehabilitation units and GEM services is subject to recall for 100 per cent of any shortfall between actual activity and target. NHT or interim care activity is not included when calculating GEM or rehabilitation activity. Changes to targets at a Health Service level can only be undertaken after consultation and agreement with the sub-acute unit in the Department’s Head Office. If a Health Service is considering a significant shift in activity between existing sub-acute facilities within the Health Service, they must consult with and obtain the agreement of the sub-acute unit in the Department’s Head Office.

Non-Admitted Specialist Clinics 2.9.10 The only specialist clinics with notional unit prices applied are continence and cognitive dementia and memory clinics. These services have targets determined based on the number of patients treated. A patient treated is defined as a patient/client formally admitted to the clinic service for a defined episode of assessment, management or treatment, regardless of the number of attendances or occasions of service provided within the episode of care. The unit price for continence clinics is $500. The unit price for cognitive dementia and memory clinics is $1,300. Throughput targets for DVA clients of specialist clinics were initially developed in 2001- 2002 and have been reviewed for 2002-2003.

Inpatient Palliative Care Services 2.9.11 The VAED will be used to determine activity levels for inpatient palliative care services 2.9.12 Health services in rural areas that have exceeded their bed day targets will be able to convert WIES to palliative care. 2.9.13 Health services not meeting their palliative care bed day targets will have funds recalled equivalent to the unmet bed days.

Section B 13

Community Based Palliative Care Services 2.9.14 Community based palliative care services are required to provide data to the Department through the Victorian Palliative Care Reporting System (VicPCRs) on a quarterly basis. Dates for submission are: • 28 January (for data period 1 October – 31 December); • 28 April, (for data period 1 January – 31 March); • 28 July (for data period 1 April – 30 June); and • 28 October 9 (for data period 1 July – 30 September). 2.9.15 Financial Accountability Reporting requirements are required to be submitted on an annual basis and must be submitted by 1 October, three months following the end of the financial year. The reports are to be sent to the Regional Office.

Statewide Palliative Care Services 2.9.16 Statewide services are required to report information in line with the deliverables contained in their service agreements. Income and expenditure reports are also required by to be submitted on an annual basis and must be submitted by 1 October, three months following the end of the financial year.

Unassigned Palliative Care Bed Funds 2.9.17 The aim of these funds is to optimise the flexibility of services in their ability to respond to the individual needs of a specific client. The funds may be utilised by services to acquire additional care for the client, to purchase equipment that is not readily available, or to arrange for additional home care or respite care for the client. In 2002, all services will be required to provide data on the activities provided from the funds on a quarterly basis as part of the VicPCRs reporting. 2.9.18 Flexible Funding Arrangements • Home Based Care • Unassigned Bed Funding - Geriatric Evaluation and Management • Continuum of Care – Geriatric Evaluation and Management During 2000-2002 Acute Health plans to commence a project to examine whether the existing range of sub-acute flexible funding arrangements for home based care can be rationalised.

2.10 Hospital Accreditation Accreditation is a mandatory minimum standard for all public acute and sub-acute health providers. It is a requirement that these providers maintain their accreditation status, provide Accreditation Outcome Resorts, where appropriate, to the Department, and notify the Department of any High Priority Recommendations (HPR) and submit an action plan for addressing the HPR.

2.11 Patient Flow The Effective Discharge Strategy applies to all health services (acute hospitals, sub-acute services and Multi-Purpose Services). 2.11.1 Health services are required to:

Section B 14 • consult with clients and their carers regarding their discharge and arrangements required, and ensure a timely transfer of information pertaining to a patient’s discharge to patients and their family/carers, GPs, other community based providers, and other receiving hospitals/services; • provide to all clients on discharge, a single hospital point of contact for follow-up phone calls for professional information, advice and support following discharge; and • involve GPs in the care of their patients in the hospital, particularly in discharge planning. The Enhanced Primary Care MBS items can be used to facilitate this. 2.11.2 Health services are required to: • risk screen patients within one day of admission; • develop discharge plans when appropriate; • notify community providers at least two days prior to separation when services are required; and • dispatch a discharge summary to GPs within one day of separation. Health services are expected to report on their performance against the four performance indicators using the database supplied by the Department. An audit will be conducted in July 2002-2003. A random sample will be drawn for each health service from the VAED for this purpose. Health services will be provided with both individual and comparative results. It is expected that health services will use these indicators on an ongoing basis for internal reporting.

2.12 Post Acute Care Eligibility 2.12.1 To receive additional post acute care services through the PAC program, clients must: • have been an inpatient of a public hospital, acute or sub-acute. This includes patients who have presented to a public hospital Emergency Department (but may not have become an admitted patient); • be assessed as requiring additional services to assist with recuperation or transition to continuing care following an acute WIES-funded episode or sub-acute episode of care (this does not include patients discharged from an acute psychiatric episode of care but does include patients discharged from an acute WIES-funded “same day” episode of care); • consent to receive additional post acute care services under the PAC program; and • agree to the forwarding of individual de-identified client level data to the Department for the purposes of program monitoring and evaluation. 2.12.2 Patients receiving Hospital in the Home or Rehabilitation in the Home are classified as inpatients and the hospital is responsible for providing nursing, allied health and hotel- type services (eg. meals on wheels and home help) if required. These patients are therefore not eligible for PAC until they have been discharged from the hospital. 2.12.3 Patients receiving services from Community Rehabilitation Centres (CRC) and community based palliative care are eligible for PAC if the patient has previously been an inpatient of a hospital. Services provided through PAC should not duplicate those provided by the CRC or the palliative care service. PAC services that may typically be provided to CRC patients could include nursing and hotel type services, and for palliative care patients, hotel type services.

Section B 15

Provider Arrangements 2.12.4 If patients are assessed by the hospital or sub-acute service as requiring additional care services and are eligible for PAC, the PAC Service should: • develop, coordinate and implement a post discharge care plan; • purchase an individually tailored package of health and community care services in accordance with the post discharge care plan developed above; • liaise with the client’s nominated general practitioner; • review client needs and adjust services accordingly; and • facilitate transition to continuing care where required by referring PAC clients to appropriate health and community care agencies, prior to their exit from the PAC program. 2.12.5 There is no specific time limit for the provision of services through the PAC program. However, PAC is intended to be a short term intervention designed to assist patients to recuperate following an acute or sub-acute inpatient episode of care and to facilitate their independence or transition to continuing care where required. For some patients services may be required for several days, for others, particularly those discharged from sub-acute facilities, this may mean a number of months. 2.12.6 Hospitals are responsible for implementing and providing effective discharge for their patients. As such, PAC Services should not take on those tasks within the discharge process that are the responsibility of the hospital, including risk screening and assessment processes. 2.12.7 PAC Consortia are responsible for management of their budgets. In the case of under- expenditure by a PAC Service, the Department will recall the funds. Over expenditure by PAC Services will not be reimbursed. 2.12.8 For the purposes of the PAC program, the following guidelines have been established to assist projects in purchasing services for clients: • Receiving services prior to admission to hospital or sub-acute facility, these services should be maintained at existing levels during and following the post acute care episode, at no charge to the PAC program. Where additional services are required for post acute care, these may be charged to the PAC program; or • Who have continuing care needs beyond the post acute care episode, PAC services should arrange for these needs to be met through referral to suitable health and community care providers. DVA Clients 2.12.9 In 2002–2003, additional funds will be available to expand PAC Services for service provision to eligible Department of Veterans Affairs (DVA) sub –acute patients in addition to acute patients. Details of the arrangements are available from the Continuity Unit, Metropolitan Health and Aged Care Services Division. Reporting and Accountability Requirements 2.12.10 PAC services are required to comply with the following reporting arrangements: • Participating providers must sign a PAC Services Terms of Funding Agreement. Where a consortium of agencies exists for the management of PAC, all consortium members must sign the agreement. • Participating hospitals to record on the Victorian Admitted Episodes Dataset (VAED),

Section B 16 all patients discharged from hospital or sub-acute service and admitted to the PAC program, by the use of formal separation Type H accompanied by Separation Referral code P in accordance with the PRS/2 Manual 12th Edition, July 2002. • Participating PAC Services to record sub-acute clients using a funding source category with the code “SUBP”. • Participating PAC Services to record emergency department patients who have not been admitted to a hospital ward by using a funding source category with the code “ED”. • No later than ten working days following the end of September and March, provide by email the number of episodes completed during the preceding quarter. Episodes completed for acute, sub-acute and emergency department clients are to be recorded separately. • No later than ten working days following the end of December and June, provide electronic six monthly and year-to-date reports, containing information at least equivalent to that provided by the PAC Service Accountability Reports and Financial Accountability Reports generated by the Care Manager software. Separate reports to be provided for acute, sub-acute and emergency department patients. The information provided electronically following the end of each six months, as above, is to include data which is in a format compatible with the Department’s PAC Reporting Module, such as that generated by the Care Manager software, or as specified by the Department. • No later than ten working days following the end of the financial year, or as required by the Department for monitoring and evaluation purposes, provide de-identified client data, as provided by the Encrypted Backup function of the Care Manager software. • By 31 July 2003 submit a certified statement of income and expenditure on an accrual basis for the 2002-2003 financial year in the format specified by the Department. • Advise the Department of any intention to change the auspice body or management structure of the PAC Service; and provide other information as required by the Department. • Provide other information as required by the Department.

2.13 Hospital In The Home (HITH) Program Patient Eligibility 2.13.1 The Hospital In The Home (HITH) Program is available to acute public patients, DVA, TAC, and Work Cover clients. Patients in residential care (nursing homes, supported residential services, supported accommodation and other residential care facilities) are eligible for HITH. 2.13.2 For patients to be eligible to be treated under HITH, they must: • be assessed as clinically suitable for home based acute care; • have appropriate support in the home, ie. a carer; • have a suitable home environment;. • be fully informed about HITH, their rights and obligations and those of the providing hospital; • choose to be treated in HITH and provide written consent to be treated in HITH; and • be registered as admitted patients who are transferred to HITH care.

Section B 17 2.13.3 Hospitals participating in the Program must ensure that they have appropriate patient selection, admission, treatment and discharge protocols. 2.13.4 Patients are eligible to receive the full range of services, ie. “hotel” services, allied health, etc. they would have normally received in hospital. Participating providers may either provide HITH services directly or purchase services from health and community care providers. Treating hospitals may sub-contract HITH services from other providers to meet the care requirements of patients. Patients will remain inpatients of the treating hospital and the hospital will retain primary responsibility for the care of the patients. Payment for HITH services provided are to be negotiated between the services. Reporting and Accountability 2.13.5 All participating hospitals are required to record patients treated under HITH on the VAED as Accommodation Type 4 in the Episode Record, in accordance with the PRS/2 12th Edition, July 2002. 2.13.6 Additional information may be sought from hospitals in the form of progress reports for the purposes of continuing policy and program development. Monitoring, Evaluation and Review 2.13.7 Hospital HITH activity, including HITH substitution rates, will be monitored via the VAED on a quarterly basis as part of the Quality Framework. The Department will distribute HITH activity reports as part of Quality Reports to participating Hospitals at the end of each quarter. The Department will monitor HITH activity at least according to 2.13.13 and 2.13.14 below. 2.13.8 Calculations relating to HITH separations or HITH bed-days involve the following: • Only episodes eligible for WIES funding (see Calculation of WIES, Box 1, in Section C - Supplementary Information of these Guidelines). • Accommodation Type 4 separations in any of the Status Segments (refer to the PRS/2 manual, 12th Edition, July 2002). • HITH bed-days exclude same-day episodes, except for same-day episodes grouping to R63Z Chemotherapy. • The HITH substitution rate is defined as the number of HITH inpatient bed-days, calculated as a proportion of all inpatient bed-days completed by the hospital or health service for all separations for the given time period. All of these bed-day numbers exclude same-day separations, except for same-day chemotherapy separations. • DRG specific activity rates will also be calculated to reflect both the number of HITH separation of a particular DRG and the HITH lengths of stay of the same DRG. DRG Specific activity rates will be calculated for participating hospitals in Groups A1, A2 and B for the most common HITH DRGs in addition to HITH bed day substitution rates. HITH bed day substitution rates only will be calculated for other participating hospitals. • HITH bed-days for any patient episode are totalled on the day of separation and include days that may have occurred in a previous reporting period. 2.13.9 In 2002-2003, hospitals will again be required to monitor and report bi-annually unplanned returns to hospital during a patient’s HITH episode, as part of the Quality Framework. This indicator is also being collected as a clinical indicator through the ACHS EQuIP program. 2.13.10 The Department encourages the use of the HITH Minimum Data Set (MDS) that was developed by the VCACI. The development of the HITH MDS was to enable the collection of comprehensive data to plan for and manage change, and to assist in enabling optimum

Section B 18 utilisation of HITH Programs.

2.14 Specific Purpose Grants for Services to Persons from Non-English Speaking Backgrounds 2.14.1 Hospitals receive these grants as part of the Quality Fund and will continue to be required to report on culturally and linguistically diverse services in their Quality of Care Reports. Hospitals will need to participate in and collaborate on research and evaluation to develop appropriate reporting requirements, such as the trialing of an appropriate performance indicator. 2.14.2 The grants encourage hospitals to improve service delivery to admitted and non-admitted patients from culturally and linguistically diverse backgrounds. Provision of language and culturally sensitive information in hospitals is an important quality issue and services should generally be consistent with those outlined in the publication working with Patients from non-English speaking backgrounds: Guidelines for Health Agencies. 2.14.3 Hospitals are expected to participate and contribute to research and evaluation conducted in relation to services for patients from culturally and linguistically diverse backgrounds, such as the work being undertaken by the Centre for Ethnicity and Health and the other Departmental reviews.

2.15 Maternity Services 2.15.1 Provider Arrangements Hospitals are expected to provide: (a) the offer of at least one postnatal domiciliary visit to every woman giving birth and further visits for women according to their needs; (b) care during pregnancy and childbirth that reflects best available evidence on effectiveness; (c) increased continuity of care, with respect to hospital care and integration with the community provision of antenatal and postnatal care and support; (d) improved responsiveness to women with special needs; (e) improved arrangements for monitoring, review and improvement in the quality of care; and (f) greater opportunities for consumers to make informed choices, participate in decision making and provide feedback for service improvement. Hospitals are required to ensure adequate postnatal care for women and their families according to clinical and psycho-social needs. This is defined as offering as a minimum: (a) at least one postnatal home visit for all women following discharge from hospital and more depending on postnatal length of stay in hospital; (b) at least two postnatal home visits or more if required for women with special needs, such as women from diverse cultural backgrounds, newly arrived migrants, single young mothers, women with disabilities and first time mothers; and (c) at least two or more postnatal home visits for women after a caesarean section, or with complications arising from the birth or immediate postnatal period. Most women will receive more than one visit.

Section B 19

Reporting Requirements Hospitals will be required to provide data in line with performance reporting requirements as specified in the Quality Framework Business Rules 2002-2003. Additional indicators, piloted in six hospitals in 2001-2002, will be included. Hospitals are required to provide patient level data monthly, on postnatal domiciliary care through both the VAED and AIMS: Domiciliary Postnatal Services: Form 111/D1. There will be a focus during the current year on ensuring a more complete AIMS collection, but the VAED remains crucial to performance monitoring.

2.16 Payment For Non-Admitted Radiotherapy 2.16.1 Payment for non-admitted radiotherapy services will comprise of: (a) A variable payment of $124.14 per WAU; (b) An associated department cost payment of $55.86 per WAU; (c) A DVA premium (where applicable); (d) A specified grant (for SXRT, DXRT, Brachytherapy, Stereotactic Radiosurgery and IMRT); and (e) A growth payment on targets set for each patient type which is to be funded at the full variable rate.

2.16.2 Table 2: 2002-2003 Targets 2002-2003 2002-2003 2002-2003 2002-2003 2002-2003 Public DVA Private Base Maximum The Alfred 33,997 1,611 1,017 36,626 38,026 ARMC 8,416 1,258 16,714 26,063 27,055 Geelong 24,484 1,340 - 25,824 25,824 PMCI 37,192 8,083 87,500 132,775 137,763 All Providers 103,765 12,292 105,231 221,289 228,669

2.16.3 The review of funding identified that some patients have not been receiving services funded by the associated department cost payment. These services must be provided to all patients as required. The services include: • Allied health • Patient accommodation • Patient transport • Patient education • Pharmacy (associated with planning) • Radiology 2.16.4 Activity above the maximum targets will not be funded. 2.16.5 Adjustments will be made for activity below target. 2.16.6 Payments will be based on hospitals complying with monthly reporting requirements specified under the Agency Information Management System (Public Hospital User Manual).

Section B 20

Additional Data Collection in AIMS Form 111-S8 2.16.7 In order to assist with service planning, the AIMS Form 111-S8 has been revised to include some additional data collection in 2002-2003. The data that will be collected includes: • Number of courses commenced as an inpatient by patient type and by site; and • Number of courses commenced as a non-admitted by patient type and by site. Below is the data table that will require completion. Operators of the radiotherapy services only will be required to submit the data on a monthly basis. Table 3: Radiotherapy Courses Data Collection Form Radiotherapy Courses Commenced as Admitted Patient Commenced as Non Admitted Patient Other Other Campus [Insert Names] Public DVA Public DVA Private Private Campus 1 Campus 2 Campus 3 Campus 4 Total For further information and instruction refer to the Agency Information Management System Public Hospital User Manual.

2.17 Quality Fund 2.17.1 Payments from the Quality Fund will be determined in accordance with the provisions outlined in the Quality Framework Business Rules.

2.18 New Technology/Clinical Practice Program 2.18.1 Funding is available for the New Technology/Clinical Practice Program in 2002-2003 at a similar level to that in 2001-2002. Submissions were sought in May 2002. Submission criteria include: • a procedure or practice introduced during the past two years; • of proven efficacy with demonstrated improvement in either (or both) clinical outcome or reduction in long term health costs; • demonstrated to have significant costs not incorporated into cost weights;

• demonstrated evidence of operator credentialing and competency, where a new procedure or the use of a new prosthesis/device is involved. This a new criterion for 2002-2003; and • a minimum cost for each submission of $20,000. 2.18.2 The New Technology Grant Program for 2002-2003 will comprise funding for: • new grants; • a second year of funding for items funded in 2001-2002 and not covered by casemix in 2002-2003; and • extended (beyond a second year) funding of items previously supported through this program which are not incorporated into casemix and/or are not funded by the

Section B 21 Commonwealth. This will be proportionately distributed based on the allocation to each hospital/health service for rollovers in 2001-2002 and be allocated as a block payment. Submissions are not required. 2.18.3 This year, co-payments for AAA stents and Atrial Septal Defect closure devices have been included in casemix. These items will no longer be funded under the New Technology grant. As hospitals are now able to seek funding for trastuzumab (Herceptin) through a specific Commonwealth funding program this also will not be funded under the New Technology grant program. 2.18.4 As for previous years, proformas will be used in the 2002-2003 program to strengthen the application process and enable a more equitable approach to assessment. Generally additional information will not be sought from incomplete applications. 2.18.5 New information will be required in submissions for the 2002-2003 program to ascertain the process for formal appraisal of new technology by Hospitals/Health Services. This includes details of any internal assessment by a New Procedures/Practice/Technology or Pharmaceutical Advisory Committee or equivalent.

2.19 Co-ordinated Care Trials 2.19.1 Northern Health and the Austin and Repatriation Medical Centre will be participating in the Coordinated Healthcare Trials in 2002-2003, as Phase II of the coordinated care trials. 2.19.2 Coordinated Care trials utilise funds provided by the Commonwealth and the State to coordinate the care of a selected group of the population who are either chronically ill or who have ongoing complex medical needs. The aim of the trials is to test the hypothesis that coordination of care of people with multiple service needs, where care is accessed through individual care plans, and funds pooled from existing Commonwealth, State and joint programs, will result in improved individual client health and well-being within existing resources. 2.19.3 The trials involve the pooling of a negotiated quantum of public hospital WIES with MBS and PBS payments, and funds from other agreed health programs to allow trials to purchase the range of health services required to support the trial participants. Services to be purchased will include acute admissions.

2.20 Rural Patients Initiative General Conditions 2.20.1 Funds are made available under the Rural Patient Initiative to purchase additional elective surgery activity in addition to usual elective surgery throughput. 2.20.2 The Initiative targets specialties in which there are a high proportion of long waiting patients. Targets groups are Category 2 elective surgery patients waiting over ninety days and Category 3 elective surgery patients waiting over one year, as well as medical patients with excessively long waits. 2.20.3 The type and level of activity undertaken should be appropriate to the level and role of the hospital within the local area and region. 2.20.4 The model of funding determines the type of payment received by hospitals. For example, if additional activity is approved at the normal WIES rate, funding will flow as WIES. Most payments are made in this form. However, if other models are employed which involve additional or modified costs, funding will be in the form of a cash flowed specified grant.

Section B 22 2.20.5 Hospitals that receive additional funding through this process will be required to submit information monthly on elective surgery and other throughput under this initiative. Budgets may be adjusted if normal elective activity is not demonstrated in addition to the extra activity generated by the Initiative. A quarterly report on throughput funded by this initiative and other related throughput will be compiled. 2.20.6 As well, activity undertaken through the Rural Patients Initiative will be flagged in Victorian Admitted Episodes Dataset (VAED). All Patients admitted through the initiative should be reported with the admission Type code Q-Rural Patients Initiative. As the aim of this initiative is to treat long-waiting patients from hospital waiting lists, the Admission Source for these episodes will be L - Waiting List. If your health service currently reports the Admission Source of elective patients with code Z - Other formal you are advised to continue to use this code for elective patients. 2.20.7 All allocations made under the Rural Waiting List initiative are subject to amendment if activity does not reach anticipated levels. Any review of hospitals allocations will be undertaken in consultation with hospital and Regional staff. 2.20.8 In accordance with long standing policy, for example on rural specialty grants, the preferred models for service provision are non fee for service models. Models that involve the transport of rural patients to other rural or metropolitan sites to receive more timely service may include additional costs for travel, medi-hotel arrangements or other additional costs in these are necessary for more timely treatment. Ongoing Funding 2.20.9 Hospitals that participated in the Rural Waiting List Initiative in 2001-2002 will be considered for funding in 2002-2003 provided that the hospital can demonstrate ongoing need and success in treating long waiting patients and reducing waiting lists and times. 2.20.10 Allocations for these hospitals will be based on 2001-2002 allocations, activity performed under the Initiative at each hospital as reported in the VAED and monthly reports submitted by participating hospitals, and Regional advice on the willingness and capacity of the hospital to continue to provide the additional service. 2.20.11 Modelled budgets include 2001-2002 allocations on a notional basis only. Additional Allocations - 2002-2003 2.20.12 Approximately 1,750 WIES is available for allocation in 2002-2003. 2.20.13 Hospitals seeking funds through the initiative will be asked to submit proposals providing • Data on the number of patients in the program’s target group, as listed in 20.20.2. • Information on the proposed additional activity, including the number of patients to be treated, the number of WIES (or other payment) requested, and the specialties in which the work will be undertaken • Information demonstrating the capacity of the service to achieve the proposed activity levels. 2.20.14 Further information about the submission process will be provided in July 2002. Regions will be the key contact point for hospitals wishing to discuss and submit proposals. The Director, Rural and Regional Health will make final decisions Services, on advice from Regional and Divisional staff. 2.20.15 Submissions will be prioritised on the basis of: • Demonstrated demand for services, as indicated by the number of patients experiencing long waits for surgery. Hospitals that do not collect such data but are able to otherwise demonstrate need should discuss their proposal with Regional

Section B 23 contacts.

• Ability of the proposed service to address identifiable gaps in the range of services available to the local community. • Capacity to establish the service and sustain the proposed levels of activity in the medium to long term. • Cost effectiveness in respect the proposed number and type of patients treated.

2.21 Rural Hospital Specialist Service Grants Introduction 2.21.1 It is a Government policy to maintain and enhance specialist services in major rural centres. Current fee-for-service payment arrangements by rural hospitals to specialists may be a disincentive to develop and provide specialist services. In order to support and in some cases provide specialist services in rural hospitals, the Department will continue with rural Hospital Specialist Services Grants. These grants will be made in respect of specialist services undertaken on a regular and substantial basis in Sub-Regional Hospitals. Whilst the final decision in terms of the range and level of specialist services provided is to be made by the individual hospital management, taking into account the medical needs of its local community, allocation of the grants will be determined by the Rural Health and Aged Care Services Division following regional office recommendations and consultation with acute health policy personnel. In determining the range and level of specialist services, Hospitals should refer to The Guide to the Role Delineation of Health Services in order to take into account factors such as available support services, staff profile, minimum safety standards and other requirements to ensure that clinical services are provided safely and are appropriately supported. 2.21.2 Decisions on making grants available will take into account: • Eligibility, with much more emphasis on access to practitioners. • Need for the specialty taking into account access to existing specialist services and the natural catchment of the hospital. • The Guide to the Role Delineation of Health Services. • Regional strategic planning, integrating the local service profile within the wider service system. • Regional self sufficiency. Hospital Specialist Services 2.21.3 Specialist services should be within reasonable access for rural residents. A maximum of five specialties will remain for sub regional hospitals of: • Obstetrics & gynaecology • Anaesthetics • Surgery, (any surgical specialty providing it is clinically appropriate) • General medicine 2.21.4 For the purpose of grant allocation under the Scheme, core specialist services have been identified as those services which ought to be available to communities of a given catchment size.

Section B 24

Regional/Sub-Regional Hospitals 2.21.5 Specialist Service Grants for regional hospitals are included for 2002-2003 in the Rural Grant Premium per WIES. Specialist Service Grants in 2002-2003 will therefore apply only to sub-regional hospitals who provided between 3000-5000 WIES in 2001-2002. Services must be provided by recognised specialists. Regular and Substantial Services 2.21.6 A number of criteria will be used to establish whether a service is deemed to be regular and substantial. These include time and commitment, patient numbers and cost to the hospital. The requirements are minimum requirements which must be met in order for a grant to be considered for approval. For a service to be considered regular and substantial there must be an attendance by a specialist no less frequently than once every two weeks and the time spent must be no less than an average of 0.1 of an EFT per week. There must be a commitment to after hours support. The workload for the specialist service would be both in excess of one hundred and twenty cases per annum and the cost to the hospital should be in excess of $66,000 per annum. Hospitals will be required to substantiate their applications with information that addresses their criteria. Government Policy On Fee-For-Service Remuneration of VMOs. 2.21.7 It is the Government’s expectation that there will be a significant shift away from a pure fee for service remuneration model for VMOs providing a regular and substantial service. Hospitals should be actively working towards a sessional model of remuneration and will be asked, from time to time, to report on their progress. Pure fee for service payment remains an option, but it is a non-preferred option from the Department’s perspective because it is difficult to cap, and because it is an uncapped expenditure element facing hospitals within a largely capped revenue stream. This approach is consistent with the Lochtenburg Review. Quantum of Grant 2.21.8 Grants for each eligible specialty will be $70,000. Hospitals may be eligible for up to five specialties. Specific Qualifications 2.21.9 All submissions from hospitals to be considered for the grant will need to include the eligibility criteria above as well as demonstrating that practitioners have approved qualifications. Evidence of Postgraduate study without the required certification will not be sufficient for the purpose of the Rural Specialist Services Grant, unless adequate supervision can be arranged. The Ministerial Review of Medical Staffing in Victoria’s Public Hospital System, (aka the Lochtenburg Report) noted that rural hospitals face difficulties in attracting and retaining specialists and recommended that the colleges review their guidelines and standards for certification and credentialing to ensure they do not unreasonably impair the provision of services to rural areas. (Recommendation No.27). The report also noted that in rural areas anaesthetic and obstetric services may need to be provided by specially trained General Practitioners in the absence of specialists and recommended that the relevant specialist college recognises this training. (Recommendation No.28).

Section B 25

Grant Process 2.21.10 Hospitals which consider that they are eligible for a Rural Specialist Services Grant (i.e. that they meet the criteria of providing specialist services as outlined above) should prepare submissions in conjunction with their Regional Manager, Provider Management. Such submissions should clearly demonstrate the compliance with each of the necessary criteria. The Regional Director must formally support the proposal submitted to the Executive Director, Rural Health and Aged Care Services Division, copied to the Director, Funding and Financial Policy, Metropolitan Health and Aged Care Services Division. 2.21.11 Hospitals are required to reapply for each specialty every year and substantiate the actual activity to the criteria for the previous year’s grant. Hospitals are also responsible to maintain processes to ensure that the specialists are properly credentialed and that their facilities and systems are of an appropriate standard to provide a quality service. 2.21.12 Applications for these grants must be received by the Department prior to 17 September 2002. Applications should be addressed to the Regional Manager, Provider Management.

2.22 Redirection of Funds 2.22.1 Where total earnings for the Metropolitan Health and Aged Care Services Division program exceed the expenses incurred in delivery of the full quantity of services specified in the HSA, the surplus may be used by the Hospital for any purpose connected with its agreed function. 2.22.2 This clause does not apply if contrary arrangements regarding unexpended funding provided for a specially identified purpose are agreed.

2.23 Privacy 2.23.1 The Hospital, its employees, agents and subcontractors must comply with the requirements of the Information Privacy Act 2000 (Vic) and Health Records Act 2001(Vic) (both as amended and in force from time to time), with respect to any act done, or practice engaged in, for the purposes of this Agreement. 2.23.2 The Hospital must take reasonable steps to ensure that its employees, agents and subcontractors comply with this requirement. 2.23.3 In this clause: (a) "subcontractor" includes any person employed or engaged by a subcontractor; and (b) "information" means: (i) in relation to an employee-information acquired whilst acting in the course of employment; (ii) in relation to an agent-information acquired whilst acting on behalf of the Hospital; or (iii) in relation to a subcontractor-information acquired whilst providing services to, or on behalf of, the Hospital.

Section B 26

2.24 Decentralised Programs Continuous Positive Airways Pressure (CPAP) 2.24.1 Since July 2001, the Continuous Positive Airways Pressure (CPAP) program ceased as a separate program funded by a specified grant. Funding for this service has been incorporated into the VACS outpatient base grant for Metropolitan Health Services/Major Rural Regional Hospitals, or the general outpatient grant for non-VACS funded hospitals. For 2002-2003 funding for CPAP will continue to form part of these outpatient grants. Routine reporting of these services to the Department is not required. Home Enteral Nutrition 2.24.2 Since July 2001, the Home Enteral Nutrition program ceased as a separate program funded by a specified grant. For 2001-2002, funding for this service has been incorporated into the VACS outpatient base grant for Metropolitan Health Services/Major Rural Regional Hospitals, or the general outpatient grant for non-VACS funded hospitals. Routine reporting of these services to the Department is not required. Victorian Artificial Limb Program (VALP) 2.24.3 Since July 2002, funding for the artificial limbs services has been converted to general WIES equivalents and rolled into and added to the individual agency’s (or health service’s) budgets. Therefore, the amount a particular agency allocates for these services is a matter for the agency and its assessment of clinical priorities. Hospitals that continue to be funded for these services are: • Austin and Repatriation Medical Centre (Royal Talbot Rehabilitation Centre) • Ballarat Health Services (Queen Elizabeth Centre) • Barwon Health (Grace McKellar Centre) • Bayside Health Service (Caulfield General Medical Centre) • Bendigo Health Care Group (Anne Caudle Centre) • Melbourne Health Service (Melbourne Extended Care & Rehabilitation Service) • Latrobe Regional Hospital • Peninsula Health Service (Mt Eliza Aged Care & Rehabilitation) • South West Healthcare (Warrnambool & District Base Hospital) • St Vincent’s Hospital • Women’s and Children’s Health Service (Royal Children’s Hospital) 2.24.4 It is expected that within two years, this data will be routinely collected as part of standard reporting and the general Cost Weight Study. For 2001-2002, agencies were asked to provide the Department with six monthly activity statements of provision of limbs and repairs. From 2002-2003 these statements will only be required yearly. Agencies have been notified of the format for reporting statements.

2.25 Cystic Fibrosis 2.25.1 An additional specified grant for outpatient allied health services is provided to three specialist services for Cystic Fibrosis: the Royal Children’s Hospital, The Alfred Hospital and Monash Medical Centre. Funding is provided for outpatient physiotherapy, dietetic and counselling occasions of service (psychology and social work).

Section B 27 The original grant was based on estimated activity. For 2002-2003, hospitals that have not reached expected limits will continue to receive the current grant. Hospitals that have reported higher than expected activity have had their grant increased accordingly. All grants have been adjusted to reflect current VACS payments i.e. $45 per occasion of service.

2.26 Transport Accident Commission (TAC) Patients 2.26.1 New funding arrangements for TAC admitted patients will commence from 1 July 2002. The Department will receive funding directly from the Transport Accident Commission for the admitted patient treatment of TAC patients eligible for WIES funding and will cash flow hospitals accordingly. That is, separate uncapped TAC WIES targets have been incorporated into hospital budgets for 2002-2003 based on throughput previously reported in the VAED. 2.26.2 Hospitals will now receive WIES payments for TAC patients directly from the Department. Hospitals, however, will need to continue to charge TAC directly for the medical costs associated with these admitted patient episodes. 2.26.3 For the Department to receive payment from TAC, patient information reported by the hospitals to DHS via PRS/2 must match those held by the Transport Accident Commission for each admitted patient separation. Details of the new data elements required to assist in this process are published in the Specifications for Revision to PRS/2 and to the VAED for 1 July 2002 (hdss.health.vic.gov.au/vaed/index.htm#2002specs). 2.26.4 Notwithstanding the provisions of Clause 2.2, the Department will pay a rate applicable for all TAC patients matched with TAC records (as reported in the VAED) including numbers in excess of the target. If hospitals do not achieve the TAC target, any funding which has been cash flowed will be recalled at the full TAC rate. It is imperative that hospitals ensure that their own records are complete, comprehensive and timely. 2.26.5 The Department will be actively monitoring the status of TAC patient records and liaising with the hospitals to ensure that for records where claims not accepted by TAC, either (i) additional information is transmitted to allow the claim to be accepted or (ii) hospitals retrospectively reclassify these patients to reflect any changes in care type and the preferences indicated by the patient on the form of election for admission.

3 Mental Health Services 3.1 Preamble In general terms, Hospitals and agencies in receipt of mental health funding are expected to: • Implement or deliver the specific service for which Departmental funding is provided. • Deliver quality services, as well the required volume of service. • Deliver services that are accessible, inclusive and responsive to the diversity of the Victorian community and take account of the needs of consumers and carers. • Provide data and other evidence that funding has been used appropriately. • Work with the Department to develop new approaches to service delivery. • Meet statutory requirements regarding the care of people with a mental illness Hospitals and agencies receiving funding for the delivery of mental health services enter into a service plan or agreement with the Department. The service plan or agreement provides details of:

Section B 28 • Services (or activities) for which funding is provided. • Level of service to be provided. • Level and type of funding. • Data and reports agencies are required to submit to the Department. • Basis on which agency performance will be assessed. • Service standards and guidelines that apply.

Diagram 1: Relationship Between Mental Health Service Structure and Outputs Mental Health Output Group

Clinical Psychiatric Service System Clinical Community Disability Capacity Inpatient Output Support Output Development Output Output

Day Programs Consumers Adult Acute Ambulatory Respite Carers Residential Extended Care Mutual Support Training Self Help Research Quality IDP Aged Ambulatory Acute Outreach Ethnic Residential Productivity Investment Prevention & Promotion CAMHS Workforce Acute Ambulatory Residential

Acute Minor Capital Forensic Rehabilitation Ambulatory Extended Care

Specialist/ Acute Ambulatory Statewide

3.2 Performance Requirements The Mental Health Branch will continue to streamline and improve its performance monitoring processes in 2002-2003. Diagram 1 shows how the four mental health outputs relate to the mental health service system. Appendix 4 provides information about the funded activities that contribute to each of the outputs. New performance measures for the Clinical Inpatient, Clinical Community Care and Service System Capacity Development outputs are being introduced for reporting purposes in the 2002- 2003 financial year. The Psychiatric Disability Support Services Output performance measures remain unchanged. Appendix 4 describes the required output performance data and shows the relationship between these measures and data that agencies are required to collect.

Section B 29 In addition to the new measures shown in Appendix 4 other performance measures are set by the Mental Health Branch1 for inclusion in service agreements and plans. All activities, performance measures and their reporting requirements are detailed in Appendix 4. Further performance measures may add to a hospital or agency’s service agreement or plan as a result of negotiations between the Department and agencies. As specified in service agreements, all performance data must be collected, stored and reported using:

Clinical Services Data • RAPID – agency performance data are extracted monthly. However, as RAPID is used by agencies as a client management system, key client data must be entered by agencies more frequently. Admission, transfer and separation data for bed-based services must be entered onto RAPID within two hours of the event or if out of hours no later than 10am of the following business day. Diagnosis must be entered before, or at the time of, separation and linked to the Unit from which the client is leaving; • VAED – mental health reporting is as per reporting requirements for acute health data; and • AIMS information systems - mental health reporting is as per reporting requirements for acute health data.

Psychiatric Disability Support Services (PDSS) Data • PDSS Minimum Data Set – currently agency performance data must be submitted to the Mental Health Branch twice yearly. Quarterly reporting will commence when a redeveloped data set is implemented in October 2002.

Other Data • Other performance data will be obtained through periodic data collection as required.

3.3 Revenue Revenue targets are generally based on the previous year’s revenue patterns. Hospitals and agencies may retain revenue raised in excess of targets, although they must absorb any revenue shortfalls.

3.4 Minor Capital and Equipment The Annual Provisions Program is an annual rolling program providing funds to assist in the appropriate maintenance of assets. Approximately half of this funding is distributed to regions for direct maintenance funding; a portion is applied to existing commitments; an allocation goes toward feasibility and design costs for projects under development; and the balance is distributed to maintenance projects and minor capital developments in accordance with specific criteria. The distribution of annual provisions funding will occur early in the 2002–2003 financial year to enable the funds to be expended in the most effective manner for the purposes of maintaining assets.

1 Measures applicable to individual agencies are listed Schedule 3 of their service agreements.

Section B 30 3.5 Varying Targets Targets for performance measures and funding may need to vary throughout the year as a result of: • Growth funding • Changes to unit prices • Changes in the scope or type of services to be delivered Where funding and output targets need to be changed to reflect these factors, advice and guidelines as to how such changes are to be accounted for will be provided to contract managers in Central Office or Regions, who will then negotiate changes. Hospitals and agencies wishing to initiate changes to their agreements should contact their Department of Human Services contract manager in the first instance.

3.6 Other Conditions of Funding Mental health service providers are advised to also refer to: • Policy documents, guidelines and circulars (such as the Program Management Circulars) released by the Mental Health Branch and the Office of the Chief Psychiatrist. • The 2002–2003 Policy and Funding Plans produced by other Divisions of the Department of Human Services, where relevant. • The service agreement information produced for all agencies funded by the Department.

4 Fire Risk Management 4.1 Health and Safety 4.1.1 The Hospital is responsible for ensuring that it complies with all laws relating to fire protection, health, and general safety which apply to any premises from which the Hospital operates irrespective of whether the relevant regulatory requirements place the obligation upon the owner or occupier of those premises. 4.1.2 The Hospital is also responsible for ensuring that it complies with the Department’s Capital Development Guidelines: Series 7 (Fire Risk Management) insofar as they are relevant to the Hospital.

4.2 Operational Readiness 4.2.1 The Hospital must ensure that appropriate operational readiness measures are developed, implemented and reviewed. This includes (but is not limited to) fire emergency management and evacuation procedures, and training of staff to implement the procedures developed. The Hospital must also ensure that essential services are maintained.

Section B 31 4.3 Client Placement 4.3.1 At the time of patient placement in any premises, the Hospital must ensure the premises complies with all laws relating to fire protection, health, and general safety which apply to any premises from which the Hospital operates. The Hospital must also ensure that the premises are suitable for the client to be evacuated reasonably, taking into account the fire systems installed, and the evacuation capacities of the client. Where any relevant change occurs which may affect the client’s ongoing ability to evacuate safely, the suitability of the placement must be reassessed, and appropriate action taken.

4.4 Certificate of Fire Safety Compliance 4.4.1 The Hospital shall complete and return Certificate No. 6 of Fire Safety Compliance for 2002–2003 to the Department by the due date set out in the “Agency Fire Safety Return Table for 2002–2003”, which will be available on the Department’s web site.

5 Revenue 5.1 Requirement to Raise Fees and Charges 5.1.1 Hospitals will raise fees and charges in accordance with the Department’s manual Fees and Charges for Acute Health Services in Victoria: A Handbook for Public Hospitals. It is located at: http://www.dhs.vic.gov.au/ahs/feesman/index.htm The Department’s Fees Manual stipulates that public hospitals are permitted to raise fees for the following non-admitted patient services: (a) dental services; (b) spectacles and hearing aids; (c) pharmaceutical at a level consistent with Pharmaceutical Benefits Scheme statutory co-payments; (d) surgical supplies; (e) prostheses (this does not include artificial limbs or surgical implanted prostheses), aids and appliances and home modifications; and (f) services provided to compensable and ineligible patients. 5.1.2 Hospitals cannot raise fees for these services where they are services provided to admitted patients on discharge. The one exception is for pharmaceuticals provided by hospitals participating in the Australian Health Care Agreement – Pharmaceutical Reforms. 5.1.3 Admitted patient fees revenue includes fees raised for prostheses. 5.1.4 Any shortfall in outpatient revenue will be absorbed by the hospital. Any revenue generated in excess of the target will be retained by the hospital.

5.2 Payments and Revenue from Treating Private Patients 5.2.1 Arrangements For Private Patients Under current arrangements for acute inpatients, each hospital has a specified private inpatient WIES target and revenue target. Since June 1999 and the introduction of Lifetime Health Cover and a 30 per cent rebate scheme by the Commonwealth Government, the

Section B 32 number of people with private health insurance has increased by 50 per cent, and the number of privately insured bed days in public hospitals has increased.

5.3 Arrangements for 2002-2003 5.3.1 Arrangements for 2002-2003 will provide an incentive for hospitals to seek an election from those patients that hold private insurance to be private patients. Thus, the proportion of patients who elect to be private patients should increase, matching the significantly higher proportion of people holding private health insurance in the community. 5.3.2 Under the Department arrangements, each agency will have: i) One WIES activity target (cap) covering both public and private patients. (DVA activity to remain separate and payment made according to actual activity.) ii) Within the target (cap), public patient activity will be paid at the relevant public patient payment rate and private patient activity will be paid at the relevant private patient payment rate. iii) Within the overall target (cap) there will be a notional split between public and private WIES, based on the current split, but that split will only be used to determine under target or over target performance. Within the overall cap, hospitals can change that mix of public and private patients without limit. iv) The current private patient revenue target will continue at current levels, although most hospitals are now earning more revenue than this. v) The amount of the revenue target will continue to be deducted from payments to hospitals even if private patient activity is not undertaken. vi) Additional revenue received by the hospital (eg. from treating additional private patients) will be kept by the hospital and not be clawed back by the Department. 5.3.3 This policy provides an incentive for hospitals to seek an election from those patients that hold private insurance to be private patients. The hospital will receive maximum financial benefit when a patient switches from being a public patient to electing to be a private patient, and the hospital remains within its overall WIES target. In those circumstances, the hospital will continue to receive a WIES payment for the patient (at the private patient rate), will receive revenue from insurance funds, but will not have its Department revenue target altered. 5.3.4 Once the hospital meets its overall WIES target, the hospital may undertake additional private work, but it will receive no additional Department funding, and needs to consider the additional revenue from the insurance funds against the marginal costs. 5.3.5 For hospitals to take the greatest advantage from these arrangements, hospitals must actively support these measures by improving procedures at admission about declaration of private insurance coverage, and by establishing arrangements with doctors to support the policy and introduce simplified billing arrangements. 5.3.6 These arrangements are for 2002-2003 only. The current AHCA expires on 30 June 2003 and the AHCA operating after 1 July 2003 is likely to be altered to reflect the Commonwealth’s new policy on private health insurance. Thus, arrangements between the Department and public hospitals beyond 2002-2003 would reflect those new arrangements. 5.3.7 Public hospitals are still required to follow Medicare principles, and give priority to patients based on clinical needs.

Section B 33 6 Goods and Services Tax The Commonwealth Government’s introduction of the Goods and Services Tax (GST) from 1 July 2000 requires that at a minimum, hospitals to be registered with the ATO, have an ABN, and are able to submit as required a Business Activity Statement to the ATO. Hospital management is responsible for ensuring that their hospital is compliant with the GST, and meets the reporting obligations. The Government will not be responsible for the inability of hospitals to identify and claim all input credits owing to them.

7 Long Service Leave Commencing with the 2000-2001 financial year the Department assumed the liability arising from the net increase in the Long Service Leave (LSL) provision of public hospitals. Hospitals will therefore record a net increase in the LSL liability as revenue with the Department a debtor. This was advised to hospitals in circular 13/2001. That circular provides details of the appropriate accounting treatment. Discussions are being held with Department of Treasury and Finance and the Auditor General to enable a similar treatment with respect to Annual Leave, however no agreement has been reached on that issue to date, and separate advice on this will be provided.

7.1 Accounting for Long Service Leave (LSL) As advised in hospital circular 3/2001, at the introduction of casemix the Department included a loading of 1.8 per cent of salaries for LSL purposes and this loading has continued to be applied in funding for award increases ever since. Analysis of data over the past four years indicates that generally hospitals manage cash outgoings within the 1.8 per cent payment. However, where hospitals are paying out cash in excess of funding, the Department has agreed to provide additional funding to meet the excess cash outgoing. This will be based on the annual reports provided after year end. The debtor established by the non-cash revenue recognition can be run down in future years by a negative non-cash liability movement or by the claiming of cash revenue to match a cash expense greater than the amount recognised in Health Service Agreement cash budgets.

8 Cash Flow to Hospitals Subject to meeting the requirements of the Hospital Conditions of Funding, payments for WIES and other activity will be made available to the hospital in twenty four (24) payments based on the quarterly targets specified by hospitals and recorded in the HSA, or negotiated cash flow requirements. Cash so advanced will be adjusted annually to match hospital earnings.

9 Force Majeure Circumstances (including industrial action), beyond the reasonable control of hospital management, may sometimes prevent the attainment of targeted throughput. The Department will continue its policy whereby, on a case by case basis it will fund hospitals according to their cash flow projections irrespective of throughput, but only for so long as force majeure continues.

Section B 34 Hospitals are expected to actively mitigate their financial exposure and throughput decline during and following such events, and will not be additionally funded for extra “catch-up” throughput in specific service areas undertaken around a period of force majeure. The relevant quarter’s performance together with other available data and indicators will be used to determine the net impact of any period of force majeure.

10 Risk Management Risk management is recognised as an integral part of good business management practice. Hospital management can directly influence the control of risks through the development of a risk management strategy supported by a risk management process. This regime should reduce the likelihood and consequences of adverse outcomes occurring from hospital activities. The Department’s insurer and risk adviser, Victorian Managed Insurance Authority (VMIA) recommends the use of the Standard AS/NZS 4360:1999 Risk Management for the risk management process which incorporates: • Risk Identification; • Risk Analysis; • Risk Evaluation; • Risk Treatment; • Communication & Consultation; and • On-going Monitoring and Review. The “shadow apportionment” of premium cost introduced for hospitals during 2001-2002 will be maintained for the 2002-2003 financial year. However, with effect from 1 July 2003 premiums as determined from a combination of past claims performance and risk exposure will be directly charged out to hospitals. The containment of future premium costs is a significant financial incentive to hospitals. It is therefore in the interests of hospitals to develop a risk management culture not only to help minimise claims losses but also achieve best practice quality care within an overall sound corporate governance framework.

11 Reporting

11.1 Supply of Statistics and Information 11.1.1 The Hospital or Multi-Purpose Service (MPS) will comply with standard definitions for reporting financial and statistical data as set out in the Notes and Definitions for Use in Completing the 2002–2003 Annual Return, the PRS/2 Manual Version 12.0, AIMS Public Hospital User Manual Version 10.0, and any other amending documentation prepared by the Department. 11.1.2 The Hospital or MPS will code patient episodes in accordance with the current Australian Coding Standards effective 1 July 2002, Victorian Additions to the Australian Coding Standards and ICD Coding Newsletters issued by the Department. 11.1.3 The Hospital or MPS will provide data to the Department as specified in the HSA and in these Conditions of Funding.

Section B 35 11.1.4 The following categories of reporting are specified: (a) Agency Level/Aggregated Hospital. The hospital will report on each of the Agency Level forms by the due dates. (b) Program Specific. The hospital will report on the forms relevant to the hospital's program sources of funding in accordance with AIMS Public Hospital User Manual 2002–2003. The data specified in this section will be supplied in hard copy paper returns or computer readable form in accordance with Departmental specifications.

11.2 Financial Information 11.2.1 F1 financial returns for major providers (metropolitan health services, Barwon Health, Ballarat Health Services and Bendigo Health Care Group) are required twelve days after the end of the month for which the financial data is provided (e.g. the F1 for November is required by 12 December). F1 financial returns for all other hospitals are required fourteen days after the end of the month for which the financial data is provided. 11.2.2 MPSs are required to submit the MPS F1 return twenty-one days after the end of the month for which the financial data is provided.

11.3 Specific Data Requirements 11.3.1 Commonwealth/State (a) Hospitals and MPS receiving funding under Commonwealth/State programs are required to submit regular statistical and financial reports for the monitoring of activity, payment of grants and acquittance to the Commonwealth. (b) The information required, format and time lines for individual programs are detailed in the guidelines applicable to the appropriate Commonwealth or State Programs. 11.3.2 Metropolitan Health Services and major rural hospitals are required to operate and maintain, to a minimum standard, patient costing systems that monitor service provision to patients and allow recalibration of the DRG funding formulae. Such hospitals are required to provide, sufficient accurate and timely information from the system, as specified by the Department to allow recalibration of the DRG relative weights. Penalties for non-provision of costing data will be based on, and may exceed, the average cost of operating an appropriate clinical costing system according to the operating size of the agency. 11.3.3 Metropolitan Health Services and major rural hospitals are required to maintain systems that enable monitoring of clinical effectiveness and provide to the Department coded clinical data that are of appropriate reliability and quality for the monitoring and development of the Clinical Indicator Program 11.3.4 In addition to the monthly reports specified in section 11.2.1, hospitals, aggregated hospitals and MPS are required to complete an Annual Return by 30 September 2003 in accordance with the detailed requirements specified by the Department. 11.3.5 Failure of a Hospital or MPS to supply accurate and timely statistical and financial data in accordance with the Conditions of Funding: Metropolitan Health and Aged Care Services may result in penalties or suspension of payments by the Department.

Section B 36 11.4 Transmission of Minimum Employment Dataset 11.4.1 Hospitals and MPS are required to transmit information detailed in the Minimum Employment Data Set. The Minimum Employment Data Set requires that data be transmitted to the Department by the tenth day following the end of the relevant month. 11.4.2 Hospitals and MPS who have their payroll/budget processing undertaken by Allegiance systems will continue to have their data forwarded direct to the Department. Agencies whose payroll/budget processing is being undertaken by other operators are required to transmit the information detailed in the Minimum Employment Data Set directly to the Department. Where payroll/budget processing operators are changed, hospitals will be required to satisfactorily complete the Accreditation process detailed in the Minimum Employment Data Set.

11.5 Transmission of Admitted Patient Data 11.5.1 The hospital will transmit data to the VAED via PRS/2 according to the timelines detailed in clauses 11.5.1. (a) and 11.5.1(b). (a) Admission and separation details for any month are to be transmitted in time for the VAED file consolidation on the 21st day of the following month (see (d) below for processing schedule). (b) Diagnosis and procedure and sub-acute details in any month are to be transmitted in time for the VAED file consolidation on the 21st day of the second month following (see (d) below for processing schedule). (c) Data for the financial year should be completed in time for the VAED file consolidation on 21 August 2003. Any corrections must be transmitted before finalisation of the VAED database on 21 September 2003. (d) It is the hospital's responsibility to ensure that data are transmitted to the VAED to meet the processing schedule for inclusion in the Allegiance Systems file consolidation on the 21st of each month. VAED data (sent by modem) must be received by 5pm on the 17th of each month, regardless of the actual day of the week. VAED (sent by disc) must be received by 12pm (noon) on the last working day on or before the 17th of the month. (e) WIES10, multi-purpose service and sub-acute payments will be: (i) fully paid for data originally submitted in accordance with the deadlines specified in clauses 11.5.1.(a) and 11.5.1(b) above, even if data is subsequently amended; or (ii) paid at a reduced rate (50 per cent), or not recognised for payment, according to Schedules 2.1 and 2.2 located at the end of this section if the data has not been submitted in accordance with either deadline specified in clauses 11.5.1(a) and 11.5.1(b) above; or (iii) not recognised for payment, if data has not been submitted in accordance with both deadlines specified in clauses 11.5.1(a) and 11.5.1(b) above. This clause applies to all account classes including DVA. (f) If difficulties are anticipated in meeting the relevant data transmission timeframes for either admission and separation data, or diagnosis and procedure details, the Hospital or MPS must write to the Department, indicating the nature of the difficulties, remedial action being taken, and the expected transmission schedule. Exemptions for one-off late submission of data will generally only be considered

Section B 37 for computer system problems that are beyond the control of the Hospital or MPS. (Hospitals or MPSs undertaking the PRS/2 data submission testing process are automatically exempted). Exemptions for late submission of admission and separation data will also be considered for staffing problems that are beyond the control of small rural hospitals and MPSs. Exemptions for late submission of admission and separation data will be automatically granted to hospitals or MPSs maintaining a consistently high level of timely data submission.

11.6 VAED Audits 11.6.1 The Hospital or MPS will provide sufficient access to data and records to allow an audit of patient records, patient coding and data transmitted to the VAED. 11.6.2 If the audit shows a difference in assignment of DRGs and/or other data items that alter the allocation of WIES, or that patients fail to meet admission criteria, then the number of weighted inlier equivalent separations and/or throughput payments to the Hospital or MPS may be adjusted to take account of those differences. 11.6.3 Where the audit indicates that a Hospital or MPS has been consistently erroneous in the application of admission criteria and/or coding standards, the Department will adjust or suspend the relevant throughput payments until such time as the issue is resolved to the satisfaction of the Department. 11.6.4 Department also reserves the right to undertake supplementary audits to confirm an issue and/or monitor improvement; the cost of which is to be borne by the Hospital or MPS. 11.6.5 Access to data and records for interstate patients transmitted to the VAED will also be required should State or Territory Health Authorities request an independent audit to verify information on DRG weighted separations. 11.6.6 The Hospital or MPS will also provide sufficient access to data and records to allow an audit of patient records and data transmitted via AIMS as part of VACS. 11.6.7 Access to data and records for emergency department patients and persons on waiting lists will also be required should this Department or the Commonwealth require an audit to verify information used for funding calculations either at the hospital or State level.

11.7 Access to Hospital Patient Level Data 11.7.1 The Department will have access to patient level cost data and to patient level data transmitted to the VAED, VEMD, and ESIS.

12 Health Service Agreement The HSA is the vehicle used by the Department to ‘purchase’ health services from providers on behalf of the community. A HSA is effectively the contract between the Department and another legal entity under which the Department provides public funds to ‘purchase’ direct services for individuals or groups in the community. These services may be varied over the life of the agreement. A Health Service Agreement which lists the conditions applicable to all hospitals for 2002-2003 is available at the Department website http://www.dhs.vic.gov.au/ahs Metropolitan Health Services will also be required to sign an Acute Health Budget and Target table. Regional and rural hospitals will be required to sign the Department Health Service Agreement including schedules specific to each individual hospital.

Section B 38

Section B 39 Schedule 2.1 Timelines for the Receipt of Admission and Separations Details (E2) VAED Consolidation Date

Month of 21 21 21 Oct 21 21 Dec 21 Jan 21 Feb Separation 2002 Aug Sept Nov July Full Half Nil Nil Nil Nil Nil Rate Rate August Full Half Nil Nil Nil Nil Rate Rate September Full Half Nil Nil Nil Rate Rate October Full Half Nil Nil Rate Rate November Full Half Nil Rate Rate December Full Half Rate Rate January Full Rate

VAED Consolidation Date

Month of 21 Mar 21 Apr 21 21 Jun 21 Jul 21 21 Sep Separation 2003 May Aug December Nil Nil Nil Nil Nil Nil Nil

January Half Nil Nil Nil Nil Nil Nil Rate February Full Half Nil Nil Nil Nil Nil Rate Rate March Full Half Nil Nil Nil Nil Rate Rate April Full Half Nil Nil Nil Rate Rate May Full Half Nil Nil Rate Rate June Full Half Nil Rate Rate

Section B 39 Schedule 2.2 (cont) Timelines for the Receipt of Diagnoses and Procedure (X2, Y2) and Sub-Acute Details (S2) VAED Consolidation Date

Month of Separation 21 Sept 21 Oct 21 Nov 21 Dec 21 Jan 21 Feb 21 Mar 2002 July Full Half Nil Nil Nil Nil Nil Rate Rate August Full Half Nil Nil Nil Nil Rate Rate September Full Half Nil Nil Nil Rate Rate October Full Half Nil Nil Rate Rate November Full Half Nil Rate Rate December Full Half Rate Rate

VAED Consolidation Date

Month of Separation 21 Mar 21 Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 2003 December Half Nil Nil Nil Nil Rate January Full Rate Half Nil Nil Nil Nil Nil Rate February Full Half Nil Nil Nil Nil Rate Rate March Full Half Nil Nil Nil Rate Rate April Full Half Nil Nil Rate Rate May Full Rate Half Nil Rate June Full Half Rate Rate

Section B 39 APPENDIX 1

Glossary of Terms:

ABN Australian Business Number AHCA Australian Health Care Agreement AIMS Agency Information Management System ATO Australian Taxation Office CAPD Continuous Ambulatory Peritoneal Dialysis DVA Department of Veterans' Affairs ESIS Elective Surgery Information System GST Goods and Services Tax Hospital(s) Public hospital(s), and metropolitan and rural health service(s). HSA Health Services Agreement IPD Intermittent Peritoneal Dialysis MDS Minimum Data Set MPS Multi Purpose Service PAC Post Acute Care T&D grant Training and Development Grant TAC Transport Accident Commission The Department The Department of Human Services VACS Victorian Ambulatory Classification System VAED Victorian Admitted Episodes Dataset VEMD Victorian Emergency Minimum Dataset VMD Victorian Maintenance Dialysis VMIA Victorian Managed Insurance Authority WIES10 Weighted Inlier Equivalent Separation, 10th Revision

Section C — Supplementary Information

Current Cost Weights—Admitted Patients

Current Cost Weights—Victorian Ambulatory Classification & Funding System (VACS)

VACS: 2002–2003 Cost Weights

VACS Code Description Weight 101 General Medicine 1.104 102 Allergy 1.495 103 Cardiology 1.739 104 Diabetes 0.962 105 Endocrinology 1.240 106 Gastroenterology 1.181 107 Haematology 1.361 108 Nephrology 1.678 109 Neurology 1.430 110 Oncology 1.539 111 Respiratory 1.725 112 Rheumatology 1.146 113 Dermatology 1.162 114 Infectious Diseases 2.039 115 Developmental Neurological Disability 1.871 201 General Surgery 1.062 202 Cardiothoracic 1.792 203 Neurosurgery 1.043 204 Ophthalmology 0.771 205 Ear, Nose and Throat 0.881 206 Plastic Surgery 0.760 207 Urology 0.939 208 Vascular 1.127 209 Pre-admission 1.709 301 Dental 0.981 310 Orthopaedics 1.020 311 Orthopaedic applications 0.461 350 Psychiatry and Behavioural Disorders 1.799 401 Family Planning 1.116 402 Obstetrics 0.850 403 Gynaecology 1.060 404 Reproductive Medicine 0.862 405 Dysplasia and Colposcopy 0.958 501 Paediatric Surgical 1.342 502 Paediatric Medical 1.331 550 Emergency Medicine n/a 601 Audiology n/a 602 Nutrition n/a 603 Optometry n/a 604 Occupational Therapy n/a 605 Physiotherapy n/a 606 Podiatry n/a 607 Speech Pathology n/a 608 Social Work n/a 609 Other Allied Health Services n/a 610 Cardiac Rehabilitation n/a 611 Hydrotherapy n/a Notes: 1. The 2002–2003 cost weights have been set on the basis of a “four year rolling average cost” based on the past four cost weight study results.

2. Weights are not detailed for VACS 550 - 609 as these categories are funded as fixed grants.

Current Cost Weights—VicRehab

VicRehab Units: 2002–2003 Rehabilitation Weights

CRAFT Categories Inlier Boundaries DHS Average Same Day Short Stay Low Outlier Inlier Weight High Outlier Length of Stay Weight Weight per Diem per Diem Low High (days) (days)

Short Stay (overnight) 1 3 1.98 0.0000 0.1185 0.0000 0.0000 0.0000 Stroke/Neuro LB 38 46 42.37 0.0327 0.1185 0.0468 1.7770 0.0381 Stroke/Neuro HB 19 28 23.50 0.0244 0.1185 0.0349 0.8016 0.0259 Ortho Fracture LB 27 35 31.39 0.0323 0.1185 0.0433 1.2569 0.0342 Ortho Fracture HB 18 26 22.06 0.0330 0.1185 0.0471 0.7542 0.0331 Ortho Replace Hip/Knee LB 20 29 24.54 0.0365 0.1185 0.0458 0.7328 0.0326 Ortho Replace Hip/Knee MB 12 20 16.34 0.0404 0.1185 0.0577 0.5773 0.0358 Ortho Replace Hip/Knee HB 9 18 13.81 0.0440 0.1185 0.0628 0.5028 0.0360 Other Ortho LB 27 35 31.21 0.0319 0.1185 0.0430 1.2042 0.0331 Other Ortho HB 17 26 21.54 0.0255 0.1185 0.0365 0.8027 0.0272 Cardio/Pulmonary 18 27 22.64 0.0394 0.1185 0.0628 0.8786 0.0432 Other LB 23 31 27.26 0.0360 0.1185 0.0514 1.0799 0.0379 Other HB 15 24 19.93 0.0407 0.1185 0.0582 0.6983 0.0391

Calculation of WIES

AR-DRG Modifications

In 2002-2003, hospitals will assign diagnoses and procedure codes using the 3rd edition of the ICD-10-AM classification. For funding purposes, these codes will be mapped back to second edition codes and then grouped using AR-DRG Version 4.2.

As in previous years, some adjustments are to be made to the original AR-DRG4 (Version 4.2) grouping utilising the VIC-DRG4 field, prior to the calculation of WIES10. The AR-DRG Version 4.2 adjustments that applied in WIES9 will continue to apply in WIES10. Where possible, modifications have been made as co-payments within the funding formula rather than changes to the DRG classification system.

The VIC-DRG4s for WIES9 for Peritoneal dialysis, Radiotherapy, Bone Marrow Transplants and Admission weight remain for WIES10.

Peritoneal Dialysis In recognition of cost differences between peritoneal and haemodialysis, episodes with a principal diagnosis of peritoneal dialysis (ICD-10-AM code Z49.2) are to be assigned a VIC- DRG4 of L61Y Admit for peritoneal dialysis.

Radiotherapy

Victorian Coding Standard 0229 states that non-same day patients receiving radiotherapy should have the malignant condition sequenced first, followed by the radiotherapy code (ICD-10-AM code Z51.0). Same day radiotherapy admissions, which follow the Australian Coding Standard, have Z51.0 assigned as the principal diagnosis followed by the malignancy code.

To maintain funding equity, a VIC-DRG4 of R64Z Radiotherapy will be assigned for non-same day non-surgical episodes that include a radiotherapy diagnosis code (grouped as if the radiotherapy code is the principal diagnosis).

Bone Marrow Transplants

In recognition of cost differences between allogeneic and autologous bone marrow transplants, AR-DRG4 A04Z Bone marrow transplant is split into VIC-DRG4 A04A Allogenic bone marrow transplant and A04B Non-allogenic bone marrow transplant. Any cases grouped to AR-DRG4 A04Z with ICD-10-AM 2nd edition procedure codes of 13706-00, 13706-06, 13706-09, or 13706-10 are allocated to VIC-DRG4 A04A and all other cases originally grouped into AR-DRG4 A04Z are allocated to VIC-DRG4 A04B.

Admission Weight

In AR-DRG Version 4.2, admission weight must be between 400 and 9999 grams otherwise the episode will be assigned to AR-DRG 960Z Ungroupable. The Department has been notified of live births where the baby weighs significantly less than 400 grams.

Episodes with an admission weight between 125 and 399 grams are assigned an admission weight of 400 grams for grouping to an appropriate VIC-DRG4.

Nasopharyngeal Intubation For 2000-2001, new 2nd edition procedure codes were introduced for nasopharyngeal intubation (90179-02 Nasopharyngeal intubation and 90179-05 Management of nasopharyngeal intubation).

In AR-DRG Version 4.2, these codes are valid only for MDC 22 Burns. These codes will be mapped to 92035-00 Other intubation of respiratory tract, so that episodes with either of these codes will group to an appropriate VIC-DRG4.

Arteriovenous Fistula In AR-DRG Version 4.1, procedure codes for surgical formation of arteriovenous fistula of lower limb (34509-00) and upper limb (34509-01), were not included in the lists of procedures relevant to MDC 11 Diseases and disorders of kidney and urinary tract. AR-DRG Version 4.2 has amended the allocation of procedure code 34509-01 arteriovenous anastomosis of upper limb but has not been amended for procedure code 34509-00 arteriovenous formation of lower limb.

The procedure code for formation of arteriovenous fistula in lower limb (34509-00) will be mapped to 34509-01 arteriovenous anastomosis of upper limb, for grouping to an appropriate VIC- DRG4.

Calculation of WIES10

The WIES10 weights table and specification follow the WIES9 format.

Boundaries—Low Outliers, Inliers and High Outliers

Payment for VIC-DRG4s is primarily based on length of stay. In most cases (there are exceptions) the average length of stay is divided by three to get the low boundary point and multiplied by three to get the high boundary point. Cases within this range (ALOS÷3,ALOS×3) are called inliers, cases below the low boundary point are called low outliers and cases above the high boundary point are called high outliers. For example, if the average length of stay was 6 days, the inlier range would be from 2 days to 18 days. Cases less than 2 days would be low outliers and those greater than 18 days high outliers. Boundary points have been set at the 2001-2002 level.

Weights

The weights are based on costs derived from the Victorian Cost Weights Study. A series of modifications are made to adjust for technical difficulties in the costing process and to ensure WIES equivalence over time. This is outlined in Chapter 4.

Definition of Variables

Definitions and descriptions of each variable within the WIES10 weights table are given below.

Variable Label Description (Column Heading) Victorian DRG VIC-DRG4 Victorian modification to AR-DRG4.2. Same day medical target Sdmt VIC-DRG4s marked with a “Y” are classed as same day medical target VIC-DRG4s. VIC-DRG4s marked with “N” are not classed as same day medical target VIC-DRG4s. WIES for same day patients allocated to same day medical target VIC-DRG4s are calculated normally but the total WIES associated with same day patients in these VIC-DRG4s cannot exceed specified levels (usually 6.5% of total WIES). Excess same day medical target WIES are not funded. Mechanical ventilation Mv_elig This describes the way mechanical ventilation severity co-payments are made for the VIC-DRG4. Options are :- D: funded provided more than six hours of ventilation is provided. Patients attract a one off payment of 0.6980 WIES plus a daily rate of 0.7729 WIES for patients in hospitals with appropriate ICU facilities. N: funded provided at more than six hours of ventilation is provided. Patients attract a one off payment of 0.6980 WIES plus a daily rate of 0.7729 WIES for patients in hospitals with appropriate Neonate ICU facilities. 4: funded for each day of mechanical ventilation after 4 days. Patients attract a one off payment of 0.6980 WIES plus a daily rate of 0.7729 WIES for patients in hospitals with appropriate ICU facilities. I: ineligible for mechanical ventilation co-payments

Variable Label Description (Column Heading) Other co-payments Copay Some groups of patients attract additional funds in recognition of their higher costs. Options are:- Thal: a co-payment of 0.2648 WIES is made to patients with a reported ICD-10-AM thalassaemia diagnosis code of D56.x or D57.2 (Note: These do not have to be principal diagnoses) AAA: a copayment of 3.1421 WIES for patients with the procedure code for the insertion of a stent for endovascular repair of aneurysm of the aorta (AAA stent). ASD: a copayment of 2.4713 for patients with a procedure code for the use of an atrial septal defect (ASD) closure device. Colono: a copayment of 0.1765 WIES for gastroscopy patients also undergoing a colonoscopy.

Low inlier boundary Lb The low length of stay boundary for inliers. Patients with a length of stay of less than the low boundary are classed as low outliers. For most VIC-DRG4s the low boundary has been set at a third of the estimated average length of stay for the VIC-DRG4. Boundaries are truncated to the whole number. High inlier boundary Hb The high length of stay boundary for inliers. Patients with a length of stay greater than the high boundary are classed as high outliers. For most VIC-DRG4s the high boundary has been set at three times the estimated average length of stay for the VIC-DRG4. Boundaries are rounded to the nearest whole number. Inlier average length of i_alos The average length of stay (days) for inliers. stay VIC-DRG4 designation Sd_od Flag for designated sameday (S) or one day (O) VIC-DRG4s Same day weight Sd The same day weight is used to allocate WIES to episodes where patients are admitted and separated on the same day. Depending upon the VIC-DRG4, same day patients may be either low outliers or inliers:- Designated Same day VIC-DRG4s The same day weight is based on the costs of same day patients. Non-Same Day VIC-DRG4s with a low boundary of zero days The same day weight is set at the multiday inlier weight. Non-Same Day VIC-DRG4s with a low boundary of 1 day The same day weight is set at half the multiday inlier weight Non-Same Day VIC-DRG4s with a low boundary of 2 days or more (low outliers) The same day weight is set at half of the multiday inlier weight divided by the low boundary (0.5×md_in ÷ lb) One day weight Od The one day weight is used to allocate WIES to episodes where patients have a length of stay of one but who were not separated on the same day as they were admitted. Depending upon the VIC-DRG4, one day patients may be either low outliers or inliers:- Designated Same day VIC-DRG4s The one day weight is based on the costs of all inliers excluding same day patients. If the patient is an inlier they attract the full multiday inlier weight. If the patient is a low outlier they attract the low outlier per diem weight. Designated One day VIC-DRG4s The one day weight is based on the costs of patients with a length of stay of one day. Non-Same/One Day VIC-DRG4s with a low boundary of 1 day or less The one day weight is set at the multiday inlier weight. Non-Same/One Day VIC-DRG4s with a low boundary of 2 day or more (low outliers) The one day weight is set at the low outlier per diem weight.

Variable Label Description (Column Heading) Low outlier multiday per Lo_pd The low outlier multiday per diem weight is used to allocate WIES to low outliers who diem weight have a length of stay of at least two days. Not all VIC-DRG4s have low outliers. No weight is reported in these cases. For most VIC-DRG4s the weight is derived as: md_in ÷ lb The WIES value is calculated by multiplying the low outlier multiday per diem weight by the patient’s length of stay. Inlier multiday weight md_in The inlier multiday weight is used to allocate WIES to inliers who have a length of stay of at least two days. For designated VIC-DRG4s, same day/one day patients are excluded when deriving the inlier multiday weight. High outlier multiday per ho_pd The high outlier multiday per diem weight is used to allocate additional WIES for all diem days of stay in excess of the high boundary after adjusting for any mechanical ventilation co-payment days. In general this is derived from: high factor × md_in ÷ i_alos where the high factor is set at 0.7 for surgical VIC-DRG4s and 0.8 for medical VIC- DRG4s to recognise that the days at the end of a patients stay are less resource intensive than days at the beginning of a patients stay. A number of variations exist on the general formula:- 1) The high factor is set at one or greater for some high cost VIC-DRG4s (Chapter 16). 2) Theatre and prostheses costs are excluded from the calculation of the weight for some VIC-DRG4s with high costs in these areas (Chapter 16). 3) Maximum and minimum criteria apply (Chapter 16).

Calculating WIES10

To calculate the WIES funding allocated to a patient you need to: • Determine if the episode is eligible for WIES funding (see box 1). • Calculate any WIES co-payment (see box 2a, 2b, 2c, 2d, 2e) • Calculate the base WIES allocation using the VIC-DRG4 and the patient’s length of stay adjusted for mechanical ventilation per diem. This can be done using the appropriate weights from the WIES weights table (see box 3a, 3b, 3c). • Apply the Aboriginal and Torres Strait Loading if applicable (see box 4). • Add the base WIES payment, any co-payments and ATSI loading (see box 5).

The steps are described in detail below with technical specifications provided in the boxes.

1. Scope

The majority of patients in hospital will be allocated a WIES10 score, however, as in previous years, WIES cannot be calculated for incomplete or uncoded episodes. Further, WIES is not necessarily an appropriate measure of resource use for many non-acute patients.

WIES10 scores may be allocated to some patients who are ineligible for casemix funding. WIES10 from these patients will need to be excluded when comparing hospital activity against targets during 2002-2003.

Eligible patients might be entitled to different types of WIES payments including base WIES payments and WIES co-payments. Base WIES payments are made according to the formula

which models the average costs for patients in each VIC-DRG4. WIES co-payments are made to cover the higher costs of care provided to some special types of patients.

Base WIES payments to long-stay patients can be affected by co-payments, so it is advisable to determine if a patient is eligible for WIES co-payments first.

Box 1: Episodes eligible for WIES funding

All episodes are eligible for WIES funding except for:

Episodes with the following care types:

1 NHT/Non-acute

2,6,7 Designated Rehabilitation Program/Unit (Levels 1 and 2)

9 Designated Geriatric Evaluation and Management Program

5 Designated Psychiatric Unit or Psychogeriatric Program

3 Family choice: Awake attendant care

E,F Interim Care Programs

Incomplete or uncoded episodes, or episodes coded to a problem VIC-DRG4 (zero weight) including VIC-DRG4s 960Z, 961Z,

962Z,and 963Z.

Episodes with a program funding source other than Acute Health Services.

Episodes with an account class on separation of Newborn (Unqualified, Not birth episode)

While episodes where the contract role is B and some episodes in non-casemix funded hospitals are allocated a WIES score they are not eligible for WIES funding.

2. Co-payments

For 2002-2003 there are five types of co-payments: mechanical ventilation and thalassaemia. Technical specifications for mechanical ventilation co-payments are given in box 2a and technical specifications for thalassaemia co-payments are given in box 2b.

To be eligible for a mechanical ventilation co-payment the patient must have had more than six hours of continous mechanical ventilation and have been allocated to a VIC-DRG4 that is eligible for a mechanical ventilation co-payment. VIC-DRG4s are classed as either:

Eligible for daily co-payments of 0.7729 WIES (mv_elig =“D”, or mv_elig =“N”, in the WIES10 weights table);

Eligible for daily co-payments at 0.7729 WIES for ventilated days in excess of four days (96 hours) mechanical ventilation (mv_elig = “4” in the WIES10 weights table); or

Ineligible for co-payments (mv_elig = “I” in the WIES10 weights table).

All patients who are eligible for a mechanical ventilation copayment receive an additional one off payment of 0.6980 WIES. This payment was introduced for WIES9 subsequent to the publication of the 2001-2002 policy and funding guidelines and shall continue in 2002-2003. This additional WIES payment is to provide hospitals with the capacity to run at lower levels of ICU occupancy so that ICU beds will be available for periods of peak demand. However, the additional copayment is subject to hospitals staffing appropriate numbers of ICU beds.

Mechanical ventilation co-payments are only made to patients admitted to specific hospitals (see Related Definitions).

Box 2a: Calculating Mechanical Ventilation Co-payments

Select mv_elig case “D” then

if (hours on mechanical ventilation > 6) and ICU hospital then Adjmvday = round((hours mechanical ventilation +12)/24) else adjmvday = 0 × mv_copay = adjmvday 0.7729 + 0.6980 go to box 2b

case “N” then if (hours on mechanical ventilation > 6) and NICU hospital then Adjmvday = round((hours mechanical ventilation +12)/24) else adjmvday = 0

mv_copay = adjmvday × 0.7729 + 0.6980 go to box 2b

case “4” then if (hours on mechanical ventilation > 96) and (ICU hospital) then

adjmvday = round((hours mechanical ventilation +12)/24) - 4 else adjmvday = 0 mv_copay = adjmvday × 0.7729 + 0.6980 go to box 2b otherwise do adjmvday = 0 mv_copay = 0 go to box 2b

Base WIES payments for high outliers are reduced when a patient receives daily mechanical ventilation co-payments. To make this reduction you will need to remember the number of days receiving mechanical ventilation co-payments (“adjmvday” in the technical specifications).

Thalassaemia co-payments are made to patients with any ICD-10-AM diagnosis code of D56.x or D57.2 who are allocated to an eligible VIC-DRG4 (indicated with a “Thal.” in the “Other Co- payments” column in the WIES10 weights table). For 2002-2003 the thalassaemia co-payment is set at 0.2648 WIES per episode. Technical specifications are provided in box 2b.

Box 2b: Calculate Thalassaemia Co-payment

If ( copay = “Thal”) and record has an ICD-10-AM diagnosis of D56.x or D57.2 then th_copay = 0.2648 else th_copay = 0; go to box 2c

AAA stent co-payments are made to patients undergoing an endoluminal repair of an aortic aneurym as indicated by any ICD-10-AM procedure code of 33116.00 and who are allocated to an eligible VIC-DRG4 (indicated with a “AAA” in the “Other Co-payments” column in the WIES10 weights table). For 2002-2003 the AAA stent co-payment is set at 3.1421 WIES per episode. Technical specifications are provided in box 2c.

Box 2c: Calculate AAA stent Co-payment

If ( copay = “AAA”) and record has an ICD-10-AM procedure of 33116.00 then AAA_copay = 3.1421 else AAA_copay = 0; go to box 2d

ASD co-payments are made to patients patients receiving an atrial septal defect closure device as indicated by the presence of any ICD-10-AM procedure code of 38742.00 and who are allocated to an eligible VIC-DRG4 (indicated with a “ASD” in the “Other Co-payments” column in the WIES10 weights table). For 2002-2003 the ASD co-payment is set at 2.4713 WIES per episode. Technical specifications are provided in box 2d.

Box 2d: Calculate ASD Co-payment

If ( copay = “ASD”) and record has an ICD-10-AM procedure code of 38742.00 then

ASD_copay = 2.4713 else ASD_copay = 0; go to box 2e

Under DRG logic patients are classified according to the most significant procedure they receive. However, it is becoming routine practice for in some instances for patients to undergo both a gastroscope and an endoscope during the same session in theatre. Such patients typically group to gastroscopy DRGs. However, for uncomplicated gastroscope DRGs, undertaking an additional colonoscopy represents a significant additional cost. As a consequence an such patients will receive a WIES copayment in 2002-2003.

Colonoscope co-payments are made to patients with any ICD-10-AM procedure code listed in ARDRG4.2 grouper tables 43.1 or 44.1 and who are allocated to an eligible VIC-DRG4 (indicated with a “Colono” in the “Other Co-payments” column in the WIES10 weights table). For 2002- 2003 the colonoscopy co-payment is set at 0.1765 WIES per episode. Technical specifications are provided in box 2e.

Box 2e: Calculate Colonoscope Co-payment

If ( copay = “Colono”) and record has an ICD-10-AM procedure in either table G43.1 or G44.1 of the ARDRG 4.2 grouper definition manual ie 30479.01, 30479.02, 90308.00, 90312.01, 32084.00, 32084.01, 32087.00,32090.00, 32090.01, 32093.00, 32094.00

Colonocopay = 0.1765

else Colonocopay = 0 go to Box 3a

3. Base WIES

To calculate a patient's base WIES you need to determine: • The patient’s VIC-DRG4. • The patient’s length of stay (LOS). • The patient’s length of stay category (LOS_cat: “S” or same day, “O” or one day, “M” or multiday). • The number of mechanical ventilation co-payment days (“adjmvday” see box 2a). • The patient’s inlier equivalence (“I” or inlier, “L” or low outlier, “H” or high outlier).

The patient’s length of stay and length of stay category are derived from the admission date, separation date and leave days. For payment purposes a maximum length of stay of five years (1825 days) is used. This ensures that WIES are not allocated to extreme stays that are likely to represent non-acute care. Technical specifications are given in Box 3a.

Box 3a: Determining Length of Stay Category and Maximum Length of Stay

Sameday='Y' if admission date = separation date

Else sameday='N'

If (sameday = ‘Y’) then LOS_cat = “S” go to step 3b else if (sameday = ‘N’) and (LOS =1) then LOS_cat = “O” go to step 3b else LOS = min(LOS,1825) LOS_cat = “M“ go to box 3b The patient’s inlier funding equivalence is determined by comparing the patient’s length of stay with the inlier boundaries for the VIC-DRG4 to which the patient is allocated. The low inlier and the high inlier boundaries are given in the WIES10 weights table. For purposes of reporting a patient is classified as an inlier based only upon length of stay. However, the high outlier per diems are adjusted for any mechanical ventilation co-payments. Consequently, some high outliers are paid at the inlier rate (where: LOS – HB < adjmvday).

A patient is funded as an inlier when their length of stay is greater than or equal to the low inlier boundary and less than or equal to the sum of the high inlier boundary plus any mechanical ventilation co-payment days.

Patients with a length of stay less than the low inlier boundary are funded as low outliers.

Patients with a length of stay greater than the sum of the high inlier boundary and mechanical ventilation co-payment days are funded as high outliers. Technical specifications are given in Box 3b.

Box 3b: Calculate Inlier Funding Equivalence

If LOS < LB then

Inlier = “L” go to box 3c else if LOS > (HB + adjmvday) then Inlier = “H” go to box 3c else Inlier = “I” go to box 3c Separate columns occur in the WIES10 weights table for episodes which are: • same day • one day • multiday low outliers • multiday inliers • high outliers.

The base WIES score for sameday episodes (inlier and low outlier), one day episodes (inlier and low outliers), and multiday inliers can be read directly from the WIES10 weights table using the appropriate column and row (VIC-DRG4). The base WIES score for multiday low outliers can be calculated by multiplying the per diem weight given in the WIES10 weights table by the patient’s length of stay. The base WIES score for high outliers is obtained by multiplying the number of high outlier days by the high outlier per diem weight (from the WIES10 weights table and adding the multiday inlier weight (from table)). Technical details are provided in box 3c.

Box 3c: Calculate Base WIES

Select Inlier case “L” do select LOS_cat case “S” do base_WIES = sd IES = base_WIES ÷ md_in go to box 4 case “O” do base_WIES = od IES = base_WIES ÷ md_in go to box 4 case “M” do base_WIES = LOS × lo_pd IES = base_WIES ÷ md_in go to box 4 case “I” do IES=1 select LOS_cat case “S” do base_WIES = sd go to box 4 case “O” do base_WIES = od go to box 4 case “M” do base_WIES = md_in go to box 4 case “H” do high_days = max(0, LOS - hb - adjmvday) base_WIES = Md_in_ + high_days × ho_pd IES = base_WIES ÷ Md_in go to box 4

High outlier days are days stayed in excess of the high outlier boundary minus any mechanical co-payment ventilation days (“adjmvdays” - see box 2a).

Inlier Equivalent Separations (IES) can be calculated by dividing the base WIES by the multiday inlier weight.

Aboriginal and Torres Strait Islander Loading

A 10 per cent WIES premium is paid to hospitals for treating Aboriginal and Torres Strait Islanders in recognition of their poorer health status and associated higher costs of care. Technical details are given in box 4.

Box 4: Applying the Aboriginal and Torres Strait Islander Loading

If indigenous status in (5,6,7) then do ATSI_WIES = 0.1 × (base_WIES + mv_copay + th_copay + AAA_copay + ASD_copay + Colonocopay) else ATSI_WIES = 0 go to box 5

The WIES score is calculated by adding base WIES, co-payment WIES and ATSI WIES. Details are provided in box 5.

Box 5: Calculating WIES Score

WIES10 = base_WIES + mv_copay + th_copay + AAA_copay + ASD_copay + Colonocopay +ATSI_WIES

Mechanical Ventilation Severity Co-payment Eligibility

Hospitals eligible for mechanical ventilation co-payments for ventilated patients in non- neonate eligible DRGs (‘D’, ‘4’).

Only episodes with the following campus codes may be eligible: 1010 Alfred 1031, 1032 Austin & Repatriation Medical Centre 1050 Box Hill 2111 Dandenong 1210 Maroondah 1170 Monash Medical Centre [Clayton] 2220 Frankston 1280 Northern 1191 Royal Children's 1331 Royal Melbourne 1450 St Vincents 1180 Western 2010 Ballarat 1020 Bendigo 2060 Central Gippsland Health Service 2050 Barwon Health [Geelong] 1121 Goulburn Valley [Shepparton] 2440 Latrobe Regional 2320 New Mildura 1150 Wangaratta 2160 South West Healthcare [Warrnambool] 1071 Western District Health Service [Hamilton ] 2170 Wimmera Health Care Group [Horsham] 1390 Sunshine

Hospitals eligible for mechanical ventilation co-payments for ventilated patients in eligible neonate DRG’s (‘N’).

Only episodes with the following hospital codes may be eligible: 1160 Mercy - East Melbourne 1170 Monash Medical Centre [Clayton] 1191 Royal Children’s 1230 Royal Women’s

Calculation of Rehabilitation Weighted Units (CRAFT)

VicRehab: Weighted Units Specification

Calculation of Rehabilitation Weighted Units

The following describes the steps involved in calculating the rehabilitation weight score for patients:

1) Allocate the patient to a CRAFT category 2) Determine the patient’s length of stay (LOS) 3) Determine whether the patient is a low outlier, inlier or high outlier and look up the appropriate weights in the Rehabilitation weights table in Section C. It may be necessary to multiply a daily weight by the number of days.

1. Allocating the patient to a CRAFT Category

CRAFT categories are based upon the patient’s clinical program and in some cases admission Barthel score. Technical instructions are given in Box 1. Box 1

Clinical Sub Program 10, 31 to 39 Admission Barthel <60 CRAFT category = Stroke/Neuro Low Barthel Admission Barthel ≥ 60 CRAFT category = Stroke/Neuro High Barthel 81 to 84 Admission Barthel <60 CRAFT category = Ortho Fracture Low Barthel Admission Barthel ≥ 60 CRAFT category = Ortho Fracture High Barthel 85, 86 Admission Barthel <60 CRAFT category = Ortho Replace Hip/Knee Low Barthel Admission Barthel >59 and <80 CRAFT category = Ortho Replace Hip/Knee Medium Barthel Admission Barthel ≥ 80 CRAFT category = Ortho Replace Hip/Knee High Barthel 89 Admission Barthel <60 CRAFT category = Other Ortho Low Barthel Admission Barthel ≥ 60 CRAFT category = Other Ortho High Barthel 90, 101, 109 CRAFT category = Cardio/Pulmonary 61 to 69, 71 to 79, 120, 132-133, 140, 150 Admission Barthel <60 CRAFT category = Other Rehabilitation Low Barthel Admission Barthel ≥ 60 CRAFT category = Other Rehabilitation High Barthel

2. Determining length of stay

Use the LOS field as reported to the VAED.

3. Calculating the Stay Status and appropriate weights score

A patient is a sameday if admitted and separated on the sameday. Samedays patients are identified within the VAED by ‘Y’ in the sameday field.

A patient is a short stay if the stay is overnight and 1 to 3 days. Low outlier patients are those where the length of stay is 4 days or more and less than the low boundary.

A patient is an inlier if their stay is equal to or more than the inlier low boundary and less than or equal to the inler high boundary. A high outlier patient is one whose stay is longer than the inlier high boundary.

Refer to VicRehab Units: 2002–2003 Rehabilitation Weights in Section C for appropriate weight. Details for calculating the stay status and calculating the rehabilitation score for each status are given in Box 2. These scores can then be added to give the total number of Rehabilitation Weighted Units for the Hospital. Refer to Rehabilitation Weighted Units Specification for descriptions of the variables in Box 2. Use Box 2 to calculate the rehabilitation score.

Box 2

Calculating stay status and appropriate Rehabilitation Weighted Unit score

LOS = 1 and Sameday = ‘Y’ Stay Status = Sameday Rehabilitation score = SD LOS = 1 and Sameday = ‘N’ Stay Status = Short Stay Rehabilitation score = SS LOS = 2 or LOS = 3 Stay Status = Short Stay Rehabilitation score = SS LOS = ≥ 4 and LOS < LIB Stay Status = LOW OUTLIER Rehabilitation score = LO_PD x LOS LOS ≥ LIB and LOS ≤ HIB Stay Status = INLIER Rehabilitation score = MD_IN LOS > HIB Stay Status = HIGH OUTLIER Rehabilitation score = MD_IN + ((LOS - HIB) x HO_PD)

Rehabilitation Weighted Units Specification and Technical Definitions

Variables in columns shown within the table VicRehab Units: 2002–2003 Rehabilitation Weights in Section C are outlined and described below. Each column in the weights table has been given a label below to assist in calculating the Rehabilitation Score, e.g. SD = Sameday Weight.

Definition of CRAFT Categories

CRAFT Short Stay /Overnight (1 - 3 days) For 2002–2003, twelve of the sixteen CRAFT Stroke/Neurological LB < 60 categories will be used to fund Level 2 rehabilitation Stroke/Neurological HB ≥ 60 units with twenty beds or more. A separate Orthopaedic Fracture LB < 60 category is provided for short stay patients Orthopaedic Fracture HB ≥ 60 (overnight stays of 1 to 3 days). Separate weights Orthopaedic Replace Hip/Knee LB < 60 are provided for these thirteen funding categories. Orthopaedic Replace Hip/Knee MB 60 - 79 (See Section C). Orthopaedic Replace Hip/Knee HB ≥ 80 Other Orthopaedic LB < 60 LB means a low admission Barthel score of up to Other Orthopaedic HB ≥ 60 59. HB means a high admission Barthel score of 60 Cardio/Pulmonary or over (or for Orthopaedic Replace Hip/Knee, 80 or Other Rehabilitation LB < 60 more). MB means a medium admission Barthel score Other Rehabilitation HB ≥ 60 of 60 to 79.

Technical Definition of Variables (See VicRehab Units: 2002–2003 Rehabilitation Weights in Section C). Weights (referred to in Box 2) are derived from the average cost of episodes in the 2002 Victorian Cost Weights Study. Low Inlier Inlier Boundaries Low The low length of stay boundary for inliers. Patients with a length of Boundary LIB stay of more than 3 days and less than the low boundary are classed as low outliers. The low boundary point is set at the Average Length Of Stay for the category less 4 days. Boundaries are truncated to the nearest whole number. The estimated average length of stay is calculated from the calendar year 2001 VAED data. High Inlier Inlier Boundaries High The high length of stay boundary for inliers. Patients with a length of Boundary HIB stay greater than the high boundary are classed as high outliers. The high boundary point is set at the Average Length Of Stay for the category plus 4 days. Boundaries are rounded to the nearest whole number. The estimated average length of stay is calculated from the calendar year 2001 VAED data. Same day Same Day Weight The Rehabilitation Weighted Unit allocated to patients who are SD admitted and separated on the same day. The weight is derived as:

0.7 * Inlier Weight ÷ Low Inlier Boundary

The factor of 0.7 is in recognition that sameday stays do not incur overnight resource costs. Short Stay Short Stay Weight The Rehabilitation Weighted Unit allocated to patient overnight stays SS from 1 to 3 days. Multi-day per Low Outlier Per Diem The per diem Rehabilitation Weighted Unit value allocated to patients diem low outlier LO_PD who have a length of stay of at least four days and less than the low weight boundary. The weight is derived as:

Inlier Weight ÷ Low Boundary

The total Rehabilitation Weighted Unit value is calculated by multiplying the low outlier multi-day weight by the patient’s length of

stay.

Multi day Inlier Inlier weight Inliers are patients whose length of stay falls on or between the low weight MD_IN and high boundary. This weight is calculated based on the weights derived from the average cost of inliers in the CRAFT category as reported in the 2001 Victorian Cost Weights Study.

Multi-day per High Outlier Per Diem The per diem Rehabilitation Weighted Unit value allocated to patients diem high outlier HO_PD whose length of stay is in excess of the high boundary. weight This is derived from:

0.9*Inlier Weight ÷ average length of stay

The factor of 0.9 is in recognition that the days at the end of a patients stay are less resource intensive than days at the beginning of a patients stay.

The total Rehabilitation Weighted Unit value for high outliers is calculated by multiplying the high outlier multi-day weight by the number of days the patient stays beyond the high boundary and adding to the inlier weight:

Inlier weight + (LOS - high boundary)*high outlier per diem

HOSPITAL ACTIVITY & WIES REPORT

Purpose, Content, and Frequency: Victorian Public Hospitals for several years have received a paper-based monthly IES & Related Items Report from Allegiance Systems. This report provided hospitals with a financial year-to- date summary by month of their throughput including separations, patient days, Inlier Equivalent Separations (IES) and Weighted Inlier Equivalent Separations (WIES). During 2001- 2002, the Department also made this report available electronically.

Following feedback from several hospitals and the Victorian Advisory Committee on Casemix Data Integrity (VACCDI), this report has been redeveloped and expanded for 2002-2003 to more closely reflect the reporting standards and requirements currently in use (for example, consistent definitions with other reports, data presented according to modelled budget patient types). Also it will enable hospitals to accurately monitor and reconcile actual throughput (including the addition of several sections to represent the ‘full picture’ such as the addition of ‘Sameday’ activity to complement the ‘Non-sameday’ activity).

This report will be available monthly from the Department shortly after the VAED consolidation on the 17th of each month. For hospitals with more than one campus, reports will be made available at both the ‘site’ and ‘hospital’ level.

Line Item Definitions Separation Details 1.1 Separations with Care Type (care) = '0'. 1.2 Separations with Care Type (care) = '1'. 1.3 Separations with Care Type (care) = '2'. 1.4 Separations with Care Type (care) = '3'. 1.5 Separations with Care Type (care) = '4'. 1.6 Separations with Care Type (care) = '5'. 1.7 Separations with Care Type (care) = '6'. 1.8 Separations with Care Type (care) = '7'. 1.9 Separations with Care Type (care) = '8'. 1.10 Separations with Care Type (care) = '9'. 1.11 Separations with Care Type (care) = 'E'. 1.12 Separations with Care Type (care) = 'F'. 1.13 Separations with Care Type (care) = 'U'. 1.14 Total separations (= sum of items 1.1 to 1.13).

Patient Day (LOS) Details

2.1 Patient Days (LOS) of Separations with Care Type (care) = '0'. 2.2 Patient Days (LOS) of Separations with Care Type (care) = '1'. 2.3 Patient Days (LOS) of Separations with Care Type (care) = '2'. 2.4 Patient Days (LOS) of Separations with Care Type (care) = '3'. 2.5 Patient Days (LOS) of Separations with Care Type (care) = '4'. 2.6 Patient Days (LOS) of Separations with Care Type (care) = '5'. 2.7 Patient Days (LOS) of Separations with Care Type (care) = '6'. 2.8 Patient Days (LOS) of Separations with Care Type (care) = '7'. 2.9 Patient Days (LOS) of Separations with Care Type (care) = '8'. 2.10 Patient Days (LOS) of Separations with Care Type (care) = '9'. 2.11 Patient Days (LOS) of Separations with Care Type (care) = 'E'. 2.12 Patient Days (LOS) of Separations with Care Type (care) = 'F'. 2.13 Patient Days (LOS) of Separations with Care Type (care) = 'U'. 2.14 Total Patient Days (LOS) (= sum of items 2.1 to 2.13).

The following Sections 3, 4, 5, 6, 7, 8, 9, and 10 are based on separations eligible for WIES10 funding as described in Box 1. That is, separations with {Care Type (care) in ('4', '8', '0','U'} and {Program Funding Source='6'}, and with {VIC-DRG4 assigned} and not {VIC-DRG4 960Z, VIC- DRG4 961Z, VIC-DRG4 962Z or VIC-DRG4 963Z} and not {Contract Role='B'}.

All co-payments/loadings (Mechanical ventilation, thalassaemia, AAA, ASD, Colonoscopy and ATSI) are to be included in the WIES10 calculations wherever WIES10 is reported. That is, WIES10 is the WIES score as defined in Box 5 of the WIES10 specification.

WIES Fundable Separations

3.1 Total Separations. 3.2 Total WIES10.

WIES Co-Payments/Loadings

3.3 ATSI loading component only (as defined in Box 4).

3.4 Mechanical Ventilation Severity co-payment component only (as defined in Box 2a). 3.5 Thalassaemia co-payment component only (as defined in Box 2b). 3.6 AAA co-payment component only (as defined in Box 2c). 3.7 ASD co-payment component only (as defined in Box 2d). 3.8 Colonoscopy co-payment component only (as defined in Box 2e). 3.9 Total co-payments (= sum of items 3.3 to 3.9).

Inlier Funding Equivalence

3.10 Low outlier separations (Inlier ='L' as defined in Box 3b). 3.11 WIES10 of low outliers. 3.12 Inlier Separations (Inlier ='I' as defined in Box 3b). 3.13 WIES10 of inliers. 3.14 High outlier separations (Inlier ='H' as defined in Box 3b). 3.15 WIES10 of high outliers.

Other 3.16 Sum of Hospital in the Home (HITH) Separations = separations with Accommodation Type = '4' in any status segment (Acctype1 - Acctype7). 3.17 HITH Patient Days (LOS) of HITH separations = sum of LOS in HITH segments (ie segments with accommodation type = '4', LOS in non-HITH segments excluded). 3.18 Same day Medical Target Separations = WIES Fundable separations that are same day episodes (admission date = separation date) identified as contributing to the Same day Medical Target. 3.19 WIES10 of Same day Medical Target Separations. 3.20 Number of ATSI separations (Indigenous status in '5','6',or '7').

Public WIES Fundable Separations

4.1 = 3.1 for public separations (Account class on separation (sepaccnt) starts with 'M'). 4.2 = 3.2 for public separations (Account class on separation (sepaccnt) starts with 'M'). 4.3 = 3.16 for public separations (Account class on separations (sepaccnt) starts with 'M'). 4.4 = 3.17 for public separations (Account class on separations (sepaccnt) starts with 'M'). 4.5 = 3.18 for public separations (Account class on separation (sepaccnt) starts with 'M'). 4.6 = 3.19 for public separations (Account class on separations (sepaccnt) starts with 'M').

Private WIES Fundable Separations

5.1 = 3.1 for private separations (Account class on separation (sepaccnt) starts with 'P'). 5.2 = 3.2 for private separations (Account class on separation (sepaccnt) starts with 'P'). 5.3 = 3.16 for private separations (Account class on separations (sepaccnt) starts with 'P'). 5.4 = 3.17 for private separations (Account class on separations (sepaccnt) starts with 'P'). 5.5 = 3.18 for private separations (Account class on separation (sepaccnt) starts with 'P'). 5.6 = 3.19 for private separations (Account class on separations (sepaccnt) starts with 'P').

DVA WIES Fundable Separations

6.1 = 3.1 for DVA separations (Account class on separation (sepaccnt) starts with 'V').

6.2 = 3.2 for DVA separations (Account class on separation (sepaccnt) starts with 'V').

TAC WIES Fundable Separations 7.1 = 3.1 for TAC separations (Account class on separation (sepaccnt) starts with 'T'). 7.2 = 3.2 for TAC separations (Account class on separation (sepaccnt) starts with 'T').

Other WIES Fundable Separations 8.1 = 3.1 for remaining separations (Account class on separation (sepaccnt) does not starts with 'M', 'P', 'V ' or 'T'). 8.2 = 3.2 for remaining separations (Account class on separation (sepaccnt) does not starts with 'M', 'P', 'V ' or 'T').

Sameday WIES Fundable Separations 9.1 Same day (admission date equals separation date) Emergency Separations {Admission Type (admtype) equals 'R', 'I' or 'O'}. 9.2 WIES10 of Same day Emergency Separations. 9.3 Same day (admission date equals separation date) Elective Separations {Admission Type (admtype) does not equal 'R', 'I', 'O', 'Y', 'M' or 'S'}. 9.4 WIES10 of Same day Elective Separations. 9.5 Same day (admission date equals separation date) Other Separations {Admission Type

(admtype) equals 'Y', M' or 'S'}. 9.6 WIES10 of Same day Other Separations. 9.7 Total Same day Separations. 9.8 Total WIES10 of Same day Separations.

Non-Sameday WIES Fundable Separations 10.1 Non-Same day (admission date does not equal separation date) Emergency Separations {Admission Type (admtype) equals 'R', 'I' or 'O'}. 10.2 WIES10 of Non-Same day Emergency Separations. 10.3 Non-Same day (admission date does not equal separation date) Elective Separations {Admission Type (admtype) does not equal 'R', 'I', 'O', 'Y', 'M' or 'S'}. 10.4 WIES10 of Non-Same day Elective Separations. 10.5 Non-Same day (admission date does not equal separation date) Other Separations {Admission Type (admtype) equals 'Y', M' or 'S'}. 10.6 WIES10 of Non-Same day Other Separations. 10.7 Total Non-Same day Separations. 10.8 Total WIES10 of Non-Same day Separations.

Non-WIES Fundable (Excluded) Separations 11.1 Separations with {no VIC-DRG4} and {Care Type (care) in ('4', '8', '0','U')}. 11.2 Separations with {VIC-DRG4 960Z, VIC-DRG4 961Z, VIC-DRG4 962Z or VIC-DRG4 963Z} and {Care Type (care) in ('4', '8', '0’,'U')}. 11.3 Separations with {contract type='1' and contract role=’B’} and {Care Type (care) in ('4', '8', '0', 'U')}. 11.4 Separations with {contract type not ='1' and contract role=’B’} and {Care Type (care) in ('4', '8', '0', 'U')}. 11.5 Separations with PFS not equal to '6' and {Care Type (care) in ('4', '8', '0', 'U')}. 11.6 Non-WIES Fundable (Excluded) Separations - Total (= sum of items 11.1 to 11.5).

Notes on Precision: Data should be shown rounded to the number of decimal places indicated in the total column of the sample Hospital Activity & WIES report. Full precision should be maintained prior to printing; eg item 3.9, which is defined as the sum of 3.3, 3.4, 3.5, 3,6, 3.7, and 3.8, is to be calculated by summing components at full precision, not by summing components that have been rounded.

CRAFT Funded Hospitals Rehabilitation Report

Regional Contacts

Ms Jan Snell Mr Don Peterson Manager, Partnership & Service Planning Acting Manager, Primary Health Services Barwon South Western Region Loddon Mallee Region P O Box 760 P O Box 513 GEELONG VIC 3213 BENDIGO VIC 3552 Ph: 03 5226 4579 Ph: 03 5434 5590 Fax: 03 5226 4908 Fax: 03 5434 5695

Mr Steven Jones Mr John Joyce Manager, Health & Aged Care Manager, Housing and Community Care Grampians Region Hume Region P O Box 712 P O Box 460 BALLARAT VIC 3533 WANGARATTA VIC 3677 Ph: 03 5333 6008 Ph: 03 5722 0511 Fax: 03 5333 6093 Fax: 03 5722 0644

Ms Dorothy Wee Ms Christine Owen Manager, Health, Disability and Aged Care Manager, Housing, Primary and Complex Gippsland Region Care P O Box 1661 Western Metropolitan Region TRARALGON VIC 3844 71 Moreland Street Ph: 03 5177 2581 FOOTSCRAY VIC 3011 Fax: 03 5177 2570 Ph: 03 9275 7190 Fax: 03 8398 5025

Ms Lise Pittman Ms Shauna Walter Acting Manager, Housing, Primary and Complex Manager, Housing, Primary and Complex Care Care Northern Metropolitan Region Eastern Metropolitan Region 145 Smith Street 883 Whitehorse Road FITZROY VIC 3065 BOX HILL VIC 3128 Ph: 03 9412 5302 Ph: 03 9843 6293 Fax: 03 9412 5301 Fax: 03 9843 6118

Ms Lisa Gardner Manager, Planning and Budget Southern Metropolitan Region 122 Thomas Street DANDENONG VIC 3175 Ph: 03 9213 2043 Fax: 03 9213 2140