1. Introduction
Objectives
Metropolitan Services
Rural Services
1997-98 will be the fifth year of casemix funding. It marks the consolidation of improvements to established policies for inpatient funding and the beginning of activity based funding for outpatients (ambulatory care). The policy continues directions established in earlier years, namely ensuring some targeted throughput growth and maintenance of high-quality performance. Funding for the Elective Surgery and Emergency Services Enhancement Programs has increased, reflecting and emphasising the qualitative dimension of patient treatment and hospital throughput.
Throughput levels are expected to remain relatively constant and Target A levels for the State have been maintained at 1996-97 levels. Last year, greater certainty was given to hospitals by the introduction of options and bids as a means by which the Department contracted additional throughput. Hospitals were able to finalise planning of their year's throughput by end August, enabling early planning. This certainty is continued for 1997-98. The element of contestability will be increased this year by establishing a Tender Pool to replace bids, and enabling Networks and rural hospitals to tender for WIES in terms of volume and price within overall guidelines.
For the majority of rural hospitals and metropolitan Networks, the 1997-98 policy delivers modelled budgets and aggregated throughput levels which are relatively stable. Thus, there is considerable public expectation that Networks, in their third year of operation, will be able to deliver an all round improvement in performance covering quality, efficiency and access to a full range of services. The modelled budgets imply significantly less productivity requirements than in recent years. This is not a signal that continuous improvement should not be sought or cannot be achieved. Rather this is a year where the impact of prior restructuring can be realised and consolidated.
Objectives
The major objectives for 1997-98 are to:
- Maintain but not increase patient throughput targets.
- Emphasise qualitative outputs and manage patient demand by a number of targetting, substitution and quality initiatives.
- Maintain the low numbers on waiting lists in urgent categories and decrease the semi- urgent and less urgent waiting list.
- Maintain and improve levels of performance for emergency services.
- Extend casemix funding to hospital outpatients with the introduction of a new ambulatory funding model.
- Encourage further efficiencies through the introduction of a Tender Pool and best practice innovations.
- Improve local decision-making in rural areas, by establishing rural regional targets within which individual hospital targets are set by regional consultation and agreement.
- Improve access to specialist services in rural areas.
- Continue to support service changes introduced by the Networks.
- Provide a specific funding pool for rapid technological advances.
The development of the proposals and processes outlined in this document has been undertaken with extensive industry consultation. Industry groups have provided substantial advice and support in the development of general policy initiatives, classification and implementation issues. Details of committees are provided in appendix 1.
The general purchasing objective this year has been to absorb demand pressure within the current level of funded throughput but to achieve a markedly better overall outcome. This can occur by ensuring higher complexity and more urgent work is undertaken through increasing the incentives for better performance in waiting list management and emergency care. Throughput can also be improved by reducing unplanned readmissions with improved post acute care services and reducing length of stay associated with acquired infection or other medical conditions. This will be achieved through better infection control and clinical risk management.
This strategy has been discussed with industry leaders who believe it to be a sensible evolution of purchasing practice for 1997-98.
1997-98 will also see the extension of casemix funding beyond inpatients. A new ambulatory system will be introduced on 1 July 1997 that will provide more specific funding, based on clinical specialities, to major hospitals. This affects approximately $275 million or 75 per cent of the total outpatient budget. This change also means a reassignment of the basis for funding of emergency areas within hospitals. The discussion paper Paying for Hospital Emergency Care by Duckett, Jackson and Scully is currently being circulated and a formal response will be given in 1997-98. The details are described in a later section of this document.
Additional funding has also been provided for a range of innovative programs, such as Hospital in the Home, post acute care and new quality initiatives, particularly infection control.
Last year a small amount was allocated for best practice projects to encourage clinical improvements and new cost effective techniques. The funding is intended to improve and encourage quality, and effectiveness in health and hospital care delivery. A number of projects have commenced in areas of high volume and funding is available again for similar projects in 1997-98.
Metropolitan Services
The 1996-97 year saw Metropolitan Health Care Networks undertake significant actions in improving the efficiency of their services through consolidation and restructuring across their various campuses. This was a key direction for Networks to undertake and was clearly outlined in the report of the Metropolitan Hospitals' Planning Board in 1995. It is expected that in 1997-98 Networks will continue to test and examine current policies and systems to improve their services and efficiency.
Networks, in conjunction with the Department, have joint responsibility for ensuring increased equitable access to hospital services. One of the major directions of Victorian health policy is to redesign existing services to meet the needs of future populations and to ensure services continue to be accessible to changing populations. Network-wide targets with campus reporting allows Networks to redesign services according to local priorities, with appropriate accountability, within a State context.
Rural Services
Two major challenges face acute hospitals in rural communities. The first is maintaining access to specialist services at a time when it is difficult to attract and retain specialists in rural areas. The second challenge relates to small rural hospitals, and involves encouraging these hospitals to provide a wider range of community-based as well as bed-based health services. The policy for 1997-98 addresses both of these challenges. It is desirable that major regional referral hospitals and sub-regional hospitals have an appropriate range of specialist services so that rural people can access these services within their local area rather than travelling to Melbourne.
In 1996-97, the Rural Specialist Services Grant was introduced to foster and maintain specific specialty services in rural regional and sub-regional hospitals. Fifty thousand dollars was allocated for each of nine identified specialties with a total of $5 million being budgetted. In 1997-98, funding for each specialty will be increased to $60,000, increasing the total amount to be spent to $7.2 million. Funding will not be tied to the nine identified specialties; instead a wide range of specialties will be eligible. Hospitals will therefore have greater flexibility in determining which specialities are priority requirements in their particular area. The Geelong Hospital will also be eligible to receive the Rural Specialist Services Grant in 1997-98.
A new cardiothoracic unit has been established at the Geelong Hospital and an allocation of 2,000 additional WIES has been made to support its introduction.
The Department has established the Healthstreams Program to enable more flexible funding and purchasing arrangements in small rural communities. Five agencies have been approved for participation in the Healthstreams Program and a further eleven have been approved in principle. Healthstreams Task Groups have been established with extensive industry representation. Although Healthstreams agreements will be operational during 1997-98, it is expected that the final model will be introduced for 1 July 1998.
Rural self-sufficiency, encouraging local treatment and services, remains a key policy objective. Throughput targets were significantly increased for 1995-96 and continued in 1996-97 for selected rural hospitals to improve self-sufficiency. Although a review of performance to-date suggests these targets have not been met in a number of cases, it has been decided to continue the existing aggregate rural regional targets for 1997-98.
The shortage of trained specialists in rural areas requires general practitioners to assume responsibility for delivering a greater range of services, particularly in the areas of obstetrics, anaesthetics, minor surgery and accident and emergency services. A Continuing Medical Education subsidy program for rural general practitioners commenced on 1 July 1996. The joint contribution to the costs of the program by the Department, hospitals and general practitioners will continue in 1997-98. The Rural and Isolated Grant has been retained at 1996-97 levels.
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Victoria - Public Hospitals
Policy and Funding Guidelines
1997-1998 - Table of Contents