2.3 Throughput WIES Targets
2.3.1 Target A 2.3.2 Target A Margin 2.3.3 Option WIES 2.3.4 Tender Pool
As outlined above, this year's strategy is to improve management of demand through targetting and quality improvement, and to increase the capacity of hospitals to deal with more complex cases, while using latest proven technology and techniques. In aggregate, throughput targets for 1997-98 will be substantially unchanged from 1996-97. Aggregate throughput targets for metropolitan networks will continue and rural regional aggregate targets have been introduced this year This guarantees greater attention to local differences and complexities within Networks and rural regions.AN-DRG Version 3 was introduced on 1 July 1997 and will continue in 1997-98. The grouping software used is AN-DRG Version 3.1. The Department engaged Health Solutions Pty Ltd to conduct the Victorian 1996 Cost Weights Study of 1995-96 inpatient activity. In 1997-98 the unit of measure for casemix adjusted throughput will be formally known as WIES5 (this is defined in Section 3).
As part of the development of the 1997-98 purchasing policy an extensive regional consultation process was carried out. Consultation provides a mechanism for the Department, Networks and regions to raise issues and refine policy. An important theme from the consultations was that providers need greater certainty in purchasing policy and a continuation of the freedom to allocate WIES across campuses.
The proposed system for 1997-98 continues the 1996-97 purchasing structure comprising Target A: Target A margin; and Option WIES and introduces a Tender Pool.
2.3.1 Target AThe total number of WIES has been set at levels comparable to those of 1996-97 except for addition of 1,000 WIES for the establishment of the cardiothoracic unit at Geelong Hospital. A further 1,000 WIES have been redistributed from Networks according to their share of Target A throughput. There is an increase to Geelong of 2,000 WIES.
In the metropolitan area the target is 477,496 WIES5 and in the rural area 209,389 WIES5. Appendix 2 shows the comparison between 1996-97 and 1997-98 targets in WIES4 terms.
Target A WIES will be funded at a rate comprising both fixed and variable components. For major providers this will be $2,076 for public patients and $1,688 for private patients. Target A throughput will be subdivided into quarterly targets, as determined by the Network/hospital.
2.3.2 Target A MarginAs introduced last year, a margin has been set at 2 per cent of Target A. This margin recognises that it is not always possible for a Network or hospital to precisely meet its Target A in volume. Any throughput above the Target A level up to 2 per cent, will be funded, but at marginal rates. Similarly any short fall in throughput below the Target A level up to 2 per cent will result in reduction in payment at marginal rates. This will continue as a quarterly payment. The margin for smaller hospitals (with an annual throughput of less than 2,000 WIES) has been set at between 2 and 4 per cent.
2.3.3 Option WIES
Options are additional WIES available to hospitals. They are optional in that providers can choose to accept or decline them. The unit rate has been set at $1,327.Option WIES are allocated to major providers, and other hospitals on the basis of the Department's assessment of demand, taking into account the Metropolitan Health Services Plan and past achievement of targets.
There are 40,851 Option WIES5 available for distribution across the State in 1997-98. The numbers of Option WIES for metropolitan and rural regions has increased since 1996-97 (appendix 2). Preliminary estimates have been discussed and agreed with Networks and rural regions.
2.3.4 Tender Pool
Between 8,000 and 12,000 WIES will be set aside in a Tender Pool. This pool provides the State with the opportunity to provide some throughput at marginal rates from hospitals or Networks who are able to provide additional throughput at lower prices or who have available capacity. The Tender Pool draws on the principles of the National Competition Policy by tendering a small portion (around 2 per cent) of the State's throughput to be provided by any public hospital, providing planning guidelines are met. It is anticipated that most work in the Tender Pool will be undertaken by major providers. However smaller hospitals outside the metropolitan area will also be able to bid for a portion of this pool.Administrative details of the Tender Pool are set out below:
Hospitals and Networks will be asked to nominate the volume and price at which they are willing to do work from the Tender Pool. Tenders will be required to be submitted by 31 July and will be allocated by 15 August, to enable certainty in hospitals' throughput planning.
- Tender WIES will be offered in multiples of 200 WIES for major providers (100 for other hospitals).
- Separate prices can be nominated within each 200 WIES lot.
- The tender should not result in throughput being diverted to an extent that Government planning and service guidelines are compromised.
- Hospitals or Networks are required to fully meet their contracts for their full allocation of Option WIES before they can enter the Tender Pool.
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Purchasing PolicyTo:
Victoria - Public Hospitals
Policy and Funding Guidelines
1997-1998 - Table of Contents
