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Section A - Policy

3. Hospital Activity & Throughput Targets

3.4 Network and Regional Targets

The following table sets out the targets for 1999-2000 (excluding Tender WIES).

Table 3: Metropolitan and Rural Targets, 1999-2000

3.4.1 Metropolitan Targets (including Barwon Health)

Throughput growth will be allocated according to the principles agreed within the budget process. This incorporates demographic growth, technology related growth, and 'unexplained' growth partly reflecting declining private health insurance levels. All hospitals will receive some throughput growth, with higher growth targetted to A1 hospitals (to assist in the cost pressure of new technologies); to targetted areas of demographic growth; and to large regional hospitals.

Campus level activity will be monitored to ensure consistency with the principles of the Metropolitan Health Care Services Plan. Any significant departure from the agreed service plans or indicative levels will be assessed by the Department. Quarterly targets at the network and campus level will be nominated by Networks and included in the Health Service Agreement (HSA). Significant departure from network target levels, (greater than 2 per cent) after consultation with the Network, may result in financial penalties. Same day caps will operate within overall WIES7 targets. Non-admitted patients will have a budget ceiling for each hospital campus.

Major providers are required as soon as possible, but no later than 30 July 1999, to advise the Department on:

• Quarterly throughput levels and indicative campus level throughput;
• The amount of allocated Option WIES that they will take up; and
• Their ability to comply with the timetable in respect of Option WIES.

Tenders for the Tender Pool WIES must be received by the Department by 13 August 1999. Formal notification of the outcome of the Tender Pool will be provided by 27 August 1999.

3.4.2 Rural Targets

In general, the allocation of throughput targets in 1999-2000 shows a similar position to previous years, with an increase to all hospitals as a result of demand pressures. Details are provided in Chapter 15. Allocations to individual rural hospitals will continue to be determined by rural regions. Reallocations have been decided on factors such as the achievement of throughput targets over recent years, and the planned direction of services within the region in future years.

Quarterly targets will be nominated by each Group B hospital 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 WIES7 targets. Details on individual hospitals are provided in Chapter 15.

Group B hospitals are required to advise the Department by 30 July 1999 on:

• Quarterly throughput levels; and
• The number of Option WIES to be taken up (where appropriate).

Rural hospitals will also be able to tender for Tender WIES. Tenders are required to be received by rural Provider Managers by 13 August 1999.

3.4.3 Service Agreements

Service Agreements with the Department are to be signed as soon as possible in the financial year. In particular, the Acute Schedule to the Service Agreement is required to be concluded by 15 October 1999. The Acute Health Division will provide assistance to resolve any outstanding issues in that period. However, agencies that have not signed the Acute Schedule will not be eligible to receive the bonus payments under the Hospital Access Program.

3.5 Unit Rates

The unit rates for all WIES7 are given in table 4.

Table 4: Unit Rates, 1999-2000

For 1999-2000, as previously, it has been recognised that smaller Group B hospitals (those with less than 10,000 WIES per year) and Group C, D and E hospitals in rural areas have higher and less elastic infrastructure costs. Thus a higher notional fixed rate for these hospitals continues.

As larger Group B hospitals do not have these costs to the same degree, their notional fixed rate is unchanged. As for 1998-99, Barwon Health and the Networks have been grouped as Major Providers. Major providers have a lower notional fixed rate reflecting economies of scale in their infrastructure.

The variable payment will be $1,371 per WIES7 and will be payable on all WIES (except those in the Target A Margin and Tender Pool).

3.6 Same Day Caps

Since the introduction of casemix funding there has been strong growth in the volume of same day cases in Victorian public hospitals, partially due to changes in statistical admissions and clinical practice. Some of this growth has been the direct result of improved hospital practices involving the substitution of multi-day stays with same day care. Efficient substitution has occurred where patients are admitted for surgery. At the same time as same day care for surgical cases has grown, the number of patients admitted for medical conditions on a same day basis has also increased significantly, with an increase in admissions through emergency departments and for investigative procedures.

In 1995-96 the Department introduced throughput caps and these currently apply at the Network level for metropolitan hospitals and the hospital level for rural hospitals.

In 1997-98 there were 132,832 cases (32 per cent of all same day separations, and 15 per cent of separations) across Victorian public hospitals that were designated target same day medical cases (i.e. included in the cap).

The figure below shows the number of cases under the cap in terms of separations. These cases accounted for 41,204 WIES or 5.4 per cent of a total of 761,948 WIES for all WIES fundable separations in Victoria.

During 1998-99, the diagnoses of same day cases within the cap were examined to improve the specification of the caps. In 1999-2000, the following cases will be excluded from the cap:

• Where the patient has received chemotherapy or radiotherapy (including those cases grouped to other DRGs);
• Patients admitted for treatment under oncology DRGs;
• Male sterilisation; and
• Transfers and deaths.

Same day caps will be maintained at the 1998-1999 level of 6.5 per cent of total casemix fundable WIES. Further work on this issue will continue in 1999-2000.

A review of same day gastroenterological service provision will examine hospital specific and geographic area specific trends in the provision of services. It will also review the logic of the inclusion of procedure based care in the list of target same day medical DRGs; the cost of service provision for metropolitan and rural hospitals; and possible funding options for 2000-2001.

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