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Section C - Supplementary Information

Calculation of WIES7 (Part A)(Part B)

The WIES7 tables and specification have been simplified to assist anyone wishing to calculate WIES7. There is a new WIES weights "lookup" table so that users may add the components without having to work out or apply complex formulae.

Total, Fixed and Variable Weights

For WIES7, separate weights are provided for calculating total, fixed and variable WIES. Modelled budgets are based upon total WIES, but hospitals are paid according to fixed WIES (based upon agreed targets) and variable WIES (based upon actual throughput in 1999/2000). Weights are calculated so that for networks and major providers

Modelled total funds = Modelled Variable funds + Modelled fixed funds

For most VIC-DRG3s total, fixed and variable weights are equal but for some high cost VIC-DRG3s a greater proportion of funding is based upon actual throughput (ie on variable WIES). For these VIC-DRG3s total weights, fixed weights and variable weights differ.

In the computer files containing the weights tables for calculating WIES7 there are separate variables (columns) for total, fixed and variable weights. The type of weight is indicated by the last letter on the column label (t for total; v for variable; f for fixed). For example:

  • md_in_t means the multiday inlier episode total weight used to calculate total WIES.
  • md_in_v means the multiday inlier episode variable weight used to calculate variable WIES.
  • md_in_f means the multiday inlier episode fixed weight used to calculate fixed WIES.

For ease of presentation, the weights table printed in this report gives total, fixed and variable weights as separate rows for each VIC-DRG3 (labeled 'Tot.', 'Fix.', or 'Var.'). Where all three sets of weights are equal they are presented as a single row (labeled 'All').

Boundaries—Low Outliers, Inliers and High Outliers

Payment for VIC-DRG3s are 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 are called inliers, cases below the low boundary point are called low outliers and cases beyond 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.

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 12. 

Definition of Variables

Definitions and descriptions of each variable within the WIES weights "lookup" table are given below.

Variable
(Column Heading)
Label
Description
Victorian DRG
VIC-DRG3
Victorian modification to AN-DRG3.1.
Same day medical target
sdmt
VIC-DRG3s marked with a "Y" are classed as same day medical target VIC-DRG3s. VIC-DRG3s marked with "N" are not classed as same day medical target VIC-DRG3s. WIES for same day patients allocated to same day medical target VIC-DRG3s are calculated normally but the total WIES associated with same day patients in these VIC-DRG3s 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-DRG3. Options are :-

D: funded for each day provided at least six hours of ventilation is provided. Patients attract a daily rate of 0.7729 WIES

E: patients with a reported ICD-10-AM procedure code of 13382-02 are funded an additional 3.1323 WIES

4: funded for each day of mechanical ventilation after 4 days. Patients attract a daily rate of 0.7729 WIES.

I: ineligible for mechanical ventilation co-payments

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 thalessaemia diagnosis code of D56.x or D57.2 (Note: These do not have to be principal diagnoses)

Redo : a co-payment of 0.9108 WIES is made to patients with an ICD-10-AM procedure code for hip revision (49324-00).

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-DRG3s the low boundary has been set at a third of the estimated average length of stay for the VIC-DRG3. Boundaries are truncated to the nearest 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-DRG3s the high boundary has been set at three times the estimated average length of stay for the VIC-DRG3. Boundaries are rounded to the nearest whole number.
Inlier average length of stay
i_alos
The average length of stay (days) for inliers.
Weight type
wght_tp
In the table printed in this report total (T), fixed (F) and variable (V) weights are presented as separate rows. "A" is used where all weights are equal. In the lookup files provided by the Department separate columns occur for total, fixed and variable weights so this variable "A" is not required.
VIC-DRG3 designation
sd_od
Flag for designated sameday (S) or one day (O) VIC-DRG3s
Same day weight
sd_x

where

x = t,v or f

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-DRG3, same day patients may be either low outliers or inliers:-

Designated Same day VIC-DRG3s
The same day weight is based on the costs of same day patients.

Non-Same Day VIC-DRG3s with a low boundary of zero days
The same day weight is set at the multiday inlier weight.

Non-Same Day VIC-DRG3s with a low boundary of 1 day
The same day weight is set at half the multiday inlier weight

Non-Same Day VIC-DRG3s 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_x ¸ lb)

One day weight
od_x

where

x = t,v or f

The one day weight is used to allocated 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-DRG3, one day patients may be either low outliers or inliers:-

Designated Same day VIC-DRG3s

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-DRG3s

The one day weight is based on the costs of patients with a length of stay of one day.

Non-Same/One Day VIC-DRG3s 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-DRG3s with a low boundary of 2 day or more (low outliers)

The one day weight is set at the low outlier per diem weight.

Low outlier multiday per diem weight
lo_pd_x

where

x = t,v or f

The low outlier multiday per diem weight is used to allocate WIES to low outliers who have a length of stay of at least two days. Different weights are provided for total, fixed and variable WIES.

Not all VIC-DRG3s have low outliers. No weight is reported in these cases.

For most VIC-DRG3s the weight is derived as:

md_in divided by 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__x

where

x = t,v or f

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-DRG3s, same day/one day patients are excluded when deriving the inlier multiday weight.

high outlier multiday per diem
ho_pd_x

where

x = t,v or f

The high outlier multiday per diem weight is used to allocate additional WIES for all 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 ´ In_md_x divided by estimated alos

where the high factor is set at 0.7 for surgical VIC-DRG3s and 0.8 for medical VIC-DRG3s 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-DRG3s (Chaper 12).

2) Theatre and prostheses costs are excluded from the calculation of the weight for some VIC-DRG3s with high costs in these areas (Chapter 12).

3) Maximum and minimum criteria apply (Chapter 12).

  Calculating WIES7 - Part B

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