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Casemix: moving forward

Key elements of inpatient funding policies, 1997-98, by State*

ElementVictoria
Funding modelStandard price by hospital group, capped,
fixed and variable model with minor
purchasing price competitive elements
Prices for different
hospital groups
Variable payment constant. Fixed
payment varies for five hospital groups,
with payment declining as size increases
Relative weightsDerived from clinical costing data
provided by 15 Victorian hospitals
(updated annually)
Volume flexibility
method
Base volume target set for each
metropolitan area and rural region, then
distributed as a capped budget to hospitals.
Throughput, up to 2% above base,
funded at discounted rate.
Additional throughput at differential
rates offered at start of financial year
Trim points**L3H3
No cost trim point
Outlier and exceptional
case payment policy
Outliers converted into "inlier equivalents"
by adding a discounted payment for all days
above the high trim point; or by discounting
the normal inlier payment if length of stay
is below the low trim point
Critical care
supplement
No
Payment for public
and private patients
Differential payment for public and private
patients. Same weights for both groups
ElementQueensland
Funding modelStandard price by hospital group, capped,
fixed and variable model
Prices for different
hospital groups
Prices based on five hospital groups (base
payment price increases with size). Weights
differ for different groups
Relative weightsNational public hospital weights from
1995 national cost modelling study adjusted
by deducting allocated overhead, medical
pathology and critical care components
Volume flexibility
method
Volume caps at district (multi-hospital) level.
Districts distribute the capped budget
to hospitals
Trim points**L3H3 plus "extra high" trim point at five
times average length of stay.
No explicit cost trim point
Outlier and exceptional
case payment policy
Discounted per diem price paid for short
stay outliers
Additional per diem rate for long
stay outliers.
Extra long stay outliers paid twice inlier
payment plus per diem payment for days
above extra high boundary point.
Special case can be made for high
cost ouliers
Critical care
supplement
Taken into account in identifying hospital
categories and relevant payment weights
Payment for public
and private patients
Separate medical cost weights used for
medical payments for public patients
ElementWestern Australia
Funding modelStandard price capped, full price
model
Prices for different
hospital groups
Two groups for payments: hospitals
with Trendstar clinical costing system
and those without (the latter, generally
smaller, receive a lower payment).
Access subsidy for rural and
remote hospitals
Relative weightsDerived from clinical costing data
provided by four major hospitals
comprising seven sites (updated
annually)
Volume flexibility
method
Volume target set for each hospital
Trim points**L3H3
High cost trim point at $75 000
Outlier and exceptional
case payment policy
An Exceptional Episodes Insurance Pool
funds "exceptional DRGs" (DRGs with low
volume or unpredictability in costs); cases
with length of stay >91 days; cases with
length of stay <91 days but cost >$75 000;
short stay outliers and 35% of the payment
for long stay outliers.
65% funding of long stay outliers folded
back into "central episodes" (inliers)
Critical care
supplement
Block intensive care unit payment based on
historical expenditure
Payment for public
and private patients
Block medical payment based on
historical expenditure
ElementSouth Australia
Funding modelStandard price, capped, full price model.
If activity targets not reached, funding
discounted by 65% of full price
Prices for different
hospital groups
Metropolitan teaching hospitals have 6%
loading; metropolitan non-teaching and
country regional have 2% loading.
Access subsidy for very small
hospitals
Relative weightsNational public hospital weights derived
from 1995 national cost modelling study
adjusted by deducting critical care component.
State-developed paediatric weights for
paediatric services at Women's and Children's
Hospital and Flinders Medical Centre
Volume flexibility
method
Volume target set for each hospital
Trim points**H3
Short stay trim 3 SD below mean in those
DRGs in which average length of stay
is >4 days.
High cost trim at $60 000 above AN-DRG
reimbursement
Outlier and exceptional
case payment policy
Additional per diem rate for long stay
outliers at two rates - up to 90 days
higher than longer stays.
Pool for high cost outliers established
Critical care
supplement
Intensive care units funded separately
on a per diem basis
Payment for public
and private patients
No distinction
ElementTasmania
Funding modelStandard price, capped, full price
model.
Prices for different
hospital groups
Casemix funding only applies to the State's
three major hospitals
Relative weightsNational public hospital weights from 1995
national cost modelling study
Volume flexibility
method
Volume target set for each hospital
Trim points**L3H3
No cost trim points
Outlier and exceptional
case payment policy
Long stay outliers paid $200 per DRG
weighted day for days above trim point.
Discounted payment (on a per diem basis)
for short stay outliers.
Discretionary pool established for
high cost outliers
Critical care
supplement
No
Payment for public
and private patients
No distinction

*New South Wales does not fund hospitals on a casemix basis.
**L3H3 indicates a long stay trim point three times average length of stay of DRG, and a short stay trim point one third of the average length of stay of DRG.


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