development of a funding model for the indigenous Australians' health programme

1. development of a funding model for the indigenous Australians' health programme Julia Evans & Heather Grant Strategy and Evidence Branch Indigenous Health Division

2. Background • Sector has repeatedly called for a new funding model • Funding levels are non-transparent and historical • Repeated unsuccessful attempts to devise a new model • The 2014-15 Budget required a funding model is developed as part of the establishment of the IAHP.

3. It’s a beginning… • Simply agreeing a funding model is a big step forward • Provides a mechanism for informed funding negotiation and decisions • Future work plan to improve and refine this model

4. Funding Model Advisory Committee • Nominees from NACCHO and the Departments of Finance, Prime Minister and Cabinet, and Health • Has made a recommendation on a proposed model • Will continue to meet quarterly to refine the model into the future

5. Implementation Options FMAC recommended: • The model is a starting point only • Grandfathering arrangements • Model used initially for distribution of 5 years funding • Evaluation of the model after 3 years • NACCHO proposed continued provision of indexation increases to grandfathered ACCHS. • Proposed options will be put forward for Ministerial consideration and then to Government at MYEFO. • Implementation options will be a decision of Government.

6. Proposed model - what it’s based on : Principles agreed with NACCHO • Primary health care funding should: • be directly related to the type, complexity, quantity and quality of services delivered; • be transparent and defensible; • promote sector stability and administrative efficiency; • represent sound value for money; and • enhance equity within the confines of the current funding appropriation.

7. A new funding model for the IAHP Aim • More equitable distribution of existing resources that is fair and transparent and targeted to need Funding • Does not reduce the total amount of IAHP funding available for ACCHS in any given year. • Redistribution of existing IAHP PHC funding.

8. Scope • Initially to distribute PHC funding to ~140 ACCHS • Excluded: • AMSs/ organisations that do not provide PHC/ services • Organisations only indirectly funded by IAHP through state and territory governments. • Targeted program funding (eg capital works and research, ANFPP, TIS). • Extremely remote services- using aircraft based model of care • Expected to be used more widely over time.

9. Proposed Model • A needs adjusted, capitation based model. • Capitation usually require clients to enrol with a service and the service is paid based on the number of enrolees • Model doesn’t enrol but uses a proxy for enrolment • Proxy is OSR reported Clients and Episodes of Care AHCWA- 4 April 2017

11. Adjustment Factors : Need

12. Adjustment Factors: Dispersal

13. Adjustment Factors: Performance • This component of the model is the one component where agreement was not reached • Proposed model includes a set of nKPIs and an accreditation indicator: • Diabetes care • % of people with type 2 diabetes who have regular HbA1c checks • % of people with type 2 diabetes who have regular blood pressure checks • % of people with type 2 diabetes who have renal function tests (PI 18) • Health checks • % of children 0-4 years who have at least one health check in a year • % of adults 25-54 years who have at least one health check in 24 month period • Accreditation- Service has organisational accreditation ( ISO or QIC)- Y/N

14. Quality of data inputs to the model • OSR data • Episodes of Care • Client Numbers • nKPIs or other performance component • Identification at the clinic level. • Undercounting outreach clients • Clear identification of PHC funding and targeted program work

15. Data Support and Baseline Audit project • FMAC requested that ACCHS are provided support to improve quality of data used by the model • Funding secured for consultant to visit service providers: • Education on how to improve OSR and nKPI reporting • Baseline audit of model relevant OSR and nKPI data • Consultant to collaborate with Aboriginal Community Controlled Sector Support Organisations where they have interest/capability.

16. Next steps on proposed model • Submission to Minister Wyatt on the proposed model • Consideration of the model by Government as part of MYEFO in September 2017 • Implementation of an agreed model planned for funding agreements from July 2018.

17. Refining the proposed model • Draft Model Forward Work Plan • FMAC meeting quarterly • Creation of Funding Model Working Group • Ongoing communication with the sector • Your input on what works and what doesn’t work

18. Proposed IAHP funding model – Walkthrough Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Calculate funding available for distribution = Total IAHP funding - Pre-allocated funding Calculate each service provider’s % of total adjusted Clients and Client funding Calculate total funding for each service = EoC funding + Client funding Calculate total adjusted EoC and Clients for all providers Calculate each service provider’s % of the total adjusted EoC and EoC funding EoC funding and client funding are both allocated ½ of the funding available for distribution

19. Example1 Provider A Step 1: Calculate funding available for distribution Funding available = Total IAHP funding – Pre-allocated funding. • Some IAHP funding is set aside each year for special programs (e.g.TIS) and is not available for distribution through the model. Let’s say for this example there is $361M funding available for distribution.

20. Step 2: EoC funding and client funding are both allocated ½ of the funding available for distribution $180.5M EoC $361M $180.5M Clients

21. Step 3: Calculate total adjusted EoC and Clients for all service providers • Adjusters: • 1. Health need: based on the IRSEO at IARE level • 2. Dispersal: based on the MMM at IARE level • 3. Capability: based on process-of-care nKPIs • EoC and Clients are adjusted exactly the same way

22. Step 3: continued • Adjustment matrix

23. Step 3: continued Hypothetical Provider A operates in a high dispersal and high need area, and is on track with most of the capability nKPIs. Provider A’s loading from the matrix is 3.47.

24. Step 3: continued further Provider A has reported 45,000 EoC and 5,000 clients. Provider A’s Adjusted EoC: 45,000 x 3.47=156,150 Provider A’s Adjusted Clients : 5,000 x 3.47 = 17,350 This calculation is done for all providers and the totals summed.

25. Step 3: continued further • Let’s say that total adjusted EoC across all providers was 6,000,000 • And that the total adjusted Clients across all providers was 700,000

26. Step 4: Calculate each service provider’s EoC funding Hypothetical Provider A undertook 156,150 adjusted EoC. Provider A undertook: 156,150 /6,000,000=~2.60% of the total EoC Consequently Provider A will receive ~2.60% of the funding available for EoC. So, Provider A would receive: 2.60% x 180.5M = ~$4,697,513 in Episodes of Care funding.

27. Step 5: Calculate each service provider’s Client funding Hypothetical Provider A’s adjusted Client count was: 5,000 x 3.47=17,350. Provider A cared for: 17,350 / 700,000 = ~2.48% of the total clients across providers Consequently, Provider A would receive ~2.48% of the funding available based on Clients. Provider A would receive: 2.48 % x 180.5M = ~$4,473,821 in Client funding.

28. Step 6: Calculate how much total service continuity funding each service will get In total, Provider A will receive: Funding based on EoC$ 4,697,513 Funding based on Clients $ 4,473,821 Total Service Continuity Funding$ 9,171,334

29. QUESTIONS