Pricing and funding for safety and quality

The Commission and the Independent Health and Aged Care Pricing Authority (IHACPA) have established a Joint Working Party (JWP) to consider potential approaches to pricing for safety and quality in public hospital services in Australia.

Collaboration with the Independent Hospital Pricing Authority

The JWP was tasked with providing advice to the Commission and IHPA on:

  • potential approaches to including elements of safety and quality within the national Pricing Framework for Australian Public Hospital Services and the likely benefits to the Australian community
  • current pricing mechanisms operating within and outside Australia
  • the need for any unique pricing features that may be desirable in a potentially revised national Pricing Framework in Australia.

Through the initial work of the JWP, the Commission and IHPA have worked in collaboration to identify and specify indicators for the pricing of safety and quality for public hospital services.

Pricing for Best Practice

In June 2014, the JWP established a sub-committee to investigate best practice pricing schemes, supported by evidence, with a particular focus on hip fracture care. The sub-committee, co-chaired by Dr Diane Watson, CEO of the National Health Performance Authority (NHPA) and Dr Robert Herkes, Clinical Director at the Commission, is comprised of representatives from the JWP, senior medical experts, policy experts, and government and commonwealth representatives. The sub-committee has undertaken an exploration of:

Requirements and feasibility of introducing best practice pricing for hip fracture care in Australian public hospitals including:

  1. examining local and international schemes
  2. investigating potential processes for adopting or developing a clinical pathway or achieving consensus on ‘best practice
  3. preliminary scoping of a national best practice pricing model in the Australian public hospital funding context in light of (a) and (b)
  4. an appropriate mechanism and format for providing safety and quality data to clinical teams and hospital leaders to drive quality improvement. This mechanism will support implementation of best practice pricing in priority clinical areas, with a focus on hip fracture care.

The sub-committee consulted with national and international experts, the IHPA and clinical specialty groups for evidence-based pricing schemes and implementation strategies tailored to the Australian context. A best-practice pricing in hip fracture care recommendations report was completed by the sub-committee and endorsed by the JWP on 29 June 2015.

Literature review

A literature review of existing Australian and international mechanisms for integrating safety and quality into hospital pricing mechanisms was completed in 2013.

Linking quality and safety with hospital funding is being considered and implemented by many countries using a variety of approaches. The evidence for the material impact of such schemes on patient outcomes remains equivocal. However, the available evidence points to the provision of relevant and timely clinical information as an effective driver of safety and quality improvement. In July 2015, the literature review was augmented with a supplementary briefing and literature update. The July instalment is attached below:

Using administrative hospital data

The JWP explored the use of hospital administrative data (routinely collected clinical data generated from hospital information systems), to drive improvements in healthcare safety and quality.The following projects examining potential uses of administrative hospital data have been completed:

  1. An environment scan of how administrative hospital data is being used to drive quality improvement.
  2. An analysis of hospital-acquired diagnoses and their effect on case complexity and resource use.
  3. A clinician driven process was undertaken to develop a national list of high-priority hospital acquired complications (HACs). The recommendations in the clinical reference group’s final report: National set of high-priority hospital complications were supported by the JWP and the Commission Board, subject to broader consultation and testing.
  4. A proof-of-concept study was completed in 2015 which confirmed that the draft HAC list is sufficiently reliable to support implementation of HAC surveillance systems to assess patient safety, notwithstanding that there are some areas for improvement in data quality.
  5. The HACs list was refined based on the findings from the proof-of-concept study, a Clinical Reference Group coding review and investigation of complications from clinical domains that required specialist advice.

Joint Working Party Safety and Quality members

Members of the JWP were chosen for their individual significant experience and expertise and were nominated by both organisations.

JWP Member Position
Adjunct Professor Debora Picone AM (Chair) CEO, Australian Commission on Safety and Quality in Health Care
Mr James Downie A/CEO, Independent Hospital Pricing Authority
Mr Wayne Adams Private Healthcare Australian representative
Dr Stephen Christley Interim Mental Health Commissioner, South Australia Health
Dr Michael Coglin Chief Medical Officer, Healthscope
A/ Professor Liza Heslop Associate Professor at Victoria University
A/ Professor Louis Irving Director of Respiratory and Sleep Medicine, Royal Melbourne Hospital Director of Clinical Training
Dr Audrey Koay Senior Clinical Adviser, Office of the Chief Medical officer, WA Health
Dr Karen Luxford Director Patient Based Care, Clinical Excellence Commission, NSW Health
A/ Professor Brian McCaughan Cardiothoracic surgeon; Board Chair, Clinical Excellence Commission; Board Chair, Agency for Clinical Innovation
Mr Russell McGowan Board Member, Public Health Association of Australia
A/ Professor Graham Reynolds Consultant Paediatrician and Associate Dean (admissions) Australian National University Medical School
Ms Cindy Schultz-Ferguson Consumer representative
Ms Jennie Shepheard Principal Health Information and Classification Advisor, Department of Health Victoria
Dr John Wakefield PSM Executive Director of Medical Services, Children's Health Queensland
Dr Diane Watson CEO National Health Performance Authority
Dr Bernard Whitfield Otolaryngology Head and Neck Chair – Royal Australasian College of Surgeons (QLD)
Professor Fiona Wood AM Plastic Surgeon, Director of the Royal Perth Hospital Burns Unit and the Western Australia Burns Service.