530480 research-article2014
APY0010.1177/1039856214530480Australasian PsychiatryWand et al.
Australasian
Psychiatry
Psychiatric services
Activity-based funding: implications for mental health services and consultation-liaison psychiatry
Australasian Psychiatry 2014, Vol 22(3) 272–276 © The Royal Australian and New Zealand College of Psychiatrists 2014 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/1039856214530480 apy.sagepub.com
Anne Wand Staff Specialist Psychiatrist, South Eastern Sydney Local Health District, Sydney, NSW; Conjoint Senior Lecturer, School of Medicine, University of New South Wales, Sydney, NSW; Clinical Lecturer Discipline of Psychiatry, Sydney Medical School, University of Sydney, Sydney, NSW, Australia
Abstract Objective: The aim of this paper is to inform mental health professionals about Activity-based funding (ABF) and the implications for data collection and clinical practice, in particular for consultation-liaison (CL) psychiatry. Conclusions: Activity-based funding may provide an opportunity for mental health services to be more equitably resourced, but much needs to be done to demonstrate that the funding model works in mental health. It is important to ensure that data collected is meaningful and accurate and reflects the diverse roles of mental health clinicians, including in CL. Inpatient and community services should be integrated in the model, as well as safeguards against potential abuse. Clinicians, in partnership with initiatives such as the Australian Mental Health Outcomes and Classification Network, are best placed to guide the development of an ABF system for mental health which appropriately recognises the complexity and variability between patients in different settings. Keywords: Activity-based funding, public psychiatry, mental health, payment, consultation-liaison
A
ctivity-based funding (ABF) has commenced for mental health services. Although clinicians are broadly aware of its arrival, there is much uncertainty about what it is, and the changes that may follow for data collection and clinical practice. There are particular implications for consultation-liaison (CL) psychiatry, whose varied roles do not easily fit the funding model. This paper aims to provide an overview of what ABF is, the evidence for and against the model, and the implications for mental health professionals, especially those in CL settings, a subspeciality of the author.
What is activity-based funding? Background and definition
The development of a national, consistent approach to ABF was one of the key reforms outlined in the National Partnership Agreement on Hospital and Health Workforce Reform (2008) of the Council of Australian Governments.1 This approach to funding public hospital services assigns a fixed price (the National Efficient Price) for each episode of patient care, which varies according to the setting and service care type.2 The Independent Hospital Pricing Authority has been tasked with determining the National Efficient Price for public hospital
services in order to enable ABF to be introduced nationally. To establish an ABF system, patients must be classified into clinically relevant groups, episodes of care counted and costed, and then a pricing model determined (see http://www.ihpa.gov.au). A diagnosis-related group (DRG) system will be used to fund acute and hospital-based mental health services.3 Activities other than treatment, such as research and training, will be incorporated into the new funding model.2 Activity-based funding models have been used in many Australian hospitals for over 20 years. However, mental health services have previously been funded through block grants to public hospitals and local health districts.3 With the new ABF system, only mental health services in acute inpatient (hospital) settings and Emergency Departments (ED) are so far included.3 Some outpatient mental health services, which could be considered a public hospital service, may also be included.2
Corresponding author: Dr Anne Pamela Frances Wand, Department of ConsultationLiaison Psychiatry, Euroa Centre Level 1, Prince of Wales Hospital, Barker St Randwick NSW 2031, Australia. Email: [email protected]
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Wand et al.
Goals of activity-based funding The overarching purpose of ABF is to deliver more consistent, cost-effective and efficient health care.2 Other benefits of ABF include greater transparency in funding and fairer allocation of resources, because equivalent activities are equally funded.4 Evidence for activity-based funding Various forms of ABF are used internationally and some data is available.5,6 In a comparison of the experience of implementing ABF in five European countries, it was concluded that ABF appears to be associated with reduced length of stay and/or the rate of growth in hospital costs and an increase in activity, but that formal evaluations are largely absent.6 It was noted that outcomes may have been influenced by factors other than the introduction of ABF, including for example, in England, contemporaneous policy changes and funding increases in health.7 Certainly, during the period when ABF was introduced, hospital activity changed to a greater proportion of day procedures and day-care compared with inpatient care, with the effect of increasing patient numbers in the system whilst minimising costs.6 Fears of deliberate upcoding (i.e. placing patients in higher-funded payment categories) were not realised in England, where coding and payment are directly linked.8 Reviews from the USA, with a similar system to ABF of “pay for performance”, have concluded there is insufficient evidence of benefit.9,10 The question of whether the quality of healthcare services has changed under ABF has not been answered. Whilst lengths of stay may be reduced along with the associated nosocomial risks, patients may lose when discharged prematurely and still unwell.6 Strategies to safeguard the quality of this aspect of healthcare services under ABF have been implemented in some countries. For example, in Germany and England, hospitals do not receive reimbursement for cases readmitted for the same cause within 30 days of discharge from the index admission.6 In England, the quality of hospital care under ABF was not found to be adversely affected in two evaluations.7,11 Nonetheless, there are major deficiencies in many countries in the measurement of patient outcomes such as readmission and complication rates.12 The impact upon mental health services has not been separately analysed.
Criticisms of activity-based funding Hospitals with costs above the fixed price for a service will lose money from that service. Thus there is a financial incentive with ABF to minimise the costs per episode of care in order for the hospital to make a profit. Strategies for hospitals to improve efficiency may include withdrawing expensive services (e.g. complex surgery), changing the staff mix of services (e.g. using enrolled
rather than registered nurses), cutting unnecessary costs or reducing length of stay.13 The quality of the service provided and whether the activity is based upon best practice are not inherent to the funding model.3 There is little financial incentive to improve the quality of care.13 In addition, patient access to ‘expensive’ services may be reduced, unless the price paid to those hospitals performing the specialised services is topped-up to offset the potentially higher costs they may incur, as occurs in England.14 Another criticism of the ABF model is the potential for ‘gaming’ the system.3 This refers to hospitals or local health districts exploiting the system to obtain more funding. One example of this is the diversion of patients from community-based services to the more lucrative options of inpatient admissions and EDs. Not only would this add to the current problems with overstretched EDs and bed block, but it is at odds with the evidence favouring the effectiveness of communitybased mental health care and consumer preferences.15 Other practices such as ‘cream skimming’ may occur.4 This refers to hospitals favouring simple cases over those which are complex and time-consuming (which may inevitably have more adverse patients outcomes), to increase throughput and therefore funding.4 ‘Upcoding’ is another type of gaming, whereby patients are fraudulently placed in payment categories which attract more funding.4 Therefore, there are serious ethical issues raised by the possibility that healthcare decisions will be made on the basis of whether they will attract funding or not, rather than clinical indication. Activity-based funding fits best with procedural health care. Whilst it may be straightforward to set an efficient price for a hip replacement for example, a fixed price is less obvious for many of the activities mental health services have with patients, their families and staff. For example, it is unclear how environmental, non-pharmacological interventions (for example in delirium management), clinician support of families, or the reflective supervisory roles of psychiatrists with multidisciplinary staff will be recognised. It has also been noted that DRGs for mental health are less accurate than those for all other conditions.16 The Mental Health Major Diagnostic Category is least able to account for differences in resource use (costs) between patients compared with all other DRG classifications.16,17 In recognition of this fact, the UK and USA do not use the DRG classification to predict the costs of mental health care.17 Thus using mental health DRGs as the foundation of the funding model in Australia is problematic. In addition, the DRG classification may be altered to reduce complexity levels, and therefore ABF, to services with adverse outcomes of care.16 This provides incentive for clinicians (or coders) not to record adverse care outcomes, and risks important information being lost from which services can learn and quality improvements be made.16 Losing data on the complex needs of many patients with mental health problems, or worse,
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Australasian Psychiatry 22(3)
Table 1. Key challenges that ABF brings to CL psychiatry Coding issues • Psychiatric comorbidities are poorly documented in general hospital patients. • Many patients referred to CL psychiatry do not have a diagnosable mental disorder. Difficulties capturing the diverse roles of CL psychiatry with ABF • CL psychiatrists may question or withdraw psychiatric diagnoses previously given to patients. • CL psychiatrists are often asked to make assessments of ethical questions and decision-making capacity which are not easily coded. • The main role of the CL team may be to work with staff, to assist them to better understand and manage a patient. This role is often time-consuming and ongoing. • Whilst the referring team may ask CL about a diagnostic issue, the underlying issue may be systemic or interpersonal. • CL routinely provides informal teaching through discussing assessments with referring teams. Ethical questions • If funding is primarily attached to diagnostic groups, will CL be pressured to make a psychiatric diagnosis, even when unwarranted (upcoding)? • There are implications for patients if psychiatric diagnoses (accurate or not) are recorded, including their privacy, insurance, employment and eligibility for medical treatments. Staff may prejudge a patient based upon particular documented diagnoses. • If more funding is attached to patients who are detained involuntarily, will there be pressure to use the MHA, when there are more appropriate alternatives?
penalising services by not funding complex patients at high risk of complications or adverse outcomes, risks excluding those with greatest need. As has been noted in subacute settings it is level of function, not diagnosis, which often drives the cost of care,16 and this can be highly variable even within a diagnostic group, including mental disorders in acute settings.
Additional challenges of activitybased funding for mental health services Consultation-liaison psychiatry
The CL sector interacts directly with patients admitted to public hospitals, including EDs. Yet, at present, there is no consensus upon how to capture and code what we do.18 An overview of the specific challenges ABF brings to the CL setting are presented in Table 1. It has long been recognised that patients referred to CL services are a complex and expensive cohort, and that psychiatric comorbidities are poorly documented, leading to inadequate coding.19,20 In one recent study, the administrative coding for psychiatric diagnosis accurately matched the psychiatrist’s coding in only 35% of cases.20 It has been demonstrated that improving the accuracy of discharge coding with psychiatric comorbidity can move a patient into a higher DRG, which may be more appropriate given the recognised associations with longer lengths of stay, poorer outcomes and higher costs compared with inpatients without psychopathology.19 ABF may provide an impetus to address this problem.
However, improving the accuracy of psychiatric diagnoses is only one part of the issue for CL services. A CL psychiatrist might diagnose delirium or major depression, for example, in a general hospital inpatient, which may easily be categorised into a DRG. However, many patients referred to CL services do not have a diagnosable mental illness,21 but they may still have psychological issues affecting treatment of their medical problem.22 In fact the ‘undiagnosing’ of mental illness labels and withdrawal of accompanying treatment are key aspects of CL work. In addition, a CL referral may not relate to a patient’s diagnosis or management, but to other issues such as the capacity to consent for a healthcare decision. This does not neatly fall into a DRG either. Further, CL psychiatry often provides the referring team with an understandable formulation of what might be occurring between the patient, staff and the hospital system, with associated management recommendations, rather than simply a diagnosis. The complexity of this intervention cannot readily be reduced into a DRG. CL services also routinely work with staff (sometimes more so than patients) in managing a ‘difficult’ patient. This work can be timeconsuming and in addition to formal education sessions for staff. As ABF only applies to patients, not healthcare staff, such activities would also not be captured, with adverse consequences for funding. It is possible under ABF that CL clinicians may be more inclined, or even under pressure from hospital managers, to assign a mental health diagnosis, even if
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Wand et al.
unwarranted. This has significant implications, not only in terms of ethical clinical practice, but also for patients. Inaccuracies or upcoding of mental health diagnoses may be recorded in discharge summaries and medical files, in some instances influencing the person’s future interactions with the healthcare system; for example, inflating interpersonal disputes between treating teams and patients as personality disorder diagnoses, rather than recognising the complexity of what is occurring. Such a label may lead to pejorative attitudes or stereotypic, unempathetic responses from staff.23,24 There is also a privacy issue in recording what may be a sensitive diagnosis on a patient’s record, with potential implications for their insurance,25 employment and eligibility for certain medical or surgical treatments. In some cases psychiatric diagnoses may already not be recorded for these reasons.19 Community mental health services As ABF is concerned with acute hospital settings, it has been highlighted that new innovations with an evidence base in the community mental health sector may be further neglected and underdeveloped (see examples in Rosenberg and Hickie, 2013).15 If community mental health is not part of the funding reforms, ABF risks reinforcing expensive hospital-based mental health care, resulting in continued inefficiency, less outpatient care, and contrary to community preferences and current mental health policy.15,17 The disconnect in funding also discourages service integration between acute and community care,3 although integration was a priority in the fourth National Mental Health Plan.26
Network’s consideration of the theoretical and practical issues involved in defining case complexity in mental health,29 which are directly relevant for ABF. This involves working out why mental health costs and outcomes vary between mental health services and care settings. Understanding case complexity is essential to developing appropriate classifications to underpin an integrated ABF system for mental health,17 and a discourse that clinicians can usefully contribute to. The appropriateness of ABF for mental health services still needs to be demonstrated. This will require further work on an appropriate classification system for mental health activities, which is applicable across similar service settings and may be used to compare care and outcomes. Mental health professionals must be involved along with coders and administrators in order develop a meaningful and real-world classification system and to improve the accuracy of coding in complex patients. This is particularly urgent in CL settings, where there are significant implications for loss of hospital revenue and resource allocation if the needs of patients with psychiatric comorbidity are not captured and the broad activities of CL services with patients and the staff caring for them are not recognised.20 The wholesale adoption of ABF provides an opportunity for mental health services to obtain their fair share of new Commonwealth funding available in the national reform.18 Unless we can record the work we do and demonstrate value (in terms of outcomes for patients), patients risk losing access to mental health services and mental health services will continue to be under-resourced. Acknowledgements
The introduction of ABF also raises the potential for misuse of mental health legislation. For example, it is likely that patients certified under a Mental Health Act would be assigned greater funding under ABF. This presents an ethical minefield and a potential serious threat to efforts to promote voluntary access to mental health care. Similarly, if ABF is only introduced in acute inpatient psychiatric settings without an equivalent funding model in the community, the most restrictive form of care, hospitalisation, may be encouraged inappropriately, which is at odds with best clinical care and mental health legislation.17 If some community health centres are determined to be outpatient-based services of a public hospital, more funding may be attached to patients on Community Treatment Orders. There is evidence that such orders are already overused in Australia compared with internationally27 and a lack of evidence of benefit.28 ABF may provide incentive to continue this practice.
The author acknowledges the helpful preliminary discussions with Timothy Wand and Robert Gribble.
What do we need to do?
5. Ettelt SS, Thomson E, Nolte E, et al. Reimbursing highly specialised hospital services: The experience of activity-based funding in eight countries. London: London School of Hygiene and Tropical Medicine, 2006.
The Australian Mental Health Outcomes and Classification Network reports patient outcome information collected from states and territories to the Commonwealth.17 The data collection has informed the
Disclosure The author reports no conflict of interest. The author alone is responsible for the content and writing of the paper.
References 1. Council of Australian Governments. National Partnership Agreement on Hospital and Health Workforce Reform. 2008. Available at: http://www.ahwo.gov.au/documents/ COAG/National%20Partnership%20Agreement%20on%20Hospital%20and%20 Health%20Workforce%20Reform.pdf (accessed 21 September 2013). 2. Council of Australian Governments. Activity Based Funding National Framework and Implementation Plan. 2009. Available at: http://www.federalfinancialrelations.gov.au/ content/npa/health_payments/workforce-reform/activity_based_funding/national_ partnership.pdf (accessed 21 September 2013). 3. Rosen A, McGorry PD, Hill HR, et al. The Independent Hospital Pricing Authority and mental health services: it is not a case of “one size fits all”. Med J Aust 2012; 196: 675–677. 4. Collier R. Activity-based hospital funding: boon or boondoggle? Can Med Assoc J 2008; 178: 1–4.
6. O’Reilly J, Busse R, Hakkinen U, et al. Paying for hospital care: the experience with implementing activity-based funding in five European countries. Health Econ Policy Law 2012; 7: 73–101.
275 Downloaded from apy.sagepub.com at Kungl Tekniska Hogskolan / Royal Institute of Technology on March 10, 2015
Australasian Psychiatry 22(3) 7. Farrar S, Yi D, Sutton M, et al. Has payment by results affected the way that English hospitals provide care? BMJ 2009; 339: b3047.
download?path=Publications/Activity%20Based%20Funding%20issues%20paper.pdf (accessed 21 September 2013).
8. Audit Commission. PbR Data Assurance Framework 2007/08. Findings from the first year of the National Clinical Coding Audit Programme. London: Audit Commission, 2008.
19. Jordan I, Barry H, Clancy M, et al. Financial impact of accurate discharge coding in a liaison psychiatry service. J Psychosom Res 2012; 73: 476–478.
9. Rosenthal MB, Frank RG, Li Z, et al. Early experience with pay-for-performance: from concept to practice. JAMA 2005; 294: 1788–1793.
20. Udoh G, Afif M and MacHale S. The additional impact of liaison psychiatry on the future funding of general hospital services. Ir Med J 2012; 105: 331–332.
10. Wodchis WP, Ross JS and Detsky AS. Is P4P really FFS? JAMA 2007; 298: 1797–1799.
21. Ellen S, Lacey C, Kouzma N, et al. Data collection in consultation-liaison psychiatry: an evaluation of Casemix. Aust Psychiatry 2006; 14: 43–45.
11. Audit Commission. The right result? Payment by results 2003–07. London: Audit Commission, 2008. 12. Or Z and Hakkinen U. DRGs and quality: for better or worse? In: Busse R, Geissler A, Quentin W and Wiley M (eds) Diagnosis related groups in Europe. Moving towards transparency, efficiency and quality in hospitals. Maidenhead: Open University Press, 2011. 13. Scott A and Yong J. Why the new way of funding public hospitals won’t work. The Conversation. 4 July 2012. Available at: http://theconversation.com/why-the-new-wayof-funding-public-hospitals-wont-work-7952 (accessed 21 September 2013). 14. Department of Health. Payment by results guidance for 2011–12. Available at: https:// www.gov.uk/government/uploads/system/uploads/attachment_data/file/216212/ dh_133585.pdf (accessed 21 September 2013). 15. Rosenberg SP and Hickie IB. Making activity-based funding work for mental health. Aust Health Rev 2013; 37: 277–280. 16. National Casemix and Classification Centre. Comments on the document “Activity based funding for Australian public hospitals: towards a pricing framework”. Available at: http://nccc.uow.edu.au/content/groups/public/@web/@chsd/documents/doc/ uow119700.pdf (accessed 21 September 2013). 17. Eager K, Burgess P and Whiteford H. ABF Information Series No. 8. Mental health. University of Wollongong: Centre for Health Service Development, 2011. 18. Mental Health Council of Australia. Activity based funding and mental health issues paper. 2012. Available at: http://www.mhca.org.au/index.php/component/rsfiles/
22. Lewis C. Lost in liaison. Health Serv J 2004: 30–31. 23. Gallop R, Lancee WJ and Garfinkel P. How nursing staff respond to the label “Borderline Personality Disorder”. Hosp Community Psychiatry 1989; 40: 815–819. 24. Treloar AJ. A qualitative investigation of the clinician experience of working with borderline personality disorder. N Z J Psychol 2009; 38: 30–34. 25. Koran LM. Funding consultation-liaison psychiatry via medicare screening. Gen Hosp Psychiatry 1992; 14: 7–14. 26. Commonwealth of Australia. Fourth National Mental Health Plan—An agenda for collaborative government action in mental health 2009–2014. Barton ACT: Commonwealth of Australia, 2009. 27. Light EM, Kerridge IH, Ryan CJ, et al. Out of sight, out of mind: making involuntary treatment visible in the mental health system. Med J Aust 2012; 196: 591–593. 28. Kisely SR, Campbell LA and Preston NJ. Compulsory community and involuntary outpatient treatment for people with severe mental disorders. Cochrane Database Syst Rev 2011; 2: CD004408. 29. Burgess P and Pirkis J. Case complexity adjustment and mental health outcomes: Conceptual issues. Australian Mental Health Outcomes and Classification Network, 2009.
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APY0010.1177/1039856214530480Australasian PsychiatryWand et al.
Australasian
Psychiatry
Psychiatric services
Activity-based funding: implications for mental health services and consultation-liaison psychiatry
Australasian Psychiatry 2014, Vol 22(3) 272–276 © The Royal Australian and New Zealand College of Psychiatrists 2014 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/1039856214530480 apy.sagepub.com
Anne Wand Staff Specialist Psychiatrist, South Eastern Sydney Local Health District, Sydney, NSW; Conjoint Senior Lecturer, School of Medicine, University of New South Wales, Sydney, NSW; Clinical Lecturer Discipline of Psychiatry, Sydney Medical School, University of Sydney, Sydney, NSW, Australia
Abstract Objective: The aim of this paper is to inform mental health professionals about Activity-based funding (ABF) and the implications for data collection and clinical practice, in particular for consultation-liaison (CL) psychiatry. Conclusions: Activity-based funding may provide an opportunity for mental health services to be more equitably resourced, but much needs to be done to demonstrate that the funding model works in mental health. It is important to ensure that data collected is meaningful and accurate and reflects the diverse roles of mental health clinicians, including in CL. Inpatient and community services should be integrated in the model, as well as safeguards against potential abuse. Clinicians, in partnership with initiatives such as the Australian Mental Health Outcomes and Classification Network, are best placed to guide the development of an ABF system for mental health which appropriately recognises the complexity and variability between patients in different settings. Keywords: Activity-based funding, public psychiatry, mental health, payment, consultation-liaison
A
ctivity-based funding (ABF) has commenced for mental health services. Although clinicians are broadly aware of its arrival, there is much uncertainty about what it is, and the changes that may follow for data collection and clinical practice. There are particular implications for consultation-liaison (CL) psychiatry, whose varied roles do not easily fit the funding model. This paper aims to provide an overview of what ABF is, the evidence for and against the model, and the implications for mental health professionals, especially those in CL settings, a subspeciality of the author.
What is activity-based funding? Background and definition
The development of a national, consistent approach to ABF was one of the key reforms outlined in the National Partnership Agreement on Hospital and Health Workforce Reform (2008) of the Council of Australian Governments.1 This approach to funding public hospital services assigns a fixed price (the National Efficient Price) for each episode of patient care, which varies according to the setting and service care type.2 The Independent Hospital Pricing Authority has been tasked with determining the National Efficient Price for public hospital
services in order to enable ABF to be introduced nationally. To establish an ABF system, patients must be classified into clinically relevant groups, episodes of care counted and costed, and then a pricing model determined (see http://www.ihpa.gov.au). A diagnosis-related group (DRG) system will be used to fund acute and hospital-based mental health services.3 Activities other than treatment, such as research and training, will be incorporated into the new funding model.2 Activity-based funding models have been used in many Australian hospitals for over 20 years. However, mental health services have previously been funded through block grants to public hospitals and local health districts.3 With the new ABF system, only mental health services in acute inpatient (hospital) settings and Emergency Departments (ED) are so far included.3 Some outpatient mental health services, which could be considered a public hospital service, may also be included.2
Corresponding author: Dr Anne Pamela Frances Wand, Department of ConsultationLiaison Psychiatry, Euroa Centre Level 1, Prince of Wales Hospital, Barker St Randwick NSW 2031, Australia. Email: [email protected]
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Wand et al.
Goals of activity-based funding The overarching purpose of ABF is to deliver more consistent, cost-effective and efficient health care.2 Other benefits of ABF include greater transparency in funding and fairer allocation of resources, because equivalent activities are equally funded.4 Evidence for activity-based funding Various forms of ABF are used internationally and some data is available.5,6 In a comparison of the experience of implementing ABF in five European countries, it was concluded that ABF appears to be associated with reduced length of stay and/or the rate of growth in hospital costs and an increase in activity, but that formal evaluations are largely absent.6 It was noted that outcomes may have been influenced by factors other than the introduction of ABF, including for example, in England, contemporaneous policy changes and funding increases in health.7 Certainly, during the period when ABF was introduced, hospital activity changed to a greater proportion of day procedures and day-care compared with inpatient care, with the effect of increasing patient numbers in the system whilst minimising costs.6 Fears of deliberate upcoding (i.e. placing patients in higher-funded payment categories) were not realised in England, where coding and payment are directly linked.8 Reviews from the USA, with a similar system to ABF of “pay for performance”, have concluded there is insufficient evidence of benefit.9,10 The question of whether the quality of healthcare services has changed under ABF has not been answered. Whilst lengths of stay may be reduced along with the associated nosocomial risks, patients may lose when discharged prematurely and still unwell.6 Strategies to safeguard the quality of this aspect of healthcare services under ABF have been implemented in some countries. For example, in Germany and England, hospitals do not receive reimbursement for cases readmitted for the same cause within 30 days of discharge from the index admission.6 In England, the quality of hospital care under ABF was not found to be adversely affected in two evaluations.7,11 Nonetheless, there are major deficiencies in many countries in the measurement of patient outcomes such as readmission and complication rates.12 The impact upon mental health services has not been separately analysed.
Criticisms of activity-based funding Hospitals with costs above the fixed price for a service will lose money from that service. Thus there is a financial incentive with ABF to minimise the costs per episode of care in order for the hospital to make a profit. Strategies for hospitals to improve efficiency may include withdrawing expensive services (e.g. complex surgery), changing the staff mix of services (e.g. using enrolled
rather than registered nurses), cutting unnecessary costs or reducing length of stay.13 The quality of the service provided and whether the activity is based upon best practice are not inherent to the funding model.3 There is little financial incentive to improve the quality of care.13 In addition, patient access to ‘expensive’ services may be reduced, unless the price paid to those hospitals performing the specialised services is topped-up to offset the potentially higher costs they may incur, as occurs in England.14 Another criticism of the ABF model is the potential for ‘gaming’ the system.3 This refers to hospitals or local health districts exploiting the system to obtain more funding. One example of this is the diversion of patients from community-based services to the more lucrative options of inpatient admissions and EDs. Not only would this add to the current problems with overstretched EDs and bed block, but it is at odds with the evidence favouring the effectiveness of communitybased mental health care and consumer preferences.15 Other practices such as ‘cream skimming’ may occur.4 This refers to hospitals favouring simple cases over those which are complex and time-consuming (which may inevitably have more adverse patients outcomes), to increase throughput and therefore funding.4 ‘Upcoding’ is another type of gaming, whereby patients are fraudulently placed in payment categories which attract more funding.4 Therefore, there are serious ethical issues raised by the possibility that healthcare decisions will be made on the basis of whether they will attract funding or not, rather than clinical indication. Activity-based funding fits best with procedural health care. Whilst it may be straightforward to set an efficient price for a hip replacement for example, a fixed price is less obvious for many of the activities mental health services have with patients, their families and staff. For example, it is unclear how environmental, non-pharmacological interventions (for example in delirium management), clinician support of families, or the reflective supervisory roles of psychiatrists with multidisciplinary staff will be recognised. It has also been noted that DRGs for mental health are less accurate than those for all other conditions.16 The Mental Health Major Diagnostic Category is least able to account for differences in resource use (costs) between patients compared with all other DRG classifications.16,17 In recognition of this fact, the UK and USA do not use the DRG classification to predict the costs of mental health care.17 Thus using mental health DRGs as the foundation of the funding model in Australia is problematic. In addition, the DRG classification may be altered to reduce complexity levels, and therefore ABF, to services with adverse outcomes of care.16 This provides incentive for clinicians (or coders) not to record adverse care outcomes, and risks important information being lost from which services can learn and quality improvements be made.16 Losing data on the complex needs of many patients with mental health problems, or worse,
273 Downloaded from apy.sagepub.com at Kungl Tekniska Hogskolan / Royal Institute of Technology on March 10, 2015
Australasian Psychiatry 22(3)
Table 1. Key challenges that ABF brings to CL psychiatry Coding issues • Psychiatric comorbidities are poorly documented in general hospital patients. • Many patients referred to CL psychiatry do not have a diagnosable mental disorder. Difficulties capturing the diverse roles of CL psychiatry with ABF • CL psychiatrists may question or withdraw psychiatric diagnoses previously given to patients. • CL psychiatrists are often asked to make assessments of ethical questions and decision-making capacity which are not easily coded. • The main role of the CL team may be to work with staff, to assist them to better understand and manage a patient. This role is often time-consuming and ongoing. • Whilst the referring team may ask CL about a diagnostic issue, the underlying issue may be systemic or interpersonal. • CL routinely provides informal teaching through discussing assessments with referring teams. Ethical questions • If funding is primarily attached to diagnostic groups, will CL be pressured to make a psychiatric diagnosis, even when unwarranted (upcoding)? • There are implications for patients if psychiatric diagnoses (accurate or not) are recorded, including their privacy, insurance, employment and eligibility for medical treatments. Staff may prejudge a patient based upon particular documented diagnoses. • If more funding is attached to patients who are detained involuntarily, will there be pressure to use the MHA, when there are more appropriate alternatives?
penalising services by not funding complex patients at high risk of complications or adverse outcomes, risks excluding those with greatest need. As has been noted in subacute settings it is level of function, not diagnosis, which often drives the cost of care,16 and this can be highly variable even within a diagnostic group, including mental disorders in acute settings.
Additional challenges of activitybased funding for mental health services Consultation-liaison psychiatry
The CL sector interacts directly with patients admitted to public hospitals, including EDs. Yet, at present, there is no consensus upon how to capture and code what we do.18 An overview of the specific challenges ABF brings to the CL setting are presented in Table 1. It has long been recognised that patients referred to CL services are a complex and expensive cohort, and that psychiatric comorbidities are poorly documented, leading to inadequate coding.19,20 In one recent study, the administrative coding for psychiatric diagnosis accurately matched the psychiatrist’s coding in only 35% of cases.20 It has been demonstrated that improving the accuracy of discharge coding with psychiatric comorbidity can move a patient into a higher DRG, which may be more appropriate given the recognised associations with longer lengths of stay, poorer outcomes and higher costs compared with inpatients without psychopathology.19 ABF may provide an impetus to address this problem.
However, improving the accuracy of psychiatric diagnoses is only one part of the issue for CL services. A CL psychiatrist might diagnose delirium or major depression, for example, in a general hospital inpatient, which may easily be categorised into a DRG. However, many patients referred to CL services do not have a diagnosable mental illness,21 but they may still have psychological issues affecting treatment of their medical problem.22 In fact the ‘undiagnosing’ of mental illness labels and withdrawal of accompanying treatment are key aspects of CL work. In addition, a CL referral may not relate to a patient’s diagnosis or management, but to other issues such as the capacity to consent for a healthcare decision. This does not neatly fall into a DRG either. Further, CL psychiatry often provides the referring team with an understandable formulation of what might be occurring between the patient, staff and the hospital system, with associated management recommendations, rather than simply a diagnosis. The complexity of this intervention cannot readily be reduced into a DRG. CL services also routinely work with staff (sometimes more so than patients) in managing a ‘difficult’ patient. This work can be timeconsuming and in addition to formal education sessions for staff. As ABF only applies to patients, not healthcare staff, such activities would also not be captured, with adverse consequences for funding. It is possible under ABF that CL clinicians may be more inclined, or even under pressure from hospital managers, to assign a mental health diagnosis, even if
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Wand et al.
unwarranted. This has significant implications, not only in terms of ethical clinical practice, but also for patients. Inaccuracies or upcoding of mental health diagnoses may be recorded in discharge summaries and medical files, in some instances influencing the person’s future interactions with the healthcare system; for example, inflating interpersonal disputes between treating teams and patients as personality disorder diagnoses, rather than recognising the complexity of what is occurring. Such a label may lead to pejorative attitudes or stereotypic, unempathetic responses from staff.23,24 There is also a privacy issue in recording what may be a sensitive diagnosis on a patient’s record, with potential implications for their insurance,25 employment and eligibility for certain medical or surgical treatments. In some cases psychiatric diagnoses may already not be recorded for these reasons.19 Community mental health services As ABF is concerned with acute hospital settings, it has been highlighted that new innovations with an evidence base in the community mental health sector may be further neglected and underdeveloped (see examples in Rosenberg and Hickie, 2013).15 If community mental health is not part of the funding reforms, ABF risks reinforcing expensive hospital-based mental health care, resulting in continued inefficiency, less outpatient care, and contrary to community preferences and current mental health policy.15,17 The disconnect in funding also discourages service integration between acute and community care,3 although integration was a priority in the fourth National Mental Health Plan.26
Network’s consideration of the theoretical and practical issues involved in defining case complexity in mental health,29 which are directly relevant for ABF. This involves working out why mental health costs and outcomes vary between mental health services and care settings. Understanding case complexity is essential to developing appropriate classifications to underpin an integrated ABF system for mental health,17 and a discourse that clinicians can usefully contribute to. The appropriateness of ABF for mental health services still needs to be demonstrated. This will require further work on an appropriate classification system for mental health activities, which is applicable across similar service settings and may be used to compare care and outcomes. Mental health professionals must be involved along with coders and administrators in order develop a meaningful and real-world classification system and to improve the accuracy of coding in complex patients. This is particularly urgent in CL settings, where there are significant implications for loss of hospital revenue and resource allocation if the needs of patients with psychiatric comorbidity are not captured and the broad activities of CL services with patients and the staff caring for them are not recognised.20 The wholesale adoption of ABF provides an opportunity for mental health services to obtain their fair share of new Commonwealth funding available in the national reform.18 Unless we can record the work we do and demonstrate value (in terms of outcomes for patients), patients risk losing access to mental health services and mental health services will continue to be under-resourced. Acknowledgements
The introduction of ABF also raises the potential for misuse of mental health legislation. For example, it is likely that patients certified under a Mental Health Act would be assigned greater funding under ABF. This presents an ethical minefield and a potential serious threat to efforts to promote voluntary access to mental health care. Similarly, if ABF is only introduced in acute inpatient psychiatric settings without an equivalent funding model in the community, the most restrictive form of care, hospitalisation, may be encouraged inappropriately, which is at odds with best clinical care and mental health legislation.17 If some community health centres are determined to be outpatient-based services of a public hospital, more funding may be attached to patients on Community Treatment Orders. There is evidence that such orders are already overused in Australia compared with internationally27 and a lack of evidence of benefit.28 ABF may provide incentive to continue this practice.
The author acknowledges the helpful preliminary discussions with Timothy Wand and Robert Gribble.
What do we need to do?
5. Ettelt SS, Thomson E, Nolte E, et al. Reimbursing highly specialised hospital services: The experience of activity-based funding in eight countries. London: London School of Hygiene and Tropical Medicine, 2006.
The Australian Mental Health Outcomes and Classification Network reports patient outcome information collected from states and territories to the Commonwealth.17 The data collection has informed the
Disclosure The author reports no conflict of interest. The author alone is responsible for the content and writing of the paper.
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