GCHHS Finance

Stephen Cole Director – ABF Financial Reporting

Gold Coast Hospital & Health Service stephen.cole@health.qld.gov.au

GCHHS Finance

Some GCHHS statistics… • Two facilities – Large University & Mid tier facilities • Full range of services including Mental Health & Rehab • Large ED • Growing fast • $1.1B HHS Budget

FY13-14 Inpats Outpats EDSouthport (530 beds) 70,773 338,335 83,050

Robina/Carrara (370 beds) 40,607 77,756 59,435 111,380 416,091 142,485

GCHHS Finance

Why an Activity Based Budget (ABB)? • Conventional budget build methodologies

– Not responsive to targeted/funded activity in our Service Agreement

– Were not good at assessing clinical arguments for additional resources

– Gave no indicators regarding efficiency • No clear relationship between revenue

and budget

GCHHS Finance

GCHHS’s approach to ABB • Not a lot of information around on implementing

ABB in Purchaser/Provider environment • Chose to take similar approach to building state-

wide ABF funding – Build a set of weights to allocate activity internally – Apply this to both purchased and forecast activity

GCHHS Finance

ABB Timeline Proof of

concept – Nov 2013

Built using Transition II,

MS Excel

New Costing System – Jul

2014 PPM

MS SQL Server

platform

ABB v1 – Oct 2014

Built using PPM & SQL

Server

Presented using MS

Excel

ABB v2 – May 2015

Enhanced features

Better documented

Integrated with standard

budget build

ABB v3 – 2015 2016

Integrated with benchmarks

Improved statistical analysis

Feeder to Management Information

System

Monthly performance

reporting

GCHHS Finance

Hypothetical ABF Encounter Timeline

• A hypothetical patient timeline – Resources usage and clinical practice may differ in real life

GCHHS Finance

Hypothetical ABF Encounter Timeline Admission to hospital for a Medical DRG with an ABF QWAU = 1

QWAU : Resource Usage

GCHHS Finance

Hypothetical ABF Encounter Timeline Admitted into a Surgical bed, so Nursing resources provided by SAPS

QWAU : Resource Usage

GCHHS Finance

Hypothetical ABF Encounter Timeline Some Imaging done Resourcing from DEMS

QWAU : Resource Usage

GCHHS Finance

Hypothetical ABF Encounter Timeline Transferred to ICU ICU resources provided by SAPS

QWAU : Resource Usage

GCHHS Finance

Hypothetical ABF Encounter Timeline Spends overnight in ICU

QWAU : Resource Usage

GCHHS Finance

Hypothetical ABF Encounter Timeline Transfer back to Medical Bed

QWAU : Resource Usage

GCHHS Finance

Hypothetical ABF Encounter Timeline Drugs from Pharmacy as part of CAS

QWAU : Resource Usage

GCHHS Finance

Hypothetical ABF Encounter Timeline Physiotherapy appointment also provided with CAS resources

QWAU : Resource Usage

GCHHS Finance

Hypothetical ABF Encounter Timeline Discharge, but overheads resources have been provided by indirect areas

QWAU : Resource Usage

GCHHS Finance

Basic relationship map Organisationa

l Structure

Cost Centres

Areas

Cost Types/Cost Categories

Encounters

Activity

Area Weights

Activity/Area Weights

Indirect Cost Weights

GCHHS Finance

What do you need to make ABB happen?

• Access to costing system tables • Understanding of SQL and some MS SQL

Server skills – Training is easily available

• A bit of patience to work it all through

GCHHS Finance

ABB Timeline Proof of

concept – Nov 2013

Built using Transition II,

MS Excel

New Costing System – Jul

2014 PPM

MS SQL Server

platform

ABB v1 – Oct 2014

Built using PPM & SQL

Server

Presented using MS

Excel

ABB v2 – May 2015

Enhanced features

Better documented

Integrated with standard

budget build

ABB v3 – 2015 2016

Integrated with benchmarks

Improved statistical analysis

Feeder to Management Information

System

Monthly performance

reporting

GCHHS Finance

New Costing System • Easily accessible RDBMS

– Multiple tools able to connect • Excel • Access • Crystal

– Normalised database • 3rd Normal form • Allows easy query design

GCHHS Finance

ABB Timeline Proof of

concept – Nov 2013

Built using Transition II,

MS Excel

New Costing System – Jul

2014 PPM

MS SQL Server

platform

ABB v1 – Oct 2014

Built using PPM & SQL

Server

Presented using MS

Excel

ABB v2 – May 2015

Enhanced features

Better documented

Integrated with standard

budget build

ABB v3 – 2015 2016

Integrated with benchmarks

Improved statistical analysis

Feeder to Management Information

System

Monthly performance

reporting

GCHHS Finance

Retain the WAU factor Activity (WAUs)

Areas (WAUs)

Direct Areas (WAUs)

Direct CCs (WAUs)

Total Of All WAUs

Indirect Areas (WAUs)

Indirect CCs (WAUs)

Equal To Initial WAUs

GCHHS Finance

Retain the WAU factor • Allocating WAU not $ allows

– Simple checksum at the end to make sure all activity has been allocated

– Allows for different pricing to be applied to the activity to evaluate

• Efficient price • Efficiency dividend • 45% on activity above target

GCHHS Finance

Multiple Target Sets

Purchased Targets in Service

Agreement

Forecast Targets

Over Target

Activity (at 45%)

Effect of Expanding Services

GCHHS Finance

Multiple Target Sets • Allows us to compare and contrast

between different scenarios • See the full effect on direct and indirect

cost centres • Multiple targets can be combined with

multiple pricing • Easily allows building of “What if?”

scenarios

GCHHS Finance

Budgets with Benefits • Allows you to connect actual WAUs to

CCs to compare with actual CC expenditure – Evaluate efficiency – Help identify information issues – Provides an evidence base for a budget

• No activity – no ABF budget!

GCHHS Finance

Wrapping it up with a bow • Build it into a tool to use with the service line directors and General

Managers and add in • non-ABF • Adjustments for new services, EB, other allocations, business practice

changes • Compare and contrast with your conventional budget build • Allows operational areas to take more control

Service Line Summary Service Line

2014 Expenditure 2015 Budget Purchased Forecast

Adj 2015 Budget

Select Revenue

Select Revenue Adjust Final Budget

Head, Neck And Spine Ent 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Forecast 1,000,000 1,000,080

Head,Neck,Maxillo-Facial,Dental Surgery 1,000,000 1,000,000 1,000,000 1,000,000 1,005,000 Forecast 1,005,000 1,005,000

Neurosurgery 7,000,000 8,000,000 8,000,000 7,000,000 8,028,000 Forecast 7,028,000 241,380 7,269,380 Opthamology And Orthoptics 2,000,000 2,000,000 2,000,000 2,000,000 2,033,000 Forecast 2,033,000 240,516 2,273,516

Plastic And Reconstructive Surgery 2,000,000 2,000,000 2,000,000 1,000,000 2,001,000 Forecast 1,001,000 88,808 1,089,808

Operating Theatre Management Central Sterilisation 4,000,000 5,000,000 4,000,000 5,000,000 5,411,000 Forecast 5,411,000 5,411,000

Theatre 40,000,000 40,000,000 50,000,000 50,000,000 43,130,000 Purchased 53,130,000 -11,421,630 41,708,370 Oral Health Adult Community 1,000,000 1,000,000 1,000,000 1,000,000 1,070,000 Forecast 1,070,000 1,070,000

Directorate 8,000,000 2,000,000 6,000,000 6,000,000 1,970,000 Budget 1,970,000 1,970,000 Maxfax 80,000 800,000 0 0 800,000 Budget 800,000 800,000 Oral Health Labour 5,000,000 7,000,000 4,000,000 4,000,000 6,902,000 Budget 6,902,000 6,902,000

GCHHS Finance

Outcomes • Multiple target sets

– Allow budgeting for forecast activity – Additional activity/different activity models

• Eg. 45% Commonwealth funding estimation

• Cost per WAU can be devolved to Department/Area level – And subsequently to CCs and Service Lines – Gives an efficiency indicator

• Provides an evidence base for your budget development

GCHHS Finance

Benefits • Focusses Clinician attention on activity • Highlights the need to capture information

– No evidence no budget • Improves data quality

– Suddenly Clinical Costing is your clinician’s best friend

GCHHS Finance

ABB Timeline Proof of

concept – Nov 2013

Built using Transition II,

MS Excel

New Costing System – Jul

2014 PPM

MS SQL Server

platform

ABB v1 – Oct 2014

Built using PPM & SQL

Server

Presented using MS

Excel

ABB v2 – May 2015

Enhanced features

Better documented

Integrated with standard

budget build

ABB v3 – 2015 2016

Integrated with benchmarks

Improved statistical analysis

Feeder to Management Information

System

Monthly performance

reporting

GCHHS Finance

Integration with Benchmarks

Target_Level Area CostOutputRollup CostingDataset EncounterType Costs CostWght Ear, Nose and throat (ENT) ALAH11-GCH Allied Health FDE-0 GCH 1415 O 50.92960338 5.29E-06 Ear, Nose and throat (ENT) ALAH11-GCH Allied Health VDL-NURSE GCH 1415 O 25.02232646 2.60E-06 Ear, Nose and throat (ENT) ALAH11-GCH Allied Health VDS-DRUGS GCH 1415 O 27.08313033 2.81E-06 Ear, Nose and throat (ENT) ALAH40-ROB Allied Health VDL-HPRAC GCH 1415 O 3719.781049 0.000386091 Ear, Nose and throat (ENT) ALAH40-ROB Allied Health VDL-OPER GCH 1415 O 51.82233226 5.38E-06 Ear, Nose and throat (ENT) IMRA40-ROB Medical Imaging Serv VDO-SUPER GCH 1415 O 2172.609698 0.000225504 Ear, Nose and throat (ENT) IMRA40-ROB Medical Imaging Serv VDS-IMAGX GCH 1415 O 669.2825358 6.95E-05

• Weights built on historical costing proportions • Need to include cost benchmarks to encourage change • Current weights are built to level of Cost Types and

Categories • Will allow alignment with benchmark costing information

from HRT

GCHHS Finance

What is GCHHS going to do with ABB? • Make it more sustainable

– Giving the ABB team more resources – Develop the skills in-house – Document and automate the process

• Make it more robust – Include benchmarking – Integrate statistical analysis to manage outlier costs

• Make it more available – Distribute it using the Management Information System – Increase the timeliness of information – Focus on the service lines including auxiliary services

• Imaging, Allied Health, Theatre, ICU, Pathology, Cath Lab, etc…

GCHHS Finance

ABB Timeline Proof of

concept – Nov 2013

Built using Transition II,

MS Excel

New Costing System – Jul

2014 PPM

MS SQL Server

platform

ABB v1 – Oct 2014

Built using PPM & SQL

Server

Presented using MS

Excel

ABB v2 – May 2015

Enhanced features

Better documented

Integrated with standard

budget build

ABB v3 – 2015 2016

Integrated with benchmarks

Improved statistical analysis

Feeder to Management Information

System

Monthly performance

reporting

GCHHS Finance

Questions