Pwc report

Townsville HHS

Site overview

The Townsville HHS is made up of 18 hospitals, community health campuses and two residential aged care facilities servicing a population of approximately 200,000 people in north QLD. There are seven spoke sites within the network, which are generally smaller, block-funded facilities offering 20 to 30 beds. The region services a relatively high proportion of ATSI patients compared to the other sites visited in this financial review.

Table below outlines the flow of costs from the GL through to submission to IHPA. We noted a $270,000 variance when costs were allocated to patients, which is less that 0.04% of total costs.

Table : Financial overview of Townsville HHS, FY 2012/13

Financial data

General Ledger (Item A)

Financial statements are released at the HHS level. The total expenses per the financial statements for FY 2012/13 were $715.1 million. A $227,000 variance was noted between what was recorded on the financial statements and what was included in the costing system (display under GL in Table above). This was due losses on inventories and price differences which were recorded as expenditure in the financial statements but as negative revenue in the GL.

The GL structure and treatment of costs are consistent throughout QLD. As part of this review, specific cost items were examined to understand how they were treated in the GL and in costing. Please see Section for more information on what costs were examined and their treatment.

Inclusions and exclusions (Item B)

No inclusions to the GL are made at the site level. The total dead-ended costs for this round were $27.8 million. Dead-ended costs may include various administrative functions and commercial services which are out of scope in the AHPCS. Another $1.4 million for capital costs was excluded from the GL.

Allocation of overheads (Item C)

Overheads that are included in the hospital GL are allocated to patients based on total expenses. However, not all overheads are included in the hospital GL, and additional costs are added by the jurisdiction upon submission. These overheads were added to comply with the AHPCS and allocated to costed patient records based on total expenses.

Distribution of costs between hospital products (Item D)

Distribution of costs was performed using activity data in line with the state wide methodology. See Section for more information.

Activity information and costing methodology

Overview

The costing methodology and activity information used in Round 17 at Townsville did not deviate from the state wide methodology. Section explains the allocation methodology by product that was used by Bundaberg and Townsville for Round 17.

Feeder data for sample areas

Overview

As part of the costing process different methodologies will be utilised to allocate costs to a patient level. The recommended methodology in the AHPCS is using a feeder system, which uses direct patient activity data to allocate costs. However, if this is not available then service weights or RVUs could be used. Townsville used a range of feeder systems in Round 17 in order allocate costs to patients, include pharmacy, imaging, prosthetics, theatre, critical care, bloods, ED, ward nursing and ward medical. Three sample feeder systems are discussed in more detail below.

Pharmacy

Townsville uses the iPharmacy system, which acts as the pharmacy activity feeder. All wards have a med-station that allows staff to dispense medication and allocate it directly to a patient record, which means there are no imprest drugs. However, the current feeder system does not, however, distinguish between PBS and non-PBS drugs.

Linking of records is performed in accordance with the state wide process, as described in Section . For Round 17, 86% of records were matched to inpatients and 7.2% of source records were unable to be matched to a patient encounter.

Table : Outcome of pharmacy feeder linking



Theatre

Townsville HHS uses ORMIS, which records various data points during the patient operation. The use of the feeder data and linking rules used was consistent with the approach taken at Bundaberg, which can be found in Section . For Round 17, all but 11 records were matched to inpatients, as displayed in Table below.

Table : Outcome of theatre feeder linking



Ward Nursing

Townsville uses FAMMIS, which includes data on the patient’s encounter in hospital, such as the admission and discharge date and time, and transfers between wards. The use of the transfer records and RVUs to allocate costs, along with the linking methodology, is consistent with the approach taken at Bundaberg, which can be found in Section . In Round 17, all records were linked to inpatients as shown in Table .

Table : Outcome of ward nursing feeder linking

The costed dataset

QA process

Costing is the responsibility of the costing officer from the Funding Analysis and Clinical Costing Team. A manager from the same team will review the costed outputs before submission to the jurisdiction. The hospitals do perform some reconciliations and checks of their own by reviewing the activity summary, which is a reconciliation of expenditures from the GL and final costs charged to encounters. Various other validations of the data are performed including checks to source feeder systems and checks of zero cost and high cost patients.

More detailed QA checks are performed by the jurisdiction and reported back to the HHS. These are described in more detail in Section . The jurisdiction provides the CFO of the HHS summarised cost reports to approve by sign off. After the jurisdiction has completed their validity testing and made the required adjustments, the CFO of the Townsville HHS signs off the finalised costed output.

Adjustments

The site costing team makes no adjustments to activity or costs. All adjustments to the costed dataset are made by the jurisdiction once costed output has been submitted. A description of the adjustments can be found in Section .

Work in progress (Item E)

Adjustments are made for patients whose stay at the hospital crosses the financial year in accordance with the state wide policy described. This is consistent with the approach taken by Bundaberg, which is described in Section above.

Sample patients

A sample of five patients was requested to verify that the total cost attributed to the jurisdiction’s submitted patient records reconciles with what IHPA has recorded as being received. As Table below demonstrates, no differences in costs were noted.

Table : Sample patient reconciliation with IHPA