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How can costing and coding improve healthcare processes and patient care?

19 May 2015, by Informa Insights

Understanding data and ensuring the fitness of patient data are now essential elements of many healthcare professions, as the required skills for many traditional hospital roles is speedily changing to match the demands of this new, increasingly competitive era in healthcare.

The acute health sector in Australia is data rich, but currently does not meet all the clinical and business needs of organisations. Information is crucial, yet it is currently an underutilised asset for managing patients in health organisations. Improving data is a common concern for all hospitals and a central point of discussion between health information, business/data analysts, costing and coding professionals. Improving the integrity of patient data is more important than ever within an activity based environment.

Harry Chiam

Process improvement is a goal for all organisations and with over a decade’s experience in financial analysis and account management roles in healthcare. Harry Chiam, Finance Business Partner, War Memorial Hospital Waverley, SESLHD, elaborates.

What are some of the key concepts associated with the ABF model in Australia and do you think these concepts have evolved over the last decade?

ABF is based on 3 key principles:

– Counting and reporting the services provided (timely and accurate coding and classification)
– Improving the accuracy and timeliness of costing services
– Understanding the relationship between price and cost, in order to make more informed decisions on services within the available funding parameters.

With the full implementation of ABF nationally with the oversight of the Independent Hospitals Pricing Authority (IHPA), ABF is now getting entrenched across public hospitals across Australia.

What role does patient data and clinical costing play in budgeting?

Clinical costing studies the cost and mix of resources used to deliver patient care. By definition, it is an ideal framework upon which to build a hospital budget. There are many ways that hospitals prepare budgets. I would argue that using clinical costing data takes the process to the next level where budgets focus on outputs and not inputs.

Can Australia hospitals learn from other big data users?

Just to cite one example, cardiologist Dr Jessica Mega has left Harvard Medical School to run a large, innovative study in Silicon Valley. She has now joined Google X, Google’s research arm, where she will head up the Baseline Study. Baseline Study will use big data techniques to study what it means to be healthy or sick down to the cellular level. The aim is to find connections between disease and other related factors using computer algorithms and to go where no clinician has gone before!

Are information system needs and cost drivers different across different settings, service delivery models and hospital operations?

You know, I really don’t think so! A hospital is a hospital whether it is public or private. The funding models are not even that different because case mix is used across both the public and private sectors.

Focusing on budgeting are costs always a real reflection of activity and service provision. Labour tends to be one of the highest service costs in healthcare. What impacts would reducing labour costs have on an ABF model?

Before ABF, say 2-3 years ago in NSW, there was wider variation in costs across DRGs across different hospitals. Now, with ABF fully embedded, the costs are tending towards the average so public hospitals are starting to see much less variation in cost.

Harry is the Finance Business Partner at War Memorial Hospital in Waverley near Bondi Beach in Sydney. He is passionate about good healthcare that provides the best clinical outcomes for patients, but sometimes, clinicians don’t take too kindly to accountants telling them how to care for their patients!  Catch Harry on Day 2 of the Hospital Costing and Health Coding Forum in August.

Hospital Costing and Health Coding Forum 2015

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