1. Developing a Population Need Based Funding Allocation Methodology for Manitoba Regional Health Authorities MANITOBA CENTRE FOR HEALTH POLICY Community Health Sciences University of Manitoba October 17, 2005

2. Working Group RHAs Kevin Beresford – Interlake Paul Kochan – Winnipeg Brenda Langevin – Churchill Karen McClelland – Burntwood Neil Walker – Central Manitoba Health Joe Brown Karen Hurd Winston Maharaj Heather Reichert Julene Reimer “Others” Josée Lavoie – Centre for Aboriginal Health Research Steve Power – Education Harvey Stevens – Family Services and Housing MCHP Greg Finlayson Evelyn Forget Oke Ekuma Shelley Derksen Ruth Bond

3. © 2005 Manitoba Centre for Health Policy 3 Purpose of this presentation To review the scope and purpose of the funding allocation methodology To consider various ways that funding allocation may be done To describe how the funding allocation methodology works To talk about outstanding issues

4. © 2005 Manitoba Centre for Health Policy 4 Scope and Purpose Develop a funding allocation methodology for Hospitals, PCH, Home Care, Community and Mental Health Services, and Emergency Response and Transportation Focus on proportional distribution, not absolute amounts

5. The End Result

6. Historical/ Budget & Planning CapitationRisk AdjustmentModelling InputsPast experience/ Future plans Limited number of factors (age, sex, SES) Past utilizationUnlimited number of factors at multiple levels OutputsBudgetAverage costExpected costPredicted cost AdjustmentsNonePost ApproachPolicy/ ManagementAccountingHistorical experienceStatistical Unit of analysisPopulationPopulation sub-unitsIndividual ProsPlan drivenStraightforward In use elsewhere StraightforwardControls for many factors Can involve multiple levels ConsHistorical basis Difficult to establish equity Data intensive Limited number of factors No individual SES indicator in Manitoba Doesn’t directly control for inefficiencies/ unmet need Uses only past utilization to determine future expected cost More complex Data intensive Data not available for all factors Limited to modelling past utilization Funding Allocation Methods

7. © 2005 Manitoba Centre for Health Policy 7 Need for health services is a function of … age, gender, chronic health conditions, SES, aboriginal status … The Theoretical Model

8. Factors theoretically affecting need for or use of health services, and potential level of measurement

9. A Simple Model Cost of Hospital Care AGE 095+ $0 $1,000 Cost Predicted Cost

10. © 2005 Manitoba Centre for Health Policy 10 Dependent Variables (the “outcomes”) Hospitals Personal Care Home Home Care Cost = CWC * RIW Weighted Days of Care Days of Care

11. Demographic Predictor Variables All Independent Variables Considered for ModelsFinal Models Individual VariablesCommunity VariablesHospitalPCHHome Care Age ●●● Marital Status ●● Sex ●●● Death ●●● Newborn ● Proximity to major hospital ● SEFI ●●● Aboriginal  Proportion of aboriginal identity  Proportion identifying as aboriginal Age  Proportion of population age 65+  Proportion of population age 75+ Population Density Size of Population

12. SEFI Socioeconomic Factor Index Age dependency ratio - the ratio of the population aged 65 or older in a region to the population aged 15-64. Single Parent households - Percent of single parent households among households with children aged 0-14. Female single parent households - Percent of single female parent households among households with children aged 0-14. Labour force participation female - Women working or seeking work on census day. Unemployment 15-24, 25-34, 35-44, 45-54 - persons during the week prior to the census that were without work, had looked for work in the previous four weeks and were available for work in the week of the census. Education 25-34, 35-44, 45-54 - the count of the number of residents on census day reporting attaining a minimum of a high school diploma.

13. Morbidity/Mortality Predictor Variables All Independent Variables Considered for ModelsFinal Models Individual VariablesCommunity VariablesHospitalPCHHome Care ADG Count/Co-morbidities ●●● Birth Weight (at risk) ● Chronic Disease ●● Injury ● Infant mortality rate Injury hospitalization rate Potential years of life lost (PYLL) Premature mortality rate (PMR)

14. Other Predictor Variables All Independent Variables Considered for ModelsFinal Models Individual VariablesCommunity VariablesHospitalPCHHome Care Hospital days in fiscal year ● Panelled for LTC in fiscal year Home care in fiscal year LTC resident in fiscal year Hospitalization  Admitted to hospital in fiscal year  Discharged from hospital in fiscal year

15. © 2005 Manitoba Centre for Health Policy 15 Social Allowance Status NPHS/CCHS-derived rates (e.g., smoking rate, substance abuse rate, self- rated health) Predictor Variables Not Included Due to Incomplete Data

16. © 2005 Manitoba Centre for Health Policy 16 Modelling Example - Cost of Hospital Services Region A has a history of admitting people to hospital more frequently than most other regions. Region B has not historically had the same number of beds available for patients as some other regions, and therefore people have gone without care they might have received elsewhere.

17. © 2005 Manitoba Centre for Health Policy 17 Modelling Example After controlling for age, sex, chronic conditions, co-morbidities, major hospital proximity, whether or not they were hospitalized for an injury, whether or not they died and the SEFI of the community where they live, we find the predicted annual hospital cost for 52 year old men in Manitoba is $343. (simulated values)

18. © 2005 Manitoba Centre for Health Policy 18 Modelling Example Currently, Region A has an actual average cost of $375 for 52 year old men. Currently, Region B has an actual average cost of $292 for 52 year old men. Under the funding allocation methodology, Region A will receive less, while Region B will receive more. (simulated values)

19. © 2005 Manitoba Centre for Health Policy 19 Modelling Moves beyond basing future funding on past practices Allows us to address inefficiencies and different practice patterns Maximizes equity among individuals and RHAs

20. 2003/04 Distribution “Actual” based on values reported in 2003/04 Manitoba Health Annual Report

21. Pattern of Inter-Regional Hospital Use 2000/01 to 2002/03 (percent of costs for inpatient care in-region, and out-of-region)

22. © 2005 Manitoba Centre for Health Policy 22 Out-of-province residents Emergency departments/outpatient clinics Emergency response and transport Community and mental health services Outstanding Tasks

23. M anitoba C entre for H ealth P olicy M C H P http://www.umanitoba.ca/centres/mchp