AHIA’s Position Paper on Out of Hospital Gate Care

The Australian Health Insurance Association (AHIA) understands there is a strong possibility that the Federal Government will legislate to enable health funds to purchase services outside the current hospital environment to provide members with greater healthcare options. Such services can be referred to as “out of hospital gate care” services. These services can substitute for an in-hospital episode of care or prevent the need for a hospital admission.

Any regulatory change will directly impact health fund operations and health fund contributors. As such it is essential that industry views, and particularly those of health funds, be taken into account prior to implementation.

AHIA is the Australian private health industry’s peak representative body that represents 26 health funds throughout Australia and collectively covers more than 94% of the private health insurance industry. This position paper represents the views of AHIA members in regard to “out of hospital gate care” (OOHGC).

AHIA is very supportive of the OOHGC concept, and has developed the following principles to ensure any regulatory change improves and maintains the private health insurance product in the best interests of health fund contributors.

AHIA OOHGC Principles
The most important rationale for extending care into the Out of Hospital Gate situation is to provide BETTER HEALTH CARE for patients, and every action must be rigorously scrutinised against this primary criterion.

1. Any new system should create a framework to enable health funds to broaden benefit payments for the substitution or prevention of hospital admissions.

2. Any new framework ought NOT be mandatory. Application for every program into, or participation of a program in a new system should be overseen and agreed by individual health funds.1

3. Any new framework should enable health funds to provide better outcomes for members, via the most appropriate treatment in the most appropriate setting based completely on well researched clinical evidence.

4. Legislation should not prohibit health funds from providing the most appropriate care for its members, and should be sufficiently flexible to allow for creative funding arrangements in the interests of members and better patient care.2

5. Control and management of the patient should always be the responsibility of the primary clinician/carer.

6. The approval process for OOHGC programs should be overseen via a Panel as identified below.

Structure of an Industry OOHGC Panel
The panel should consist of 5 or 7 health fund members. The panel should include an independent chair, an observer from the Department of Health and Ageing and a consumer representative (preferably via AQSC).

Program Approval Process
A system to approve OOHGC programs for funding should be managed and funded by the private health insurance industry. The industry panel would determine whether a program provided improved health outcomes on a cost effective basis.

Once a program has been endorsed by the panel it will qualify for payment under a hospital table, and therefore be included in the reinsurance pool.

Each fund must retain the flexibility to enter into commercial arrangements with third parties of its choice without needing Panel approval. However if the program is to be reinsurable, then it should require the approval of the panel.

The approval system should:

– be based on a structured framework,
– be transparent,
– concentrate on quality issues and service delivery, and, (most importantly),
– be outcome based.

The panel would consider all the available evidence (including Clinical Reports on efficacy) and consider the cost effectiveness of any proposed program. The Panel would report on the efficacy, cost-effectiveness and supporting evidence of available programs.

Workings of the Panel
In the short term, OOHGC programs to be considered by the Panel should be sponsored by at least one health fund.

The panel would meet on a six monthly basis. The approval system would be reviewed after a period of 12 months.

The Panel would request that all submissions provide credible, well researched evidence of the clinical benefits of the program to be considered.

Endorsed programs will be subject to regular ongoing review to ensure they continue to satisfy their objectives of better health outcomes in a cost-effective manner.

Funding of OOHGC Programs
Payments for OOHG programs should be based on outcomes rather than process. However, many forms of payment systems should be available to funds including episodic, outcome based, per diem, capitation or fee for service. Regulation should not hinder health fund flexibility in the payment process.

Individual Health Funds will be free to make their own individual commercial decisions on whether or not to take-up an endorsed program. Participation would not be mandatory. Benefit payments for any program would be negotiated by individual health funds at their discretion.

1 The current outreach service program (hospital in the home) is a prime example of a mandatory system that is not working. Fund experience suggests that while this system was an attempt to shift high cost patients into a lower cost setting it has added to health fund outlays rather than reducing them. Mandatory systems not only increase costs for members and health funds, but also for Federal Government outlays.

2 Health funds should be allowed to deal with all forms of medical practitioners (Specialists and GP’s). They should be able to purchase services such as hospital in the home and Disease Management Programs from providers other than hospitals on an equal footing.