Casemix provides the health care industry with a consistent method of classifying types of patients, their treatment and associated costs. It includes developing and implementing casemix classifications, tools and services.

Page last updated: 25/01/2013

The Review of the AR-DRG Classification System Development Process

The terms of reference of the Review were to look at all processes associated with the cyclical development of the system to assess opportunities for business process improvements that could be realised to offer better value for money and ensure Australia remains an international leader in this area. The Department would like to implement all recommendations from the Review.

The Review undertook to examine the processes associated with management of the system, perform an economic analysis of the investment return of the system and examine examples of international practice against which to improve the efficient and effective management of the system by the Australian Government. It did this through a combination of desktop analysis, international survey and consultation with around 140 stakeholders representing the diversity of interests in the system.

The key findings of the review of the AR-DRG classification system consisted of 8 major recommendations (with 26 sub-recommendations). The material covered by the review is complex and one of the clear statements is that the system reaps benefits to the community of around $4 billion per annum in savings (for bed days) against an estimated annual cost of $10 million.

The Review of the AR-DRG Classification System Development Process (PDF 1349 KB) Large file warning
The Review of the AR-DRG Classification System Development Process (Word 18183 KB) Large file warning

The Review recommends:
  • The development of a work plan, communication plan and balanced scorecard by which to manage refinement and to prioritise changes to the system in a transparent way.
  • Changes to governance of the system including enhancing clinical engagement with the system’s refinement and seek to increase the contribution of the private sector to the activity.
  • Improved uptake, consistency and end user support by seeking to ensure universal uptake of a single version of the system across Australia, analysis and clinical coding audits to ensure compliance with national standards and assisting end users in using the national standards through a centralised query response mechanism.
  • A review of international sales, including the legal framework, pricing model and communications to ensure that sales of the system overseas are well managed.
  • Improved software and grouper certification processes to ensure that grouper software meets national standards through implementing a user-pays arrangement for certification.
  • The reconsideration of roles and decision making to create stakeholder support for changes to, and universal uptake of, versions along with revising existing working group memberships to ensure representativeness across the diverse group of stakeholders (eg Coding Standards Advisory Committee) and creating new groups to ensure robust cross-functional and cross-discipline stakeholder input.
  • Centralised development of the system to one organisation for coordination of all aspects of the system’s refinement with the Department managing the performance of this organisation, setting policy, consolidating the work program and managing international sales.
  • Consideration of cycle timing and workforce impacts of updates to the system and undertake a review of the annual update cycle and also an audit of the current and future workforce needs.
The Australian Casemix Glossary defines commonly used terms and abbreviations relating to casemix and Australian health services.

Australia Hospital Patient Costing Standards

The Australia Hospital Patient Costing Standards aims to provide direction for hospital patients costing through the development and publication of standards for specific elements of the costing process and reporting requirements.
Australia Hospital Patient Costing Standards – Version 2.0 – 1 March 2011

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