A perfect partnership: improving the financials and ... · the financials and delivering better...

A perfect partnership: improving the financials and delivering

better client outcomes

Liz Cairns, Manager, National Serious Injury Service, ACCDr Maree Dyson, Strategic and Technical Consultant

Darryl Frank, Actuary, PricewaterhouseCoopers

November 2008

Introducing ACC’s serious injury clients

Liz Cairns,Manager, National Serious Injury Service

ACC - unique in the world

– No fault

– Everyone in NZ including workers, non-workers, & tourists

– Any kind of personal injury caused by an accident (including assault, medical mishap, mental injury)

– Funded by everyone through direct levies (workers, employers, car owners) and taxation

ACC’s serious injury clients

• Injury causes– Predominantly motor vehicle

• Permanently disabled after an accident– Brain injuries– Spinal cord injuries– Other e.g. severe burns,

multiple amputations

• ACC fund life long care and support


Severe brain injury19%

Moderate brain injury34%

Spinal cord injury42%

Other5%

• ACC receives 1.5 million + claims per year

• 250 – 300 are serious injury claims

• Currently ACC has 4,172 serious injury clients

• Size of the serious injury client base will continue growing for another 20-25 years



• Currently 4,172 clients with aserious injury:

– 390 are children 0-16 years17 are aged 90+ years

– Average age at injury = 28 years Average age now = 41 years

– 74% male26% female

Serious injury - actuarial perspective


Context – overall ACC Scheme

Payment type

Annual payments

$m Liabilities Multiplier

Social rehabilitation (serious) 226 5,131 22.7

Social rehabilitation (non-serious) 182 868 4.8

Weekly compensation 948 5,290 5.6

Medical/ hospital 694 2,150 3.1

Other 223 1,595 7.2

TOTAL 2,274 15,033 6.6

• Ratio of liabilities to annual payments:– About 7 for ACC Scheme as a whole– About 23 for serious injury social rehabilitation costs

Context – overall ACC Scheme

• Serious injury claims are about 10% of payments and over 30% of liabilities

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Annual payments Liabilities

Serious injury claimsAll other claims

Average cost per person

Severe TBI, $2.03m

Moderate TBI, $0.79m

High-level tetra, $3.00m

Low-level tetra, $2.05m

Paraplegic, $0.84m

Incomplete, $0.42m

Comparable, $0.48m

• Over the person’s lifetime, , ACC will fund an average of $1.2m of social rehabilitation (excludes treatment and weekly compensation)

Number of $1million + claims

Distribution of claim liabilities

0%

5%

10%

15%

20%

25%

30%

35%

$0 - 100k $100k -500k

$500k -1m

$1 - 3m $3 - 5m $5 - 10m $10m+

• Nearly half of all claims have liabilities of more than $1m, this represents over 80% total of serious injury liabilities.

A liability overview

Severe TBI, $1,604.21m

Moderate TBI, $1,231.24m

High-level tetra, $931.66m

Low-level tetra, $417.09m

Paraplegic, $526.96m

Incomplete, $239.88m

Comparable, $119.80m

• If ACC stopped business today…– $5.1 billion is needed to fund social rehabilitation for

existing seriously injured clients to the end of their lives

Modelling challenges

• In any scheme these benefits are the most challenging to model…..– Short payment history relative to the volume of future

payments– Changes in provision of care and expectations of

claimants, families and care providers– Changes in broader supply and demand for attendant care

and like services– Changes in claims management approaches

• Challenge is greater in ACC….– Uncertainty relating to care provided by families– Past management of claims not “optimal”. Difficult to

assess ACC portfolio relative to “best practice”

Modelling approach

• Due to small number of claims, and variability in cost per claim, serious injury claims are modelled individually

• Takes into account– Age– Duration since injury– Injury Type (eg high level TBI, paraplegic etc)– Current payments

• Allow for mortality (higher than population mortality)

• Growth in average cost per claim is the greatest challenge……

• Continuation of past trends could lead to significant liability increases– each additional 1% p.a. growth in cost/claim adds about

$700m

Modelling of liabilities

• Past growth in average cost per claim has been significant

Past and projected cost per claim

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

Payment year

Aver

age

cost

per

cla

im

New NSIS has similarities with TAC

• Dedicated staff managing serious injury claims• Focus on liability impact of decision making• Focus also on client outcomes, not just cost• More objective assessment approach (using

measures such as FIM)• Improved data capture• Alternatives to Attendant Care

These should result in greater consistency of decision-making, leading to more predictable payment increases

TAC: pre-New division

New Division established

TAC experience

TAC growth rate in attendant care costs for catastrophically injured clients (delay years 4+)

Service Year ended September

TAC: new Division for severely injured clientsTAC: Lifetime Support established ACC "lagged"

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

TAC changed claims management approach about 8 years ago

Recent ACC experience similar to TAC’s prior to change

Introductionof Lifetime Support

Serious injury - strategy

Dr Maree Dyson, Strategic and Technical Consultant

Situation 30 June 2007

Liability blow-out Isolation & dependence

Accelerating rate of growth in average cost per serious injury claim:

• 4.2% in 2005

• 5.8% in 2006

• 14.3% in 2007

Low participation rates in community activities & employment:

Best Typical NZ

SCI 80% 40% 18%

TBI 56% 35% 9%

Strategy

• Simple objectives:– Stabilise growth rate to

sustainable rate– Improve client outcomes

2003 2004 2005 2006 2007 2008 2009 2010

Cost per claim

Sustainable growth rateSustainable growth rate

Strategic approach

Knowing our clientsManaging theservice gateway

Targeted attendant care & alternatives

Specialist case management

Increased accountability

Knowing our clients

Person-centred planning

Service-basedplanning

Managing the gateway

• Assessment:– Not routine– In response to change in needs

and/or circumstances only

– Evidence based assessment tools

• incorporating FIM & FAM, OBS, Lawton’s IADL measures

– Decision-making tools

• Outcomes:– Use of objective outcome

measures (AusTOMs)

– Closing the ‘service loop’

Targeted Attendant Care

FIM+FAMLawton’s IADLAttendant Care Guidelines for SCI

High medical support needs

Overt Behaviour Scale(OBS)

Human assistance

Exceptional responses

Technological alternatives to attendant care

Life alternatives to attendant care

Facilitating alternatives to attendant care

• New disability support services:

– Supported Living• Focus on independence &

participation goals

– Supported Employment• Focus on finding &

maintaining open, paid employment

– 2009, Transition from School to Work

• Focus on the 16+ group

Increasing accountability

Efficiency and effectiveness reporting & purchasing

InputsClient demographics and complexity indicators (e.g injury profile, age, disability)

OutputsVarious (e.g. ACC decisions, number of episodes of intervention, costs, hours of service, service duration)

OutcomesActual impact on clients’lives (e.g. employment participation, goal achievement, increased participation, stability)

ReportsReportsACC reporting:– Client complexity– Service utilisation– Costs– ACC decisions– Outcomes

Provider monitoring:– Client complexity– Costs– Outputs– Outcomes

Benchmarking

• Can we bring some benchmarks to the use of Attendant Care to:– Assist staff decision making– Provide more information to stakeholders– Improve actuarial modelling

• SCI Guidelines• Functional Independence Measure (FIM)

Improving information, decisions & modelling

FIM™ is directly relevant to the need for attendant care, but…

Can the FIM™ to predict attendant care hours?

FIM™ is an 18-item instrument

• Covering areas such as mobility, transfers, communication

• Item scores range from 1 (indicating complete dependence) to 7 (complete independence)

• Scores of 5 or less indicate the person needs human assistance to complete the task

What is acceptable variance explanation in service modelling?

• Serious injury profile:– SCI 19% variance– 7% for TBI

• Case mix relies on a ~ 15% variance explanation in LOS

• FIM-FRGs explain ~ 31% of the variance inlength of stay in inpatient rehabilitation

• US VA Hospital Based Home Care (HBHC) model explains 20% of the cost variance

• Nursing home Resource Utilization Groups (RUGs)~45% of the variance in patient contact time

Yes ….

• ~47% of the variance in attendant care hours can be explained by a FIM based model

• Strong result in human services modelling

• Unexplained variance

– FIM does not profile challenging behaviours

– Ceiling effects

– Other

Is ageing a risk?

Traumatic brain injury• People injured over the

age of 40 tend to have poorer outcomes than people injured at an earlier age

• Limited international longitudinal data

• Is dementia a risk?• Stability in support needs

likely:– Traumatic Brain Injury

Model Systems (TBIMS) data

– ACC data

Is ageing a risk?

Spinal cord injury• Extensive international

longitudinal data

• Increasing needs more likely if:– Paraplegic

– Injured under 15 years of age

– Injured over 50 years of age

– Now over 50 and > 15 years post accident

• High utilisation and median hours of Attendant Care

• Key strategy– Using a standardised measure (ICAP) that describes the

difference between chronological age and developmental age

This is our risk

Serious injury - delivery and results

Liz CairnsManager, National Serious Injury Service

Support Coordinator

Support Coordinator

Service Coordinator

Service Coordinator

Senior Support

Coordinator

Senior Support

Coordinator

Area Team Manager

Area Team Manager

Support needs yet to be

established or

changing

Support needs well-

established and

stable

Structure

National Service Manager

National Service Manager

Service Delivery Manager

Service Delivery Manager

Area Team Manager

Area Team Manager

Central

Area Team Manager

Area Team Manager

AucklandNorth

Area Team Manager

Area Team Manager

AucklandSouth

Area Team Manager

Area Team Manager

Midlands

Area Team Manager

Area Team Manager

Southern

Structure

• Key elements of this structure:

– Client segmentation into active management versus stable needs

– Job roles differentiated to meet needs of different client segments (active management versus stable needs)

– Case loads matched to the requirements of each role, so staff have time to do the job required

– Mentoring role (Senior Support Coordinator) to support development of specialist skills & knowledge

– Locate staff close to communities where clients reside, so they develop knowledge of local community services & supports

16 months on…

• National service specialising in serious injury

– 100 Support/Service Coordinators handling 4,200 serious injury cases

– Five regional Area Team Managers

– National & regional KPIs specific to serious injury:

• Liability• Client outcomes• Quality

Northland & North Auckland

South Auckland & Waikato

Midlands

Central

Southern

Hours per week

Current situation

Recommended in ACC Spinal

Guidelines

CASE 1: Tetraplegic 168.0 28.5 - 91.5

CASE 2: Tetraplegic 58.0 98.5 - 105.5

CASE 3: Paraplegic 114.0 0.5 - 14.5

CASE 4: Paraplegic 0.0 0.5 - 10.0

Knowing our clients

Managing the service gateway

• Pilot results

Support Needs Assessment service trial Oct – Dec 2007

• Newly-injured clients have on average 20 hours less attendant care compared to newly-injured from this time last year

– $4.7m not added to liability

• 6 attendant care costs reduced by 440 hours per week, saving:

– $5380 per week– $270,00 per year– $5.5m liability

• 96 attendant care costs held stable

New clients(20)

Existing clients(102)

Technological alternatives to attendant care

• Assessor advised increasing attendant care hours to enable a 70 year old client to access their community

– Increase in attendant care hours 21.0 hours

– Liability impact $134,000

• Alternative response

Stair lift so client can get out of house& access the community themselves $57,000

• Reduction in ACC $77,000Scheme liability over life of the claim

• Reduction in ACC $77,000Scheme liability over life of the claim

Facilitating alternatives to attendant care

• Supported Living– 11 service providers nationwide

– 123 clients receiving service

– Outcomes → reduced attendant care & increasing participation

• Supported Employment trial(one site)– 40% of referred long term unemployed

clients now in paid employment (6 spinal & 9 brain injury)

• Community participation though Individual Planning– Hemi case study

Financial results Q1

• Total costs:4% lower than expected for the quarter

– Assessment costs $300k less than same period last year

– Housing modifications:$1.5m less than same period last year

– Vehicles:$2.8m less than same period last year

– Attendant caresee next slide….

Financial results Q1

– Attendant care

Age group % of clients

% using attendant

care

Median attendant care hours per week

Baseline: 31 Mar 08 30 Sep 08

0-14 years 8.4 54.0% 27.0 28.0

15-24 years 13.2 38.9% 28.0 25.0

25-44 years 37.3 33.8% 17.0 17.0

45-64 years 32.5 34.3% 17.0 16.0

65+ years 8.7 44.0% 17.0 17.0

Case study: “Hemi”

• History:• 43 year old male with severe brain injury• 5 years post-injury • Currently living with wife & 3 children on family

land in rural South Auckland• 118 hours of attendant care per week

– Includes 87 hours for “supervision”– Hemi socially isolated & not engaged with his local

community– Partner struggling with being Mum to 3 kids & being

Hemi’s full-time carer


• Independence:– “Supervision” replaced with

personal alarm for emergencies

• Involved at local marae– Carving– Kapa haka– Hemi & his partner get

some time out from each otherwhile he’s at the marae


• Result - stabilised cost growth:

– Reduction in attendant care hours (supervision) - $42,000 per year

– Personal alarm +>$1,000 per year

• Net annual savingsfor NZ taxpayers - $41,000 per year• Reduction in ACC $0.820 million

Scheme liability over life of the claim• Reduction in ACC $0.820 million

Scheme liability over life of the claim

Strategic objectives

• Stabilise liabilities growth rate• Improve client outcomes

2003 2004 2005 2006 2007 2008 2009 2010

Cost per claim

Sustainable growth rateSustainable growth rate

Rebuilding independence……supporting participation…living life !

A perfect partnership: improving the financials and delivering

better client outcomes

Liz Cairns, Manager, National Serious Injury Service, ACCDr Maree Dyson, Strategic and Technical Consultant


Questions?

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