An automated, easy way to cost residents’ care will allow aged care homes to inform more accurate pricing and manage their operations better, an industry executive tells Australian Ageing Agenda.

While data driven costing is advanced in the acute sector, it’s much more limited in aged care due to a lack of suitable resident-level electronic data that reflects the activities performed on residents, said Patrick Power, managing director of PowerHealth.

It’s a problem that a joint venture between PowerHealth and Telstra Health is trying to address by  working with aged care facilities and residents’ care plans – which describes the care that should be happening.

Patrick Power

“We’re using the resident’s care plan in an attempt to develop an automated and simple costing process so that aged care facilities can have access to frequent costing information, which can be used to help update pricing,” Mr Power told Australian Ageing Agenda.

“But also help inform aged care facilities to better manage in an casemix funded environment.”

Mr Power and PowerHealth have been involved with costing in the acute sector – which is used by the Independent Health and Aged Care Pricing Authority to set the pricing – since 1995.

“The acute sector is easier to cost now, just because they’ve have so much electronic data and have been costing for so long. We have a lot of activity data on what’s happening to the patients at any given moment. And using that information as cost drivers, we have a sophisticated costing system that performs the costing process,” Mr Power told AAA.

While IHACPA needs the same information to get the cost and set up the pricing in aged care, there is no recording of who’s doing what for residents at any time, resulting in the current manual and expensive process of funding cost of care studies, he said.

“The art of costing in this setting is one of matching the work performed with the expenses incurred. We have the expenses incurred – that’s the general ledger. But we don’t have the work performed, which is all the activities that carers, registered nurses [and others] are providing to the residents on a daily basis.”

As a first step in addressing this gap, PowerHealth has created an automated touchless costing exercise using the care plan information and Telstra Health’s software. Mr Power will present the results of this costing exercise as well as comparisons to IHACPA’s pricing with delegates at IHACPA’s The Future of Funding conference next month.

“We’re going through the methodology and showing the results, and then how they compare to the IHACPA pricing, and whether there’s a lot of correlation or no correlation between what these categories are paying versus what our costing showed.”

IHACPA provides pricing advice and determinations to help the Commonwealth Government fund health and aged care services more efficiently and transparently. This is its first annual conference to include aged care since its functions were expanded last year as recommended by the aged care royal commission.

The in-person and virtual conference is taking place in Brisbane on 9 – 11 August 2023. It targets people working in hospital and aged care settings who are passionate about or interested in learning more about funding, classification, coding or value-based care.

Towards full automation

At the conference, Mr Power will also talk through his organisation’s next steps toward automating the cost of what is actually happening in aged care homes using real-time technology.

“We use contactless cards and bracelets, developed by Contact Harald right here in Australia, that staff can put with their employee badge, and residents can either wear or carry on their person or attached to a walking device, for example. And then anytime that the staff get within contact of a resident, it automatically calculates the time you’re spending together.”

Mr Power stressed there were no dangers to staff and resident confidentiality when using this automation process, as both PowerHealth and Telstra Health were “extremely cognisant of the risks of resident and employee information.”

All data is anonymised, he said. “We’re just crunching numbers. When it goes back to the facility, a mapping table is applied within the business intelligence reporting layer, which maps it back to their personal information. We don’t record or hold any confidential information at any time so there’s no risk.”

However, there are many potential benefits of finding an automated, easy way to do the costing, he said.

“Aged care facilities will be able to cost on a regular basis, which means they’ll be able to submit that information to IHACPA to inform better pricing, as well as better support their internal information requirements that they will need to manage under casemix funding.“

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