A new report calls for a nationally consistent case-mix funding model, echoing the recommendations of previous reports and the pleas of the home and community support services (HCSS) sector over the last five years.

Will the collaboration between the Ministry of Health and District Health Boards on a new programme focused on the future of HCSS finally bring sustainable change? Or will the sector continue to operate under what HCSS providers view as an inflexible, inconsistent and inadequate funding framework?

Why the status quo isn’t working

Home and Community Health Association (HCHA) chief executive Julie Haggie doesn’t mince words when she describes the current funding arrangements for the home and community support services sector.

“It’s a dog’s breakfast,” she says of the current set-up – a mish-mash of case-mix and fee-for-service funding models across the country.

HCSS services are not delivered under a national contract and funding arrangements vary considerably between the Ministry of Health, Accident Compensation Corporation and the 20 District Health Boards (DHBs), making it difficult for providers to reliably forecast their income and consequently cover their overheads, maintain service standards and pay their workforce.

“What we have now is eight DHBs which are using some form of case-mix. The rest are using fee-for-service. All of them are trying to hold or reduce spend when demand is rising. No one is measuring the relative merits of any method,” says Haggie.

The current system doesn’t give the consumer much say and it frustrates workforce planning, says Haggie. It also results in unequal allocations within regions and across New Zealand.

“In most normal contracting systems you have the ability to negotiate changes to contracts and funding when there is significant legislative change, or you have some other adjuster, like putting up prices. This is not the case in home support contracts in New Zealand.”

The sector has certainly had its share of “significant legislative change”. Pay equity, guaranteed hours, in-between travel, and employment standards have all landed on the shoulders of HCSS providers. Collectively these requirements suck up the majority of the sector’s funding.

Meanwhile DHBs continue to shift costs onto the providers. However, as the only funder in an area, there is no incentive for a DHB to change or act fairly.

“District Health Boards reframe their dominion as being able to ‘innovate locally’, but frankly it quacks more like ‘driving down what is paid’. The problem is that each DHB has local control of what is a nationally provided service, but each can only see the view through their regional window,” says Haggie.

Interestingly, HCSS providers INsite contacted were unwilling to share their views, perhaps suggesting that they do not want to risk jeopardising their funder contracts.

Long-simmering problem

It all feels a bit like déjà vu. Over five years ago, INsite published an article that discussed the same problems and the need for a nationally consistent funding framework. DHB Shared Services confirmed then, back in 2013, that the variation across the country was “an issue that providers have been raising and is being discussed at a national level”.

Why then, five years on, are we no closer to getting a better system in place for the HCSS sector? In those five years, the pressure has mounted. With a growing ageing population, the sector is facing rising demand for its services and providers are struggling to meet their commitments relating to pay equity, guaranteed hours and in-between travel time.

In those five years, there have been several major independent reports each outlining what needs to change and why.

In 2014, as part of the In-between travel settlement, providers, unions, the Ministry of Health and all the DHBs agreed on a timeline for achieving the ‘regularisation’ of the HCSS workforce, which included, among other things, a case-mix mechanism to ensure the fair and safe allocation of clients within the DHB environment.

In 2015, an independent report by Deloitte, commissioned by the HCHA, concluded that the HCSS sector was under threat because the current funding model was unsustainable and that more funding and a nationally consistent funding model was needed to support a rapidly ageing population.

The same year, this was echoed by the Ministry of Health’s Director-General’s Reference Group for Home and Community Support Services (DGRG), which identified the need for best practice care models for HCSS, and recommended the creation of national service standards; a national pricing model; a national case mix assessment methodology; and a regularised workforce.

And now we have Fernhill Solutions’ report, Putting the Case*, commissioned by the HCHA, also calling for some of the same recommendations, based on the same carefully researched conclusions that the status quo is not sustainable.

The case for case-mix

A case mix model allows clients to be assessed to identify their needs and then be allocated the services that best meet these needs. Services can be funded according to the identified needs of a population grouping, while retaining an appropriate degree of tailored service provision, without needing to develop a bespoke service offering for every client.

According to the report while there are some challenges to adopting a case mix model – such as shifting from a regionalised system to a centralised system and shifting more control and accountability to the provider – the benefits are clear. A case mix model promotes a consistent approach towards support allocation; it promotes risk sharing and enables risk reduction; it cuts hospital admissions and is cost-effective but not at the expense of client care.

The Fernhill report outlines good examples of up and running case mix systems. In 2008-2009, Auckland DHB and the University of Auckland developed a casemix system for the

New Zealand setting and population called the Home and Community Support Services Case Mix System (HCSS CM). The system offers the ability to benchmark against best practice; compare practice at both the national and regional level; use nationally consistent quality frameworks; and develop nationally applicable pathways in collaboration with other HCSS case mix system users.

ACC’s integrated HCSS contract provides another good example of greater service integration can lead to greater consistency in service delivery and client experience, supported by a quality framework as well as a more collaborative approach between funder and provider.

Is change finally coming?

Jon Shapleski Programme Director, Health of Older People says DHBs fund home and community support services through local contracting arrangements based on strategies developed with community input that aim to deliver best care for those in need of such services.

However, Shapleski says there is interest in bringing consistency to the system.

“DHBs have a strong interest in developing nationally consistent quality standards and models of care that support improvement in this area and to this end are currently working with Ministry, sector representatives and consumers on future models of care which should deliver greater consistency both for consumers and providers.”

The Ministry of Health told INsite this ‘future models of Home and Community Support Service’ programme will “identify future models of care for home and community support services that will be fit for the future and align to the wider context of the Healthy Ageing Strategy”.

“The programme wants to concentrate on giving greater choice and control to clients; expanding the range of supports available and improving integration in the health sector,” says a Ministry spokesperson.

The Ministry and DHBs are collaborating on the programme and hoping to have a broad representation of views from a wide range of people – including health professionals, formal and informal care providers, and health managers – at these workshops so all views are able to be considered.

On the face of it, a future-focused programme sounds positive for the sector, but it is hard not to take a cynical view when such discussions have been happening for years now. Let’s hope increased pressure from the sector and renewed interest from the Government will result in meaningful change for the HCSS sector.

*The  full title of the Fernhill Solutions paper commissioned by the Home and Community Health Association is ‘Putting the Case:  Improving the viability, delivery and outcomes of New Zealand’s home and community support Services: a national casemix delivery and contracting framework’. It can be accessed here.


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