Linking measures of health gain to explicit priority setting by an area health service in Australia

A demonstration project was undertaken to develop, an integer programming m odel that could help a regional health authority to take into account data on service effectiveness when allocating resources to acute inpatient servi ces. The model was designed to find the mix of services that would maximise health gain from the available resources, and so provide information that could be used to encourage hospitals to change their patient mix. It was de veloped in collaboration with an Area Health Service in New South Wales, Au stralia, with the aim of assessing its potential as a decision support tool . Acute inpatient services were categorised in the model using classes derive d from the Australian National Diagnosis Related Groups (AN-DRG) classifica tion and the classes developed by the Oregon Health Services Commission. Es timates for the effectiveness of each service was derived from the Oregon b enefit data. Estimates of resource use were derived from AN-DRG data. The e xpected demand for each service was derived from local activity data. Various scenarios were developed to assess the potential of the model to su pport decision makers. These mimicked plausible policy options and tested t he sensitivity of the results to changes in the data. The scenarios demonst rated the model could reveal the consequences of different policy options, but also suggested that the difference in the cost-effectiveness of service s close to the margin would be small and so a rigid approach to priority se tting is undesirable. Difficulties in developing the model also demonstrate that incorporating health gain data into resource allocation decisions wil l not be straightforward for health planners. (C) 1998 Elsevier Science Ltd . Al rights reserved.