Cost-benefit Analysis Of Nurse Practitioner Models Of Care

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Inherent LimitationsThis report has been prepared as outlined in the Introduction section of the document. The services provided in connectionwith this engagement comprise an advisory engagement, which is not subject to assurance or other standards issued bythe Australian Auditing and Assurance Standards Board and, consequently no opinions or conclusions intended to conveyassurance have been expressed.No warranty of completeness, accuracy or reliability is given in relation to the statements and representations made by,and the information and documentation provided by, stakeholders consulted as part of the process.KPMG have indicated within this report the sources of the information provided. We have not sought to independentlyverify those sources unless otherwise noted within the report.KPMG is under no obligation in any circumstance to update this report, in either oral or written form, for events occurringafter the report has been issued in final form.The findings in this report have been formed on the above basis.Third Party RelianceThis report is solely for the purpose set out in the Introduction Section and for the Department of Health’s information, andis not to be used for any other purpose without KPMG’s prior written consent.This report has been prepared at the request of the Department of Health in accordance with the terms of KPMG’sengagement letter/contract dated 13 April 2018. Other than our responsibility to the Department of Health, neitherKPMG nor any member or employee of KPMG undertakes responsibility arising in any way from reliance placed by athird party on this report. Any reliance placed is that party’s sole responsibility.2 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

ContentsList of acronyms4Executive Summary61Introduction162Methodology183Case Studies254Findings81Case Study ACase Study BCase Study CCase Study DCase Study ECase Study FCase Study GCase Study H2632394753596673Appendix A – Literature findings101Appendix B – CBA framework127Appendix C – Stakeholder interview questionnaire133Appendix D – Site visit questionnaire135Appendix E – PHN questionnaire142Appendix F – References1433 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

List of acronymsAcronymDescriptionACCHSAboriginal Community Controlled Health ServiceACNPAustralian College of Nurse PractitionersAIHWAustralian Institute of Health and WelfareANMFAustralian Nursing and Midwifery FederationBCRBenefit cost ratioCATSINaMCongress of Aboriginal and Torres Strait Islander Nursing and MidwiferyCBACost benefit analysisCDMChronic disease managementEDEmergency DepartmentENEnrolled nurseFIFOFly in / fly outFTEFull time equivalentGPGeneral practitionerHCHHealth care homesKPIKey performance indicatorLHDLocal Health District (the term LHD has been used to describe networks of public acutehealth services in every state)MBSMedical Benefits ScheduleMMModified Monash Model (remoteness classification)NMBANursing and Midwifery Board of AustraliaNFPNot for profitNPNurse PractitionerPBSPharmaceutical Benefits SchemePHNPrimary Health NetworkPIPPractice Incentives ProgramQALYQuality-adjusted life yearRACFResidential aged care facilityRACGPRoyal Australian College of General PractitionersRCTRandomised controlled trialRDNRural Doctors NetworkRFDSRoyal Flying Doctors ServiceRDAARural Doctors Association of AustraliaRNRegistered nurse4 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

Modified Monash Model classificationsModified MonashCategoryInclusionsUnofficial Description*MM 1All areas categorised ASGS-RA1Major CityMM 2Areas categorised ASGS-RA 2 and ASGS-RA 3 that are in, orwithin 20km road distance, of a town with population 50,000.Large RegionalMM 3Areas categorised ASGS-RA 2 and ASGS-RA 3 that are not inMM 2 and are in, or within 15km road distance, of a town withpopulation between 15,000 and 50,000.Medium RegionalMM 4Aras categorised ASGS-RA 2 and ASGS-RA3 that are not in MM2 or Mm 3, and are in, or within 10km road distance, of a town withpopulation between 5,000 and 15,000Medium RegionalMM 5All other areas in ASGS-RA 2 and 3Small RegionalMM 6All areas categorised ASGS-RA 4 that are not on a populatedisland that is separated from the mainland in the ABS geographyand is more than 5km offshoreRemoteMM 7All other areas – that being ASGS-RA 5 and areas on a populatedisland that is separated from the mainland in the ABS geographyand is more than 5km offshore.Very Remote*as used by the Australian longitudinal study on women’s /InfoData/Data Dictionary Supplement/DDSSection5 ModMonashMod.pdfSource: Doctor Connect, For the purposes of this report the term patient is used to encompass both individuals receivingcare in primary and aged care settings, as the focus of the report is on Nurse Practitionerssupporting delivery of health care within these settings.5 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

Executive SummaryKPMG was engaged to conduct a cost benefit analysis (CBA) of Nurse Practitioner (NP) modelsof care in the aged care and primary health care sectors in Australia in order to identify keysuccess factors and challenges as well as areas for potential expansion.The NP role has emerged as a way to expand the scope of practice for nurses in order to improveaccess to healthcare, particularly for remote, marginalised and vulnerable populations. The abilityfor NPs to work both independently and collaboratively within a multidisciplinary health team, andtheir ability to undertake advanced clinical care, positions the role to provide flexible andaffordable health services to Australian communities.Project ObjectivesThe CBA provides an estimate of the costs and benefits associated with introducing a NP inprimary health, residential aged care and other settings. Specifically, the objectives of the projectwere to: Objective 1: Conduct an assessment of NP operating models in the aged care and primaryhealth care sectors; Objective 2: Undertake case studies to review and assess, from an economic perspective,existing NP models (i.e. residential aged care facility-based, sole operator NPs, GeneralPractice (GP) clinic, NP clinic) with a view to identify potential new or innovative models; Objective 3: Identify potential areas of expansion for NP models within existing primary healthcare and aged care settings through identification of success factors and challenges; Objective 4: Identify potential areas of expansion for NP models in program areas such asHealth Care Homes and aged care; Objective 5: Identify areas and costs associated with the under-utilisation of NPs; potentialsavings associated with the expansion of NP roles, such as reducing avoidable hospitaladmissions, lengths of stay, ambulance costs, and any other related operational and financialcosts; Objective 6: Liaise with key stakeholders to affect a high quality response to this servicerequirement and within the bounds of the contractor’s control; Objective 7: Investigate the recognition of NPs within the existing Medicare BenefitsSchedule (MBS) parameters and detail any issues and options for change, to enable the NPworkforce to work fully to their scope of practice.A primary purpose of this research is to fill a gap in the literature regarding the financial costs andbenefits associated with NP models in use across primary care and residential aged careservices. As such, the case studies review and assess, from an economic perspective, existingNP business models. There are other components of NP models of care that are not covered aspart of this research, but are well documented in the existing literature. This includes the qualityof care delivered by NPs, and patient outcomes. The literature review provided in Appendix Atouches on some of these points.6 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

MethodologyThe objectives were met through a mixed method approach including the development of anassessment framework, the collection of data and the cost benefit analysis, as follows:Table 1: Methodological approach by project objectiveObjectiveMethodology UsedObjective 1 Literature Review Stakeholder Consultations Case Study Site VisitsA review of the eight case study sites was completed using both quantitative andqualitative data collection methods. The findings were consolidated to identify casestudy sites and to conduct the assessment of NP operating models.Objective 2 Case Study Site Visits Data request and analysisEight case study site visits were completed. During these visits the project teaminterviewed a range of stakeholders including the NP, site leadership and otherclinicians to understand the NP model from an economic perspective and to identifypotential new models. The findings were consolidated to identify potential new orinnovative models.Objective 3 Literature Review Stakeholder Consultations Case Study Site VisitsInformation was consolidated from the literature review, case study site visits, andstakeholder consultations to identify potential areas of expansion.Objective 4 Literature Review Stakeholder Consultations Case Study Site VisitsInformation was consolidated from the literature review, case study site visits, andstakeholder consultations to identify potential areas of expansion.Objective 5 Cost Benefit Methodology Cost Benefit AnalysisA cost benefit methodology was developed and utilised to identify the costs associatedwith each site. The analysis was informed by the quantitative data captured from NPsite visits in addition to valuations informed by literature and used to identify potentialareas of under-utilisation. Site visits included two components – stakeholder interviewsand observations, as well as a data request.Objective 6 Stakeholder Consultations Case Study Site VisitsThe project worked closely with stakeholders to deliver a high quality response.7 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

ObjectiveMethodology UsedObjective 7 Literature Review Stakeholder Consultations Case Study Site Visits Review of MBS data Cost Benefit Methodology Cost Benefit AnalysisInformation was consolidated from the literature review, stakeholder consultations,case study site visits and cost benefit analysis to investigate potential MBS parametersand detail any issues and options for change.Source: KPMGLiterature ReviewThe high-level literature review provided the basis for stakeholder consultations, the developmentof a CBA analytical framework as well as the subsequent cost benefit analyses of the project’scase study sites. In addition, the literature review supported project reporting, including this finalreport.The literature review was developed through searching grey and peer-reviewed literature,reviewing literature identified and developing an outline based on areas of research.Stakeholder ConsultationsA number of stakeholder interviews were conducted in order to gain qualitative input into thedevelopment of the CBA framework. The stakeholders were determined through consultation withthe Department, which resulted in seven peak bodies representing key clinical groups beingidentified.Cost Benefit FrameworkThe Literature Review and Stakeholder Consultations informed the development of the CostBenefit Framework. A framework guided the collection of data and the methods of analysis.Case Study Site VisitsA list of eight sites was identified, covering off a range of models and settings (i.e. both primaryhealth and aged care settings, different models of care, services provided and funding models,as well as both metropolitan and regional / rural sites). The case study sites were selected basedon responses to a national survey of NPs, developed by the Department, and administered bythe Australian College of Nurse Practitioners on behalf of the Department.The project team visited each site to collect data guided by the Framework. Qualitative data wasgathered through semi-structured interviews with key site stakeholders and observations, whilstquantitative data was provided by the site in response to a data request.Cost benefit analysisA financial model and CBA was completed for each case study site. The CBA took a wider healthsystem and patient perspective. A scenario-based ‘what if’ analysis was also considered for siteswhose income was sourced predominantly from discretionary funding rather that MBS billing. The8 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

overall costs of the NP model were obtained from the financial model, and the benefits for eachNP site were estimated using one of three broad methods and informed by the literature review,depending on the specific NP model.Case StudiesA total of eight case study sites were investigated as part of the CBA. The sites encompassed avariety of NP models of care and included primary care settings and residential aged care settingsin metropolitan and regional or remote locations. An overview of the models of care is presentedin Table 2 below.Table 2: Overview of NP models of care across case study sitesCasestudy siteModelBrief description of modelSite ANP based inhospital EDThe NP is based in the ED of a local public hospital, and acts as a link between theED and the community (mainly in aged care). The NP attends to patients who wouldnormally present to the ED, sets up a treatment plan and provides care to olderpatients living at home or in a RACF (in collaboration with GPs and specialists ifrequired).Site BNP clinicThe model is a primary health NP clinic in rural Australia. Services are currentlyprovided in a local community centre, with a main clinic due to open in theneighbouring town in the near future. Services are almost entirely provided by one NP,with a collaborating GP visiting the site one day per fortnight.Site CNP part ofprimary healthcare clinicThe NP operates as part of a multidisciplinary publically funded primary health careclinic with a focus on women’s health and supporting Aboriginal women in thecommunity. The NP works independently and only refers to GPs when required.Site DGP / NPcollaboratingpracticeThe NP model is a private practice incorporating two GPs and nine NPs who are allassociates within the practice. The practice provides person-centred health careservices to RACF residents.Site ESingleoperator NPThe model consists of a specialist dementia care NP who is employed by a regionalhealth clinic. The services provided by the NP revolve almost entirely aroundconducting tests and assessments required to provide patients with their dementiadiagnosis.Site FNP part ofACCHSThe NP at this site operates as part of a multidisciplinary team employed by ACCHS.The NP at this site is a generalist with specialised skills in women and child healthcare.Site GSingleoperator NP /contracted byRACFsThe NP operates across separate RACF sites with one day per week assigned toeach. The goal is to up-skill RACF employees and improve continuity of care toresidents.Site HNP part ofACCHSThe NP operates as part of a remote ACCHS alongside a team of FIFO specialist staffsuch as RFDS and Allied Health as well as State-operated community health services.The NP at this site is focused on providing primary health and aged care services tothe community, including chronic disease management.Source: site visitsThe detailed case studies are provided in Section 3 of this report.Report FindingsThe key findings of this report are set out below as follows: key summary findings against each of the project objectives; other considerations; considerations that go beyond the immediate scope of this project.9 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

Detailed findings are described in Section 4 of this report.Table 3: Summary of report findingsObjectiveFinding, evidence and implicationExplorationofNPoperating models in theaged care and primaryhealth care sectorsNP models are more likely to be successful where they are established tomeet a clearly identified need and fill a gap in health service delivery.Stakeholder consultations and analysis of case study site data identifiedsignificant variability in NP operating models. This highlights a key strengthof NP models reviewed as part of this project which relates to NPs andservice providers tailoring their model to meet the specific communityrequirements. Stakeholder consultation revealed that individual NPs weremost often involved in self-identifying community need and establishingmodels in response. Across both primary health care and aged care,stakeholders identified that collaboration between NPs and other clinicians,particularly GPs, was a critical success factor. Stakeholders further identifiedthe importance of a generalist approach in rural settings and aged care (referto recommendations made in the following sections).Options for changeConsideration should be given to:Potential areas ofexpansion for NPmodels of care /Potential areas ofexpansion for NPmodels of care inprogram areas such asHealth Care Homes andaged care targeting dissemination of information to prospective and current NPs,Primary Health Networks (PHNs) and primary health care and aged careproviders outlining how to develop and implement NP models in primaryhealth care and aged care settings. This should profile better practicecase studies. This should be considered based on workforce and serviceplanning activities, as outlined above. Service planning and identifiedareas of need will support NPs and service providers to implementmodels in the aged care and primary health care settings. Furtherrecommendations in this regard are made below. strengthening the formal network of NPs to disseminate key successfactors, particularly in relation to efficient and effective NP models ofcare.NP models can improve access to healthcare and support the managementof chronic and complex health conditions, particularly for vulnerable andremote populations. While there are specific areas and settings that havebeen identified as opportunities to expand the NP role, increased focus isrequired on facilitating the implementation of NP models to address areas ofneed.Development of these models should be informed by the key success factorsoutlined in Section 4. This should be supported by: creating and sharing a robust data and evidence base on NP models ofcare to address areas of need; identifying and socialising areas of need appropriate to NP models; considering NP models in local service and workforce planning.This would require increased coordination by key stakeholders, including theDepartment of Health, PHNs, the College of NPs, The Royal AustralianCollege of General Practitioners (RACGP), and the Chief Nursing andMidwifery Officers in each jurisdiction.10 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

ObjectiveFinding, evidence and implicationSpecific opportunities exist across aged care, Aboriginal CommunityControlled Health Services and Remote communities.Aged CareStakeholders at case study sites identified that NP models improved accessto treatment, diagnosis and the patient experience of residents, and appearsto support the quality and safety of care delivered by the aged careworkforce. This was found to reduce hospital admissions. However, thepotential to expand models was limited by the availability of NPs within thesector. As a proportion of total endorsed NPs, the number of NPs workingwithin aged care facilities is low. Consultation with key stakeholdersidentified NPs working specifically within aged care as a significant gap inthe NP workforce. Consideration should be given to: communicating the benefits of NP models in aged care to RACFproviders, PHN and Hospital and Health Services (focused on avoidableadmissions); identifying and documenting better practice case studies drawn fromestablished models, including specialist dementia and palliative carealong with aged care generalist models; considering NP roles in the development of career pathways for agedcare nurses.Aboriginal Community Controlled Health ServicesThe case study visits identified that the NP model was implementedsuccessfully across ACCHSs. Stakeholders specifically noted that NPmodels are particularly valued in providing culturally competent care andclinical expertise and improving access to care. Despite these benefits,implementing NP models faces barriers related to incomplete access topatient information and financial sustainability. Therefore considerationshould be given to: working with ACCHSs and other providers to implement mechanismsthat provide NPs with the tools and information required to deliver care.For instance, this could involve providing NPs who have leadresponsibility for the coordination of planned care with access to acomplete view of patient information across providers (with thepermission of the patient). This will support NPs to operate at the top oftheir scope of practice and support the coordination of patient care incommunities serviced by multiple, often disconnected, service providers.Implementing these mechanisms will also support an uplift in continuityof care. utilising existing forums (NACCHO, ACNP, CATSINaM and affiliates) toconnect NPs working within the sector and communicate and educatekey stakeholders on the benefits of NP models. This can be in the formof case studies of both NPs and the providers they work for.Remote communitiesThe case study visits identified that NP models play a critical role inimproving access to diagnosis and treatment, as well as providingcoordinated and connected care for patients living in remote communities.However, there are key challenges associated with implementing NP models11 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

ObjectiveFinding, evidence and implicationin these areas due to fly-in-fly-out medical workforce, accessibility toinfrastructure, recruitment and sustainability of business models.Health Care HomesCurrent reforms in primary health care enable a discussion around theinvolvement of NPs in new health and innovative service delivery models.One of these new models is Health Care Homes (HCH), which introducesparticipating primary health care providers as a home base to the patient forongoing coordination, management and support of their chronic conditions.The case study visits identified that the NP models of care were implementedsuccessfully in a manner that would be suited to HCH.Case study sites demonstrated evidence of NP models having an ability todeliver comprehensive care within the HCH setting. While material alreadyexists outlining the potential of NP roles within HCH, further considerationshould be given to documenting and publicising how NP models can supportHCH, including through highlighting successful models. 1Therefore consideration should be given to: integrating education, workforce and service planning to link current andfuture NPs with identified areas of need. This may include working witheducation providers, such as universities, National Rural HealthAlliance, PHNs and state and territory health departments to identifyareas of need and suitable for NP models of care; increasing the professional and financial incentives for facilitating accessto NP services in rural and remote communities to mitigate thehealthcare shortage being experienced. This needs to be reviewed inline with the recognition of NPs within the existing MBS considerations.Further exploration of the optimisation of the NP role is provided in the‘Future considerations section.Areas and costsidentified with potentialunder-utilisation ofNPs/ Potential savingsassociated with theexpansion of NP rolesThe NP workforce is unevenly distributed across Australia, whilst two PHNshave over 50 registered NPs identified in MBS records; 13 PHNs have lessthan 10 NPs. Based on stakeholder consultations, the distribution of NPs islargely driven by specific state and territory initiatives, rather than by acoordinated workforce and service planning activity.Based on the CBA of the case study sites, an expansion of 10 NP roles inaged care roles would cost approximately 1.5 million per year, butconservatively result in 5,000 avoided ED visits each year, and annualsavings of over 5.7 million in reduced ED, hospitalisation and ambulancecosts.In primary care, an expansion of 10 NP roles in rural and regional Australia,at a cost of 1.5 million per year, could conservatively improve access tocare for 10,000 Australians; another 10 primary care NP roles in specificallytargeted locations could provide services to over 6,000 Aboriginal and TorresStrait Islander population with limited access.The implications from this analysis are that continued expansion of NPmodels could deliver substantial cost savings to the healthcare system andimproved access to thousands of Australians. There is sufficient patient needDepartment of Health (2017), FAQs about nurse n/publishing.nsf/Content/health-care-homes-cp/ 112 2019 KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliatedwith KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo areregistered trademarks or trademarks of KPMG International.Liability limited by a scheme approved under Professional Standards Legislation.

ObjectiveFinding, evidence and implicationand service gaps to support substantial expansion of the NPs relative tocurrent numbers.The recognition of NPswithin the existing MBSRecognition within the existing MBS parameters was identified as the mostsignificant limitation to the sustainability of existing NP models and theirexpanded use within primary and aged care settings. In particular, currentparameters limited an NP’s ability to work fully to their scope of practice,resulting in duplication and fragmentation of care, and an inability to providecomplete episodes of care.Therefore, consideration should be given to:Other considerations the level of the MBS reimbursement relative to costs associated with theNP model; reimbursement parameters that recognise the longer duration of manyNP consults relative to GP consults when conducting services such ascomprehensive health assessments or chronic disease management,for example; the expansion of the availability of Health Assessment and ChronicDisease Management (CDM) items to suitably qualified NursePractitioners practicing in areas of need; the range of other incentives available to support the development of NPmodels in order to support an enhanced role within primar

3 Contents List of acronyms 4 Executive Summary 6 1 Introduction 16 2 Methodology 18 3 Case Studies 25 Case Study A 26 Case Study B 32 Case Study C 39 Case Study D 47 Case Study E 53 Case Study F 59 Case Study G 66 Case Study H 73 4 Findings 81 Appendix A - Literature findings 101 Appendix B - CBA framework 127 Appendix C - Stakeholder interview questionnaire 133

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