Incorporating Safety and Quality Measures Into Australia's Activity-Based Funding of Public Hospital Services.

In a bid to improve quality of care, numerous countries have incorporated rewards and penalties into the funding and pricing of hospital services. This paper outlines recent advances in Australia to incorporate financial penalties for hospital acquired complications (HACs) and avoidable hospital readmissions (AHRs) adjustments into the funding of public hospital services. It describes the work in the development of suitable measures to identify episodes, the design of the analytical approach used for risk adjustment and the calculation of the funding implications including dampening effects to account for the level of risk.