Provision of Casemix Review: Literature Review

The University of Queensland Social Research Centre (UQSRC) was commissioned by the Department of Families, Housing, Community Services and Indigenous Affairs in June 2009 to examine the casemix approach to funding in the context of specialist homelessness services.

The resulting literature scan considered three distinct dimensions including:

• Casemix and case-based approaches used by the homelessness sector in Australia and overseas;
• The funding mechanisms currently used by the homelessness sector in Australia;
• Casemix and case-based approaches used to fund community services in general;
• Funding mechanisms used to fund community services.

The report on the literature scan, includes:

• A summary of key issues and themes based on the above framework;
• An overall summary of the existing knowledge base as per the literature identified; and
  
• Identification and bibliography of all relevant literature identified through the scan.

Download the report: Provision of Casemix Review: Literature Review [Adobe Acrobat PDF - 514.98 KB]

 The University of Queensland Social Research Centre (UQSRC) was commissioned by the Department of Families, Housing, Community Services and Indigenous Affairs in June 2009 to examine the casemix approach to funding in the context of specialist homelessness services. The resulting literature scan considered three distinct dimensions including:
• Casemix and case-based approaches used by the homelessness sector in Australia and overseas;
• The funding mechanisms currently used by the homelessness sector in Australia;
• Casemix and case-based approaches used to fund community services in general;
• Funding mechanisms used to fund community services.

Conclusions and implications

A casemix approach to funding specialist homelessness services has been the focus of this literature scan. For the purpose of this report, the outcomes were divided into two broad areas:
1. Approaches to funding allocation, including casemix and case-based funding models, specifically for the homelessness sector, both in Australia and internationally. This section also considered cognate funding approaches in other community service sectors;
2. Existing funding and resource allocation arrangements for homelessness services in Australia.

This final section of the report seeks to consolidate the key findings of the literature scan and to describe the potential applicability of casemix, as a funding model, in the context of homelessness. It will also expand on the reform initiatives currently operating in Australia and comment on the applicability of casemix as an approach to funding homelessness services.
Casemix funding models and homelessness

One of the primary aims of this literature review was to understand the use of casemix funding in the context of funding homelessness services. It was found that there is no single way to define casemix, as it is a mechanism designed for specific institutional frameworks (Hutchinson et al., 1991). A casemix funding model classifies the type, or mix, of cases within a given service environment. It is, however, greater than a simple classification system because it also relates or links a particular group to the services required including the type and volume of intervention activities and the cost associated with such activities. The literature scan found that casemix funding models are predominantly associated with hospitals and allied health systems. Subsequently, the reported advantages and disadvantages of using casemix are related to these settings. The reported advantages of this model include its usefulness in:
• Managing available resources and payments;
• Identifying how resources are being used, as well as how they could be use more efficiently; and
• Comparing the use of resources between organisations in a transparent and objective manner.

Conversely, the related disadvantages that emerged included:
• A lack of focus on client outcomes;
• The propensity to overlook complex and severe cases;
• The challenge posed by the need to develop adequate classifications based on comprehensive and precise data or information on the different types of cases that may arise in a given setting; and
• Conflicts between equity and efficiency.

Despite an extensive search of academic databases, government and non-government organisation websites, no articles or reports were found which described casemix as an approach to funding homelessness in either Australia or overseas. The development of a model of casemix funding is reliant on robust and comprehensive data bases which provide detailed information about the nature and volume of activities carried out and the cost associated with such activities. Therefore, creating a model of casemix for funding that is applicable to the area of homelessness, where the settings and service activities are multiple and inherently complex, will require a classification system that is capable of representing this complexity, including the range and volume of activities undertaken by various organisations and the associated costs. It is not, therefore, a model that can be easily applied to the homelessness sector without extensive research, analysis and consultation with stakeholders.

Section 3 of this report described casemix funding in the broader context of a formula funding approach to resource distribution. Defined by a devolved delivery of public services and an equation to distribute funds, the formula funding approach is an increasingly preferred method of allocating resources to service provider organisations. This approach led to an investigation of the use of formula funding models in the context of community service provision, both domestically and internationally. Community service organisations use a number of different terms to describe the manner in which funds are allocated to them. For example:
• Case-based funding in the context of disability employment networks;
• Outcome, output and performance based in the context of mental health;
• Results based funding in the context of child support in third world countries; and
• Unit-cost funding in the context of higher education and assisting older people.

The terms given to these funding models do not appear to be discrete or definitive rather, like casemix, they are based on a formula funding approach. They are generally characterised by a devolved delivery of public services and a calculation which determines how resources are allocated.

Case studies were used in this report to show how these funding models can be applied to the community services sector and provide alternative approaches to resource allocation, cognate with a casemix funding model.
Section 4 reports on existing approaches to funding of homelessness services in Australia, based on searches of the websites supplemented with email and telephone contact with homelessness funding. This review identified only a small amount of documentation about funding models but discussions with funders indicates considerable progress in developing and implementing formula based approaches to funding homelessness services in some states, especially Victoria and New South Wales. Funders in other states indicated intentions to move in similar directions. It was not possible to obtain details for all jurisdictions due to the short timeframe and scope of the study.

The Victorian and New South Wales approaches can be categorised as unit based funding models that are supported by specification of service types, categorisation of client need typologies and collection of data on service costs. The funding model reforms in Victoria and New South Wales share some similarities in general approach but are significantly different in detail such as the ways services are specified and clients categorised. This highlights the impact of each jurisdiction having a unique history and culture in the funding relationships between government and funded services and the ways that homelessness services are embedded in local homelessness and human services delivery and funding contexts.

Given the amount of progress already made in states such as Victoria and NSW, consideration could be given to evaluating the outcomes of those models with a view to building on and extending them. The next stage to the project might consider more engagement with SAAP/Homelessness state program administrators obtain in-depth and up-to-date information about changes that are taking place and lessons to date. Such an approach lends itself to interchange of ideas and approaches between jurisdictions that could inform national policy formulation.

A further consideration is the intention of the national homelessness policy agenda to significantly reform existing homelessness service delivery models. These changes will have implications for the specification of services and collection of data on costs required to implement formula based funding. In this context a pilot of casemix funding may be premature until the anticipated changes are further progressed and emerging service delivery models more clearly specified.

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