Final Report on RREF 2001 - Department of Health

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Part B: Development of Options for a Revised RREF 4.6 FURTHER ISSUES AND PREFERRED OPTIONS Two aspects of differential weighting of the need variables were canvassed in the consultations: 1. views as to the variables that warranted greater weight on the basis of making a greater contribution to need for HACC services, and 2. the actual weight that each variable contributed to the model. Variables warranting greater weighting Participants in the Round 2 consultations expressed the view that some variables were seen to have a greater bearing on need than others. The two variables that were most widely seen to warrant more weight were rurality and socio-economic status, each identified in around 40% of responses, followed by the health indicator and the residential care shortfall variable, each identified in around 20% of responses. Only a minority of responses, around 10%, identified cultural diversity and the Koori variable as warranting additional weighting. At the same time, it was recognised that there were no clear empirical grounds for adjusting the weightings and it was noted that any weighting based on arbitrary decisions would complicate the process; even those who favoured giving additional weighting to some variables commented that the process was imprecise. The option of further statistical modelling beyond the principal components analysis already carried out was precluded by the lack of a measure of need that could be used as the independent variable in methods such as regression analysis. Actual contribution of variables to model The scaling of all variables from 0 to 9 treats each variable as having an equal relationship to need for HACC services. This equal treatment or equal weighting does not however mean that each variable does in fact make the same contribution to overall need. The contribution that each variable makes depends on the distribution of LGAs across the range of scores from 0 to 9. A variable on which many LGAs receive a high scaled score will make a greater contribution to the overall outcome than one on which only a few LGAs have a high scaled score and most have lower scores. Thus, as a large number of LGAs have a relatively high scaled score on median household income, reflecting low socio-economic status, this variable contributes a large part of the overall model. Similarly, a large number of LGAs receive a relatively high YLD and ARIA scores. In contrast, only a small number of LGAs have a high proportion of their population that is Koori and many LGAs receive a low scaled score on this variable. The contribution that each variable makes to the revised RREF model is shown in Table 4.1 in which the total points that each variable actually contributes are also expressed as a percentage of the actual total of 1293. Even without any further adjustment to take account of perceived relationships to need, it is evident that each variable makes a different contribution to the overall model and so carries a different weight. Thus, the Household Income variable contributes 494 points, 38.2% of the total actual points, while the cultural diversity variable contributes 136 points and 10.5% of total need. Given these differences, it may be more appropriate to refer to “unadjusted” weightings rather than “even” weightings. <strong>Final</strong> <strong>Report</strong> July 2001 46
Part B: Development of Options for a Revised RREF The overall effect of doubling the two selected variables is shown in Table 4.1, but the impact on regions is affected by the distribution of the scores on these variables across LGAs and the size of the LGA populations to which the adjusted weightings apply. Table 4.1: Contribution of need variables to overall need weighting in five variable model Contribution to overall need weighting Median H’hold Income Years Life Disability ARIA Cultural Diversity Koori Population Total Unadjusted: Total Score 494 387 209 136 67 1293 % contribution 38.2 29.9 16.2 10.5 5.2 100.0 Doubling of Median H’hold Income Total score 988 387 209 136 67 1787 % contribution 55.3 21.7 11.7 7.6 3.7 100.0 Doubling ARIA Total score 494 387 418 136 67 1502 % contribution 32.9 25.8 27.8 9.1 4.5 100.0 Impact of adjusting weightings The household income variable already carries the greatest weight in the model, followed by the health indicator. Doubling the weight for the household income variable increases the total actual points to 1787 and increases the contribution of this variable to 55.3%, but as shown in Table 4.1 above, the weightings for all the other variables decrease. The Round 2 Consultations attached considerable importance to inclusion of the separate health indicator and as it was seen as a candidate for increased weighting, it is seen to be more appropriate to include the two separate variables, which together contribute 68.1% of the total need weighting in the revised model, than to double the income variable and exclude the health indicator. With doubling of the socio-economic variable, it together with the health indicator account for 77% of the total need weighting. The ARIA contributes the third highest weight to the overall model, 16.2%. Doubling the ARIA suggests that its contribution to the overall model increases to 27.8%, but the size of the base populations in LGAs to which the increased weighting is applied is an important factor in determining the actual outcome for regions. Whether adjusted or not, the weightings for rurality as the single need variable in the current RREF cannot be compared with the weightings for the ARIA as one of several variables in a multi-variable model. <strong>Final</strong> <strong>Report</strong> July 2001 47
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FINAL REPORT REVIEW OF THE RELATIVE
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STEP 3: OPTIONS FOR SCALING NEED VA
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ABBREVIATIONS AND NOTE ON TERMINOLO
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ACKNOWLEDGEMENTS An exercise as ext
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EXECUTIVE SUMMARY The Review of the
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Page 99 and 100: Part D: Achieving Equity in the HAC
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LGA Median H’hold Inc. YLD Lang o
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Department of Human Services 1999b.
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Final Report on RREF 2001 - Department of Health

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