Final Report on RREF 2001 - Department of Health

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Part C: Outcomes 7.2 COMPARISON OF CONTINUATION OF CURRENT RREF AND INITIAL OPTIONS Range of initial options A total of 12 initial options were modelled to illustrate how different approaches to adjusting the weighting of need factors and inclusion of 4 or 6 variables affected the regional allocation of growth funds. These options were modelled for the initial Base Populations 2 and 3, as follow: Option Initial Base Population Weighting of need variables Number of need variables Current RREF Rurality only (1) Base 2 Even 4 (2) Base 2 Even 6 (3) Base 2 SES x 2 4 (4) Base 2 SES x 2 6 (5) Base 2 ARIA x 2 4 (6) Base 2 ARIA x 2 6 (7) Base 3 Even 4 (8) Base 3 Even 6 (9) Base 3 SES x 2 4 (10) Base 3 SES x 2 6 (11) Base 3 ARIA x 2 4 (12) Base 3 ARIA x 2 6 One of the rationales in modelling options with only four variable models was that while recognising that a great many variables contribute to differences in the need for HACC services between LGAs and regions, the RREF formula has to focus on a small number of key variables. The variables excluded from the four variable models were: 1. life expectancy, on grounds of high correlation and hence duplication with median household income; and 2. residential care shortfall, on grounds of the difficulty of allocating excess beds in some LGAs to adjacent LGAs with shortfalls, and in projecting changes in residential care provision. Other models could have been developed with any of the other variables excluded. However, as the remaining variables contributed less to the overall model, as detailed in Step 4 above, there would be less change in outcomes. The current RREF and all the other options are constrained by the total amount of growth funds being fixed, so that redistribution of funds among regions has to balance out. The result is that all regions continue to receive growth funds, however the 12 options show different regional shares than would be expected under the continuation of the current RREF. Outcomes of initial options Whilst, the regional shares of growth funds projected for 2002 under the current RREF provide a basis for comparison of outcomes of other models, it should be remembered that the outcome under the current RREF is not fixed and that there would be further changes in the allocation of resources between regions if the current RREF were to continue. Continuing reallocation of growth funds would come about due to changes in regional populations over time, and continuing adjustments to achieve per capita equity as defined by the current RREF. Further, there would be likely to be an adjustment for the VHC in any continuation of the current RREF. <strong>Final</strong> <strong>Report</strong> July 2001 74
Part C: Outcomes The outcomes of the 12 initial options were discussed in detail in the Options Paper and are summarised here in Table 7.2. This summary table was presented and discussed at the Round 2 Consultations to illustrate the diversity of outcomes generated by different models. To highlight this diversity: • the maximum share for each region under any option is shown in bold. • the minimum share for each region under any option is shown in italics and underlined. Table 7.2: Comparison of outcomes for current RREF and 12 initial options Base Population Current Base Population 2 Base Population 3 Weighting RREF Even SES X 2 ARIA X 2 Even SES X 2 ARIA X 2 No. of variables 4 6 4 6 4 6 4 6 4 6 4 6 Column number (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) Refer to Table 10 11 10 12 12 13 13 11 10 12 12 13 13 Barwon S-West 7.73 7.95 8.00 8.18 8.15 8.06 8.07 7.35 7.40 7.57 7.54 7.46 7.47 Grampians 5.17 4.68 4.63 4.83 4.74 4.83 4.74 4.36 4.32 4.50 4.43 4.49 4.42 Loddon Mallee 7.59 6.96 6.78 7.07 6.89 7.20 6.97 6.37 6.21 6.48 6.32 6.60 6.39 Hume 6.26 5.67 5.55 5.78 5.64 5.84 5.68 5.43 5.31 5.54 5.40 5.59 5.44 Gippsland 6.37 6.38 6.48 6.49 6.54 6.63 6.64 6.21 6.31 6.32 6.37 6.45 6.46 Western Metro 10.77 11.62 11.72 11.51 11.62 11.33 11.50 12.85 12.93 12.74 12.84 12.55 12.71 Northern Metro 14.16 15.45 15.35 15.24 15.22 15.09 15.12 16.25 16.13 16.04 16.00 15.91 15.91 Eastern Metro 19.35 18.28 17.99 17.84 17.73 18.28 18.03 18.53 18.23 18.11 17.99 18.56 18.29 Southern Metro 22.60 23.01 23.49 23.07 23.46 22.75 23.25 22.64 23.15 22.71 23.11 22.39 22.91 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Comparison of the 12 options with the current RREF (with eligible Veterans included in the base population) and with each other points to the following conclusions: • The differences between the regional shares of growth funds are small overall. Compared to the current RREF, differences overall are less for Base Population 2 than for Base Population 3. • There is a change in the shares of growth funds for rural and metropolitan regions for all the options compared to the current RREF. In the current RREF, only the five rural regions received a need weighting for rurality, whereas in all of the options for a revised RREF, all metropolitan regions also received a weighting based on the need variables. When all LGAs and hence all regions are weighted on the same need variables, it is evident that no one model consistently generates maximum or minimum shares for any set of regions. No one model results in consistent differences between metropolitan regions vis-a-vis nonmetropolitan regions indicating that patterns of need are more complex than a simple ruralurban divide. • Differences in population size mean that even where rural LGAs receive the same or higher need weighting than metropolitan areas, regional shares of growth funds will continue to be smaller than the metropolitan regions due to smaller underlying populations and trends in these populations over time. The net effect is that as metropolitan regions receive increased shares of funds, rural regions receive smaller shares, but the extent and direction of change varies between the options. <strong>Final</strong> <strong>Report</strong> July 2001 75
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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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Executive Summary All regions will
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Final Report on RREF 2001 - Department of Health

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