Final Report on RREF 2001 - Department of Health

Four features of the revised outcomes overall warrant comment:
Part C: Outcomes
1. The differences in regional shares of growth funds between all models are small.
For Base 2 and Base 3, the shift between regions is in the order of only 3.25% of
growth funds. Assuming growth at 6% per annum, estimated growth funds for
2002 would be some $15.7 million, and the amount reallocated would be in the
order of only $500,000.
2. It is apparent that no one model shows a consistent pattern of maximum or
minimum shares of growth funds to a particular set of regions but rather that
marginal shifts occur between both rural and metropolitan regions under different
options.
3. The most marked reallocations occur under Base 3, without adjustment of need
weighting, which generates maximum shares for two large metropolitan regions,
and larger shares than under the current RREF for two other regions; at the same
time, about half the reallocation comes from the fourth metropolitan region, with
the balance spread across the other four rural regions.
4. The impact of the changes in the share of resources allocated to rural regions under
any revised RREF was widely remarked in the Round 2 consultations. Recognising
that performance targets were tied to the level of resources allocated through the
RREF, and that this outcome would not address the additional costs incurred in
service delivery in rural regions, complementary measures were seen to be required.
The kinds of measures suggested are noted in Section 8.
Three aspects of the differences between the models warrant comment:
1. The current RREF does not result in maximum shares for all rural
regions.
2. Comparison of Base 2 and Base 3 with unadjusted weightings shows
Base 2 results in a flat outcome, with no maximum or minimum shares
for any region, and a lower reallocation overall than Base 3.
3. The effect of doubling the weighting of the SES and ARIA variables is
to reduce the variation in the outcomes of these models rather than to
generate more marked changes in regional shares.
7.6 ASSESSMENT OF OPTIONS
The outcomes of different options in terms of the extent of overall change in allocations of
growth funds and in shares allocated to regions are of most immediate interest. The overall
differences are however small, and these outcomes will change from year to year given the
dynamic nature of the variables included in the RREF and underlying population trends.
Assessment on the basis of a single year outcome, or even a five year projection, is thus a
limited view of the effectiveness of the RREF in achieving equity in HACC or the extent to
which the options developed in the Review are improvements over the current RREF.
A second level of assessment can be made in terms of the relative contribution of the three
elements of the RREF model - the base population, the adjustment for the frail aged, and the
weighting for need - to the overall outcomes compared to the current RREF. This comparison
for the current RREF and the Base 2 and Base 3 options is presented in Table 7.4.
<strong>Final</strong> <strong>Report</strong> July 2001 79