Key messages

  • Alcohol and other drug services are covered by a mixed model of funding.
  • Non-residential services are mostly funded using an activity-based model of funding.
  • Residential services are mostly funded using an episode-of-care model.
  • The Drug Treatment Activity Unit allows comparison and adjustment of prices for activity-based funding.
  • Pricing is affected by weighting of treatment, complexity of treatment required, and product price loading for specific groups of clients.

The Victorian alcohol and drug services currently operate under a mixed-funding model:

  • The majority of adult non-residential services is delivered across 16 catchments and have been provided on the basis of a DTAU since September 2014.
  • Adult residential services and Aboriginal and youth-specific services are funded on the basis of an episode of care.
  • Other drug treatment grants such as research, local initiatives and pharmacotherapy programs will continue to be funded on the basis of a block grant.

Funding for drug prevention and control activities is based on block grants and submissions.

Funding provided to service providers will be indexed consistent with the government’s annual determination for community service organisations.

Activity-based funding for non-residential services

The majority of adult non-residential services have been provided on the basis of a Drug Treatment Activity Unit (DTAU) since September 2014.

Drug Treatment Activity Unit

Non-residential service providers are predominantly funded on the basis of a common unit, a DTAU. DTAUs allow relative prices to be compared and adjusted across alcohol and other drug activities that use different combinations of inputs.

The use of DTAUs allows for easy aggregation of information to account for the total cost of an individual client’s treatment journey, even where this involves use of multiple treatment streams. This in turn will be linked to transparent reporting of outcomes.

Treatment streams and products

The activity-based model will provide funding via the following alcohol and other drug treatment activity streams:

  • intake
  • assessment
  • care and recovery coordination
  • counselling
  • non-residential withdrawal
  • therapeutic day rehabilitation
  • catchment-based planning (block funded).

These treatment streams align with a number of new product types and each product is assigned a ‘weighting’ that is expressed in terms of number of DTAUs and, in turn, determines the price of the product.

Product prices are calculated based on a cost-modelling exercise that involves determining the likely inputs that contribute to delivering alcohol and other drug services, including the clinical and non-clinical resources, indirect costs and overheads and combining these with costs data, to derive a ‘modelled cost’ for each alcohol and other drug treatment product.

The counting unit for each of these products is an event (for example, a referral) or a ‘course’ of the particular treatment type involved that is modelled on an average number of sessions or length of support required.

Funding for standard and complex clients

To ensure that complex and high need clients are provided with care that meets their needs, separate ‘standard’ and ‘complex’ products apply to the counselling and withdrawal treatment streams.

Complexity is determined through the administration of a comprehensive assessment, which is conducted as part of the assessment function, or by Australian Community Support Organisation (ACSO) in the case of referral through the courts. Service providers will only receive the 'complex' price for those clients assessed as complex through this process.

Service providers will be expected to adjust the duration and intensity of the treatment response to meet the complexity of the client’s presentation. There will be scope for reclassifying between ‘standard’ and ‘complex’ should a client’s clinical requirements change significantly during the treatment episode.

Product price loadings for specific groups of clients

In accordance with Victorian Government policy for health services, a price loading of 30 per cent applies to Aboriginal clients.

A 15 per cent forensic loading is applied to identified (non-Aboriginal) forensic clients, in recognition of the additional costs associated with service delivery to this client group.

If a client is Aboriginal and a forensic client, only the 30 per cent Aboriginal loading applies.

These loadings are funded from within a provider’s DTAU allocation and not as additional payments. This means that treatment services provided to Aboriginal and forensic clients will use a greater proportion of an agency’s DTAU allocation and therefore meet their annual service delivery DTAU targets faster. Once a provider reaches the annual forensic client DTAU delivery targets, they will then receive fee-for-service funding from ACSO Community Offender Advice and Treatment Services (COATS).

Flexible-use funding

DTAU targets for each stream are set at a minimum of 80 per cent of each provider’s total allocation. Twenty per cent of DTAU within any stream may be shifted between streams for flexible use across all product types delivered by the service. The department requires funded providers to discuss the proposed use of the flexible DTAU funding with their regional office.

As the catchment-based planning function is block funded, flexible-use funding cannot be used for this purpose.

Data collection requirements

Services are accountable for the appropriate use of funding and for the delivery of services specified in the service agreement. To ensure accountability, services are required to regularly report on the services they are funded to deliver through data collections and other reporting. This allows the alcohol and other drug treatment service and the department to periodically review progress and achievement of agreed targets and performance measures and ensure accountability.

The department aggregates data received from treatment services to assess the performance of each provider and the treatment program, to produce reports to inform performance monitoring, service planning and policy development, and to meet national reporting requirements.

To ensure that product weightings and loadings are accurate, it is critical that service delivery and performance data collected and reported is true and accurate. Product weightings and loadings are reviewed on a regular basis.

Episode of care funding for residential, youth and Aboriginal-specific services

Adult residential services (such as residential withdrawal and residential rehabilitation), Aboriginal and youth-specific services and some other non-residential services are funded on the basis of an episode of care.

The formal definition of an episode of care is a completed course of treatment undertaken by a client under the care of an alcohol and drug worker, which achieves at least one significant treatment goal.

The model acknowledges that not all courses of treatment will result in a significant treatment goal being achieved, and this is taken into account in both unit prices set and targets expected. Unit prices are based on one of the following approaches for:

  • an equivalent full-time worker (38 hours per week)
  • a residential service whose outputs are separations per bed per annum based on average lengths of stay
  • a service where a team of workers may be involved in order to deliver the required episodes of care
  • other services.

Alcohol and other drugs outputs and outcomes

Funded organisations should use the Funded Agency Channel to determine their targets for alcohol and other drug services, and note that these represent the minimum deliverables expected for the funding provided. Funded organisations may consequently report higher levels of service delivery. Health services' Statements of Priorities include drug services activity targets for successful courses of treatment for both residential and community-based services.

More information

Please see Part 3 of the Alcohol and other drugs program guidelines for more information about quality reporting and performance management.