Victorian Auditor-General’s report
2 March 2011

Managing Drug and Alcohol Prevention and Treatment Services
Audit summary
Background
Harmful drug and alcohol use is a major social issue with an estimated annual cost to the community of $14 billion. More than 77 000 Victorians are hospitalised for alcohol and drug related conditions each year. Around 27 000 enter government-funded specialist alcohol and other drug (AOD) treatment programs. 
The current community-based alcohol and drug program guided by harm minimisation principles has operated since 1997. This program funds activities designed to prevent and treat harmful drug and alcohol use. The state allocated $135.7 million for AOD prevention and treatment activities in 2010–11. Of this, $110 million, or 81 per cent is allocated to treatment and 19 per cent to prevention activities.
Typically, prevention initiatives are one-off projects, such as media campaigns, with few prevention services funded on an ongoing basis. In contrast there are 105 services providing treatment services to those who use AODs harmfully.
This audit examines the effectiveness of drug and alcohol prevention and treatment services overseen by the Department of Health (the department), with a particular focus on quality and accessibility of services, and the extent to which interventions work.
Conclusions
Dealing with harmful alcohol and drug use is particularly difficult due to the complexity of addiction, which is a chronic condition where individuals are prone to relapse. A simple ‘cure’ cannot be prescribed. Because of this, prevention and treatment programs need to be reviewed regularly and refined to adapt to changing community needs and to maximise their chances of success.
At its inception the new community-based alcohol and drugs program was innovative in both its service and funding model. However, 13 years later, the problems with treatment services that it was designed to overcome have not been resolved. 
The department has no assurance that the service system objectives of effective case management and continuity of care for clients and consistent, high quality services, are being achieved. Treatment services remain difficult for clients to access and navigate, and do not provide seamless pathways to other health and social support services.
This situation has arisen not through a lack of review and awareness, but rather for want of action to address difficult issues. While the treatment system has been refined, this has been at the margins. The episode of care funding and performance measurement model, recognised as flawed since 2000, has not been satisfactorily dealt with; nor has the fragmentation and inconsistency of approach by the relatively large number of service providers.
Thirty-one internal reviews have been conducted since 1999, many on the same theme, and further reviews are currently underway. While these reviews have to some extent informed current strategies for AOD services the great majority of review findings have been subsumed by still further review activity. In this way review has stifled reform rather than being the springboard to improvement.
The poor track record of acting on review findings has resulted in scepticism among service providers about the current suite of reform projects for the program. Despite this, the staff and management of AOD services are a committed workforce who continue to perform a difficult role. 
As was the case at the inception of the new AOD program, the service sector continues to face a number of important issues that require a whole-of-system response, including improving access to and quality of services, coordination and integration with other human and health services, demand driven by population growth, prevention strategies, and measuring performance. A real commitment to implement long overdue reforms is required.
Findings
Prevention
Around $25 million is spent each year on prevention. However, there is confusion within the sector about what constitutes prevention in the AOD context. The department’s intention would be clearer if it had a prevention strategy to describe to stakeholders the kinds of activities which can lead to prevention outcomes. Despite calls for this since 2000, no such strategy exists.
Further, there is a lack of coherence in what has been funded. Projects are discrete, not complementary and they have not been sustained and integrated. 

Treatment
Challenges identified at the establishment of the current AOD service system in 1997 were listed as issues which 10 years later continue to be addressed in the department’s latest reform plan, A new blueprint for alcohol and other drug treatment services 2009–2013. These include:
·	the fragmentation of a treatment response made up of numerous service providers, rather than a coordinated system 
·	significant access barriers facing those who need the system
·	different standards across services and workforce development needs. 
The audit confirmed these issues and also found the department’s monitoring of services to be poor. In effect, the department cannot show how well services are delivered on the ground.
Funding model and effectiveness of treatment
The funding model for treatment services is based on the department purchasing outputs in the form of a specified target number of client episodes of care (EOC), or completed courses of treatment, from service providers. Each EOC has a set unit price which is historically based. Due to changes over time, unit prices have lost their relationship with the real costs of service delivery. 
The EOC-based funding model promotes episodic and fragmented service responses to clients. This is inconsistent with the underlying objectives of the AOD program which focus on continuity of care. The EOC was designed to allow clinicians the discretion to provide multiple episodes of care because of the chronic and relapsing nature of addiction. The department acknowledged that the conceptual confusion within the sector over the use of the EOC as both a performance and funding measure creates uncertainty and ambiguity about its use, resulting in inconsistent outcomes for clients.
The need to achieve EOC targets creates incentives for service providers to manipulate or ‘game’ the system. There is evidence that service providers ‘re-episode’ clients by closing a course of treatment for a client, recording an EOC and then immediately opening a new course of treatment for the same client in the same service type. There may be clinical considerations for closing and reopening an EOC due to the chronic and relapsing nature of addiction, however, these considerations can be compromised by the imperative for agencies to meet their EOC targets. The under‑costing of EOC unit prices may also be a factor.
One result of this manipulation is a system which appears successful because it greatly exceeds its activity targets. In 2009–10 the target of 31 085 for successful courses of treatment was exceeded by nearly 40 per cent. However, up to 70 per cent of clients in the AOD service system at any one time, are repeat clients. While this phenomenon is primarily due to the chronic and relapsing nature of addiction, it is also partly due to the funding model.
A fragmented system
The objectives for the service system focus on effective case management, continuity of care for clients and, where possible, services tailored to a client’s specific needs.
Notwithstanding these objectives, there are 19 different funded service types in the AOD service system and 105 funded service providers responsible for delivering treatment, many of whom are small and can only offer a limited number of treatment types. The result is a highly complex and fragmented system, which is difficult for clients to understand and navigate.
The lack of service integration makes it difficult for clients to move between different service providers and types of treatment and also makes it difficult for services to offer responses tailored to individuals. 
Ease of getting help
Access can be measured by how easy it is for a prospective client to enter and negotiate the AOD service system and by waiting times. The department’s reported waiting times for residential-based treatment have doubled since 2005–06.
The reported waiting times also understate the client’s experience of the time it takes to access the system. The department’s measure starts from the date a client is first assessed by a service provider. However, from the clients’ perspective the wait time commences when they first contact a service seeking treatment.
As the department’s allocation of resources for AOD services across the state is largely historically based, it does not align with current demand or address considerations of equity of access. In addition, particular groups, including culturally and linguistically diverse communities, continue to have a low uptake of treatment services.
Service types and mix
The department has not acted on recommendations to change its service mix to reflect available evidence and expert advice on how best to meet community needs. An issue consistently raised by the sector and independent experts during the audit was that the current service system reflects what was put in place in 1997, while client needs, and the complexity and patterns of substance use, have changed significantly since then.
In addition, the AOD budget has been relatively stable since 2003–04. Budget constraints make it critical that the department uses funds in the most effective way to deliver best results. However, the program has changed and grown through a range of small specialised add-on initiatives rather than through strategic decisions about how best to direct program resources as a whole. For example, the 2008–09 and 2009–10 state Budgets included additional funding for the establishment of new programs in relation to specific strategic priorities. There was no funding made available for broader system reforms.
Service quality
The department released service quality standards in 2008, 11 years after the system was established, but service providers’ knowledge of these standards is patchy.
The department does not directly assess service quality against the standards in any structured way. As a result, it cannot be assured about the consistency and quality of service provider approaches and practices for key activities such as client assessment, clinical supervision and after care planning.
Having a qualified workforce is a major step towards guaranteeing service quality. The department has successfully promoted the need for sector workers to acquire AOD specific qualifications. Around 67 per cent of workers now hold such qualifications, but this is well short of the department’s goal of 100 per cent.
Service performance monitoring
The department has taken steps from mid-2010 to establish a more systematic, strategic and robust approach to the monitoring of service provider performance and the use of data. Prior to this, regular quarterly reports were produced from data collected by service providers but there was little evidence that senior AOD program managers made effective use of this information.
Recommendations
Number	Recommendation	Page	
1.	The Department of Health should:
·	implement a whole-of-government alcohol and other drug prevention strategy 
·	deliver on the commitment to review unit prices 
·	prioritise work on:
·	the capacity of the alcohol and other drug sector to attract and retain a specialist alcohol and other drug workforce
·	promoting careers in the alcohol and other drug sector in relevant higher education settings
·	revise its reporting requirements to address weaknesses in the use of the episode of care.	16	
2.	The Department of Health should:
·	revise the treatment service mix so that services funded align with need
·	address the inequity of the current distribution of alcohol and other drug resources
·	address the longstanding fragmentation and inconsistency of service provision across the 105 service providers that make up the treatment service system.	27	
3.	The Department of Health should:
·	prioritise replacement of its data collection system 
·	implement data integrity assurance processes for information submitted by service providers
·	clarify responsibility for monitoring service provider compliance with service quality standards.	38	
4.	The Department of Health should:
·	improve the performance measures used for reporting publicly on the alcohol and other drug program
·	take definitive action on the wealth of review recommendations.	50	
Submissions and comments received
In addition to progressive engagement during the course of the audit, in accordance with section 16(3) of the Audit Act 1994 a copy of this report was provided to the Department of Health with a request for submissions or comments.
Agency views have been considered in reaching our audit conclusions and are represented to the extent relevant and warranted in preparing this report. Their full section 16(3) submissions and comments however, are included in Appendix F.