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Hospital Performance: Costs of acute admitted patients in public hospitals in 2011–12

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Key findings: Cost per NWAU and Comparable Cost of Care

Some hospitals were found to have twice the average cost per unit of activity in 2011–12 compared to others in the same peer group, after adjusting for the different types of services provided, complexity of admitted patients and patient characteristics that lead to legitimate increases in cost. The results were broadly the same using either of the two main measures, Cost per NWAU or Comparable Cost of Care.

NWAUCost per NWAU

Considerable variation was found across major and large metropolitan and major regional hospitals nationally in terms of the Cost per NWAU, ranging from $3,100 to $6,400. Within the individual hospital peer groups, where comparisons are fairer and more meaningful, the ranges are shown below.

Across major metropolitan hospitals, the average Cost per NWAU was $4,400. The averages at individual hospitals within this peer group ranged from $3,100 at one hospital to $5,800 at another (87% higher).

Top 10% of hospitals in this peer group:
$5,800 The Canberra Hospital (ACT)
$5,500 Sir Charles Gairdner Hospital (WA)
$5,300 Calvary Public Hospital (ACT)
$5,300 Logan Hospital (Qld)
Bottom 10% of hospitals in this peer group:
$3,400 Dandenong Hospital (Vic)
$3,400 Royal Melbourne Hospital [Parkville] (Vic)
$3,400 Sunshine Hospital (Vic)
$3,400 The Northern Hospital [Epping] (Vic)
$3,100 Maroondah Hospital [East Ringwood] (Vic)

Across large metropolitan hospitals, the average Cost per NWAU was $4,300. The averages at individual hospitals within this peer group ranged from $3,200 at one hospital to $6,400 at another (96% higher).

Top 10% of hospitals in this peer group:
$6,400 Rockingham General Hospital (WA)
Bottom 10% of hospitals in this peer group:
$3,200 Sandringham Hospital (Vic)

Across major regional hospitals, the average Cost per NWAU was $4,400. The averages at individual hospitals within this peer group ranged from $3,600 at one hospital to $5,300 at another (46% higher).

Top 10% of hospitals in this peer group:
$5,300 Hervey Bay Hospital (Qld)
$4,900 Royal Darwin Hospital (NT)
Bottom 10% of hospitals in this peer group:
$3,700 Tamworth Hospital (NSW)
$3,600 Latrobe Regional Hospital [Traralgon] (Vic)

Figure 2 summarises the Cost per NWAU in 84 major and large metropolitan and major regional hospitals. Results for all these hospitals can be found in Appendix 1.

Figure 2: Cost per NWAU* for acute admitted patients in public hospitals, 2011–12

Major metropolitan Large metropolitan Major regional
Total peer group costs $9,879,651,800 $698,317,500 $2,673,544,400
Total peer group NWAU 2,253,383 161,626 614,003
Peer average Cost per NWAU $4,400 $4,300 $4,400
An infographic image showing the Cost per NWAU for acute admitted patients in public hospitals in 2011-12

* Cost per National Weighted Activity Unit (NWAU) is a measure used by most governments to manage their largest public hospitals, focusing on acute admitted patients (excluding emergency department and property, plant and equipment costs). It includes the costs, types of patients and activity as defined by the National Efficient Price Determination 2014–15.

Includes the costs as defined by the National Efficient Price Determination 2014–15.

A measure of a common unit of activity calculated using the National Efficient Price Determination 2014–15.

Sources: National Health Performance Authority analysis of results calculated using the National Hospital Cost Data Collection 2011–12 and Admitted Patient Care National Minimum Dataset 2011–12.

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