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

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Summary

About relative efficiency

The efficiency of Australia’s health system would increase if steps were taken to reduce hospital costs while retaining or improving quality of care and patient outcomes.

The two main measures used in the report, Cost per NWAU and Comparable Cost of Care, use different methods of calculation. Both include the cost of acute admitted patients; one excludes the cost of emergency department (ED) services and one includes it for those who are admitted through ED. Results for individual hospitals are broadly the same regardless of which measure is used; in other words, hospitals that appear either more or less efficient using one measure have very similar results using the other measure. The fact that results for hospitals are similar using both measures creates additional confidence in the reliability of the report’s findings.

While the report compares the relative efficiency of hospitals by comparing the average cost of a unit of activity, it has not been possible in this report to consider the quality of care provided, or the health outcomes experienced by patients. As a result, it is not possible to conclude whether a hospital with lower or higher cost per unit of activity provides better or worse health outcomes than other hospitals, and therefore the Authority makes no determination in this report that any particular hospital is performing well or poorly.