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Hospital Performance: Costs of acute admitted patients in public hospitals from 2011–12 to 2013–14

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Time series comparison

The report compares Cost per NWAU from 2011–12 to 2013–14. The method used for 2011–12 data differs from the method used for the 2012–13 and 2013–14 data. This is due to IHPA’s process of annually refining the National Efficient Price Determination to take into account improvements to the model. The National Efficient Price Determination 2014–15 (NEP14) was used for 2011–12 data and the National Efficient Price Determination 2015–16 (NEP15) was used for 2012–13 data and 2013–14 data. A summary of the differences is provided in Table 2.

To ensure that time series comparisons were not impacted by the change in method, the Authority undertook analysis of Cost per NWAU 2011–12 using the different versions of the National Efficient Price Determination.

This analysis showed that across all major and large public hospitals the mean change in total NWAU was -80 and the mean change in raw Cost per NWAU (unrounded) was +$28. Using rounded Cost per NWAU (that is, published results), 61% (58/95) of hospitals had no change in rounded Cost per NWAU and 98% (93/95) of hospitals had a change of no more than +/- $100 rounded Cost per NWAU. A +/- $100 Cost per NWAU equates to approximately 1.5–3.2% change in Cost per NWAU ($100 divided by the minimum ($3,100) and maximum ($6,400) Cost per NWAU reported in 2011–12).

Because of the minimal change in a hospital’s rounded Cost per NWAU between NEP14 and NEP15, the Authority determined that it was appropriate to perform time series comparisons on published data.

Two hospitals had a change in rounded Cost per NWAU of +/-$200. This change was considered material. Consequently, the results for these hospitals in the In Focus report and on the MyHospitals website are footnoted to notify that time series comparisons for these two hospitals are not recommended.

A detailed analysis of the change in results for the major metropolitan peer group was undertaken. The findings of that analysis are provided in Table 3.

The percentage change over time was calculated on unrounded Cost per NWAU results by dividing Cost per NWAU (2013–14) NEP15 by Cost per NWAU (2011–12) NEP14. Results were only calculated for hospitals that had a published comparable results for 2011–12, 2012–13 and 2013–14.

The states and territories were provided data for a three week verification period to confirm the accuracy of each data point and trends over time.

Inflation

The data used in this report are nominal and have not been adjusted for inflation. The Consumer Price Index, all groups, inflation rate that existed from December 2011 to December 2013 was 5%.8 This was calculated using Index Numbers, All Groups, CPI Australia.

Analysis of change in Cost per NWAU from 2011–12 to 2013–14

The Authority undertook analysis focused on exploring whether a change in Cost per NWAU was driven by a change to in-scope costs, a change in NWAU or a combination of both. This involved comparing the change of in-scope costs and in-scope NWAU from 2011–12 to 2013–14.

The Authority also sought to understand what was driving a change in NWAU (that is, was it a change in separations or a change in relative complexity, as measured by both the cost-weight per separation and NWAU per separation). The analysis broadly observed an increase in the number of separations per hospital from 2011–12 to 2013–14; however, this increase was at a faster rate than the growth in NWAU from 2011–12 to 2013–14. That led to an observed decrease in NWAU per separation from 2011–12 to 2013–14.

To understand this further the Authority compared the cost-weight per separation from 2011–12 to 2013–14; that analysis showed that the drivers behind a change in NWAU were hospital-specific and may be driven by a change in case-mix or a change in adjacent AR-DRGs.

The Authority also undertook analysis of adjacent AR-DRGs from 2011–12 to 2013–14 (that is, the proportion of complicated separations of all separations within the AR-DRG). That analysis broadly indicated that there was an increase in the proportion of complicated patients within an AR-DRG. However, the impact of this on a hospital’s Cost per NWAU was less than 5%; largely due to the proportion of AR-DRGs that have adjacent AR-DRGs. Therefore, while in some hospitals there may be an increase in the proportion of complicated separations within an AR-DRG the impact to Cost per NWAU is immaterial.

The Authority notes that the peer average NWAU per separation per hospital from 2011–12 to 2013–14 for major metropolitan public hospitals remained relatively unchanged.

Table 2: Summary of differences between how 2011–12, 2012–13 and 2013–14 were prepared

2011–12 data 2012–13 and 2013–14 data
AR-DRG version
Grouping of admissions AR-DRG v6.0x AR-DRG v7.0
National Efficient Price Determination (price weights and adjustments) 2014–15* National Efficient Price Determination (price weights and adjustments) 2015–16
Patient adjustment
Specialist psychiatric age adjustment
Age 17 years or less at time of admission and at least 1 psychiatric care day 40% NA
Aged 65–84 years at time of admission and at least 1 psychiatric care day 5% NA
Aged ≥ 85 years at time of admission and at least 1 psychiatric care day 9% NA
Aged 17 years or less at time of admission, with primary diagnosis related to mental health and at least 1 psychiatric care day NA 15%
Aged 17 years or less at time of admission, where primary diagnosis was not related to mental health but had at least 1 psychiatric care day NA 22%
Aged 18 years or above at time of admission where the primary diagnosis was not related to mental health but had at least 1 psychiatric care day NA 34%
Remoteness area
Outer regional area resident 7% 8%
Remote area resident 15% 16%
Very remote area resident 21% 22%
Adjustment factors
Intensive care unit, level III 0.0426 NWAU/hr in specified unit 0.0440 NWAU/hr in specified unit
Indigenous 4% 4%
Radiotherapy 24% 26%
Dialysis NA 25%
Specialist paediatric Varies per admission* Varies per admission
Private patients
Accommodation adjustment same day Varies by state* Varies by state
Accommodation adjustment overnight Varies by state* Varies by state
Service adjustment Varies per admission* Varies per admission
NA
Not applicable
*
For further information see NEP Determination 2014–15 at https://www.ihpa.gov.au/publications/national-efficient-price-determination-2014-15
For further information see NEP Determination 2015–16 at https://www.ihpa.gov.au/publications/national-efficient-price-determination-2015-16

Table 3: Comparison of findings, major metropolitan public hospitals, Cost per NWAU 2011–12 between different National Efficient Price Determinations

National Efficient Price Determination 2014–15, AR–DRG v6.0x National Efficient Price Determination 2015–16, AR–DRG v7.0
Total peer group: Costs $9,879,651,800 $9,879,651,800
Total peer group: NWAU 2,253,383 2,252,096
Range: Cost per NWAU $3,100 to $5,800 $3,100 to $5,800
Top 10%: Cost per NWAU

The Canberra Hospital ($5,800)

Sir Charles Gairdner Hospital ($5,500)

Logan Hospital ($5,300)

Calvary Public Hospital ACT ($5,300)

The Canberra Hospital ($5,800)

Sir Charles Gairdner Hospital ($5,500)

Logan Hospital ($5,400)

Calvary Public Hospital ACT ($5,300)

Bottom 10%: Cost per NWAU

Maroondah Hospital ($3,100)

Royal Melbourne Hospital – City Campus ($3,400)

Dandenong Hospital ($3,400)

The Northern Hospital ($3,400)

Sunshine Hospital ($3,400)

Maroondah Hospital ($3,100)

Royal Melbourne Hospital – City Campus ($3,400)

Dandenong Hospital ($3,400)

The Northern Hospital ($3,400)

Sunshine Hospital ($3,400)

Average Cost per NWAU $4,400 $4,400
Median Cost per NWAU $4,300 $4,300
Sources
National Health Performance Authority analysis of results calculated using the National Hospital Cost Data Collection, the Admitted Patient Care National Minimum Data Set and the Hospital Casemix Protocol Data Collection. Data supplied 18 and 28 October 2014 (NEP14, AR-DRG V6X), and 27 November 2015 (NEP15, AR-DRG V7.0).
8
Australian Bureau of Statistics (ABS). 6401.0 - Consumer Price Index, Australia, Dec 2015 [Internet]. Canberra: ABS; 2016 Jan 27 [cited 2016 Feb 15]. 6401.0 – Consumer Price Index, Australia, TABLES 1 and 2. CPI: All Groups, Index Numbers and Percentage Changes. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6401.0Dec%202015?OpenDocument#Publications