Costs of acute admitted patients in public hospitals, 2011–12 Activity Based Funding Conference 2015 Dan O’Halloran Director, Financial Performance Reports Overview • National Health Performance Authority • The importance of this work • The journey • The challenges faced • High-level findings • Relationships: costs and length of stay About us • We are an independent agency • Established under the National Health Reform Act 2011 • We report on the comparable performance of health care systems (hospitals and primary health organisations) to empower clinicians, stimulate and inform improvement in the Australian health system, increase transparency and accountability and inform consumers • Provide locally relevant information Why report on this? • Ministers agreed (COAG) • Report: nationally consistent, locally relevant, impartial • Aim: Inform and enable clinicians and hospital administrators with new information to assess their relative efficiency • Australia spent $140b on health services in 2011-12 The journey • 18+ months in development • Independent Hospital Pricing Authority • Three independent data reviews (source data) • Jurisdictional Advisory Committee: • Advice on methods & content from all state and territory governments • Expert technical advisory committee • Stakeholder advisory committee Developing the report • Hospital costing data from the National Hospital Cost Data Collection (NHCDC) • 2011–12, most current data available • National Efficient Price Determination, 2014–15 • Due diligence: • Independent reviews of the NHCDC First of its kind How to measure hospital output? • Each patient is unique • Complexity • Individual patient characteristics • Australian Refined – Diagnostic Related Groups (ARDRG) • Activity Based Costing/Activity Based Funding An existing measure Time spent in Emergency Departments In 2011–12 the length of time 90% admitted patients stayed in ED ranged from 5 hours 28 minutes to 27 hours and 59 minutes.1 1National Health Performance Authority (2012). Hospital Performance: Time patients spent in emergency departments in 2011–12. New measure In-scope patients Page iv Private patients in public hospitals • Examined what was in the NHCDC • Includes hospital ledger costs *Note: some private patient costs not in ledger • Generally costs in the NHCDC are equally applied across all public and private patients • To account for this • Unique inflation adjustment applied to each hospital’s NHCDC cost (based on individual private patient casemix using the Hospital Casemix Protocol) Hip replacement Public hospital: 4 Private hospital: 2 (costs discounted) Hip replacement Public hospital: 4 Private hospital: 4 Costs Page 7 Units of activity National Weighted Activity Unit (NWAU) NWAU = PW x adjustments Units of activity = CW x adjustments Distribution of results Page 35 High-level finding Page 13 Cost and length of stay From page 16 In 2011–12, there were 5,613 admissions for knee replacements without complications or comorbidities in major metropolitan and major regional public hospitals. The average cost per admission in major metropolitan public hospitals ranged from $10,600 at one hospital to $29,300 at another. Our websites www.nhpa.gov.au www.myhospitals.gov.au www.myhealthycommunities.gov.au Conclusion • First of its kind in Australia • Two fold variation • New information to Empower clinicians and hospitals managers • Extensive reviews of data and advice • A platform for future reporting Keep in touch • Our websites www.nhpa.gov.au www.myhospitals.gov.au www.myhealthycommunities.gov.au • Subscribe to our news alerts Email us: media.enquiries@nhpa.gov.au • Connect with us on LinkedIn National Health Performance Authority • Follow us on Twitter @NHPAreporting