Similar treatment – but costs vary greatly across hospitals

The cost of treating patients can be almost twice as high depending on the hospital, according to a new report from the Australian Institute of Health and Welfare (AIHW).

The report, Costs of acute admitted patients in public hospitals from 2012–13 to 2014–15, examines the costs associated with providing similar treatment to patients, across comparable public hospitals. These data are available for benchmarking the average costs of care across hospitals and over time.

The report shows that some hospitals spent up to $6,400 to deliver a notional ‘average’ service for acute admitted patients, which cost as little as $3,300 in other hospitals.

‘Across major public hospitals, the average cost to treat acute admitted patients was $4,680,’ said AIHW spokesperson Dr Adrian Webster.

Overall, the average cost of delivering care in major public hospitals decreased by 1% over the period 2012–13 to 2014–15.

'Acute admitted patients include those who are admitted for the management of childbirth, surgery, or other diagnostic and therapeutic procedures,’ Dr Webster said

Four of the 5 major public hospitals with the lowest costs were located in Victoria: the Alfred, Monash Medical Centre, University Hospital Geelong, and St Vincent’s Hospital, with the remaining hospital—Nepean Hospital—located in New South Wales.

The 5 hospitals with the highest costs were located across Australia: Canberra (ACT), Royal Perth Wellington St Campus (WA), Sir Charles Gairdner Hospital (WA), Princess Alexandra Hospital (Qld), and Royal Adelaide Hospital (SA).

From 2012–13 to 2014–15, 7 major metropolitan public hospitals reduced their average cost of delivering care by at least 5%. Westmead Hospital saw the greatest decrease in costs, falling by 9%. This was followed by Prince Charles Hospital (Qld) and Flinders Hospital (SA) at 8% each.

‘On the other hand, 4 major metropolitan public hospitals increased their average cost of delivering care to acute admitted patients by at least 5%,’ Dr Webster said.

The average cost of care at Royal Perth Hospital (WA) grew the most, rising by 10%, followed by Royal Melbourne Hospital (Vic) (8%), and Royal Hobart Hospital (Tas) and Princess Alexandra Hospital (Qld) at 7% each.

‘To support fair comparisons of hospitals, the report does not include costs that are not comparable across hospitals nationally, such as property expenses,’ Dr Webster said.

The methods used in this report also account for key differences in the type of services provided to patients and the complexity of a patient’s condition. These data do not, however, include information about the quality of care or patient outcomes so are only an indirect measure of hospital efficiency.

‘By looking at average costs per patient, this report provides us with another way of understanding our hospital system and variability in health care expenditure,’ Dr Webster said.

‘The report also helps build a picture of costs over time, so we can develop a long term evidence base to inform policies aimed at improving the efficiency and sustainability of our health system.’

Today’s report is available on the AIHW’s MyHospitals website.


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