Cost per NWAU

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.

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 for this peer group:

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

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 hospital (96% higher).

Top 10% of hospitals in this peer group:

 
Rockingham General Hospital (WA) $6,400

Bottom 10% of hospitals in this peer group:

 
Sandringham Hospital (Vic)           $3,200

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 hospital (56% higher).

Top 10% of hospitals in this peer group:

 
Hervey Bay Hospital (Qld) $5,300
Royal Darwin Hospital (NT) $4,900

Bottom 10% of hospitals in this peer group:

 
Tamworth Hospital (NSW)      $3,700
Latrobe Regional Hospital (Traralgon) (Vic) $3,600

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 National Weighted Activity Unit (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

 

Figure 2: Cost per NWAU* for acute admitted patients in public hospitals, 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.