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