Groundbreaking report reveals changes in hospital efficiency

The cost of providing care to similar acute patients at similar hospitals can be almost twice as high depending on the hospital, a new National Health Performance Authority report reveals.

The report shows some hospitals spent up to $6,100 to deliver a notional ‘average' service for acute admitted patients, while others spent as little as $3,100.

Major metropolitan public hospitals with the lowest costs for providing similar care to similar patients in 2013–14 were all in Victoria: Frankston Hospital, Casey Hospital, Western Hospital (Footscray) and Dandenong Campus Hospital.

Major metropolitan public hospitals with the highest costs in 2013–14 were located in the ACT and WA: Canberra Hospital and Calvary Public Hospital – Sir Charles Gairdner Hospital and Fremantle Hospital.

The report is the first in Australia to show change in an individual hospital’s efficiency over time. The report finds that from 2011–12 to 2013–14:

  • Eight major metropolitan public hospitals decreased their costs per notional ‘average’ service by at least 5%, indicating improved efficiency. Both Western Hospital in Footscray in Vic and Westmead Hospital in NSW decreased by 9%
  • Six major metropolitan public hospitals increased their costs per notional ‘average’ service by at least 10%, indicating decreased efficiency. Hornsby Ku-ring-gai Hospital in NSW had the largest increase at 17%, followed by John Hunter Hospital at 15%.

The Performance Authority makes no determination that a hospital with a higher or lower cost or increased or decreased efficiency delivers better or worse care or patient outcomes.

To ensure fair comparisons, costs that are not comparable across hospitals are not included, such as building and major equipment costs. The measure also accounts for differences in the type of services provided to patients and the complexity of a patient’s condition.

Performance Authority CEO Dr Diane Watson said that variation across similar major metropolitan hospitals suggests opportunities for some hospitals to improve.

“Some major metropolitan hospitals are leaders in efficiently delivering services to patients. For the first time we can now also identify hospitals that lead at improving their efficiency over time.”

The Performance Authority reported data on comparable costs for public hospitals for the first time in 2014 for the 2011–12 period. Once this large body of work was completed, comparisons for future periods could be made, and have been released today. Today’s new information is the first in Australia to show changes in hospital efficiency over time.

Additionally, people can use the new interactive web tool to search cost information for more than 100 public hospitals. Hospitals are allocated to similar peer groups to allow for fair comparisons.

To coincide with today’s release, a range of data are also being updated on the MyHospitals website. Including data for the average length of stay in hospital for 16 common conditions and procedures, such as child birth, for almost 600 public hospitals in 2013–14 and hospital admissions data for almost 700 public hospitals over 2010–11 to 2013–14.

Another new report was released today by the Performance Authority that examines characteristics of people who attended an Emergency Department (ED) in 2013–14, and, the varying use of GPs and EDs across capital cities in Australia. It finds that people with three or more long-term health conditions were nearly three times more likely to visit an ED compared to those with none.

“The package of information released today by the Performance Authority provides fundamental new information to inform efforts to build a more sustainable and efficient health system for Australians,” Dr Watson said.

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