This section presents information on average cost of care (NWAU) and funding source for admitted patient care.
In the information below you can explore information on funding source for admitted patient care, the cost per NWAU, total national weighted activity unit, and percentage of private patients.
The funding source describes the major source of funds used to pay for a hospitalisation. Funding sources are:
Hospitals account for a large share of the funds Australia spends on the health sector each year. One way to assess hospital efficiency is to see how much money each hospital uses in comparison to its peers to provide specific treatments or procedures.
Making comparisons is difficult, as some hospitals may use more resources to treat patients with the same diagnosis because the patients they treat are sicker and have more complex care requirements. Therefore, it is important to adjust for these differences before comparing the cost of care between hospitals.
To assist in the comparing the cost of care between hospitals, the former National Health Performance Authority developed Cost per National Weighted Activity Unit (NWAU). Cost per NWAU adjusts for the factors that increase hospital costs to allow comparison. The measure provides an indicator of relative efficiency across more than 80 of Australia’s largest public hospitals.
Explore the data
In the visualisation below you can explore information on the cost per NWAU, Total national weighted activity unit, and Percentage of private patients over the three-year period from 2012–13 to 2014–15 by hospital in each state and territory.
Average cost of care
All data in these visualisations are available for download in the Data & downloads section of the MyHospitals website.
Hospitals and LHNs
This graphic explores the average cost of care between 2012–13 and 2014–15. Data is presented by measure (cost per national weighted activity unit, percentage of private patients and total national weighted activity units) and peer group. Hospital data is available.
Between 2012–13 and 2014–15:
Watch an animated explanation of how hospitals’ average cost of care is measured:
The National Weighted Activity Unit (NWAU) was developed by the Independent Hospital Pricing Authority to set the pricing of public hospital services eligible for Activity Based Funding (ABF). ABF is a system that funds hospitals according to the number and complexity of patients they treat, and the NWAU allows different hospital activities to be expressed in terms of a common unit of activity.
An ‘average’ public hospital service is worth 1 NWAU. More intensive and expensive activities are worth more than 1 NWAU, and simpler and less expensive activities are worth less. For example, a typical case of cellulitis might be assigned 0.7 NWAUs, as this condition requires fewer hospital resources than, for example, a typical knee replacement, which is assigned 4.0 NWAUs. Because of this weighting, the NWAU accounts for differences in the complexity of patients’ conditions or procedures, and a selection of individual patient characteristics (such as the patient remoteness area).
Cost per NWAU
Cost per NWAU is the cost associated with providing one ‘average’ unit (1 NWAU) of public hospital service, based on public hospital services provided to acute admitted patients whose treatment was eligible for ABF. It is an indicator of hospital efficiency.
To ensure the national comparability of public hospitals, the cost per NWAU:
Cost per NWAU is calculated by dividing the total comparable running costs by the total NWAUs for acute admitted patients. This reflects the average cost of care for a hospital.
Private health insurance was reported for any hospitalisation that used private health insurance to fund all or part of their admission, regardless of whether it was the major source of funds. A hospitalisation may be funded by more than one funding source, but information on those other funding sources is not available.
Between 2015–16 and 2019–20:
More information about the data can be found in tables 7.1–7.6 in Admitted patient care 2019–20: Costs and funds.
Definitions of the terms used in this section are availabe in the Glossary.
The average cost weight for a hospital (or group of hospitals) is calculated as the sum of the cost weights for each acute separation, divided by the total number of acute separations for the hospital. For example, a hospital with an average cost weight of 1.05 has a 5% more costly casemix than the national average. Separate cost weights are usually estimated for the public and private sectors because of differences in the range of costs recorded in public and private hospitals. For example, private hospitals do not generally report imaging, pathology and medical costs as many of these services are charged directly to the patients by providers, whereas these are included for public hospitals.
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