This report shows variation in the average cost of delivering similar services to similar patients for individual public hospitals in 2014–15, and changes in average costs for major public hospitals from 2012–13 to 2014–15.

In 2014–15, some public hospitals spent almost twice as much as others to provide similar services to similar groups of acute admitted patients. The average cost of care (per National Weighted Activity Unit, or ‘NWAU’, see page 3) ranged from $3,300 at one hospital to $6,400 at another.

Over the period 2012–13 to 2014–15, the average cost of delivering care in major public hospitals decreased by 1 per cent, after adjusting for inflation. Over this period there was a 6 per cent increase in hospital activity but hospital spending only rose by 5 per cent (Table 1). This indicates that as a group, major public hospitals have improved in their efficiency—delivering care for less cost.

In 2014–15, 20 major public hospitals maintained or decreased their average cost of care in the 2 years from 2012–13. Notably, some of these were among those hospitals with the lowest average cost of care nationally in 2014–15 (Figure 2).

This report presents data from the early stages of the National Hospital Cost Data Collection (NHCDC) and the results should be viewed in this context. The AIHW is working with stakeholders to improve the timeliness of reporting this information by using the most recent NHCDC and activity data.

Table 1: Cost per National Weighted Activity Unit (NWAU), constant prices, and percentage change for acute admitted patients, major public hospitals, 2012–13 to 2014–15

Peer average measures


2013–14 2014–15 Percentage change
Peer average expenditure per hospital, constant prices




Peer average NWAU per hospital 65,217 66,915 69,203 6%
Peer average cost per NWAU, constant prices




  1. This table presents the peer average for the major public hospitals peer group. Peer groups are groups of similar hospitals defined by the type and nature of the hospital services provided.

  2. Data for all published years is classified by a single version of the AR–DRG codes (Version 8.0) and National Efficient Pricing Determination (2017–18, NEP17).

  3. Data are presented for hospitals that recorded a change over time result, between 2012–13 and 2014–15.

  4. Peer average cost per NWAU and percentage change figures are calculated based on unrounded data.

About the data

Data used to calculate the measures in this report were sourced from the National Hospital Cost Data Collection (NHCDC), the Admitted Patient Care National Minimum Data Set (APC NMDS) and the Hospital Casemix Protocol (HCP) data collection. These collections receive data from the states and territories, and private health insurers; all of whom rely on data recorded by individual hospitals.

To support the national fair comparison of the efficiency of Australia’s largest public hospitals, this report uses a subset of total costs. It focuses on the costs of providing acute admitted care, which represents just less than three quarters of the running costs of a hospital (IHPA 2015).

To support comparison of cost per NWAU between 2012–13 and 2014–15, data are reported in real terms (adjusted for inflation). The Australian Bureau of Statistics’ Government final consumption expenditure hospitals and nursing home deflator was used to calculate real cost per NWAU (2014–15 prices applied in all three years).