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The Forum > Article Comments > Activity-based hospital funding healthy way to go > Comments

Activity-based hospital funding healthy way to go : Comments

By Stephen Duckett, published 7/3/2014

Six Australian public hospitals do more than 200 hip replacements a year. In one, the cost of a hip replacement is $9700 a patient. In another it is $23,400, nearly 2 times higher.

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such a variation in "costs" makes me wonder if the same method of calculation is used?

What are the direct and indirect costs?

For decades the ACT hospitals were held to be the most expensive in Australia. Millions of dollar were spent on consultants advice to bring costs down.

In fact the ACT spent less per head of population on health than neighbouring NSW.

Basically it all turned out to be not factual, that the ACT had the most expensive health care system in Australia, and it came down to the way 'costs' were calculated.

Put simply NSW averaged its hospital costs across a very broad range of public hospitals, where as the ACT had at the time only three public hospitals to average its cost across.
Posted by Wolly B, Friday, 7 March 2014 7:04:06 AM
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The ACT's cost disparity cannot be explained as arising from a simple average of three hospitals, Vs many. An average is an average - it is a comparison figure on a per-unit basis.

Goodness knows what produced the ACT's relatively poor average reported costs, but if this was indeed the case, then it was certainly not due to mathematics.

I live in a small NSW town of 20,000 or so people, quite possibly skewed towards an older average age than some developing areas. No doubt, the local hospital's costs compare poorly with larger ones which are able to operate on a production-line basis.

But to penalise the small hospital by steering patients to distant teaching hospitals adds costs which are outside the hospital - travel, motel accommodation for family, work disruption, family disruption and more.

I agree that this short article makes a valid point, but hospital costs are only part of the health care equation and comparisons of like with like are more instructive than broad, whole-of-community costs such as the ACT issue. Indeed, the author made clear at the outset that the comparison is valid because only the largest suppliers of hip replacements were compared. This is as it should be.
Posted by JohnBennetts, Friday, 7 March 2014 9:39:21 AM
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I use a public hospital and have been for many years. They provide a service that is not available to me in the private sector. I have become quite friendly with some of the doctors and staff and the service they provide is excellent.

What is obvious is the increase in nonmedical staff numbers. I'm not talking about cleaners and clerks but suits carrying clipboards. This is also reinforced through my conversations with those who care for me. (Incresed reporting, another person to answer to etc.)

Although it is probably prudent to look at the cost of procedures it would be equally as prudent to look at the mushroom cap of beaurocrats
sitting atop the system.
Posted by Sparkyq, Friday, 7 March 2014 9:40:26 AM
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Yes, and the comparisons don't just end there, given one can fly to an international destination, with hospitals and hospital care at least compatible to or better than our own? (Cuba perhaps)
And access a veritable raft of procedures, for considerably less, even where you include all airfares, accommodation and meals.
I recently had my femur rejoined by surgical/medical procedures.
It cost me over $50,000.00, even where thirty percent of all procedures/medication, were covered by medicare!
I see a day dawning, where hard nosed/pragmatic/profitable medical insurance companies, offering holiday medical outcomes, with far less residual Patient costs?
Rhrosty
Posted by Rhrosty, Friday, 7 March 2014 12:04:48 PM
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I'm not sure that I could face combining a femur repair with a holiday. Pain tolerance isn't my long suit.
Posted by JohnBennetts, Friday, 7 March 2014 1:38:33 PM
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<The ACT's cost disparity cannot be explained as arising from a simple average of three <hospitals, Vs many. An average is an average - it is a comparison figure on a per-unit basis.

<Goodness knows what produced the ACT's relatively poor average reported costs, but if this <was indeed the case, then it was certainly not due to mathematics.

<I live in a small NSW town of 20,000 or so people, quite possibly skewed towards an older <average age than some developing areas. No doubt, the local hospital's costs compare <poorly <with larger ones which are able to operate on a production-line basis.

<But to penalise the small hospital by steering patients to distant teaching hospitals adds <costs which are outside the hospital - travel, motel accommodation for family, work <disruption, family disruption and more.
.
<Posted by JohnBennetts, Friday, 7 March 2014 9:39:21 AM

Basically the most expensive hospitals to run are the Primary Tertiary teaching hospitals, followed by the major metropolitan hospitals. Public hospitals of less than 200 beds are cheaper than hospitals with more beds. (Go the AHIW)

The ACT has one Primary Tertiary teaching hospital and one Major Metropolitan. NSW has about 6 Tertiary teaching hospitals, around 15 major metropolitan hospitals and another 125 other hospitals. (these are not exact figures)

NATSEM published findings that support what I have said.

IN about 2000 the AHIW hospital report showed that the ACT was the most expensive with 3 Public Hospitals, followed by NT with 5, then Tasmania with 7 public hospitals.

States that had a broad variety of public hospitals had lower average costs.
Posted by Wolly B, Friday, 7 March 2014 1:47:26 PM
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