Australian Health Performance Framework: PI 2.6.1–Cost per weighted separation and total case weighted separations, 2020
Identifying and definitional attributes
|Metadata item type:||Indicator|
PI 2.6.1–Cost per weighted separation and total case weighted separations, 2020
|Short name:||AHPF PI 2.6.1–Cost per weighted separation and total case weighted separations, 2020|
Average cost per weighted separation is a casemix adjusted average cost, where the relative complexity of the activity is taken into account. It uses the national cost weights to weight separations at the Diagnosis Related Group (DRG) level. If the weighted average is lower than the simple average, the activity had a higher proportion of complex DRGs.
|Indicator set:||Australian Health Performance Framework, 2020|
Health, Standard 13/10/2021
Collection and usage attributes
Cost per national weighted average unit (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 activity based funding (ABF). It is an indicator of hospital efficiency.
To ensure the national comparability of public hospitals, the cost per NWAU:
• includes a subset of comparable running costs, which were accounted for similarly across states and territories. For example, property, plant and equipment costs are excluded from the calculations.
The reporting of selected hospitals is suppressed to ensure robust comparable results and protect the privacy of patients.
Hospitals were reported if they met the following criteria:
Numerator ÷ denominator
Indexed by the Australian Bureau of Statistics (ABS) Government final consumption expenditure (GFCE) hospital and nursing home deflator to 2014–15 prices (adjusted for inflation), rounded to the nearest $100.
Growth rates for the GFCE hospital and nursing home deflator are:
The numerator is in-scope acute admitted operational costs for a hospital.
In-scope costs are included on the basis of national comparability including: allied health, imaging, pharmacy, pathology, critical care, hotel goods and services, non-clinical and on-costs, operating room, prosthesis, specialised procedure suites, ward medical, ward nursing and supplies.
Nationally comparable costs exclude blood costs, teaching, training and research (where TTR is costed separately), depreciation, payroll tax, medications subsidised by Commonwealth programs (e.g. the Pharmaceutical Benefits Scheme) and property, plant and equipment.
|Numerator data elements:|
The denominator is in-scope acute admitted NWAUs (NEP 2017–18, AR–DRG v8.0) for a hospital.
An NWAU is a measure of health service activity expressed as a common unit, against which the NEP is paid. It provides the basis for understanding the activity undertaken at a hospital during the financial year (number of admissions), adjusted for the relative complexity of patients admitted to the hospital. The NWAU has many adjustments relating to patient characteristics beyond the AR–DRG classification, including Indigenous status, remoteness, patient age, length of stay, ICU hours and leave days. The average hospital service is worth 1 NWAU, the most intensive and expensive activities are worth multiple NWAUs, and the simplest and least expensive are worth fractions of an NWAU.
|Denominator data elements:|
1. An NWAU is a measure of health service activity expressed as a common unit. It provides a way of comparing and valuing each public hospital service by weighting it for its clinical complexity.
|Representation class:||Mean (average)|
|Data type:||Monetary amount|
|Unit of measure:||Currency|
Indicator conceptual framework
|Framework and dimensions:||6. Efficiency & Sustainability|
Australian Health Performance Framework
|Organisation responsible for providing data:|
Australian Institute of Health and Welfare
Source and reference attributes
Australian Institute of Health and Welfare
AIHW 2018, Cost of acute admitted patients in public hospitals from 2012–13 to 2014–15 (full publications; 12Nov2018 edition)(AIHW), viewed 03.08.2021
|Related metadata references:|
See also National Healthcare Agreement: PI 69-Cost per casemix adjusted separation, 2012
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