The cost of some hospital procedures varies significantly, depending on which state you are in. Photo: Glenn HuntSome public hospitals spend between two and three times as much as others to perform procedures such as appendix removals, knee replacements and births, according to a new report which suggests wide variation in efficiency between hospitals across the nation.
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The report from the National Health Performance Authority shows that the average cost of removing a patient’s appendix ranged from $4600 to $10,100 among major metropolitan hospitals, while the average cost of a baby delivery, not a caesarean birth, ranged from $2200 to $6500, and the average cost of a knee replacement ranged from $10,600 to $29,300 among the same group of hospitals.

The authority said its report, to be released on Thursday, broke new ground by developing a method of comparing hospitals costs which fairly accounted for the fact that some hospitals performed more complicated operations or saw patients with more severe illnesses. The authority has excluded from its analysis costs that are not comparable across states and territories and those that relate to property, plant and equipment.

“For the first time comparable information about the cost of patient care is available for more than 80 of Australia’s largest public hospitals. It is up to each hospital to see how they compare with those that are similar and use this new information as a starting point to learn more about their efficiencies,” authority chief executive Diane Watson said.

The report shows that the most efficient hospitals are in Victoria, which is home to the five hospitals with the lowest costs in Australia: Maroondah (East Ringwood) Hospital, Sunshine Hospital, The Northern Hospital (Epping), Dandenong Hospital and Royal Melbourne Hospital.

The most expensive hospitals were Canberra Hospital and Calvary Public Hospital in the ACT, Sir Charles Gardiner Hospital in Western Australia, and Logan Hospital in Queensland.

Australian Healthcare and Hospitals Association chief executive Alison Verhoeven noted the report was based on data from 2011-12, which was prior to the introduction of “activity-based funding” arrangements which had led to a reduction in cost growth, and a reduction in cost variation between hospitals.

Ms Verhoeven said given the positive impact of “activity-based funding,” the Abbott government should reconsider its decision to scrap that funding model from 2017-18.

1. EXAMPLE OF COST FROM EACH STATE

Cost of an average hospital treatment

The Canberra Hospital (ACT):  $6500

Prince of Wales Hospital (NSW):  $5400

Royal Darwin Hospital (NT):  $5500

The Prince Charles Hospital (QLD):  $5700

Royal Adelaide Hospital (SA):  $5000

Launceston General Hospital (TAS):  $4600

The Alfred (VIC):  $4500

Fremantle Hospital (WA):  $5400

2. HIGHEST AND LOWEST COSTS

Average cost in large metropolitan hospitals

Highest: $6400 at Rockingham General Hospital, WA

Lowest: $3200 at Sandringham Hospital, Victoria

Overall average: $4300

Average cost in major regional hospitals

Highest: $5300 at Hervey Bay Hospital, Queensland

Lowest: $3600 at Latrobe Regional Hospital, Victoria

Overall average: $4400

3. COST OF WELL-KNOWN PROCEDURES

Cost of appendix removal without complications

Ranging from $4600 to $10,100

Average: $6300

Treatment of heart failure with complications

Ranging from $7500 to $24,800

Average: $11,800

Caesarean birth without complications

Ranging from $5500 to $15,300

Average: $8800

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