Controlling costly care: a billion-dollar hospital opportunity – Grattan Institute report

The Grattan Institute released its report Controlling costly care: a billion-dollar hospital opportunity (1.8MB PDF) on Tuesday 4th March. It concluded that inefficiencies in the hospital system are the cause for significant variations in treatments between high and low cost hospitals in Australia.

In New South Wales, there is a $4,000 difference in the cost of a common gall bladder treatment between the highest and lowest cost hospitals. Cost differences for a hip replacement are more than $16,000.

To achieve savings in hospital care in Australia, the Grattan Institute’s Stephen Duckett and Peter Breadon suggest three reforms:
1.    The government should pay hospitals for treatments on the basis of an average price once all measurable avoidable costs have been removed
2.    Data should be made available to hospitals so that comparisons can shed light on where costs can be cut
3.    Governments need to hold hospital boards to account when they fail to control costs

Australia spends more than $140 billion a year on health care, and governments pay for 70% of this health spending. It is estimated that avoidable costs in Australia’s public hospital system total around $1 billion per year. Hospitals were the largest source of growth in government spending over the last decade.

Click here for more information on what’s happening in the health industry in Australia.

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