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Costing studies

To support the National Hospital Cost Data Collection (NHCDC), the Independent Health and Aged Care Pricing Authority (IHACPA) undertakes a wide range of separate costing studies.

The costing studies are undertaken in areas of the NHCDC that are still in their infancy or when there is considerable stakeholder feedback to investigate the costing in a certain area with in the health system. 

Patient level costing data

Public hospital costing is used in a variety of ways by stakeholders around Australia, but trends concerning how such data is applied remain sparse. This report provides an analysis of the uses, challenges and future opportunities of patient level costing data as identified from interviews with 100 stakeholders.

Strategic review

IHACPA also commissioned the Strategic Review of the National Hospital Cost Data Collection in 2012-13. The Strategic Review recommended 20 key deliverables and IHACPA continues to implement these with the view to improving the processes, transparency, and quality of the collection each round.

Where opportunities for improvement in understanding the cost of services are identified, IHACPA undertakes costing studies. Through these efforts and the collaboration of the states and territories, significant improvements have been made to the structure of the NHCDC and its validation processes.

Culturally and linguistically diverse patient costing study report

The purpose of this costing study was to undertake an analysis of costs of treating culturally and linguistically diverse (CALD) patients to inform a policy decision for whether an adjustment is warranted to the national efficient price for CALD patients. The report includes recommendations for improving costing data for CALD patients in the future.

Home enteral nutrition, home total parenteral nutrition and home ventilation services costing study report

The Costing study on home enteral nutrition, home total parenteral nutrition and home ventilation services was undertaken in 2014. The purpose of the study was to review the costs associated with the delivery of public hospital services to patients receiving home enteral nutrition, home total parenteral nutrition and home ventilation services. The study includes a literature review, stakeholder consultation and costing the respective services based on data collected from 14 participating hospitals.

Costing study on home delivered dialysis services

The costing study on home delivered dialysis was undertaken in 2014. The purpose of the study was to collate and compare the range of costing studies and economic evaluations that have been carried out on these services over the past decade.

The report identifies two key studies – NSW Dialysis Costing Study, conducted in 2008, and Queensland Health Renal Replacement Therapy Costing Study, conducted in 2008, which are useful in estimating the current costs of home-based dialysis.

Radiotherapy data review report

The study was commissioned to determine the reliability of radiotherapy cost data due to its role in the development of associated price weights in both admitted and non-admitted settings. 

The purpose of this review was to assist IHACPA and the jurisdictions obtain a better understanding of the cost data that had been submitted to IHACPA and to bring to light the costing methodologies employed in services specifically for the pricing of radiotherapy services in 2014–15.

Non-admitted and subacute costing study

During 2013–14 IHACPA completed a comprehensive prospective costing study of all non-admitted services and admitted subacute services. A study of this kind required significant involvement from states and territories, local hospital networks and public hospitals.

This study resulted in a robust patient level cost dataset that can be used for multiple purposes such as producing costs, price and service weights, the development of current and future classifications and inform the development of new costing standards to assist hospitals with future costings. The success of the costing study was critical to the development of the national efficient price for 2014–15 for non-admitted services. 

Clinical trials

The Clinical Trials Action Group (CTAG) Report, Clinically Competitive: Boosting the Business of Clinical Trials in Australia was released on 3 March 2011 by then Ministers Carr and Roxon. The report contains 11 recommendations that are intended to improve productivity in the area of clinical research. 

Following agreement from the Standing Council on Health in August 2012, the IHACPA received a Direction (Direction No. 1 of 2012) from then Health Minister Plibersek to undertake Recommendation C of the CTAG Report, develop a standard table of costs for conducting Clinical Trials in Australia. This work was completed in June 2013. 

In 2014 the NHMRC undertook a review of the list to refine the content. Following this, on 19 December 2014, then Health Minister Dutton issued the Direction (Direction No.1 of 2014) that IHACPA, by 30 June 2015, must determine the costs of the revised list of items and any other items (above those costs required for standard care) as determined necessary by IHACPA, associated with conducting clinical trials in Australia. 

IHACPA convened a costing study steering committee, which was a combination of costing and clinical trial experts, and engaged a consultant to develop a robust set of calculations and costs. A public consultation paper was released in early April 2015. This informed IHACPA’s Determination and report to the COAG Health Council. The Pricing Authority approved the Determination on 30 June 2015, and the Determination and Report were noted by the COAG Health Council in August 2015. 

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