Key findings

    Public hospital activity

    Hospital Episode Data

    4. 1   The Department provided AHS data for all public and private hospitals in Australia, for the years 2006-07, 2007-08 and 2008-09. This data was analysed to identify changes in the pattern of hospital utilisation by public and private patients that may correlate with changes to the Surcharge.

    4. 2   Table 1 shows year on year change in hospital episodes by the public or private status of the patient² and the hospital choice (public or private hospital). This table excludes episodes where the patient’s public or private status was other, such as compensable patients, DVA patients and patients from correctional facilities.

    4. 3   Table 1 shows that private treatment has grown more substantially than public treatment since 2006-07³. However, it also shows that there was a larger increase in public separations for 2008-09, relative to the previous year’s growth, while private growth was lower than for the previous year.

    Table 1: Separations by public or private status² and hospital setting.


    Year

    All public patients

    Private patients in public hospitals

    Private patients in private hospitals

    All private patients

    2006-07

    4,072,266

    435,470

    2,609,812

    3,045,282

    2007-08

    4,157,338

    470,684

    2,765,071

    3,235,755

    Change from previous year

    +2.1%

    +8.1%

    +5.9%

    +6.3%

    2008-09

    4,289,120

    509,817

    2,857,214

    3,367,031

    Change from previous year

    +3.2%

    +8.3%

    +3.3%

    +4.1%

    Source: AHS data for all hospitals (2006-07, 2007-08 and 2008-09).
    ² Public and private status, for the purposes of this table, are defined using the following definitions, which is consistent with that used in the AIHW’s Australian Hospital Statistics publications. Public patients comprise those patients:
    • with a funding source of the Australian Health Care Agreements or of reciprocal health care agreements with other countries; or
    • who elect to be treated publicly and for whom the funding source is contracted care through another hospital or public (health) authority; or
    • with a funding source showing no charge raised and who were treated in a public acute hospital or a public psychiatric hospital.
    Private patients are those patients with a funding source of private health insurance or self-funded.
    All remaining patients are classified as Other. This Other group principally comprises DVA patients, compensable patients, Department of Defence patients and patients from correctional facilities.
    ³ Changes in hospital classification reporting arrangements in 2006-07 may account for a component of growth activity reported for public and private hospitals.

    4. 4   Figure 3 explores this finding in terms of patient’s treatment choices, as defined by their public or private status and type of hospital chosen for treatment. It presents the underlying trend in separations by treatment choice, with each treatment choice expressed as an index relative to the 2006-07 year. As hospital separations are very seasonal in nature, Figure 3 is based on 12-month moving totals of episode numbers.

    4. 5   From Figure 3, it can be seen that the trend in the annual number of public separations was flat for the months leading up to January 2008. This trend then turned slowly upwards from around May 2008. This timing precedes the onset of the Surcharge changes by five months, with those changes coming into effect at the end of October 2008.

    Figure 3: Relative trends in numbers of hospital separations by treatment choice.
    Figure 3: Relative trends in numbers of hospital separations by treatment choice. D

    Source: AHS data for all hospitals (2006-07, 2007-08 and 2008-09).

    4. 6   To test whether this change in trend is related to the impact of the Surcharge changes on hospital insurance coverage in the Australian population, we compared the trends in public patient separations for insured and non-insured patients. Figure 4 clearly shows that the change is due to a change in treatment choices for insured patients rather than for non-insured patients. This finding is the reverse of what would be expected should the Surcharge changes have led to an immediate increase in public hospital usage caused by the dropping of hospital insurance.

    4. 7   In considering what might have contributed to this trend, other than the Surcharge changes, we analysed the patterns of planned surgical activity in Australian hospitals. This component of the analysis used the Urgency category of the episode to determine whether it was planned (elective) or not and the diagnosis related group (DRG)4 partition to determine whether the episode was surgical, medical or other (such as investigative or diagnostic) in nature.

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    4 Australian Refined Diagnosis Related Group Version 5.1

    4. 8   Results using this method will not match exactly the elective surgery waiting list data presented later in this report, but nonetheless should be consistent with those results.

    Figure 4: Relative trends in numbers of public patient separations by insurance status.
    Figure 4: Relative trends in numbers of public patient separations by insurance status.. D

    Source: AHS data for all hospitals (2006-07, 2007-08 and 2008-09).

    4. 9   Figure 5 clearly shows the substantial increase in planned, surgical separations experienced for patients electing to be treated as public patients in a public hospital. Moreover, it shows this growth to have far exceeded that for patients electing to be treated privately in either a public or a private hospital. The April 2008 timing of the rapid increase in public planned, surgical separations precedes the earlier noted upward trend in total public separations by several months.

    4. 10   While there has been growth in the public treatment component of planned, surgical activity, the proportion of all planned, surgical separations attributable to patients with hospital insurance has remained stable, ranging between 66.7 per cent and 67.1 per cent from October 2007 to June 20095. This suggests the observed increase in public activity is not related to hospital insurance coverage.

    5 Derived from AHS reported elective surgery separations by treatment choice, excluding Other category.

    4. 11   Closer examination of the trends in planned, surgical separations from public hospitals show distinctly different trends for different age groups (Figure 6). The growth has been stronger for older age groups (65 and over, and 50 to 64) and lowest for the age groups 30 to 49 and 20 to 29.

    4. 12   This pattern is consistent with more general patterns of hospital usage, with older age groups generally having higher rates of hospital treatment. It is also consistent with the trends observed elsewhere in this report, relating to elective surgery waiting list data.

    Figure 5: Relative trends in planned, surgical separations by treatment choice.
    Figure 5: Relative trends in planned, surgical separations by treatment choice. D

    Source: AHS data for all hospitals (2006-07, 2007-08 and 2008-09).

    Figure 6: Relative trends in public patient planned, surgical separations by age and month.
    Figure 6:  Relative trends in public patient planned, surgical separations by age and month. D

    Source: AHS data for all hospitals (2006-07, 2007-08 and 2008-09).

    4. 13   The analysis also considered rates of same day and overnight activity, as well as medical, surgical and other types of activity to assess the possibility that high growth in same day activity in the private hospitals may be masking a shift of more complex overnight activity to the public sector.

    4. 14   Since 2006-07, the proportion of public hospital separations treated on a same day or overnight basis has remained relatively steady, with a very slight increase in same day activity relative to decreasing overnight activity (Figure 7). There was no detectable change as a result of changes to the Surcharge.

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    Figure 7: Proportion of public separations by same day or overnight status.
    Figure 7: Proportion of public separations by same day or overnight status. D

    Source: AHS data for all hospitals (2006-07, 2007-08 and 2008-09).

    4. 15   There has also been little change in the relative mix of medical, surgical and other separations within public hospital activity (Figure 8).

    Figure 8: Proportion of public separations by medical, surgical and other partition.
    Figure 8: Proportion of public separations by medical, surgical and other partition. D

    Source: AHS data for all hospitals (2006-07, 2007-08 and 2008-09).

    4. 16   The results in this section are consistent with there having been no substantive impact on public hospital activity nor on the relative rates of private and public hospital utilisation due to the 2008 changes to the Surcharge. That is, the first parts of hypothesis (i) are supported (Section 3.2). This finding is based on the analysis of data to the end of June 2009, providing eight months of data following the changes coming into effect. The indicators analysed in this report will be revisited in the third year of the review, to test whether this finding continues to be supported when more than 12 months of post implementation data will be available for analysis.

    4. 17   The final part of hypothesis (i), relating to waiting lists, is discussed below.

    Public hospital operating costs

    4. 18   The review found that there was no discernible change in public hospital activity attributable to changes to the Surcharge.

    4. 19   As a component of the activity, there was no discernible change in public hospital trends in same day and overnight admissions subsequent to the Surcharge changes. Nor was there a discernible change in the proportion of separations classified as medical, surgical or other.

    4. 20   Given that the trends in these activity based drivers of operating costs showed no discernible change over the review period, it can be concluded that the Surcharge changes have had no significant impact (if any) on public hospital operating costs.

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    Elective surgery waiting lists

    4. 21   ESWL Reduction Plan Progress Reports for March 2010 report the number of admissions to hospital from the elective surgery waiting list, the number of patients still waiting and the number of overdue patients6 at the end of the reporting period for each quarter between September 2007 and March 2010. Figure 9 presents quarter on quarter comparison of these key indicators.

    6 Overdue patients are those patients waiting longer than the clinically recommended time based on urgency category.

    4. 22   Apparent in the RP-ESWL data is a marked decline in the number of overdue patients subsequent to the introduction of the ESWL Reduction Plan. These improvements have been maintained despite a slight increase in the December 2009 and March 2010 reported number of overdue patients relative to the corresponding 2008 and 2009 quarters.

    4. 23   The impact of the ESWL Reduction Plan on admissions from the waiting list and total number of patients on the list has not been as pronounced. There has been an increase in the number of admissions from the list, and these have been subject to seasonal fluctuations. However, the number of patients remaining on the waiting list has been increasing steadily since the December 2008 quarter and now exceeds the number of patients on the list in September 2007.

    Figure 9: National elective surgery admissions, patients waiting and patients overdue at the end of the quarter, September 2007 to March 2010 7.
    Figure 9: National elective surgery admissions, patients waiting and patients overdue at the end of the quarter, September 2007 to March 2010. D

    Source: RP-ESWL (2010).
    7 Elective Surgery Waiting List Reduction Plan. March 2010 Quarterly National Progress Report to the Australian Health Ministers’ Conference – Chart 1.

    4. 24   On initial examination, the flattening of the downward trend in overdue patients and the increasing number of patients on the waiting list subsequent to the introduction of the Surcharge changes appear to suggest that the Surcharge may have had a dampening effect on the impact of the ESWL Reduction Plan on elective surgery waiting lists. However, this interpretation is likely to be incorrect for several reasons:

    • The time period subsequent to Surcharge changes is such that general seasonal fluctuations are likely to affect activity in the time period observed.
    • Increases in the waiting list relative to the overall increase in admissions from the list are usually observed when throughput is increased. The commonly accepted explanation for this relationship is that as clinicians are provided with increased theatre time, they accept more patients onto their waiting lists.
    • The decrease in the number of patients who have been waiting an excessively long time suggests waiting times have also reduced. Increased throughput of elective surgery cases is known to generate increased admissions, as doctors and patients become aware that waiting times in the public sector are decreasing, reducing the incentive for the patient to choose private treatment.
    • The hospital activity trends reported earlier are counter to what would be expected were the Surcharge to have resulted in a shift from private to public patient activity.

    4. 25   To more closely test the relationship between the Surcharge and elective surgery waiting lists, AHS-ESWL data was examined to provide a longer timeframe for elective surgery waiting list indicators. Figure 10 shows the long-term trends in admissions to hospital from the waiting list, the rate of admissions per 1,000 population and median and 90th percentile waiting time relative to baseline 2000-01 data.

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    Figure 10: Trends in waiting times and rates of admission to elective surgery waiting lists.
    Figure 10: Trends in waiting times and rates of admission to elective surgery waiting lists.D

    Source: AHS-ESWL (2010), AHS-ESWL (2007) and AHS-ESWL (2006).

    4. 26   From Figure 10, it is apparent that, though the number of admissions from the list has increased steadily over the 10-year period, the rate of admission per 1,000 population has changed very little. In other words, the rate of increase in admissions largely has kept track with the increasing population. The three per cent increase in the rate of admissions between 2007-08 and 2008-09 as a result of the ESWL Reduction Plan returned the admission rate to a level marginally higher than that reported in 2005-06.

    4. 27   Between 2008-09 and 2009-10, the median waiting time increased by six per cent from 34 to 36 days. During the same period, the 90th percentile waiting time increased by 12 per cent from 220 to 247 days and the proportion of patients waiting more than 365 days increased by 20 per cent from 3.0 to 3.6 per cent of patients.

    4. 28   The increase in the median waiting times appears to continue a steadily increasing trend in median waiting times extending back to 2001-02. The decline in the rate of growth in the 90th percentile waiting times and percentage of patients waiting more than 365 days is reflective of successive strategies to decrease the number of patients experiencing long waits. However, the overall upward trend in 90th percentile waiting times since 2003-04 and the most recent year’s increase in the percentage of patients waiting more than 365 days suggests that, with the exception of removal of long waits (greater than 365 days), these gains may be short lived.

    4. 29   From the data, it is apparent that since 2003-04, the waiting times for most patients have been steadily increasing, despite real increases in the number of admissions. At best, increases in median waiting times have been held constant for periods of one financial year (in 2006-07 and in 2008-09) and single year improvements in 90th percentile waits achieved in the same years. However, the percentage of patients waiting more than 365 days, though increasing in the past year, remains lower than in any period between 2000-01 and 2005-06.

    4. 30   The increase in waiting times relative to increasing volumes of activity and a reasonably stable admission rate suggests that waiting times are a product of an increasing proportion of the population entering the waiting list. This is a result of a combination of factors including supply driven demand, the ageing of the population, changing models of care (for example providing more procedures to a greater range of patients), patient expectations for care (more patients requesting elective surgery) and an increasing shift to the public sector for elective surgery (potentially influenced by a declining proportion of DVA eligible patients in the older population groups 8). It is highly likely that these factors have exerted greater influence on elective surgery waiting lists than has changes to the Surcharge.

    8 AIHW (2010) has reported a fall in DVA funding between 2004-05 and 2008-09, both in real terms and as a proportion of public hospital expenditure.

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