Nhcdc round 19 Independent Financial Review

Introduction

A.1.Overview and scope

The National Hospital Cost Data Collection (NHCDC) is the primary data collection that the Independent Hospital Pricing Authority (IHPA) relies on to calculate the National Efficient Price used for the funding of public hospital services. To ensure that the quality of NHCDC data is robust and fit-for-purpose, IHPA commissions an annual validation process to verify that all participating hospitals have included appropriate costs and patient activity.

IHPA engaged KPMG to undertake the Round 19 independent financial review (IFR) of a sample of state and territory hospitals who supplied data to the Round 19 NHCDC (2014-15). KPMG were also engaged to undertake the Round 18 IFR. The Round 19 IFR includes:

Assessment of the accuracy and completeness of the NHCDC participating hospitals reconciliations provided for Round 19.

Assessment of the consistency between jurisdictions sampled of the application of Version 3.1 of the Australian Hospital Patient Costing Standards (AHPCS) in selected standards, as highlighted in Appendix I.

Review of the data flow from the health service to the jurisdictional upload of hospital information, to the data submission portal, through to the storing of data in IHPA’s national database.

As this review is not an audit, no assurance on the completeness or accuracy of the costing has been provided. The outcomes and results rely heavily on the representations, assertions and data submissions made by the hospital or local hospital network (LHN) costing teams and jurisdiction representatives. Procedures performed were limited to the review of supporting schedules, agreeing to source documentation (where possible), discussions with costing teams and obtaining extracts from costing systems.

A.2.Participating hospitals

Each of the eight jurisdictions agreed to participate in the IFR for Round 19. Jurisdictions were requested to nominate hospitals or LHNs based on the following sampling framework:

Historical participation - provides an opportunity to review new sites, or review a hospital or LHN that has previously participated in the IFR to enable progress to be tracked over time.

Size - as assessed by volume and the scope of work undertaken.

Materiality - the total cost submitted to the NHCDC by the hospital.

Systems - the types of costing systems utilised in preparing the submission, and potentially extending to the types of feeder systems available.

Other factors - where sites had previously participated and identified focus areas such as Emergency Department costing or overhead allocations, or other potential areas such as previously identified governance, control or capability issues.

In total, a sample of 18 sites, including 15 hospitals and three LHNs were selected by jurisdictions to participate in the IFR.

Table – Round 19 IFR participating hospitals/LHNs

Jurisdiction	Hospital	Characteristics
Australian Capital Territory	The Canberra Hospital	Participated in Round 17 NHCDC IFR Major urban hospital Costing system – PPM2
New South Wales	Central Coast Local Health District (LHD)	LHD has previously not participated in an NHCDC IFR Includes major regional hospitals Costing system – PPM2
New South Wales	Far West Local Health District	LHD has previously not participated in an NHCDC IFR Includes major rural hospitals Costing system – PPM2
New South Wales	Sydney Local Health District	Participated in Round 17 NHCDC IFR Includes major urban teaching hospitals Costing system – PPM2
Northern Territory	Alice Springs Hospital	Participated in Round 16 NHCDC IFR Major regional hospital Costing system – PPM2
Queensland	Gold Coast University Hospital	Participated in Round 15 NHCDC IFR Major urban, teaching and research hospital Costing system – PPM2
Queensland	Toowoomba Base Hospital	Hospital has previously not participated in an IFR Major regional hospital Costing system – Transition II
Queensland	Logan Hospital	Hospital has previously not participated in an IFR Major urban hospital and teaching hospital Costing system – Transition II
South Australia	Queen Elizabeth Hospital	Participated in Round 14 NHCDC IFR Major urban and teaching hospital Costing system – PPM2
South Australia	Royal Adelaide Hospital	Participated in Round 16 NHCDC IFR Major urban and teaching hospital Costing system – PPM2
Tasmania	North West Regional Hospital	Hospital has previously not participated in an IFR Large regional hospital Costing system – User Cost
Tasmania	Mersey Community Hospital	Hospital has previously not participated in an IFR Regional hospital Costing system – User Cost
Victoria	Ballarat Health Service	Hospital has previously not participated in an IFR Major regional hospital Costing system – Visasys
Victoria	Eastern Health	Hospital has previously not participated in an IFR Major urban, teaching and research hospital Costing system – PPM2
Victoria	Latrobe Regional Hospital	Hospital has previously not participated in an IFR Major regional hospital Costing system – Adaptive costing
Western Australia	Armadale Kelmscott Memorial Hospital	Participated in Round 16 NHCDC IFR Large urban hospital Costing system – PPM2
Western Australia	Kununurra Hospital	Hospital has previously not participated in an IFR Small regional hospital Costing system – PPM2
	Sir Charles Gairdner Hospital	Participated in Round 14 and Round 16 NHCDC IFR Major urban teaching hospital Costing system – PPM2

Source: KPMG