Pwc report

Methodology

The project team gathered information required for the financial review via:

• 
  a data collection template and questionnaire distributed to hospitals and jurisdictions
  
• 
  site visits with the hospital costing team and jurisdiction representatives
  
• 
  follow-up discussions to address outstanding issues
  
• 
  online research, using resources such as jurisdiction and hospital websites, and jurisdiction and IHPA policies available online.
  

The project team distributed and gathered the data collection templates in advance of the site visits, and participants were given the opportunity to provide additional information following these visits. The NHCDC representative from each jurisdiction reviewed their chapter prior to it being included in this report.

Data collection template and questionnaire

For Round 17, all quantitative data requests were contained in one data collection template. It included a tab for the participating hospital or LHN to complete, requesting information on the process of GL cost extraction, cost allocation and submission of data to the jurisdiction. A second tab requested information about how the jurisdiction adjusted the dataset before submitting it to the IHPA.

Each site also received a questionnaire, asking:

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  the costing teams about their quality assurance and reconciliation procedures regarding the activity and cost data,
  
• 
  the finance teams about the structure of the GL, and how selected costs were treated in the GL.
  

These templates aimed to reconcile the costs within the publicly available financial statements against the costed output, and to reconcile the costs submitted to IHPA against the submitted activity levels. Table 2 provides more information on the template and questionnaire.

Table : Data collection template and questionnaire details

Document	Contents
Data collection template	The first tab requested: a brief description of the costing methodology for major hospital products (with more detail gathered during the site visits) a breakdown of LHN costs reported in the publicly released financial statements, and how this links with the GL used for costing any inclusions in or exclusions to the GL prior to costing a breakdown of costs between direct and overhead costs a list of feeder systems used for various hospital areas and how they were used to allocate costs a detailed breakdown of records linked to hospital products for three sample feeder systems a final split of total costs and activity by hospital product, including any adjustments made before submission to the IHPA. The second tab requested: the split of costs and activities by hospital product that the participating site submitted to the jurisdiction a list of cost and activity adjustments the jurisdiction made before submitting the data to the IHPA a final list of costs and activity by hospital product that the jurisdiction submitted to the IHPA.
Questionnaire	The questionnaire was divided into two sections: The first section asked the costing team to document some of the quality assurance and reconciliation procedures it applied to the final activity and cost data. The second sections requests asked the finance team at the site to document how particular costs are treated in the GL. This year the questionnaire focused was put on salary- related expenditure – such as superannuation, payroll tax and leave liabilities.

Participants had some flexibility in how they completed the template and questionnaire, to accommodate different costing processes across jurisdictions. For example, work in progress (WIP) adjustments might be processed by the participating site or by jurisdictional staff, so respondents could document WIP adjustments on the first or second tabs of the data collection template.

Site visits

Site visits were scheduled at the jurisdictional level and at each participating site. Appendix A includes a list of all attendees at each site meeting.

A review team made up of representatives from PwC and IHPA visited each participating site, and a peer also attended some sites (see Section 12 – Peer review). The review team discussed the overall costing process and worked through the data collection templates. During this meeting, participating sites explained any exclusions from or inclusions in their data and provided additional materials relevant to the financial review.

Some jurisdictions elected to host the site visit at the jurisdiction’s department office, usually if jurisdictional staff performed the costing.

Jurisdiction meetings focused on the jurisdiction’s processes and controls, and any adjustments to the dataset the jurisdiction made before submitting it to the IHPA. Jurisdictions were also able to discuss policies they had changed following the previous financial review(s) and any planned improvements for the future.

Follow-up discussions to address outstanding issues

Where there were discrepancies in the data or the review team did not collect all relevant information during the site meetings, the review team sent out additional questions or data requests for the jurisdictions to respond to.

Online resources

The review team obtained publicly released financial statements from the various department or LHN websites, along with contextual information about the participating sites.