A comparison of costs in Australian public teaching, public non-teaching and private hospitals

This paper compares costs for caring for patients according to common diagnosis groups in Australian public teaching, public non-teaching and private hospitals. Generally, the costs for general surgical procedures are highest in public teaching hospitals, followed by public non-teaching hospitals, and are lowest in private hospitals. However, the private sector is more expensive than the public sector for obstetric activities. The reasons for the differences appear to be the much higher 'overheads' in the public sector than in the private sector, and the longer hospital stay for obstetric patients in private hospitals. Managers of individual hospitals should examine the data in detail to determine if alternative approaches are appropriate.