Hospital input price indexes in Australia: are they worth the effort?

This paper summarises aspects of the design and use of hospital input price indexes, and describes four indexes produced in Australia in the last decade. It argues that there would be some benefit in establishing a routine national index, if it were designed to be low-cost. However, care should be taken to avoid excessive reliance on the results in the resource allocation and funding context. Input prices contribute relatively little in hospitals' expenditure changes. It is also necessary to monitor and manage changes in the volumes of inputs, and this is likely to be a more rewarding task.