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KPMG on competitive elective surgery

Posted 13 June 2014

An evaluation by KPMG has found the Competitive Elective Surgery Funding Initiative has been well-received by Victorian health services, and has resulted in an average discount of 5.3 per cent of the full WIES rate for surgical procedures performed under the initiative.

The Victorian Government introduced the contestable funding initiative in 2012 to drive efficiencies and innovation, with the aim of improving access to elective surgery and maximising the number of public patients treated. According to the KPMG report, the Department of Health estimates that the $35 million initiative has delivered approximately $1.96 million in efficiency savings.

The VHA is concerned that some Victorian public hospitals have been short-changed by the initiative and will be impacted financially if it is expanded. In our recent position statement Access to Elective Surgery in Victoria the VHA expressed the view that public hospital funding should be adjusted to reflect the increasing proportion of complex patients presenting for some surgical procedures as a result of the initiative. We also advocate for DRG classifications in future to include complexities such as age, obesity, lifestyle factors, and social disadvantage.

The KPMG evaluation confirms that larger-scale reduction of short-stay, simple cases from a public hospital’s casemix could impact its overall financial position.

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