Hospitals could be $1b more efficient

EDS: Not for use before 2000 (AEDT), Tuesday, March 4.

CANBERRA, March 4 AAP - Almost $1 billion could be saved each year if public hospitals were forced to be more efficient with their spending, a think tank says.

The Grattan Institute says an efficient price for hospital services should be set by state governments to remove what it says is about $928 million in "avoidable" spending annually.

The institute's health director, Stephen Duckett, called for administrators to be held more accountable for spending, saying the current funding for the average cost of care rewarded inefficiency.

The institute's report, Controlling Costly Care, says there is a gulf between so-called high- and low-cost hospitals. The gap between the most and least expensive is as high as $2500 an admission in some states.

Dr Duckett said a new efficient average price should be set and linked to hospital funding.

The new benchmark would take account of unavoidable costs, which could be because patients were older or coming from remote areas.

However, it would also remove inefficient spending on items such as supplies, or on patients waiting or staying too long in a hospital bed.

"What we're asking states to do is to be tighter in the way they set their prices at public hospitals," Dr Duckett told AAP.

"There are a range of reasons for why hospital costs vary, and what we're saying is that these all need to be under control."

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