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The Economics and Financing of Hospitals in Australia

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  • George R. Palmer

Abstract

The Australian hospital industry is described and it is noted that the term ‘hospital’ is applied to a wide range of institutions. The main problems and issues associated with hospitals are discussed, including the lack of adequate methods of measuring their ‘products’ and of allocating funds to them. The role of the medical staff in influencing the ‘demand’ for hospital beds and in resource allocation is emphasised as a major influence on hospital behaviour. In a study of the determinants of the costs of Victorian public hospitals it was found that the complexity of the case‐mix as measured by diagnosis related groups (DRGs) was a major determinant of teaching hospital costs but not of those of other large hospitals. DRG‐based funding and costing of hospitals is recommended as a strategy for achieving increased efficiency.

Suggested Citation

  • George R. Palmer, 1986. "The Economics and Financing of Hospitals in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 19(3), pages 60-72, September.
    • Handle: RePEc:bla:ausecr:v:19:y:1986:i:3:p:60-72
    DOI: 10.1111/j.1467-8462.1986.tb00634.x
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    References listed on IDEAS

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    1. Deeble, J. S., 1982. "Financing health care in a static economy," Social Science & Medicine, Elsevier, vol. 16(6), pages 713-724, January.
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    Cited by:

    1. George R. Palmer, 1991. "The Use of DRGs in the Management and Planning of Hospital Services," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 24(1), pages 62-70, January.

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