Cost estimates for hospital inpatient care in Australia: evaluation of alternative sources.

Abstract

OBJECTIVE: This paper presents a framework for evaluation of alternative sources of estimates of the costs of hospital inpatient care in Australia. It argues that the choice of costing methods depends on the decision-context and the sensitivity of the decision to estimation errors. METHOD: Five criteria are proposed for evaluation of sources of hospital cost data, with detailed consideration of the way estimates are derived in two computerised approaches which use accounting data. Three broad approaches to cost estimation are evaluated against these criteria. RESULTS: Choosing an estimation method entails an optimisation analysis for each decision context. 'Microcosting' techniques remains t..