EXPENDITURE
Recurrent expenditure for Acute and psychiatric hospitals for the 2009-10 cycle amounted to $8,354 million, a 9.5% increase over the previous cycle. This rise in percentage was higher than the annual average increase in the five years from 2004-05 of 7.4%.
When recurrent expenditure is adjusted to remove the effects of price changes over the period, the average annual increase over the five years from 2004-05 ($6,751 million) to 2009-10 ($8,054 million) was 3.6%. This excluded 2007-08, because the Private Health Establishments Collection was not undertaken for the cycle. For further information on the use of chain volume measures to adjust income and expenditure, see Explanatory Note 23.
Wages and salaries (including on-costs such as employer contributions to superannuation and payroll tax) represented 51.6% of recurrent expenditure in 2009-10, comparable with the previous cycle. The next largest component of recurrent expenditure was Drug, medical and surgical supplies, which accounted for 27.7% of the total. This proportion was similar to the figure reported in 2008-09.
The average expenditure per patient day was $1,102 in 2009-10 compared with $1,035 in 2008-09. These average costs have increased from $859 in 2004-05. Over the past five years from 2004-05 ($993) to 2009-10 ($1,062) the average increase in expenditure per patient day in adjusted terms was 1.4%. This excluded 2007-08, because the Private Health Establishment Collection was not undertaken for the cycle.
Acute and Psychiatric Private Hospitals, Expenditure per patient
: 2004-05 to 2009-10(a)
The average cost per patient day rises as hospital size increases. This reflects the greater complexity of procedures undertaken at the larger hospitals. The more complex procedures necessitate greater use of highly trained staff, expensive equipment, drugs and medical supplies, as well as administrative expenses, maintenance and food supplies. In 2009-10, recurrent expenditure per patient day (unadjusted for price changes) at Acute and psychiatric hospitals with over 200 beds was $1,316 compared with the average of $684 for hospitals with 26-50 beds.
There were considerable differences in the average recurrent expenditure per patient day between the 'Profit' and 'Not for profit' sectors. Religious or charitable hospitals had the highest average costs per patient day ($1,248) in 2009-10. Other non-profit hospitals (comprising bush nursing, community and memorial hospitals) and hospitals operated for profit had lower average costs per patient day ($1,044 and $994 respectively).
Gross capital expenditure for Acute and psychiatric hospitals during 2009-10 increased by 18.1% over the previous cycle to $695 million and represented 8.3% of the total expenditure for the year. Capital expenditure is volatile in the Private Health sector due to the exceptional nature of such expenditure. Significant purchases or construction undertaken in any given year are unlikely to be repeated on a regular basis.
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