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Programme 2.2: Veterans’ Hospital Services


Programme 2.2 provides access to hospital services for entitled beneficiaries through arrangements with hospitals in both the private and public sectors.


In 2013–14, DVA continued to ensure beneficiaries had access to a comprehensive range of quality inpatient and outpatient services. These were provided through private hospitals, day procedure centres and mental health hospitals, as well as all public hospitals operated by the state and territory governments.

The Department worked closely with providers, particularly those in the private sector, to enhance the contractual arrangements to gain better outcomes for entitled beneficiaries, and to prevent unnecessary hospital admissions.

Expenditure and the use of services are demand-driven, depending on the healthcare needs of entitled beneficiaries. Reflecting the decline in the treatment population, the total number of hospital separations, total occupied bed days and average length of stay decreased in 2013–14. This decrease was consistent with previous financial years.

In 2013–14, the total expenditure for hospital services decreased compared with 2012–13. The continued decline in the number of beneficiaries reduced demand, which offset the increase in the cost of the services provided, keeping expenditure down.


Deliverables – Programme outcomes against Budget projections
  2013–14 PBS ($M) ESTIMATED ACTUAL 2013–14 ($M) OUTCOME 2013–14 ($M)
Administered 1,663.6 1,647.7 1,644.6
Departmental 12.4 12.9 13.7
Total resources 1,676.0 1,660.6 1,658.3

PBS = Portfolio Budget Statements


Deliverables – Programme outcomes against Budget projections
  2013–14 PBS ESTIMATED ACTUAL 2013–14 OUTCOME 2013–14
Treatment population 211,000 215,900 217,562

Key performance indicators

Key Performance Indicators – Programme outcomes against Budget target
  2013–14 PBS Estimated actual 2013–14 Outcome 2013–14
Price: Unit cost per cardholder 53 53 59

Report on performance

The number of beneficiaries accessing hospital services fell during 2013–14, compared to 2012–13. In total, 75,496 beneficiaries accessed private hospital services (all services) with a total of 196,437 separations. In the public hospital sector, an estimated 42,146 accessed services (admissions only), with an estimated total of 96,277 separations.

In 2013–14, the total administered expenditure for public and private hospitals was $1.645 billion. This represented a decrease of 1 per cent compared to the $1.667 billion spent in 2012–13.


The unit cost per card holder is reported as the programme staff and administration expenses (programme support costs) per treatment population card holder.

In 2013–14, the unit cost per card holder was $59, which is more than the unit cost of $47 in 2012–13. The increase in the unit cost from 2012–13 to 2013–14 is a combination of increases in staff and administration expenses and a decrease in treatment population.

Private and public hospital separations

Table 21 shows the number of private and public hospital separations over the past five years.

Table 21: Number of private and public hospital separations 2009–10 to 2013–14
  2009–10 2010–11 2011–12 2012–13 2013–14
Private 221,218 218,353 209,707 200,905 196,437
Public 116,195 114,339 109,909 103,483 96,277

Reconciliation of public hospital data is usually completed 12 months in arrears for most states and territories. Private hospital data is considered complete three months in arrears. Therefore, the number of hospital separations for 2013–14 is an estimate only, and earlier years’ separations have been updated from the numbers provided in previous annual reports.

Average cost per private and public hospital separation

The estimated average cost per combined private and public hospital separations in 2013–14 was $5,303, compared with $5,107 in 2012–13. The variation was due to the increased cost of medical technology and the increase in hospital fees.

Administered expenditure is an aggregate of payments made in the year rather than payments for services provided in the year. Therefore, it has not been used to determine average cost per separation. Public hospital expenditure includes payment for non-inpatient services and is an estimate because payments to state health departments for 2013–14 public hospital services have not yet been finalised.

Percentage of treatment population using private and public hospital services

During the year, approximately 35 per cent of the treatment population used private hospital services and an estimated 19.5 per cent of the treatment population used public hospital services (admissions only), as reflected in current data.

Table 22 shows the proportion of the treatment population using private and public hospital services over the past five years. The measure records the percentage of the treatment population using private and public hospitals, not the percentage of total hospital separations.

Table 22: Percentage of treatment population using private and public hospitals 2009–10 to 2013–14
  2009–10 2010–11 2011–12 2012–13 2013–14
Private hospitals 35.9% 36.1% 35.9% 36.0% 34.8%
Public hospitals 18.9% 19.8% 19.7% 19.5% 19.4%

Business activity

The Department continued to undertake significant contracting and negotiation activities during the year, to ensure that the veteran community had access to quality health care through Australia’s hospital network.

Mental health hospital services

During 2013–14, DVA conducted a tender for hospital-based mental health services. This followed an extensive review of current outpatient mental health programmes, in consultation with the Australian Centre for Posttraumatic Mental Health. In addition, the Department carried out a survey of existing outpatient mental health programmes to be better informed for the new contracting term. The new contracts will commence in 2014–15.

Pay for Performance Patient Satisfaction Survey

DVA continues to administer the Patient Satisfaction Survey as part of its Pay for Performance programme. The surveys are provided to all DVA clients who have been admitted to a private hospital. The findings inform one of the criteria that DVA uses to measure hospitals’ performance, to ensure that veterans are receiving satisfactory care.

In 2013, a tender for the survey was conducted. The tender was awarded to the Australian Survey Research Group, who are contracted to administer the survey until 30 June 2016.

Private hospitals

Current private hospital arrangements commenced on 1 July 2012 and were due to expire on 30 June 2014. During 2013–14, DVA exercised its option to extend the contracts for two years to 30 June 2016. Planning for the 2016 approach to market is now well underway with a comprehensive review of current arrangements in progress.

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