Gap in funding for specialist hospitals treating patients with traumatic spinal cord injury under an activity-based funding model in New South Wales, Australia

Objective. The aim of this study was to estimate the difference between treatment costs in acute care settings and the level of funding public hospitals would receive under the activity-based funding model. Methods. Patients aged 16 years who had sustained an incident traumatic spinal cord injury (TSCI) between June 2013 and June 2016 in New South Wales were included in the study. Patients were identified from record-linked health data. Costs were estimated using two approaches: (1) using District Network Return (DNR) data; and (2) based on national weighted activity units (NWAU) assigned to activity-based funding activity. The funding gap in acute care treatment costs for TSCI patients was determined as the difference in cost estimates between the two approaches. Results. Over the study period, 534 patients sustained an acute incident TSCI, accounting for 811 acute care hospital separations within index episodes. The total acute care treatment cost was estimated at A$40.5 million and A$29.9 million using the DNR- and NWAU-based methods respectively. The funding gap in total costs was greatest for the specialist spinal cord injury unit (SCIU) colocated with a major trauma service (MTS), at A$4.4 million over the study period. Conclusions. The findings of this study suggest a substantial gap in funding for resource-intensive patients with TSCI in specialist hospitals under current DRG-based funding methods.