Community Service Obligation (CSO) Hospital Definition

Department of Health and Ageing, 2010

The Australian Government Department of Health and Ageing (DoHA) engaged HealthConsult working in partnership with Health Policy Analysis and Collaborative Health Solutions to: ‘develop activity based funding (ABF) in community service obligation (CSO) hospitals.’

The project included consultations with representatives of DoHA and jurisdictional health authorities to discuss issues relating to the delivery and funding of health services in rural and remote areas, as well as current approaches to defining and funding CSO hospitals. The project team reviewed the available documentation (including the new Australian Hospital Patient Costing Standards (AHPCS)) and examined the published literature for issues relating to the use of ABF in small hospitals.

A CSO hospital survey was also conducted to inform our assessment of the counting and costing capability of CSO hospitals. Data specifications were developed for extracts from existing national data systems and then the extracted data were used to prepare potential CSO hospital profiles. These profiles were the basis of a comprehensive analysis to develop and test various possible definitions of a CSO hospital. These profiles were used as the basis of a series of analyses that examined the issues arising from applying alternative criteria and thresholds in defining CSO hospitals, as input into devising a definition that best identifies hospitals that may be disadvantaged in the ABF context.

A number of recommendations to further the funding approach for CSO hospitals under the health reform arrangements were identified through this project and presented as part of a final report to the DoHA.