Appendix C

Comparisons between SoFIE and MoH data

To get a sense of how well SoFIE estimates of hospital inpatient costs represent the true health care costs, the estimates from SoFIE were compared with figures reported by the MoH.

Hospital throughput information from the MoH is available for the period July 2004 to June 2005. Inpatient costs from SoFIE were therefore calculated for this period to allow comparisons to be made. The MoH figures were converted into a cost estimate using the national price for case weighted discharges. At an aggregate level the total cost estimates for all inpatient appointments from both sources was very similar (around $1.5 billion).[67] The comparison was also conducted for the previous period, July 2003 to June 2004. Here the difference between the two sources was slightly larger, indicating the variability in the types of treatments available and, thus, the variability of estimates from SoFIE. Despite these differences, at an aggregate level it seems sensible to use the SoFIE data to estimate inpatient hospital costs for the specific group of interest and be able to link this information back to the labour market information.[68]

Understanding the wider health care costs

Given the size of the Government's health budget this estimation of the cost of hospital treatments may seem small. In order to understand where this cost fits in the overall health budget the total estimated cost of hospital appointments in the July 2004 to June 2005 period for all ages ($2.7 billion) will be compared with information from the Budget 2004 Statement of Appropriations.

The total amount of public funds spent on health is known as Vote Health. In the period July 2004 to June 2005 Vote Health totalled $9.917 billion. Figure C1 shows how this is distributed.

The majority of Vote Health ($7 billion in July 2004 to June 2005) goes to the sector via the District Health Boards (DHBs). The Provider Arm mainly involves the provision of hospital services but it also includes community services, public health services and assessment, treatment and rehabilitation services. The estimated total hospital costs for adults based on the MoH Hospital Throughput information ($2.7 billion) will be funded from this $7 billion. The remaining $4.3 billion is used to fund other services; for example, hospital treatments for those under 15 years old, mental health, further post-hospital follow-up care in the community (for example, rehabilitation services and disability support and older people services).

In summary, the figures for hospital inpatient treatments and outpatient treatments are only a small component of overall Vote Health. While it is acknowledged that the SoFIE/NZHIS estimates do not cover all aspects of ill health it is not possible to distribute the other health care costs on a per person basis. It is therefore not possible to ascertain what proportion of the other costs are for ill health rather than pregnancy or injury; what proportion are for those aged 15 and over; or similarly whether the costs would remain in the absence of ill health; for example, national campaigns and screenings may still exist in some form in the absence of ill health. Therefore these costs are not considered further in this paper.

Figure C1 – Vote Health overview, July 2004 to June 2005

Source:  Estimates from Budget 2004 Statement of Appropriations Vote Health