Evaluation of the Child Health Check Initiative and the Expanding Health Service Delivery Initiative - Final Report

6.2 Efficiency

Evaluation of the Child Health Check Initiative and the Expanding Health Service Delivery Initiative - Final Report

Page last updated: 17 April 2012

The CHCI evaluation found evidence of numerous inefficient processes, including inadequately developed administrative processes (around referrals, for example) and delays in the delivery of follow-up services. Assessing the cost-effectiveness of the CHCI is problematic in the absence of clear evidence of effectiveness other than the services delivered. Table 62 shows the average costs of delivering the child health checks and hearing/ENT and dental follow-up services. Average total costs range from $1,181 (dental) to $1,842 (hearing/ENT) per service delivered.

Table 62: Average costs of CHCI services (to 30 June 2010)
Service delivery costs
(million)
Total costs(a)
(million)
Number of children (CHC) or services (hearing/ENT and dental)
Average cost (service delivery only)
Average cost (total)
CHC
$12.543
$17.935
10,605
$1,183
$1,691
Hearing/ENT
$9.935
$15.595
8,467
$1,173
$1,842
Dental(b)
$6.881
$11.067
9,374
$734
$1,181

(a) 
Includes capital and infrastructure, administrative, training, data collection and other costs (but not travel and accommodation). Excludes DoHA and DHF planning and administrative costs, and ADF support costs.
(b) 
Excludes costs of RAHC in managing dental follow-up services under the Child Oral Health Program. Source: DoHA (4 August 2010), ‘NT-related health measures—Allocation and expenditure 2007–08 to 2011–12’, AIHW and DoHA (2009).


The total costs in Table 62 do not include DoHA administrative costs, which equate to around $20 million for policy, planning and implementation functions associated with the NTER, or the ADF expenditure of around $14 million on Operation OUTREACH (which provided logistical support for a number of NTER programs). We do not know what proportion of these costs was associated directly with the CHCI. If it was 50 per cent, this would push the costs of the child health checks up from an average of $1,691 to $3,294 per child.

By way of comparison, the benefit paid for MBS Item No. 708 (health check for Aboriginal and Torres Strait Islander children) is around $200, which is 85 per cent of the schedule fee. This check is comparable to the NTER child health check in scope but the costing does not include all capital, training and other costs. Also by way of comparison, the estimated average cost of a face-to-face medical consultation is $168, based on a 20-minute consultation and adjusted for the 2003–04 financial year (Zhao et al 2006). Assuming a comprehensive health check involves an hour’s consultation, this would equate to $504. This estimate is based on wages and staff costs, occupancy costs, office expenses, other practice costs, travel costs, working capital expenses and professional indemnity insurance. Unlike the child health check cost figures, it does not include costs associated with training, data collection systems, and capital and infrastructure; however, it still compares favourably to the average cost of $1,183 per child (service delivery only) for a child health check.

There are fixed costs associated with setting up any new program, and the total cost of a program per unit (in this case per child) can be expected to decline over time as the level of service use increases. The total costs for the CHCI were significant—an average of $1,691 per child for the child health checks. Given the short time frame for the program (two years for the health check component), the level of service use is essentially capped, so there will not be efficiency gains over time other than for the follow-up services which are still being delivered.

Efficiency is a core objective of the regionalisation element of the EHSDI, although it is likely to be some time before this benefit can be realised. The ability of regionalised services to increase efficiency does not appear to have been thoroughly analysed by the EHSDI partner organisations.

The delays in allocating EHSDI funding for service expansion and infrastructure contributed to some inefficiencies; however, the system as a whole probably did not have the capacity to spend large increases in funding in short time frames. The efficiency of the EHSDI was enhanced by its ability to build on existing reform initiatives and lessons, and to use existing governance structures and partnerships. For health service providers the EHSDI is one of multiple sources of finance and was often viewed as another grant on top of everything else. Multiple funding sources and contracts can contribute to inefficiencies (for example from multiple reporting requirements and contractual negotiations) and distract providers from their core business of delivering services to the community.

The RAHC appears to offer similar efficiencies to existing service models for recruiting agency staff, although many DHF health managers would argue that staff recruited through the RAHC are not as effective as more experienced practitioners recruited through other means.
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