Review of NSW Peer Hospital Groups

In May 2009, the NSW Department of Health engaged Health Policy Analysis to review their peer grouping methodology with a view to improving it, particularly in relation to episode funding, but also for other major applications of the groupings, such as health services planning and clinical benchmarking. A final report was produced detailing the proposed peer grouping approach, the resulting peer groups and assignment of individual hospitals to the groups. The review undertaken was extensive, involving:

• a situational analysis reviewing the current NSW peer hospital groups and their history, the national approach to peer grouping and peer grouping initiatives of other jurisdictions;
• stakeholder consultation, which involved feedback from stakeholders about the strengths and limitations of the current NSW peer grouping approach;
• a comprehensive review of the literature relating to the applications of peer grouping and approaches to peer grouping; and
• analysis of data from a range of sources, including admitted patient, non-admitted patient, emergency and intensive care data.  

Out of this process, principles and options for peer grouping were developed and an approach proposed. Data were then analysed to determine the logic to be used, resulting in recommendations about the overall logic as well as assignment of individual hospitals to peer groups. This project demonstrates Health Policy Analysis’ capabilities in reviewing and developing classifications, and also an understanding of the funding and planning environments within NSW, relevant also to the development of SRGs and ESRGs.