Australian Health Review Australian Health Review Society
Journal of the Australian Healthcare & Hospitals Association

Designing an activity-based costing model for a non-admitted prisoner healthcare setting

Xiao Cai A , Elizabeth Moore B C D and Martin McNamara A

A Executive Support and Planning Unit, Justice Health and Forensic Mental Health Network, Justice Health Administration Centre, 1300 Anzac Parade, Malabar, NSW 2036, Australia. Email:

B Centre for Health Research in Criminal Justice, Justice Health and Forensic Mental Health Network, Suite 302, Level 2, Westfield Office Tower, 152 Bunnerong Road, Pagewood, NSW 2035, Australia.

C National Drug and Alcohol Research Centre, University of New South Wales, Sydney, NSW 2052, Australia.

D Corresponding author. Email:

Australian Health Review 37(4) 418-422
Submitted: 4 December 2012  Accepted: 24 April 2013   Published: 19 June 2013


Aim. To design and deliver an activity-based costing model within a non-admitted prisoner healthcare setting.

Method. Key phases from the NSW Health clinical redesign methodology were utilised: diagnostic, solution design and implementation.

Results. The diagnostic phase utilised a range of strategies to identify issues requiring attention in the development of the costing model. The solution design phase conceptualised distinct ‘building blocks’ of activity and cost based on the speciality of clinicians providing care. These building blocks enabled the classification of activity and comparisons of costs between similar facilities. The implementation phase validated the model.

Conclusions. The project generated an activity-based costing model based on actual activity performed, gained acceptability among clinicians and managers, and provided the basis for ongoing efficiency and benchmarking efforts.

Keywords: activity-based funding, benchmarking, outpatient.


[1]  Australian Government.National Health Reform Agreement; 2011. Available at l-agreement.pdf [verified 14th June 2012].

[2]  Eager K. ABF Information Series No. 1: what is activity-based funding? Wollongong: Centre for Health Service Development, University of Wollongong;2010 . Available at ow082633.pdf [verified 13June 2012].

[3]  Cleary MI, Murray JM, Michael R, Piper K. Outpatient costing and classification: are we any closer to a national standard for ambulatory classification systems? Med J Aust 1998; 169 26–31. open url image1

[4]  Turner-Stokes L, Sutch S, Dredge R, Eagar K. International casemix and funding models: lessons for rehabilitation Clin Rehabil 2011; 26 195–208.
International casemix and funding models: lessons for rehabilitationCrossRef | 22070989PubMed | open url image1

[5]  Dyson M, Duckett SJ, Allen FCL. A therapy-relevant casemix classification system for school-aged children with disabilities Arch Phys Med Rehabil 2000; 81 634–43.
A therapy-relevant casemix classification system for school-aged children with disabilitiesCrossRef | 1:STN:280:DC%2BD3c3msFertw%3D%3D&md5=9b6991e512bc722ce5d5b691ab06ad2bCAS | 10807105PubMed | open url image1

[6]  Murchland S, Wake-Dyster W. Resource allocation for community-based therapy Disabil Rehabil 2006; 28 1425–32.
Resource allocation for community-based therapyCrossRef | 17071575PubMed | open url image1

[7]  Jackson T, Sevil P.The refinement of relative resource weights for non-admitted patients. Centre for Health Program Evaluation, Technical Report no. 7; 1997.

[8]  AIHW. (2011) Health expenditure Australia 2009–10, Health and welfare expenditure series no. 46,Cat. no. HWE 55. Canberra: AIHW; 2011.

Export Citation