A NEW report has highlighted inefficiency in Tasmania's health system, suggesting the state's hospitals should cut the cost of treatment by 12 per cent.
According to the Grattan Institute report, Controlling costly care: a billion dollar hospital opportunity, Tasmanian hospitals racked up about $30 million in ``avoidable costs'' during the 2010-11 financial year.
The report said reasons for avoidable costs varied, but could include unnecessary admission, beds being empty and staffed, clinical care delays and issues with patient flow.
The cost of procedures also varied within Tasmania, as in other states, with gall bladder removal ranging from about $5000 to $8000, depending where a patient was treated.
The cost of a hip replacement ranged from $18,000 to $32,000.
The report said there was roughly a $1600 gap between the average cost of admission at Tasmania's highest and lowest-cost hospitals.
Grattan Institute health program director Stephen Duckett said that while costs for a procedure within a single state didn't need to be exactly the same, the variance was too large within all Australian states.
``The reality is that within a state, there are few excuses in a sense for efficiency variation,'' Dr Duckett said.
``Because the hospitals can learn from each other, the hospitals are all facing the same industrial conditions, for example, and so there are significant opportunities that should be realised.''
The report recommended that states set a new efficient price for hospital care: one set at the state's average cost, but only after avoidable costs were removed.
For Tasmania, the report said that would mean a 12 per cent decrease.
``Today, the price paid for care is based on the average cost of treatment,'' the report said.
``Therefore, it includes costs that can and should be avoided.''
Health Minister Michelle O'Byrne said the report used data from 2010-11, before the state government's efforts to make savings and slow growth in health spending.
Ms O'Byrne said the report confirmed what the government had known and often stated _ that the state's hospitals needed to become more efficient.
She said they had been working to achieve increased efficiency through the Commission on Delivery of Health Services in Tasmania and the Tasmanian lead Clinicians Group.
``We will drive efficiency by working with clinicians _ not by slashing levels of activity-based funding,'' Ms O'Byrne said.