On behalf of the Department of Health and Aged Care (DoHA), AHA conducted an independent and critical review of the PricewaterhouseCoopers (PwC) Medical Practice Cost Study, undertaken as a component of the Relative Value Study. PwC used a case study method involving construction of a ‘hypothetical practice’. Information sources included specialist and general practices visited, ABS data and and a number of prior studies.
DoHA wished to ascertain the robustness of PwC’s findings and AHA was therefore engaged to review PwC’s methodology and findings and the associated assumptions and data.
The study investigated the relationship between the MBS remuneration paid to medical practitioners compared with the actual costs associated with running a medical practice. The purpose of this review was to determine whether the costing process adopted by PwC was both fair and equitable. This included reviewing such components as; costing principles, cost reimbursement philosophy, the concept of a reasonably efficient practice, government policy, costing systems and model validation.
Our final expert report to DoHA also identified the strengths and weaknesses of the study and provided a schedule of potential adjustments.