Key messages

  • Cost weights are a measure of resource use in an episode of care.

Please note: This website will be updated as Victoria transitions to the National Funding Model from 1 July 2021 as a basis to determine hospital funding for Victorian public health services. The information on this page is for historical reference only.

Cost weights are calculated as the ratio of the average cost of all episodes in a diagnosis related group (DRG) to the average cost of all episodes across all DRGs.

National Weighted Activity Unit

The National Weighted Activity Unit (NWAU) is a measure of health service activity expressed as a common unit against which the national efficient price (NEP) is paid. It provides a way of comparing and valuing public hospital services whether they are admissions, emergency department presentations or outpatient episodes, and is weighted for clinical complexity.

IHPA has released operating versions of the NWAU calculators described in the National Pricing Model Technical Specification 2013-14. NWAU calculators are available for:

  • acute admitted services
  • emergency department services grouped to either Urgency Related Groups (URGs) or Urgency Disposition Groups (UDGs)
  • non-admitted outpatient services
  • subacute and non-acute admitted services.

The IHPA also provides a user guide on how to download and operate the calculators in Microsoft Excel.

Weighted Inlier Equivalent Separation

The Weighted Inlier Equivalent Separation (WIES) is a cost weight (W) that is adjusted for time spent in hospital (IES), and represents a relative measure of resource use for each episode of care in a DGR.

WIES allocated to an episode depends upon the episode’s DRG, the amount of time spent in hospital and the episode’s eligibility for WIES co-payments.

Victorian WIES cost weights

Victorian cost weights are developed each year using the costs of treating patients as reported to the Department of Health & Human Services by public hospitals.

The department pays a price per unit of WIES. WIES prices vary between hospitals to account for differences in specialisation, economies of scale and levels of remoteness.

The department provides an annual guide for installing the WEIS calculator. The calculator is compatible with Microsoft Excel 2007 or subsequent versions.