The casemix system of hospital funding can further disadvantage Aboriginal children.

The Northern Territory Health Service implemented a casemix system of hospital funding in 1996 using national averages and national cost weights as benchmarks for length of stay and funding. Clinicians and health administrators were concerned about the potential of this model to impair health service delivery, especially to children of Aboriginal or Torres Strait Islander (ATSI) descent, whose current poor health has been well described. Data were collected on children aged under 10 years who were discharged from the Royal Darwin Hospital between 1 July 1991 and 30 June 1996 and assigned one of four DRGs (simple pneumonia, bronchitis and asthma, gastroenteritis, nutritional and metabolic disorders). Data collected included age, sex, ethnicity, duration of hospital stay, location of residence and presence of comorbidities. There were significant differences in the proportion of children with multiple comorbidities between ATSI and non-ATSI children, as well as between rural- and urban-dwelling ATSI children. A higher proportion of ATSI compared with non-ATSI children had prolonged hospital stays (22.6% v. 1.5%), with the variables influencing length of stay in ATSI children including "age < 2 years", "living in a remote area", and "presence of two or more comorbidities". These results confirm clinical impressions about disease patterns and length of hospital stay in ATSI children, and highlight the problems of imposing a casemix classification system for a "typical" Australian population on a region with a high proportion of people of ATSI descent.