Health: Establishing the Average Cost of Emergency Department Presentations in South Australia
To estimate the fiscal impact of Emergency Department (ED) demand in South Australia, we apply a system-aligned unit cost methodology, focused specifically on Emergency Department activity.
Rather than attributing the full hospital budget to every presentation, this approach isolates the expenditure directly associated with Emergency Department operations and compares it against total annual ED activity.
This produces a more accurate and policy-relevant estimate of the average cost of treating an ED presentation.
1. Defining the Relevant Cost Pool
The calculation uses estimated statewide Emergency Department operating expenditure for 2024–25, including:
- emergency clinical staffing
- triage and assessment
- emergency diagnostics and treatment
- ED administration and operational overheads
- emergency infrastructure and support services.
The figures are derived from:
- SA Treasury Budget Papers 2024–25
- Department for Health and Wellbeing Annual Report 2024–25
- SA Ambulance Service Agreement 2024–25
Those establish:
- total health expenditure
- ambulance investment
- activity growth
- system demand pressures.
Estimated statewide ED expenditure:
- ~$1.0–1.3 billion annually
This excludes:
- inpatient ward treatment
- elective surgery
- long-term care programs
- mental health community services
- non-acute health expenditure
This distinction is important because not all hospital expenditure is generated by Emergency Department activity.
2. Establishing the Activity Baseline
South Australia currently records approximately:
- 622,876 Emergency Department presentations per year
This figure represents the total annual demand placed on public emergency departments across the State.
3. Calculating the Average Cost per ED Presentation
The system-average cost per ED presentation is calculated by dividing total ED expenditure by total annual ED presentations.
Lower estimate:
$1,000,000,000 ÷ 622,876 ≈ $1,605 per ED presentation
Upper estimate:
$1,300,000,000 ÷ 622,876 ≈ $2,087 per ED presentation
This produces an estimated average cost of:
- ~$1,600–$2,100 per Emergency Department presentation
A reasonable midpoint estimate for modelling purposes is:
- ~$1,850 per ED presentation
This represents a system-average activity cost, not the literal treatment cost of every patient.
Actual costs vary significantly depending on triage category and clinical complexity.
4. Estimated Fiscal Impact of Reducing ED Demand
Using the midpoint estimate of approximately $1,850 per presentation, the potential reduction in expenditure pressure associated with lower ED demand can be estimated as follows:
| Reduction in ED Presentations | Presentations Avoided | Approximate Annual Expenditure Pressure Avoided |
|---|---|---|
| 5% | ~31,144 | ~$57.6 million |
| 10% | ~62,288 | ~$115 million |
| 20% | ~124,575 | ~$230 million |
These figures represent estimated reductions in system expenditure pressure and operational demand rather than immediate cash-releasable savings, because hospital systems contain substantial fixed infrastructure and workforce costs.
5. Key Policy Insight
Emergency Departments are a major entry point into the acute health system.
Sustained reductions in ED demand can:
- reduce ambulance ramping
- reduce waiting times
- reduce workforce strain and overtime costs
- improve system capacity
- reduce downstream pressure on inpatient services
Even modest reductions in Emergency Department demand therefore have the potential to generate significant statewide economic and operational benefits over time.