The NHCDC is based on the principles of casemix costing analysis. Casemix is a scientific approach to the classification of patient care episodes using resource homogenous grouping based on coding of diagnosis and procedures for acute care (AR-DRG classification), formal patient evaluation and scoring against defined clinical patient evaluation tools for subacute care (SNAP Classification), diagnosis, triage category and discharge disposition for emergency presentations (URG Classification), and mapping of clinics by provider and clinical speciality (Tier 2 classification).
As a patient centric data collection other measures associated with the individual patient or classification group can be compared for the purposes of analysis, such as resource usage and cost, clinical utilisation patterns, cost profiles, quality outcome indicators, co-morbid conditions and other standard definitions like average length of stay, age, ethnicity, remoteness and sex.
The national standardisation of the data elements in the NHCDC, underpinned by the Australian Hospital Patient Costing Standards allows for the comparison of cost and patient outcome data between jurisdictions and against national average values. The collection is managed by the Independent Hospital Pricing Authority (IHPA).