Cutting funding to hospitals with higher complication rates is linked to a 25% reduction in complication risk, the Productivity Commission says.

The commission, the government’s economic think tank, published data this month showing the risk of a hospital-acquired complication (HAC) fell from about 2.3% to 1.7% between 2018 and 2020 at hospital networks that faced these cuts.

This was based on comparing states that passed the cuts onto hospital networks with those that absorbed the cuts into their state budgets after the penalties were built into the National Health Reform Agreement.

However, a top infectious diseases expert has warned that the results may be an artefact of disease coding, questioning whether hospitals are actually becoming safer.