CG 4.1 Scope
CG 4.1.1 This Costing guideline outlines how to identify expenses relating to direct and indirect Teaching and Training activities.
CG 4.1.2 This Costing guideline also outlines an approach to cost to Teaching and Training products.
CG 4.2 Objective
CG 4.2.1 To ensure that Teaching and Training related expenses are identified and classified into product categories that sufficiently differentiate them from other products (such as Research).
CG 4.2.2 To ensure that products which relate to Teaching and Training include those expenses and activities that have occurred within the period and that they are correctly identified and appropriately allocated to final products.
CG 4.3 Costing guideline
Step 1: Direct teaching and training scope
CG 4.3.1 Expenses that relate to Research activity are not to be included in the cost of Teaching and Training products.
CG 4.3.2 Expenses that relate to embedded Teaching and Training activities are not considered economically feasible to measure. Embedded activities and their associated expenses are considered part of patient care and included within patient products.
CG 4.3.3 Direct and indirect activities and their associated expenses should be costed as a non-patient product. Costing practitioners should be aware that the primary resource consumed in the delivery of these activities is staff time.
Step 2: Create a direct and overhead teaching and training final cost centre
CG 4.3.4 Through consultation, costing practitioners must identify expenses that relate to direct and indirect Teaching and Training activities.
CG 4.3.5 Expenses, for direct and indirect Teaching and Training activities provided by the hospital, should be grouped to discreet final cost centres within the costing system. These areas will accumulate expenses for direct and indirect Teaching and Training activities respectively, including overhead expenses from the hospital as appropriate.
Step 3: Identify direct and indirect teaching and training activities and associated expenses
CG 4.3.6 Indirect Teaching Training activities and their associated expense can be identified after consultation with appropriate stakeholders, these may include:
- the managers of the medical administration areas (i.e., surgical, medical, obstetric);
- nursing administration; and
- allied health administration departments.
CG 4.3.7 The goal of these meetings is to determine the proportion of time spent by these departments coordinating Teaching and Training activities in the hospital.
CG 4.3.8 The type of information that needs to be understood for costing purposes includes:
- the proportion of time and Full Time Equivalent (FTE) spent coordinating pre-entry student placements, rotations, lectures, tutorials, workshops, educational program development, or negotiation with higher education providers.
- the proportion of non-salary expenses related to these activities.
- supporting information from staff rosters or timetabling systems.
CG 4.3.9 To determine direct Teaching and Training department consultation should be done with the managers of junior doctors, clinical directorates, the Director of Nursing and the Director of Allied Health. Meeting with these stakeholders, the costing practitioner needs to determine the proportion of time staff spent on direct Teaching and Training activities.
CG 4.3.10 Costing managers will need to seek the following information during these meetings:
- the proportion of staff time spent attending lectures, tutorials, simulations, grand rounds, and workshops;
- non-salary related expenses associated with the direct activities; and
- supporting information from staff rosters or timetabling systems.
CG 4.3.11 Identified expenses for direct and indirect Teaching and Training activities need to be moved the Teaching and Trading final cost centre, as indicated above.
CG 4.3.12 It is important that information used as the basis for identifying these amounts are understood and signed off by the relevant manager(s) who have responsibility for these activities.
Step 4: Overhead allocation to the teaching and training final cost centre and indirect teaching and training expenses
CG 4.3.13 Broadly, costing practitioners must ensure that hospital overheads are allocated appropriately to the Teaching Training final cost centre. However, where a hospital has identifiable Teaching and Training related overhead expenses, such as a Clinical Training Coordinator, these must be allocated solely to the Teaching and Training final cost centre.
CG 4.3.14 Where necessary, overhead statistics will need to be determined and applied to enable overhead expenses to flow correctly to the Teaching and Training final cost centre. For example, if FTE is the statistic used to allocate Human Resource and Payroll service expenses within the costing system, a proportion of FTE will also need to be moved to the Teaching and Training final cost centre to ensure that HR and Payroll service expenses flow accordingly.
CG 4.3.15 Teaching and Training, expenses for indirect activities need to be allocated to direct Teaching and Training products using appropriate allocation methods. Although these are expense for indirect activities, they are to be categorised as overheads.
Step 5: Final teaching and training product
CG 4.3.16 Through consultation, the costing practitioner needs to identify the different outputs of Teaching and Training to cost as final products.
CG 4.3.17 Depending on the identified final products, the costing practitioner will also need to understand the cost drivers for activities that are delivered in producing these products. The type and level of detail about these products that is available to the costing practitioner will influence the costing methodology and final costed output.
CG 4.3.18 A hospital may consider Teaching and Training products to be hours of training received by the different student/trainee specialty categories. This would require the costing practitioner to understand the nature of Teaching and Training activities delivered to different cohort of student/trainees.
CG 4.3.19 Ideally, final Teaching and Training products would reflect the actual trainee/student placement, where a placement has a start and end period. Preferably, the feeder data from information system about these products would include some or all of the details listed in Table 1. This table also suggest key cost drivers that influence resources needed to deliver Teaching and Training to different students/trainees.
Table 1: Suggest data elements for costing trainee placements.
Training start date
Records the commencement of a placement or period of training.
Training end date
Records the end of a placement or period of training.
Full time equivalent value (FTE)
Numerical (e.g. 0.5)
Records the FTE of a trainee, as not all trainees will be full time trainees or employees.
Stage of training
Professional entry student
Trainees have different resource requirements depending on their stage of training.
Trainees have different resource requirements depending on their profession. Important for clinical credibility to differentiate between professions.
Medical speciality (e.g. orthopaedic surgery, cardiology, paediatric medicine)
Allied health discipline (e.g. physiotherapy, social work, psychology)
Trainees have different resource requirements depending on their specialty.
Important for clinical credibility to differentiate between specialities/disciplines.
Year of training
Year 3 etc.
Year of training may influence the type of training provided and its resources requirements.
Type of degree
The type of training and its resources requirements will also be depended on the subject matter delivered.
International medical trainee
International medical trainees may require additional resources.
Step 6: Matching expenses to teaching and training product
CG 4.3.20 Classifications to provide the “document” used to apply the TTR costing methodology.
CG 4.3.21 Upon processing expenses through the costing system, the outputs will consist of direct and overhead costs only for the Teaching and Training product.
CG 4.3.22 Costing Practitioners should ensure that any offsets or adjustments are specified as per Standard RR-R Matching Production and Cost – Reconciliation to Source Data.