White Paper

Economic Viability of Centralised vs Decentralised Sterilisation in Rural Australian Hospitals

August 2025

Disclaimer

This content is provided for information only. The authors make no representation or warranty regarding the accuracy, completeness or currency of the content. No information in this whitepaper should be construed as medical advice. Readers should seek appropriate professional guidance before acting on any information contained in this document. The authors expressly disclaim all liability for any direct or indirect loss or damage arising from the use of or reliance on this information.

Executive Summary

Rural hospitals face a pivotal decision in how to manage sterilisation of medical instruments: maintain decentralised on-site sterile services at each hospital, or adopt a centralised hub-and-spoke model where a regional facility handles sterilisation for multiple hospitals. This whitepaper analyzes the 20-year financial costs of each model and examines logistical, regulatory, and patient safety considerations. Key findings include:

Cost Efficiency: A centralised model can achieve economies of scale, potentially reducing 20-year costs by 30% or more compared to fully decentralised setups e.g. saving on duplicate capital investments and staffing. However, long transport distances and the need for backup capacity can offset some savings.

Logistics and Continuity: Centralisation introduces transport challenges, distances, road conditions, and emergency needs, requiring robust supply chain coordination, climate-controlled transit, and contingency plans e.g. extra instrument inventory or on-site backup sterilisers to ensure service continuity during disasters or outages.

Regulatory Compliance: Australian standards AS/NZS 4187 and the new AS 5369:2023, impose strict requirements for sterilisation facilities such as segregated clean/dirty zones, water quality, documentation, etc. Decentralised models mean each hospital must individually invest to meet these standards, often at high cost e.g. ~$3 million for a small hospital’s CSSD upgrade. Centralised models consolidate compliance efforts, but contracts and audits must ensure the hub meets standards on behalf of all clients.

Patient Safety: Both models must uphold infection control, but a centralised approach allows highly trained specialists and advanced equipment in one location, potentially improving quality control and reducing sterilisation errors. Conversely, decentralised on-site units may offer faster turnaround for urgent needs and avoid transit-related delays, which is crucial for emergency surgeries. Ensuring redundancy with multiple sterilisers or alternative plans is critical, a failure at a single central hub could impact many hospitals, whereas a failure at one local CSSD is isolated.

Case Studies: Real-world implementations, such as South Australia’s Riverland region hub-and-spoke CSSD with Riverland General Hospital in Berri as the hub serving Loxton, Renmark, and Waikerie hospitals, illustrate both the feasibility and the need for careful risk management. Hypothetical scenarios across various Australian rural settings (remote outback vs. clustered rural towns) demonstrate that the optimal model may differ by region.

Policy Recommendations: A hybrid approach is often warranted, invest in regional central hubs where viable, support small hospitals in either upgrading on-site sterilisers or using mobile/modular CSSD units, and develop clear transport protocols and emergency backups. Funding support e.g. regional infrastructure grants and guidance from health authorities will be needed to ensure compliance and patient safety regardless of model.

Introduction

Sterilisation of reusable medical instruments is a critical hospital function directly tied to patient safety and infection prevention. In rural Australia, health services must balance the need for effective sterilisation against the challenges of distance, scale, and resource constraints. This has led to a debate between decentralised sterilisation, each hospital operating its own Central Sterile Services Department, or CSSD versus centralised sterilisation, consolidating reprocessing in a single regional facility that serves multiple hospitals. Recent regulatory changes have brought this issue to the forefront: the introduction of AS/NZS 4187:2014 (effective 2016) and its updates now AS 5369:2023 mandate higher standards for reprocessing of reusable medical devices in health service organizations. Compliance often requires significant capital upgrades e.g. redesigning sterilisation departments for one-way flow, advanced water filtration, environmental controls, and electronic instrument tracking. For many small hospitals, achieving these standards independently is financially daunting, with one estimate putting the nationwide cost at ~$1 billion for hospitals to overhaul sterilisation services to the new requirements.

This whitepaper provides a comprehensive analysis of the economic viability of centralised vs decentralised sterilisation in rural hospitals, considering a 20-year horizon. We examine not only direct financial costs such as capital, operating, staffing, transport, maintenance but also logistical factors such as distance, supply chain, redundancy, regulatory compliance obligations, patient safety implications including infection rates, turnaround times and risk management, and illustrate the comparison with real case studies and hypothetical scenarios across different rural regions of Australia. We conclude with policy recommendations tailored to the rural Australian context.

Financial Modelling: 20-Year Cost Comparison

To evaluate economic viability, a 20-year financial model was developed comparing the Lifecycle Costs of a decentralised versus a centralised sterilisation approach for a hypothetical regional network of rural hospitals. The model incorporates:

• Capital Costs: Initial investment for building or upgrading sterilisation facilities, plus periodic replacement of equipment e.g. autoclaves, washers or facility refurbishments around mid-life.
• Operating Expenses: Ongoing costs including staffing (sterilisation technicians or nurses, and in a central model, drivers/logistics staff), consumables (wrapping materials, indicators, detergents), utilities (water, electricity for autoclaves), and routine maintenance.
• Transport Costs: (Centralised model only) Expenses for instrument transportation, vehicles, fuel, vehicle maintenance, and related logistics overhead.
• Equipment Maintenance and Depreciation: Both models incur maintenance costs, but a central hub may have higher-volume equipment with specialized service contracts, whereas multiple small CSSDs may duplicate maintenance efforts.
• Assumptions: Our scenario considers 5 small rural hospitals that each perform a modest volume of procedures requiring instrument sterilisation. Under the decentralised model, each hospital operates its own CSSD. Under the centralised model, one hospital or an external facility serves as a sterilisation hub for all 5, with daily instrument transport to and from the spokes. We assume each hospital under the decentralised model must invest in upgrading its CSSD to meet standards leveraging real-world data such as Kerang District Health in Victoria, which received $3.0 million to upgrade its CSSD to AS/NZS 4187 compliance. For simplicity, financial figures are in 2025 Australian dollars and not discounted. Table 1 summarises the cost comparison:

Table 1. Hypothetical 20-Year Cost Comparison for a 5-Hospital Network (figures in millions of AUD, rounded)

Figure 1: Hypothetical 20-year cost comparison for a regional network with five small rural hospitals. The centralised model shows significantly lower capital expenditure and reduced operating cost due to economies of scale, resulting in a lower total cost over two decades.

The modelling suggests a centralised approach can be markedly more cost-effective over the long term in a scenario with multiple small hospitals. In our example, total 20-year costs were roughly $26 million for centralised vs $40 million for decentralised, a savings of about 35%. The largest difference comes from capital costs: one modern hub facility can replace five individual upgrades. Centralisation also consolidates staffing e.g. a single larger CSSD might run with, say, 6 technicians and 2 drivers, versus perhaps 10 technicians if each of 5 sites needs 2 staff. This can yield savings in salaries and training. Operating overhead like quality assurance programs and compliance processes are also streamlined when done at one site rather than five. The economies of scale in sterilisation, running larger autoclaves near full capacity, bulk purchasing of consumables, etc. improve the cost per instrument reprocessed.

However, it is important to note that centralisation is not free of additional costs. The model’s operating cost for the central hub included transport logistics. If distances are large, fuel and vehicle maintenance costs rise; dedicated drivers or couriers must be employed. Furthermore, central hubs may choose to operate longer hours to accommodate instrument turnaround for all client hospitals, potentially increasing wage costs though still likely less than staffing multiple sites around the clock. Instrument inventory is another hidden cost: with off-site processing, each hospital may need a larger pool of instruments (extra sets) to cover the transit time and avoid surgery delays while some instruments are out for sterilisation. In practice, this might partially erode the savings from centralisation unless well-managed.

Sensitivity to Volume and Distance

The financial viability of a centralised model greatly depends on volume and distance:

• Low Volume Facilities: If each hospital has very low surgical volume e.g. small clinics or day surgery centers, maintaining full CSSD capability at each site is highly inefficient. This is where outsourcing or hub models shine, indeed, some small day-surgery facilities in Australia have entirely outsourced their reprocessing to commercial sterilisation providers, operating only a dispatch/receipt area on-site. For such low-volume cases, the cost per instrument can drop significantly with a central service because fixed costs are shared.
• High Volume Regional Hospitals: Conversely, if a rural hospital has a busy theatre doing many procedures daily, it likely already has an efficient in-house CSSD to meet demand. In these cases, that hospital often is the logical hub for surrounding smaller facilities. Cost modelling should consider whether the largest hospital in a region can absorb extra load from smaller hospitals without needing disproportionate expansion.
• Transport Distance: The farther the spoke hospitals are from the hub, the higher the transport costs and the longer the turnaround time, potentially necessitating more instrument inventory. Our model assumed relatively close facilities e.g. within 50 to 100 km. In regions where hospitals are hundreds of kilometers apart e.g. central Australia, the transport component would be much larger (fuel, vehicle wear, driver time), and at some point a decentralised or sub-hub model might become more cost-effective. Fuel price fluctuations over 20 years also add uncertainty.
• Capital Funding Availability: Centralisation often requires an upfront investment in a new or expanded sterilisation facility. If government funding or grants such as regional infrastructure funds are available to cover this, the economics tilt further toward centralisation. If not, some hospitals might lack capital and be forced into interim solutions e.g. mobile CSSD units or partial upgrades which could be more expensive in piecemeal fashion.

In summary, the financial model indicates a long-term cost advantage for centralised sterilisation in multi-hospital networks, especially when volumes are low-to-moderate and distances manageable. Yet, it must be weighed against practical logistical challenges, which are discussed next.

Logistical Challenges and Considerations

Implementing a centralised sterilisation service in rural areas introduces a set of logistical complexities that do not exist or are less pronounced in a fully decentralised setup. Key challenges include transportation, coordination of supply chain, equipment redundancy, and maintaining service during emergencies or disruptions.

Transportation Distances and Timing: By definition, a hub-and-spoke sterilisation model requires moving used instruments from hospitals to the central CSSD, and returning sterilised instruments back. Rural Australian regions can cover vast distances; for example, hospitals might be tens or even hundreds of kilometers apart. Transport must be timely and reliable. A common arrangement is a daily pickup/drop-off schedule, e.g. a van departs the hub each morning with sterile packs for each hospital and returns with the previous day’s used instruments. In closer clusters, multiple runs per day might be feasible, but in far-flung areas a 24-hour turnaround or longer might have to be accepted. Hospitals need sufficient instrument inventory to cover the period between sending items out and getting them back sterilised. Any delay such as vehicle breakdown, road closure, etc. can directly impact surgical schedules at the spoke hospitals, so timing is critical.

Transport Conditions and Compliance: Sterile packs must be kept clean and intact during transit. According to standards, items for distribution outside the facility must be securely packed to protect against damage and contamination, and transport vehicles should control cleanliness, temperature, and humidity. In practice, this means closed, dedicated hospital vans with appropriate shelving; some providers market specialized “AS 4187-compliant” vehicles for this purpose. The logistics team must also maintain a chain-of-custody manifest for the instrument sets, tracking dispatch and receipt, to ensure nothing is lost and that sterility is not compromised in handling. In tropical regions e.g. northern Australia, air-conditioned vehicles may be necessary to avoid heat/humidity extremes that could affect packaging integrity. Proper transport adds cost, but is non-negotiable for patient safety and compliance.

Supply Chain Coordination: Effective communication and scheduling are needed between the hub CSSD and the spoke hospitals. Surgical lists at each hospital should be coordinated with sterilisation delivery schedules. For example, if Hospital A plans an orthopedic surgery on Tuesday, it must ensure the required instrument tray is either already on site sterile or will arrive from the hub in time. This requires inventory management systems and possibly an electronic tracking system that all hospitals can access to see where their instrument sets are. Some modern CSSDs use RFID or barcode systems to track trays to specific patients/procedures. The central hub essentially becomes a service provider that must meet the needs of multiple “clients” on schedule, akin to a supply chain operation. Any failure in communication e.g. a hospital not informing the CSSD of an added emergency case could mean instruments aren’t ready when needed. Thus, robust processes and perhaps a regional sterile supply coordinator are important.

Equipment Redundancy and Downtime: A major advantage of a large central CSSD is the ability to have multiple steriliser units and washers. If one autoclave goes down for maintenance or repair, the facility usually has another to pick up the slack, avoiding service interruption. In contrast, a small rural hospital’s CSSD might only have one steriliser; a breakdown could put it completely out of action, halting surgeries until fixed. Centralisation, therefore, can enhance reliability within the sterilisation process itself. However, centralisation also introduces a single-point-of-failure risk at the system level: if the hub facility experiences a major failure e.g. fire, flood, contamination issue or must shut down, all dependent hospitals lose sterilisation capability at once. Mitigating this may involve contingency plans such as agreements with an alternate sterilisation service, perhaps a metropolitan hospital or a neighboring region’s hub to take over in an emergency. Some regions might establish two hub facilities in different towns as backup for each other, albeit at higher cost.

Emergencies and On-Demand Needs: Rural hospitals must handle emergencies such as trauma surgeries, urgent C-sections, etc. that are not always predictable. In a fully centralised model, if an emergency occurs requiring instruments that are all currently used or if additional sterile tools are needed rapidly, waiting for a delivery from a distant hub could be life-threatening. Strategies to address this include:

• On-site sterile processing for emergencies: Even if routine sterilisation is centralised, a hospital might retain a small bench-top autoclave or a few sterile instrument sets for emergency use. “Flash” sterilisation (rapid sterilising of an instrument for immediate use) could be done on-site as a backup, though this is generally avoided unless absolutely necessary due to higher infection risk if not done properly.
• Stockpiling Sterile Supplies: Hospitals can keep a reserve of critical items such as suture kits or emergency surgical packs sterilised and packaged on-site in case of urgent need. These must be rotated to ensure they remain within sterility shelf-life. This approach requires storage space and inventory oversight but provides a buffer.
• Redundant delivery runs: In some cases, having two runs per day if distance allows or an on-call driver for after-hours emergencies could be instituted. For example, if a late-night surgery arises, the hub might send a special trip with needed instruments. The cost of such responsiveness must be budgeted, and rural road travel at night has safety considerations.

Geographical and Environmental Challenges: Australia’s rural geography means dealing with occasional floods, bushfires, cyclones, or remote dirt roads. A flood could wash out roads and isolate a hospital from the central CSSD for days. In such scenarios, decentralised capacity even if limited at the stranded hospital could be a literal lifesaver. Any centralisation plan should include a disaster plan outlining how to manage if transport routes are cut. Some remote areas might consider air transport for instruments e.g. using the Royal Flying Doctor Service or charter flights if road transport is not feasible or quick enough, though this is costly and rarely used except in extreme remoteness. Another consideration is that some rural hospitals serve communities that swell seasonally e.g. tourists in holiday areas or agricultural harvest seasons. Logistics must be scaled to handle peak loads and then scaled down in off-peak times, a central CSSD might more easily manage this flexibly than multiple small ones each trying to adjust.

In summary, the logistics of a centralised sterilisation model require careful systems planning and risk mitigation. Where implemented well, such as in SA Health’s Riverland hub-and-spoke CSSD model, administrators devoted “a great deal of work” to risk-manage transport times, turnover of instrument sets, and understaffing issues to make the system viable. By understanding and addressing these challenges, through adequate resourcing of transport, maintaining backups, and clear communication protocols, the efficiency gains of centralisation can be realized without compromising service continuity.

Regulatory and Compliance Obligations

Regulatory standards for sterilisation in Australia are stringent and apply equally to all health service organizations, whether large urban hospitals or small rural clinics. The primary standard, AS/NZS 4187:2014 “Reprocessing of Reusable Medical Devices in Health Service Organisations”, and its latest update AS 5369:2023, set detailed requirements for everything from facility design and equipment performance to staff training and documentation. These standards are enforced through hospital accreditation (NSQHS Standard 3 Preventing and Controlling Infections). Non-compliance can put a hospital’s accreditation and ability to operate at risk.

Key compliance obligations that impact centralised vs decentralised models include:

Physical Facility Requirements: AS/NZS 4187 mandates segregation of clean and dirty zones, unidirectional workflow, and controlled environments such as airflow, temperature or humidity in sterilisation units. A decentralised model requires each hospital to modify or build space to meet these criteria e.g. separate decontamination rooms, sterile storage rooms, pass-through washers, HVAC upgrades, etc. Many older small hospitals were not built with this in mind, forcing costly retrofits. A centralised model can concentrate capital investment into one purpose-built facility that meets all requirements, potentially more efficiently than upgrading multiple older sites. For instance, rather than retrofitting five small CSSDs, a health network might build one state-of-the-art regional sterilisation center. This was the approach in some jurisdictions: “low volume… and the cost of refurbishment of individual, isolated CSSDs has driven a hub-and-spoke model” in at least one regional health network. On the other hand, if even one hospital in a decentralised model fails to meet the standard, that hospital cannot safely reprocess devices, a central hub could be a solution for that site to remain in compliance by outsourcing its sterilisation.

Equipment and Validation: The standards require that all sterilising equipment such as autoclaves, washer-disinfectors comply with specific performance criteria often referenced to ISO standards and that processes are validated and tested regularly e.g. daily/weekly Bowie-Dick tests, biological indicators, annual performance qualification. In a decentralised setup, each hospital must purchase compliant machines and run these tests, maintain records, and service the equipment. Smaller hospitals might struggle with this technically complex task, especially if they lack full-time sterile services staff or engineers. A centralised service would have dedicated staff to ensure machines are properly maintained and all monitoring is done consistently. Additionally, water quality monitoring is a big component of AS 4187, final rinse water for cleaning must meet strict specifications. Achieving this often requires installing Reverse Osmosis water treatment units. For a small facility, that is a significant expense and maintenance burden e.g. Kerang Hospital’s upgrade included a full RO water system replacement. A central hub can operate one large water treatment plant for all instruments processed, rather than five smaller units, again an efficiency gain.

Documentation and Traceability: Both models need robust tracking of instruments to patients. AS 4187 requires that each critical or semi-critical reusable device is traceable to the patient and procedure it was used in. In practice, this means a sterilisation record system that logs each instrument or tray’s cycle number, steriliser ID, and an identifier that gets recorded in the patient’s file. Decentralised model: each hospital likely maintains its own log books or electronic system, which must be audited. Centralised model: the hub could maintain a single database and provide documentation back to client hospitals. Outsourcing doesn’t remove the obligation, the hospital is still responsible for ensuring standards are met by the contractor. Typically, service agreements will specify that the central provider must follow AS/NZS 4187 and provide evidence of compliance e.g. yearly audits. When outsourcing to an external company, hospitals and regulators must guard against any lapse in quality control, since the hospital relinquishes direct oversight of the process. The contractual agreement must clearly assign responsibilities, as required by the standard.

Regulatory Acceptance of Off-site Reprocessing: Importantly, Australian standards do allow off-site (centralised) sterilisation, provided certain conditions are met. Even the 2003 edition of AS/NZS 4187 stated that off-site sterile items must be securely packaged and protected during transport, and that vehicles must meet cleanliness and environment requirements. The current standards reinforce that if any part of reprocessing is contracted out, the health service must have an agreement to ensure compliance by the external party. Thus, from a regulatory perspective, centralisation including outsourcing is permissible, there is no rule that sterilisation must occur on-site. The focus is on outcomes and maintaining sterility and traceability throughout the process. Some private day hospitals and clinics have taken advantage of this by using third-party sterilisation providers to meet their obligations rather than building their own CSSDs.

Licensing and Accreditation Impact: A potential wrinkle is that some jurisdictions might require notification or licensing for a standalone sterilisation facility. A central CSSD serving multiple hospitals could be part of a larger hospital (under its license) or a separate commercial entity. Either way, it will come under scrutiny during accreditation surveys. Meanwhile, small hospitals that eliminate their CSSD will be assessed on how they manage sterilised instruments coming in, surveyors will expect to see the contracts, evidence of the provider’s accreditation or certification e.g. some kind of quality certification for the off-site service. The Joint Commission in the US even introduced a certification for Centralized Sterile Processing services to standardize quality for off-site providers, reflecting a global trend towards centralisation under controlled quality systems.

In weighing central vs. local from a compliance standpoint, consider that many rural hospitals face a deadline crunch to meet AS/NZS 4187. Extensions were given initial full compliance was expected by 2021, with some aspects by 2023, but as of 2025 many are still in the process of upgrades. Surveys showed only ~30% of organizations were fully compliant by 2021, and 90% reported implementation issues. The challenges included capital limits and lack of space. For some, centralisation is a strategy to achieve compliance more easily: rather than each small hospital struggling or failing to upgrade, a single well-designed hub can be the compliance solution for the whole region. This is not without risk, oversight of that hub must be maintained, but it can relieve smaller facilities of a burden they are ill-equipped to handle. The policy trend appears to support flexible approaches: health services are exploring outsourcing, mobile CSSD units, and regional solutions as “viable compliant options” to meet the standards without completely overhauling every single hospital.

Patient Safety and Quality Implications

Regardless of cost or compliance, the foremost consideration in sterilisation service models must be patient safety. Improperly sterilised instruments can lead to surgical site infections or transmission of diseases, a serious risk to patients. Thus, any model chosen should equalise on delivering safe, sterile equipment for patient care. That said, there are some differences in how each model might influence safety, infection rates, and risk management:

Quality Control and Expertise: A centralised CSSD typically employs staff who are specialised in sterilisation techniques. They may be more likely to hold sterilisation technician certifications or extensive training, simply because their full-time role is in this field. In a small hospital, sometimes perioperative nurses or multi-skilled staff handle sterilisation in addition to other duties, which could potentially lead to less focus or expertise. Central hubs also justify investment in advanced quality systems, for example, computerised tracking, higher-grade test equipment, routine auditing by infection control professionals. The CDC’s guidelines note that performing reprocessing in a central department allows easier control of quality and consistency, with the aim of protecting patients from infection. This suggests that a well-run central CSSD could reduce the risk of sterilisation failures e.g. instruments not properly cleaned or a cycle parameter missed because processes are standardized and monitored by a dedicated team. In contrast, decentralised units might have more variability in practices and potentially a higher error rate if oversight is inconsistent. However, this is a generalization, with proper training and protocols, even a small CSSD can be very safe. It’s worth noting that infection rates are usually low for clean surgeries in Australia’s hospitals today, and major sterilisation failures e.g. non-sterile instruments used on patients are rare and not typically tied to the model of service but rather lapses in procedure.

Turnaround Time and Instrument Availability: Patient safety is also impacted by whether needed instruments are available when needed. For urgent and emergent cases, faster turnaround can be critical. Decentralised model advantage: on-site sterilisation means if a set of instruments is needed quickly, the team can immediately start reprocessing them taking perhaps 1 to 2 hours for a flash or standard cycle and have them available, or they can sterilise additional instruments on short notice. This could be life-saving in a trauma or a situation with unexpected instrument contamination during a case e.g. an instrument gets dropped on the floor mid-surgery, if on-site CSSD is there, they can rapidly re-sterilise it or have another ready. In a central model, if an extra need arises, there could be a delay waiting for the next delivery or sending a special courier. Thus, risk management plans must exist to ensure that emergencies can be handled. Some centralised networks mitigate this by keeping emergency trays at each hospital or maintaining a small local steriliser for just such situations, as mentioned earlier. Patient safety would be compromised if, for example, a patient needed an urgent surgical intervention but had to be transferred or delayed because no sterile instruments were on hand due to a reliance on an off-site service. So, while day-to-day efficiency is important, rare high-stakes scenarios must be accounted for.

Infection Rates and Sterility Assurance: From an infection control perspective, the actual sterilisation process if done according to standards should yield the same level of sterility whether centralised or decentralised. What differs is the potential points of failure:

In decentralised units, common issues might include outdated equipment not reaching proper temperature, operator error such as loading autoclave improperly, or lack of adherence to protocols e.g. not allowing proper drying time, resulting in wet packs that can wick in bacteria. These issues can be mitigated with good training and audits, but there’s a concern that in some small facilities, sterilisation might not get the same attention or resources as in large centres.

In centralised models, the transit is a new risk point, packs could get damaged or seals ruptured in transport, or exposure to extremes could compromise sterility. Best practices like sealed dust covers and rigorous handling protocols minimize this risk. Generally, if a package remains intact and dry, it should remain sterile for the duration of its shelf-life regardless of a truck ride. Still, staff at the receiving hospital must inspect packages if any are compromised, they cannot be used. Some hospitals choose to re-sterilise items upon arrival if there’s any doubt which somewhat defeats the purpose of outsourcing, but with proper agreements this shouldn’t be necessary. The ACIPC forum discussion suggests that sterility can be maintained in sealed transport, and reprocessing at the receiving site is not required if standards are met. Thus, patient infection risk should remain low.

Consistent Standards of Practice: Having one central service might actually standardise infection control practices across a region. All hospitals get instruments prepared the same way, packaged the same way, with the same indicators of sterility. This consistency can reduce confusion and ensure every site is using properly sterilised gear. It also means that improvements e.g. a new wrapping technique or better chemical indicator can be rolled out universally by the central provider, whereas in a fragmented system, some hospitals might lag in adopting best practices. As an example, if a particular type of heat-resistant bacterial spore is causing concern, a central CSSD can adjust its cycles network-wide immediately. This sort of agility and consistency can enhance patient safety on a broad scale.

Surveillance and Infection Outcomes: It would be ideal to have data comparing surgical site infection (SSI) rates or sterilisation-related adverse events between hospitals using central vs local CSSD models. Specific studies are scarce, as many factors influence infection rates. However, given that sterilisation failure incidents are extremely infrequent, one might not detect a difference unless a system was truly failing. The key point is that both models can be safe if executed well. If anything, centralised services might allow more rigorous environmental controls e.g. better ventilation and controlled environments in one big CSSD than many older small ones, theoretically reducing environmental contaminants. Also, central staff focusing solely on reprocessing may be more attuned to subtle issues like instrument wear and tear, damaged instruments can harbour debris and can pull unfit instruments from service more readily.

Clinical Workflow and Error Prevention: Patient safety extends to ensuring surgeries aren’t cancelled or prolonged due to instrument issues. In decentralised systems, a small hospital might have limited instrument sets; if something goes wrong such as a steriliser failure, or contamination discovered in a pack, the hospital could run out of sterile instruments and have to cancel cases. In a central model, there is a larger pool of instruments across the network (essentially shared resources), and the central CSSD can often provide a replacement set quickly or has extras on hand. This could reduce the incidence of case cancellations or delays, which, while not directly an “infection” issue, does impact patient care quality e.g. a patient’s surgery being postponed is not a good outcome. On the flip side, if the central service has a delay or mix-up, it could affect multiple patients across hospitals. For example, a sterilisation load recall, maybe a steriliser failed a spore test, meaning everything in a certain batch is non-validated would force multiple hospitals to pull those instruments out of use simultaneously. A decentralised setup would confine such an event to one site. Thus, robust quality assurance at the central hub is paramount to avoid a large-scale incident.

In conclusion, patient safety can be maintained in either model, but it requires diligence and risk planning. Centralisation offers potential quality improvements through specialisation and consistency, aligning with expert guidance that central processing helps control quality. Decentralisation offers immediacy and self-reliance which can be crucial in emergencies. A blended approach to centralise routine reprocessing, but keep minimal local capability for urgent needs may often provide the best of both worlds from a safety perspective. The choice should be guided by what will ensure sterile instruments are available for every patient, on time, and with minimum risk in that particular setting.

Comparative Analysis: Case Studies and Scenario Modeling

To ground the above discussions, we examine how centralised and decentralised sterilisation models have been applied or proposed in various Australian rural contexts, as well as hypothetical scenarios illustrating their pros and cons:

Riverland, South Australia (Real-World Case): The Riverland region population ~33,000 spread across several towns provides a contemporary example of moving toward centralisation. Under a recent plan, Riverland General Hospital in Berri is designated as the CSSD “Hub”, while smaller hospitals in Loxton, Renmark, and Waikerie are “Spoke” sites. The spoke hospitals would no longer perform full sterilisation on-site; instead, they send their instruments to Berri for reprocessing. This change was driven by the need to upgrade facilities to meet standards and the low volume at each small site not justifying separate costly upgrades. By pooling resources into the hub at Berri which itself needed an upgraded CSSD, the Local Health Network aimed to improve compliance and efficiency. Logistical setup: the hospitals are within roughly 30 to 80 km of Berri, so daily road transport is feasible. The plan included purchasing dedicated vehicles and coordinating schedules. Challenges faced: As noted by health officials, significant work was required on risk management, ensuring instrument turnaround times fit surgical schedules at each site, managing the inventory so that each hospital had enough on hand, and dealing with understaffing by concentrating staff at the hub where they could support each other. Early feedback indicates the hub-and-spoke is working, but it required clear communication channels and backup plans for contingencies e.g. if the Berri steriliser is down, a backup arrangement with another regional hospital or using disposables in the interim. This case study underscores that centralisation can succeed in a rural area when distance isn’t too large and when it’s supported by a policy push in this case, meeting AS 4187 standards efficiently. It also highlights how a public health network can reorganize services regionally for long-term sustainability.

Kerang and Loddon Mallee, Victoria (Real-World Situation): Not all regions have centralised. In Victoria, many small hospitals have pursued on-site upgrades with government funding. For example, Kerang District Health, a small hospital in northern Victoria secured $3 million to renovate its CSSD for compliance, rather than outsourcing to a larger centre. This suggests that for Kerang, which likely performs a number of surgeries and wanted to maintain that capacity locally, decentralised investment was chosen. However, we see a trend of clustering in some areas: larger regional hospitals like Bendigo or Ballarat serve as referral centres, but they have not taken over sterilisation for the smaller ones yet. A hypothetical scenario: If Victoria were to centralise sterilisation, one could imagine hubs in regional cities and a radius of smaller facilities sending instruments in. But given many Victorian rural hospitals are in closer proximity than in other states, mobile CSSD units or interim solutions have been used during refurbishments, rather than permanent outsourcing. This reflects a policy choice to keep services local where possible, perhaps because distances are manageable and keeping local capability aligns with retaining surgical services in those towns.

Remote Outback Hospital (Hypothetical Scenario): Consider a single hospital in a very remote area e.g. far-west New South Wales or outback Queensland, the hospital is small but the next nearest hospital is 300 km away. In this scenario, a full centralisation i.e. closing the on-site CSSD and relying on a far-off hub would be impractical due to distance. Turnaround might be 2 to 3 days by road; emergency coverage would be untenable. Here, decentralised model is nearly mandatory for core services. However, even these hospitals might centralise certain aspects: for instance, they could send out infrequently used complex instruments like flexible endoscopes to a specialist centre for high-level disinfection, rather than maintaining that capability on-site, especially if procedures are rare. They might also use a hybrid approach: some instruments sterilised on-site, others like high-volume linen packs or minor procedure kits supplied sterile from a regional centre to save effort. The key in these extreme cases is ensuring the local staff are well-trained and that the facility is supported with resources to meet standards, perhaps through funding or visiting experts. The cost here of decentralisation is high per instrument, but the cost of not doing it could be measured in life or death if the hospital couldn’t function independently.

Moderate-Distance Rural Network (Hypothetical): A region in NSW with several mid-sized towns, say each 100 to 150 km apart, each with a small hospital. They could either each upgrade their CSSD or have one or two hubs. A scenario analysis might find that two hubs each covering a cluster of hospitals within ~70 km is optimal, balancing transport distances and capital costs. For example, Hospital A (hub for Hospitals B and C), and Hospital X (hub for Y and Z). This divides the region into two service areas. Such dual-hub models build in some redundancy, if Hub A fails, perhaps Hub X could temporarily take B and C’s load, though distance might be longer. The hypothetical outcome might show substantial savings if done correctly, but also requires enough volume at each hub to justify itself. If one hub doesn’t have volume, then it might be better to centralise all into one despite distance, or keep those low-volume ones doing it themselves, particularly if they don’t do much anyway, sometimes the cheapest solution for a very low-use steriliser is actually to use disposable single-use instruments where possible. Indeed, single-use sterile instruments for minor procedures, like basic suturing kits, some surgical drills, etc. are an emerging consideration, they eliminate reprocessing needs at the point of use at the expense of higher per-unit cost and environmental waste. A rural network might choose to strategically use single-use items to reduce the burden on either model, for example, a remote clinic might stock only disposable sterile equipment for certain procedures to avoid needing an autoclave at all.

Northern Territory Top End (Real Situation and Hypothetical): In the NT, Darwin has a large hospital with a modern CSSD, and a newer hospital (Palmerston Regional) opened ~30 minutes away. There have been discussions about whether to centralise some services between them. A forum inquiry from a Palmerston educator asked about standards for transporting instrument trays between hospitals ~30 mins apart, suggesting they were considering sharing instruments or reprocessing. The consensus was that sterility could be maintained with proper sealed transport, though re-sterilisation on receipt was debated. If Darwin’s hospital took over all sterilising, Palmerston would need a good system to send/receive quickly (30 minutes is not far). The benefit would be not duplicating expensive infrastructure at the new hospital, but the risk would be any disruption in the link could slow down procedures. In practice, Palmerston Hospital does have its own CSSD for now, indicating a decentralised approach was kept, likely for self-sufficiency. The NT also has very remote clinics/hospitals, e.g. Gove, Alice Springs for central Australia), each must largely be self-reliant due to distance. However, the NT Health could evaluate if a hub in, say, Alice Springs could serve several smaller clinics within a certain radius by plane or road. Given harsh conditions and sparse population, they may find decentralised is the only feasible model except within the Darwin metro area cluster.

Across these scenarios, some general patterns emerge:

• Economy of Scale vs. Distance Trade-off: There is a tipping point where the cost of overcoming distance and risk thereof outweighs the savings of centralisation. That tipping point is different in each region based on geography and road infrastructure. Coastal and densely populated rural areas e.g. much of Victoria, NSW have more opportunity for central hubs. Remote inland areas lean toward local solutions.
• Retention of Surgical Services: Centralising sterilisation can be seen as part of a broader centralisation of healthcare services. Some stakeholders may fear that if a small hospital loses its sterilisation unit, it might eventually lose its surgical capabilities entirely since it becomes dependent on another hospital. There could be resistance at the community or clinician level to central CSSD if it’s perceived as a step toward downgrading the local hospital. Thus, case studies show the importance of policy and communication, framing the hub-and-spoke as a way to preserve surgical services by making them safer and compliant, rather than a loss of autonomy. Where this has been clearly communicated (as in Riverland SA), it can be acceptable, but it requires trust that transport and hub services will be reliable.
• Innovation and Flexibility: Some regions are exploring innovative solutions, such as modular CSSD units, essentially prefabricated sterilisation departments that can be deployed on-site temporarily or permanently. These can serve as an interim solution during refurbishments or even as a semi-centralised node placed strategically to serve multiple sites for example, a mobile CSSD parked midway between a couple of small hospitals. While not yet widespread, such approaches could blur the line between centralised and decentralised: the sterilisation is centralised for several facilities but not located at a hospital, instead in a mobile unit. Policy support for such pilots might be warranted to see if they yield cost or safety benefits.

In conclusion, real-world cases in Australia illustrate both successful centralisation and valid reasons to retain local sterilisation. A one-size-fits-all solution does not exist across all rural regions. Instead, analysis and even modeling, as done here should be conducted region by region, taking into account hospital sizes, distances, case volumes, and available infrastructure. Often a tiered approach is optimal: larger regional hospitals act as hubs for nearby small facilities, while very remote outposts maintain minimal on-site capacity. The comparative analysis demonstrates that centralised models can work and deliver cost savings and quality gains, but require overcoming logistic hurdles and maintaining rigorous standards.

Policy Recommendations

Based on the findings of this analysis, the following policy recommendations are proposed for health administrators and policymakers considering sterilisation service models in rural Australia:

• Conduct Regional Needs Assessments: Health departments should evaluate each rural region’s characteristics, number of procedures, distances between facilities, current compliance gaps, to determine where centralisation vs. decentralisation or a hybrid would be most beneficial. One approach does not suit all; policies should be flexible to regional needs rather than a blanket mandate. For example, develop a decision matrix that weighs cost vs. distance vs. volume to identify candidate regions for hub-and-spoke models.
• Invest in Regional Hub Infrastructure: Where analysis shows a clear benefit, provide targeted funding to establish centralised sterilisation hubs. This includes capital funding for construction or refurbishment of a regional CSSD that meets AS/NZS 4187 standards, and funding for necessary transport (vans, fuel budgets) and staffing. The example of an estimated $1 billion needed nationally for upgrades should be met with proportional investment, possibly through federal or state infrastructure programs focusing on rural health. Funding streams like Victoria’s Regional Health Infrastructure Fund which funded Kerang’s CSSD upgrade are good models; similar programs could fund central hubs, which ultimately might reduce the total spend needed by avoiding duplicate upgrades at every site.
• Ensure Robust Service Agreements and Governance: When implementing centralisation, formalize the arrangements through service-level agreements (SLAs) between the hub provider and the receiving hospitals. These should outline performance metrics such as turnaround time, quality indicators, responsibilities for compliance such as audit access, reporting of sterilisation parameters, and contingency plans if service is disrupted. Include requirements for the central CSSD to maintain certification or accreditation of its processes. Establish a governance committee with representation from all stakeholder hospitals to monitor the arrangement, ensuring the hub is accountable and responsive to the needs of each spoke hospital.
• Develop Contingency and Redundancy Plans: For any centralised network, create a detailed emergency plan. This might involve: keeping a small steriliser at spoke hospitals for emergency use; maintaining a backup inventory of critical instruments at each site; having mutual aid agreements with another CSSD even if farther away to step in if the primary hub is down; and considering alternative transport e.g. helicopter/air for urgent instrument delivery during road outages. Drills or simulations could be run to test these plans. Patient care should never be jeopardized due to a single point of failure, so redundancy must be built-in, even if it adds modest cost.
• Leverage Mobile and Modular Solutions: Encourage innovation by funding trials of mobile CSSD units or modular, shareable sterilisation facilities. These can serve multiple small hospitals in succession e.g. rotating service or be deployed rapidly during refurbishments so that sterilisation can continue uninterrupted. They can also act as interim compliance measures, for instance, a hospital that can’t upgrade in time might use a mobile unit parked on-site or nearby to comply with AS 4187 until a permanent solution is in place. Policies should support the regulatory acceptance of such units, ensuring they are held to the same standards but giving hospitals a practical tool to maintain services.
• Promote Workforce Development in Sterilisation: A centralised model will succeed or fail largely based on skilled staff. Invest in training programs e.g. subsidize Certificate III in Sterilisation Services courses and consider creating specialist positions that can service multiple rural facilities such as a roving sterilisation quality officer. For decentralised sites, ensure that staff often nurses or technicians with other duties receive ongoing training in sterilisation best practices. The Sterilizing Research Advisory Council of Australia (SRACA) and other bodies can be involved in rural outreach to improve competencies. A well-trained workforce reduces errors and instills confidence in whatever model is used.
• Strengthen Regulatory Support and Clarity: Regulators like the Australian Commission on Safety and Quality in Health Care should continue to provide clear guidance on implementing AS 4187/AS 5369 in rural settings. This includes clarifying that off-site reprocessing is acceptable with proper risk management, and providing templates for risk assessments, transport validation, and other tools to help hospitals comply. The development of the new standard AS 5369:2023 should incorporate lessons from the field, potentially including more explicit guidance on centralised sterilisation and what constitutes a “compliant” transport and external facility. Regulators could also consider a tiered compliance approach for very small facilities, for example, allowing them to partner with bigger hospitals rather than meet every requirement alone, which is effectively what a hub model does.
• Measure Outcomes and Adjust Policy: Implement a system to monitor the impact of any changes. Track metrics such as cost savings achieved, infection rates, instrument turnaround times, and user (surgeon/nurse) satisfaction in hospitals that have centralised vs those that are still local. Also monitor unintended consequences e.g. do surgery wait times increase or decrease? Are there more cancellations due to instrument issues? Has any hospital reduced services because of sterilisation logistics?. Use these data to refine the approach. If, for instance, infection rates remain low and costs are down in a hub network, it validates expansion of the model. If problems are observed, address them, maybe a tweak like stationing a sterilisation technician at a spoke site on busy days, or increasing delivery frequency.
• Consider Patient-Centered Factors: Finally, keep the patient experience in mind. While patients might not directly know where their instruments are sterilised, they will feel the effects if there are delays or if a local hospital can’t do a procedure and has to transfer them. Policy should aim to enhance patient access to safe surgery locally. Centralising sterilisation should be a means to support rural surgery by making it sustainable and safe, not a step to centralise surgery itself unless clinically necessary. Thus, any plan must be communicated to communities as an investment in quality and safety. Including patient representatives in planning might help address concerns and ensure transparency.

In summary, policies should encourage a scalable, flexible approach to sterilisation in rural healthcare. By pooling resources intelligently and ensuring no hospital is left struggling to meet modern requirements alone, the health system can improve both efficiency and safety. The recommendations above aim to create a supportive framework where centralised and decentralised models are each used where they make the most sense, and transitions between them are managed carefully with patient care as the priority.

Conclusion

The economic viability of centralised versus decentralised sterilisation models in rural Australian hospitals cannot be judged on cost alone, it encompasses a balance of financial efficiency, logistical practicality, regulatory compliance, and above all patient safety. Over a 20-year horizon, centralised models often demonstrate clear cost benefits, primarily by avoiding redundant capital investments and leveraging scale in operations. They also offer opportunities for enhanced quality control through specialised staff and facilities. Yet, these advantages come with significant dependencies: the need for reliable transport networks, meticulous coordination, and robust contingency measures to ensure that rural healthcare delivery is not compromised by distance or disaster.

Decentralised models, while sometimes more expensive and challenging to upgrade to modern standards, provide autonomy and immediacy that can be critical in isolated settings. They ensure that a hospital’s ability to sterilise instruments is not beholden to external factors, an important consideration in Australia’s vast interior. The decision, therefore, is not binary, many regions will find a hybrid approach serves best, maintaining some local capacity while centralising what is feasible to centralise. Real-world cases like the Riverland hub in SA validate that with proper planning, centralisation can work and yield both compliance and cost gains. Conversely, the continued investment in on-site CSSDs in places like Kerang shows that local solutions remain relevant and necessary.

Ultimately, the goal for rural health administrators should be to ensure every surgical patient, no matter how remote their hospital, has access to fully sterile instruments and safe care. By thoughtfully applying the models discussed using data-driven analysis and keeping contingency in mind, rural hospitals can meet stringent sterilisation standards without sacrificing financial sustainability or patient outcomes. The recommendations outlined can guide policymakers in creating an enabling environment for these changes. With strategic investment and coordination, rural regions in Australia can modernise their sterilisation services in a way that supports the broader objectives of accessible, high-quality healthcare close to home.

Sources

1. Australian Commission on Safety and Quality in Health Care. Ensuring compliance with the new sterilisation standards (2020)
2. Kerang District Health (Media Release, 2025). Regional Health Infrastructure Funding for CSSD Upgrade.
3. ACIPC (Australasian College for Infection Prevention and Control) Discussion Forum (2021). Transport of instruments between hospitals.
4. CDC Guideline for Disinfection and Sterilization in Healthcare Facilities (2008).
5. SA Health - Riverland Mallee Coorong LHN Plan (2022).
6. ACIPC Forum (Andrew Ellis, 2021).