Independent Hospitals Pricing Authority
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Activity Based Funding

Activity Based Funding (ABF) is a way of funding hospitals whereby they get paid for the number and mix of patients they treat. If a hospital treats more patients, it receives more funding. Because some patients are more complicated to treat than others, ABF also takes this in to account.

ABF funding should support timely access to quality health services, improve the value of the public investment in hospital care and ensure a sustainable and efficient network of public hospital services. ABF payments should be fair and equitable, including being based on the same price for the same service across public, private or not for profit providers of public hospital services.

The National Health Reform Agreement, signed by all Australian governments in August 2011, commits to funding public hospitals using ABF where practicable.

IHPA plays a pivotal role in ABF through the key functions, outlined in section B3 of the National Health Reform Agreement.

The building blocks required for an ABF system are:

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Other resources

Activity Based Funding—Education tools

IHPA has an important role in the development of national training resources for ABF. The National educational resources helps explain ABF concepts to the health sector and the general public.

Impact of New Health Technology Framework

IHPA has developed an Impact of New Health Technology Framework. The objective of the Framework is to outline the process by which IHPA, through its Clinical Advisory Committee will monitor and review the impact of new technologies on the existing classifications in order to accurately account for it in the pricing of public hospital services.

Cost-Shifting and Cross-Border Dispute Resolution Framework

Assessment of Legitimate and Unavoidable Cost Variations Framework

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Page currency, Latest update: 07 August, 2014