Assessment of New Health Technologies

Accounting for new health technologies

IHPA’s core function is the pricing of public hospital services and it was not established to take on a major technology evaluation role.  There are other organisations with this function, including the Health Policy Advisory Committee on TechnologyMedical Services Advisory Committee and Council of Australian Therapeutic Advisory Groups.

However, the IHPA Pricing Guidelines do state that the “pricing of public hospital services should respond in a timely way to introduction of evidence-based, effective new health technology and innovations in models of care that improve patient outcomes”.

IHPA partially accounts for the adoption of new health technologies through its indexation methodology which projects the three year old data to the year of the National Efficient Price. The indexation rate reflects the average increase in cost over the previous five years.

IHPA also accounts for new health technologies when updating the Activity Based Funding (ABF) classification systems.  For example, the Australian Consortium for Classification Development is responsible for updating the Australian Refined Diagnosis Related Groups (AR-DRG) classification to ensure that it reflects current clinical practice and models of care.

Impact of New Health Technology Framework

IHPA has developed the Impact of New Health Technology Framework as an additional process for the review of new health technologies.

Under the Framework, IHPA and its Clinical Advisory Committee (CAC) will monitor and review new health technologies to determine whether they are adequately accounted for in the pricing of public hospital services.  Where the technology is not accounted for, IHPA may refer the technology for priority coding and classification development.

This annual process involves IHPA, the CAC and state and territory health departments reviewing reports on new health technologies provided by government advisory groups and other interested stakeholders, such as medical technology manufacturers.

A new health technology will be referred for priority classification and coding development where it can be demonstrated that:

  • the technology is in use in Australian public hospitals or its future uptake is
    expected to be substantial enough to warrant classification or coding development;
  • the difference between the price weight for the most frequently mapped Diagnosis Related Group (DRG) and the technology’s cost estimate is significant;
  • the total cost of the mapped DRGs and the number of patients is material; and
  • the technology can be better accounted for through classification and coding development (i.e. the technology should not be a diagnostic test or pharmaceutical).

Assessment of new health technologies for 2016-17

IHPA is seeking submissions from interested parties as part of its 2016-17 review of new health technologies under the Framework.

Submissions can be emailed to or mailed to:

PO Box 483
Darlinghurst, NSW 1300

The submission period will end on 16 September 2016. IHPA’s final assessment of the technologies to refer for classification and coding development will occur by May 2017.