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IHPA releases Pricing Framework for Australian Public Hospital Services 2020-21

The Independent Hospital Pricing Authority (IHPA) today released its Pricing Framework for Australian Public Hospital Services 2020–21

The Pricing Framework outlines IHPA’s major policy decisions that inform the National Efficient Price and National Efficient Cost Determinations. These decisions underpin the national system of Activity Based Funding arrangements outlined in the National Health Reform Agreement.

Pricing and funding to improve safety and quality 

IHPA continues to develop and implement pricing approaches to support safety and quality improvements in Australian public hospital services. 

The next stage of this work focuses on providing incentives for clinicians and hospital managers to identify areas for quality improvement to reduce avoidable hospital readmissions, and improve patient safety and service quality. 

Since 1 July 2017 no Commonwealth funding has been provided for episodes of care, which incur sentinel events such as medication errors leading to death. From 1 July 2018, funding has been reduced for any episode of care where a hospital acquired complication occurs. 

Exploring new funding approaches for hospital care

IHPA will continue to investigate alternative funding models, which may be better suited to supporting chronic disease models of care and the emerging value-based healthcare programs around the country. 

Shane Solomon, the Chair of the Pricing Authority said, ‘Our vision is to drive improvements in the efficiency of public hospitals, whilst supporting new and emerging models of care.’

Broader access to public hospital data 

In this year’s Pricing Framework, IHPA has committed to making data more accessible by providing public access to its National Benchmarking Portal by the end of 2020.

‘Access to data will benefit researchers, clinicians and hospital managers for benchmarking purposes. It will also serve to increase transparency to the wider public who rely on the public hospital system,’ Mr Solomon said.

Public hospital data is currently available to clinicians and managers in public hospitals via the National Benchmarking Portal, a secure web-based application. The portal allows users to compare activity, costs, hospital acquired complication rates and efficiency at similar public hospitals around the country. 

Access to the portal is currently available to all Australian public hospitals, with access control administered by states and territories. 

Open and consultative approach

During the drafting of the Pricing Framework, IHPA consulted extensively with all Australian governments, industry associations and the wider public to ensure its decisions align with national health objectives. The Consultation Report captures how IHPA reached its decisions for 2020–21 based on the submissions received during the consultation process.

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About IHPA

IHPA is an independent government agency established under the Commonwealth legislation on 15 December 2011 as part of the National Health Reform Agreement (NHRA), reached by the Council of Australian Governments (COAG) in August 2011.

The NHRA sets out the intention of the Commonwealth Government and state and territory governments to work in partnership to improve health outcomes for all Australians.

IHPA is charged with implementing national activity based funding by determining the National Efficient Price and the National Efficient Cost for public hospital services each year. Activity based funding improves transparency and strengthens incentives for efficiency in the delivery of public hospital services.

Media enquiries

Communication and media team
E: communications.ihpa [at] ihpa.gov.au
P: +61 2 8215 1100

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