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IHPA releases Pricing Framework for Australian Public Hospital Services 2022–23
The Independent Hospital Pricing Authority (IHPA) today released the Pricing Framework for Australian Public Hospital Services 2022–23 (the Pricing Framework).
The Pricing Framework outlines IHPA’s policy decisions that inform the development of the National Efficient Price Determination and National Efficient Cost Determination for 2022–23, which are a major determinant of the Commonwealth funding contribution to public hospitals.
Impact of COVID-19
COVID-19 has resulted in significant and potentially long-term changes to models of care and service delivery in Australia’s public hospitals.
With the support of the jurisdictions, and stakeholders, IHPA has prioritised assessing and accounting for the impact of COVID-19 on public hospital activity, costs and models of care for 2022–23.
IHPA will monitor and assess the longer term impacts of COVID-19 to ensure the national pricing model accurately responds to changing models of care, activity and costs for future determinations as updated data becomes available.
Future funding models and supporting long-term health reform
The Addendum to the National Health Reform Agreement 2020–25 (the Addendum) outlines the shared commitment of IHPA, the national bodies and the jurisdictions to improve efficiency in the health system and shift the focus from paying for volume of services to paying for value and patient outcomes.
Mr Shane Solomon, Chair of the Pricing Authority, highlights ‘2022–23 marks a significant milestone in working towards building the foundations for innovative models of care that have the potential to create better incentives for improved continuity of care and the substitution of the most effective service response’, he says.
Working closely with the jurisdictions, IHPA is developing a new funding model, business rules and evaluation methodologies to pilot innovative models of care and services in some states and territories commencing in 2022–23, with a view to support improvements in patient outcomes by reducing preventable hospital admissions and integrating care across care settings.
This program of work is closely tied to the requirements under the Addendum for IHPA to progress the evaluation of safety and quality reforms and investigate options for further development of safety and quality reforms, including ways that avoidable and preventable hospitalisations can be reduced.
During the drafting of the Pricing Framework, IHPA consulted extensively with all Australian governments, stakeholder groups and the wider public to ensure its decisions align with national health objectives. The Consultation Report captures how IHPA reached its decisions for 2022–23 based on the submissions received during the consultation process.
IHPA will continue to work closely with all Australian governments, its advisory committees and working groups, and broader stakeholders to refine the national pricing model, review the national classification systems and further progress long-term health reform.
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Download the media release
About Independent Hospital Pricing Authority (IHPA)
IHPA is an independent government agency established as part of the National Health Reform Agreement that works in partnership with all Australian governments to improve health outcomes for all Australians.
IHPA is charged with implementing national activity based funding by determining the national efficient price and 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.
The Federal Budget 2021–22 was delivered on 11 May 2021 and contains two significant measures that impact IHPA’s current role.
The first measure, in response to the Royal Commission into Aged Care Quality and Safety, is the expansion of IHPA, which will be renamed the Independent Health and Aged Care Pricing Authority.
Under this measure, IHPA will inform Australian Government decisions on annual funding increases in residential aged care from 1 July 2023. IHPA will also have a role in home aged care pricing advice from 1 July 2023.
The second measure involves working with the Department of Health and key stakeholders to support reform to the Prostheses List to reduce the cost of medical devices used in the private health sector and streamline access to new medical devices.
For more information contact:
IHPA Media and Communications Section
E: communications.ihpa [at] ihpa.gov.au P: 02 8215 1110
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