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Pricing Framework for Australian Public Hospital Services open for public consultation

The Independent Hospital Pricing Authority (IHPA) today released its Consultation Paper on the Pricing Framework for Australian Public Hospital Services 2021–22

The consultation is open to the public for 30 days, until Friday 9 October 2020.

IHPA’s annual Pricing Framework outlines the major policy decisions to be adopted by the agency to set the national efficient price (NEP) and national efficient cost (NEC) Determinations for public hospital services in each financial year.  

This year’s Consultation Paper seeks comments on funding arrangements for private patients in public hospitals, funding approaches to reduce avoidable hospital readmissions, and the likely impact of COVID-19 on service delivery, activity levels and models of care.

While this consultation primarily focuses on policy issues underpinning the 2021 Determinations, Shane Solomon, Chair of the Pricing Authority, invited interested parties to submit feedback on the likely impact of COVID-19 on future Determinations.

The 2021 Determinations will not reflect the direct impact of COVID-19, as they will be based on the average cost of public hospital activity in the 2018–19 financial year.

Mr Solomon noted, ‘This consultation is an opportunity for stakeholders to provide feedback on how IHPA’s pricing models could respond to the needs of the healthcare system in the short and long term.’

The Consultation Paper seeks feedback on some key changes introduced in the Addendum to the National Health Reform Agreement 2020–25.

IHPA is consulting on an updated methodology for pricing private patients in public hospitals that accounts for all hospital revenues, to ensure funding models are financially neutral with respect to all patients, regardless of whether patients elect to be private or public. 

There is also a range of opportunities to provide feedback on how activity based funding can incorporate more innovative patient-centred models of care.

‘Supporting a sustainable public hospital network so that all Australians have equitable access to quality health care is an important principle in our work.’ 

‘The Pricing Framework consultation is IHPA’s primary avenue to canvas stakeholder views on the design of the agency’s policies that aim to improve patient outcomes, and the value of public investment in hospital care,’ concluded Mr Solomon.

Feedback gathered in this public consultation process will be used to help inform IHPA’s final Pricing Framework for 2021–22.

Submissions should be emailed to submissions.ihpa [at] ihpa.gov.au or posted to PO Box 483, Darlinghurst NSW 1300 by 5pm AEDT Friday 9 October 2020.

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For more information contact:

IHPA Media and Communications Section
E: communications.ihpa [at] ihpa.gov.au  P: 02 8215 1110
LinkedIn: Independent Hospital Pricing Authority
Twitter: @IHPAnews

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About the Independent Hospital Pricing Authority (IHPA)

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

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

In 2017, all Australian governments signed the Addendum to the National Health Reform Agreement. The Addendum has been a major impetus behind the agenda on pricing and funding for safety and quality.

In May 2020, the Commonwealth and all state and territory governments signed an Addendum that amends the National Health Reform Agreement from 1 July 2020 to 30 June 2025. This Addendum reaffirms IHPA’s core role in supporting the national activity based funding system and block grant funding in the case of small rural hospitals.

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.