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Assessment of new health technologies 2020–21

Accounting for new health technologies

The Independent Hospital Pricing Authority’s (IHPA) core function is the pricing of public hospital services. IHPA’s Pricing Guidelines recognise that the 'Pricing of public hospital services should respond in a timely way to introduction of evidence-based, effective new technology and innovations in the models of care that improve patient outcomes.'

While IHPA was not established to take on a major technology evaluation role, it partially accounts for the adoption of new health technologies through its indexation methodology, which projects 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 classification systems. For example, IHPA updates the Australian Refined Diagnosis Related Group (AR-DRG) classification to ensure it reflects current clinical practice and models of care.

IHPA seeks input from specialist health organisations such as the Health Technology Reference Group and the Medical Services Advisory Committee.

Impact of New Health Technology Framework

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

Under the Framework, IHPA, through its Clinical Advisory Committee (CAC), monitors the potential impact of new health technologies on models of care that have not yet been incorporated in the classification and costing of public hospital services. Where the technology is not accounted for, IHPA may refer the technology for priority classification development.

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

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

  • The technology is in use in Australian public hospitals or the expected uptake is substantial enough to warrant classification 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.
  • The technology can feasibly be accounted for through classification development. Note that diagnostic tests and pharmaceuticals will generally be excluded from consideration as they cannot be accounted for without imposing an additional reporting burden on jurisdictions.

Assessment of new health technologies 2020–21

IHPA sought submissions from interested parties as part of its 2020–21 review of new health technologies under the Framework.

The submission period ended at 5pm AEST on Friday, 2 October 2020.

IHPA’s final assessment of the technologies to refer for classification and coding development will occur by May 2021. IHPA will advise applicants on the outcome of its assessment.