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National Efficient Price Determination 2020–21

  • Section: 
    Pricing
  • Publication Date: 
    March 2, 2020
  • Primary Keyword: 
    National Efficient Price Determination

The Independent Hospital Pricing Authority (IHPA) is established under the National Health Reform Act 2011 (Cwlth) (the Act), and by virtue of section 131(1) of the Act is invested with the following functions relevant to this National Efficient Price Determination 2020–21 (Determination):

  1. to determine the national efficient price for health care services provided by public hospitals where the services are funded on an activity basis
  2. to determine the national efficient cost for health care services provided by public hospitals where the services are block funded
  3. to develop and specify classification systems for health care and other services provided by public hospitals
  4. to determine adjustments to the national efficient price to reflect legitimate and unavoidable variations in the costs of delivering health care services
  5. except where otherwise agreed between the Commonwealth and a state or territory – to determine the public hospital functions that are to be funded in the state or territory by the Commonwealth
  6. to publish a report setting out the national efficient price for the coming year and any other information that would support the efficient funding of public hospitals.

The Determination is used by the Administrator of the National Health Funding Pool to determine the amount of funding provided by the Commonwealth to local hospital networks.

For 2020–21, IHPA has developed shadow price weights for the Australian Emergency Care Classification (AECC) Version 1.0 and admitted Australian Mental Health Care Classification (AMHCC) Version 1.0 end classes. 

The Australian Mental Health Care Classification Pricing Feasibility Report 2020–21 provides an overview of the process undertaken by IHPA to shadow price admitted mental health services using the AMHCC Version 1.0. 

Detailed technical specifications of how IHPA developed the National Pricing Model is available in the National Pricing Model Technical Specifications 2020–21. IHPA has also developed national weighted activity unit (NWAU) calculators to assist in applying the annual NEP price weights and adjustments for 2020-21. 

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