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Corporate Plan 2019-20

Message from the CEO 

I am pleased to present the Independent Hospital Pricing Authority's Corporate Plan 2019–20 for the reporting periods 2019–20 to 2022–23, as required under paragraph 35(1)(b) of the Public Governance, Performance and Accountability Act 2013.

In 2011, the Commonwealth and all states and territories entered into the National Health Reform Agreement. One of the outcomes agreed was that the parties improve the patient access to services and public hospital efficiency through the use of activity based funding based on a national efficient price. IHPA’s primary role is to determine the National Efficient Price for public hospital services funded on an activity basis, and the National Efficient Cost for services that are block funded.

James Downie
Chief Executive Officer, Independent Hospital Pricing Authority
Accountable Authority

Our purpose

IHPA was established to promote improved efficiency in, and access to, public hospital services by providing independent advice to Australian governments in relation to the efficient costs of public hospital services and developing and implementing robust systems to support activity based funding (ABF) for those services. IHPA’s objects and functions are conferred by legislation and are set out in section 131 of the National Health Reform Act 2011.

IHPA’s principal vehicles for promoting efficiency are its determination of the National Efficient Price (NEP) and the National Efficient Cost (NEC) for public hospital services annually and building national classification systems for all hospital services.

Classifying an activity undertaken by a hospital and then accurately pricing that activity enables transparent and efficient comparisons to be made between hospitals and jurisdictions. In making such comparisons possible, IHPA plays a lead role in the introduction of a nationally consistent and effective ABF system.

The Agency’s purpose and activity structure


  • To determine the NEP and the NEC for public hospital services.


  • Perform IHPA pricing functions.
  • Refine and develop hospital classification systems.
  • Refine and improve hospital costing.
  • Develop hospital data requirements and collect data.

Enabling activities

  • Attracting, developing and retaining a skilled workforce.
  • Independent decision making and stakeholder engagement.

Strategy and performance

IHPA’s strategic objectives below will ensure delivery of its core activities in 2019–20. This Corporate Plan should be read in conjunction with the IHPA Work Program 2019–20, which provides a detailed description of the work IHPA will undertake to fulfil its objectives in 2019–20.

1. Perform IHPA pricing functions


  • Develop and refine the pricing models which will ensure the accurate determination of the NEP.

Initiatives for 2019-20

  • Continue to refine the methodology used to determine the NEP and NEC.
  • Assess options for funding approaches to reduce avoidable hospital readmissions.
  • Investigate opportunities to harmonise prices for similar same-day services delivered in different settings, such as non-admitted and admitted same-day chemotherapy services, renal dialysis and sleep disorders.
  • Explore opportunities for alternative funding models that promote high-quality care, (including investigation of the potential inclusion of patient reported outcome measures) and support technical, allocative and dynamic efficiency.

2. Refine and develop hospital activity classification systems


  • Develop and refine hospital activity classifications.
  • Seek input from clinicians and ensure acceptance of classification systems by engaging committees including IHPA’s Clinical Advisory Committee.

Initiatives for 2019-20

  • Implement the new Australian Emergency Care Classification to price emergency services in NEP20.
  • Commence the costing study to support the development of the new Australian Non-Admitted Care Classification.
  • Commence the development of Australian Refined Diagnoses Related Group (AR-DRG) Version 11 classification and the refinement of the International Statistical Classification of Diseases and Health Related Problems, 10th Revision, Australian Modification 12th edition.
  • Further refinement of the Australian Mental Health Care Classification.

3. Refine and improve hospital costing


  • Establish and maintain national costing standards.
  • Ensure effective collection and processing of costing information to support ABF outcomes.
  • Produce informative and authoritative information of hospital costs.

Initiatives for 2019-20

  • Work with states and territories to review the purpose, design and use of costing data in Australia.

4. Develop hospital data requirements and collect data


  • Develop appropriate data specifications.
  • Ensure information provided for decision‑making meets those specifications.
  • Enhance data submission capability.
  • Protect privacy and ensure data security.

Initiatives for 2019-20

  • Commence phasing out collection of aggregate non‑admitted data.
  • Work with states and territories to develop the process for the collection of the Individual Healthcare Identifier as part of national data sets, ensuring that there are appropriate safeguards in place to protect patient confidentiality.
  • Further development of the secure data management system functionality to ensure IHPA remains at the forefront of data security and capability.

Operating environment

IHPA consults extensively with Commonwealth, state and territory governments, the private sector and other stakeholders. It also has regard to national and international best practice.

Input from stakeholders through IHPA’s multiple committees and working groups ensures that IHPA’s work is informed by expert advice.

Managing risk

The ongoing management of risk is an integral part of IHPA's Corporate Governance Framework, which is underpinned by relevant risk assessment processes.

The mature risk management framework is continuously updated, and includes a range of internal controls and ongoing assurance programs that are designed to maintain IHPA’s flexibility to effectively achieve its objectives while ensuring compliance obligations are satisfied.

IHPA has developed shared risks with the National Health Funding Body (NHFB) and will review these risks with the NHFB bi-annually, or as required, and in conjunction with its review of all its risks.


IHPA’s work program incorporates a substantial amount of technical work which requires significant specialist workforce capability. IHPA’s workforce planning strategies will continue to emphasise both core public sector skills and the enhancement of the expert skills IHPA requires to meet its objectives.

IHPA will also continue to strengthen its management and leadership teams by enhancing performance feedback and providing targeted learning and development programs.

IHPA relies on the use of information and communication technology systems to conduct its business and consult with stakeholders. IHPA will continue to apply the most up-to-date measures to effectively use and protect its information (and that of its stakeholders). In doing so, it will prevent data breaches, manage the risk of inadvertent information disclosure, and ensure business continuity.

Strengthening our capabilities

Key areas of focus for 2019-20:

  • Staff development
    • Continued development of staff through attendance at internal and external training opportunities. IHPA will also continue to monitor staff turnover rates and give genuine consideration to feedback provided to the agency via the annual Australian Public Service ‘State of the Service’ report.
  • Flexible working arrangements
    • IHPA supports a flexible work environment and will continue to support all staff in providing working arrangements that suit individual needs.
  • Secure data management
    • IHPA will continue to develop the secure data management system to support IHPA’s core technical functions, whilst ensuring the current high standards of data security are maintained.
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