Message from the CEO
I am pleased to present the Independent Hospital Pricing Authority's Corporate Plan 2018–19 for the reporting periods 2018–19 to 2021–22, as required under paragraph 35(1)(b) of the Public Governance, Performance and Accountability Act 2013.
In 2011, the Commonwealth and all state 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.
CEO, Independent Hospital Pricing Authority
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 principle 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
- 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 2018–19. This Corporate Plan should be read in conjunction with the IHPA Work Program 2018–19 which provides a detailed description of the work IHPA will undertake to fulfil its objectives in 2018–19.
1. Perform IHPA pricing functions
- Develop and refine the pricing models which will ensure the accurate determination of the NEP.
Initiatives for 2018-19
- Undertake a fundamental review of the methodology underpinning the NEP
- Undertake a review of block funding services and the block funding model for small rural hospitals that underpins the NEC
- Undertake a global horizon scan to identify issues, solutions and innovations in health funding across the globe that could be incorporated into the Australian system to provide improvements.
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 committees including IHPA’s Clinical Advisory Committee.
Initiatives for 2018-19
- Complete development work on a new classification system for emergency care services
- Further refinement of the Australian Mental Health Care Classification
- Development of a new classification for non‑admitted care services through undertaking a national non‑admitted costing study
- Complete development work on the Australian Refined Diagnosis Related Group (AR–DRG) Version 10 classification and Australian Modification of the International Statistical Classification of Diseases 11th Edition (ICD-11).
3. Refine and improve hospital costing
- Establish and maintain national costing standards
- Develop and apply appropriate costing models
- Ensure effective collection and processing of costing information to support ABF outcomes.
Initiatives for 2018-19
- Review the format and content of the National Hospital Cost Data Collection (NHCDC) Cost Report to identify relevant ways to present and narrate analysis of the NHCDC
- Work with jurisdictions to implement the Australian Hospital Patient Costing Standards (AHPCS) Version 4.0.
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 2018-19
- Further refinement of the secure data management system functionality to ensure IHPA remains at the forefront of data security and capability.
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.
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 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.
Key areas of focus for 2018-19:
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 in 2018-19
Key areas of focus in 2018-19 include:
- 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 and IHPA’s Culture Survey undertaken during 2017-18.
- 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 further develop the secure data management system (SDMS) to support the core technical functions of the system, whilst ensuring the current high standards of data security are maintained.