Corporate Plan 2016–17

Message from the CEO 

I am pleased to present the Independent Hospital Pricing Authority’s Corporate Plan 2016–17 for the reporting periods 2016–17 to 2019–20, as required under paragraph 35(1)(b) of the Public Governance, Performance and Accountability Act 2013.

IHPA’s primary purpose under the National Health Reform Agreement 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
CEO, 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 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 a national classification system 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.

IHPA’s objects and functions are conferred by legislation and are set out in section 131 of the National Health Reform Act 2011.

The Agency’s purpose and activity structure

PurposeActivitiesEnabling Activities

To determine the National Efficient Price and the National Efficient Cost for public hospital services

  • Perform our pricing functions
  • Refine and develop hospital classification systems
  • Refine and improve hospital costing
  • Develop hospital data requirements and collect data
  • Management and development of staff
  • Independent and transparent decision making and stakeholder engagement


IHPA’s work program incorporates a substantial amount of technical work which requires significant specialist workforce capability. IHPA’s workforce planning strategies will continue 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 (ICT) 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 2016–17

Key areas of focus for 2016–17 include:

  • Staff development
    continued development of staff through attendance at internal and external training. 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.
  • Secure Data Management
    IHPA will procure a new secure data management system to support the core technical functions of the system, whilst ensuring the current high standards of the data security are maintained.

Strategy and performance

IHPA’s strategic objectives below will ensure delivery of its core activities in 2016–17. A detailed description of the work IHPA will undertake to fulfil its objectives is contained in IHPA Work Program 2016–17. This section should be read in conjunction with that program.

1. Perform our pricing functions


  • Develop and refine the pricing models which will ensure accurate National Efficient Price and National Efficient Cost Determinations

Initiatives for 2016–17

  • Develop an approach to pricing for safety and quality and a pricing approach for avoidable readmissions

 2. Refine and develop hospital activity classification systems 


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

Initiatives for 2016–17

  •  National implementation of the Australian Mental Health Care Classification version 1.0.

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 2016–17

  • Release of the Australian Hospital Patient Costing Standards V4.0

 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 2016–17

Enhance the data submission capability so as to establish IHPA’s capacity to securely receive, validate and store the data that informs future NEP and NEC development.

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 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.

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