IHPA releases Pricing Framework for Australian Public Hospital Services 2022–23

1 December 2021

The Independent Hospital Pricing Authority (IHPA) today released the Pricing Framework for Australian Public Hospital Services 2022–23 (the Pricing Framework).

The Pricing Framework outlines IHPA’s policy decisions that inform the development of the National Efficient Price Determination and National Efficient Cost Determination for 2022–23, which are a major determinant of the Commonwealth funding contribution to public hospitals.

Impact of COVID-19

COVID-19 has resulted in significant and potentially long-term changes to models of care and service delivery in Australia’s public hospitals.

With the support of the jurisdictions, and stakeholders, IHPA has prioritised assessing and accounting for the impact of COVID-19 on public hospital activity, costs and models of care for 2022–23.

IHPA will monitor and assess the longer term impacts of COVID-19 to ensure the national pricing model accurately responds to changing models of care, activity and costs for future determinations as updated data becomes available.

Future funding models and supporting long-term health reform

The Addendum to the National Health Reform Agreement 2020–25 (the Addendum) outlines the shared commitment of IHPA, the national bodies and the jurisdictions to improve efficiency in the health system and shift the focus from paying for volume of services to paying for value and patient outcomes.

Mr Shane Solomon, Chair of the Pricing Authority, highlights ‘2022–23 marks a significant milestone in working towards building the foundations for innovative models of care that have the potential to create better incentives for improved continuity of care and the substitution of the most effective service response’, he says.

Working closely with the jurisdictions, IHPA is developing a new funding model, business rules and evaluation methodologies to pilot innovative models of care and services in some states and territories commencing in 2022–23, with a view to support improvements in patient outcomes by reducing preventable hospital admissions and integrating care across care settings.

This program of work is closely tied to the requirements under the Addendum for IHPA to progress the evaluation of safety and quality reforms and investigate options for further development of safety and quality reforms, including ways that avoidable and preventable hospitalisations can be reduced.

During the drafting of the Pricing Framework, IHPA consulted extensively with all Australian governments, stakeholder groups and the wider public to ensure its decisions align with national health objectives. The Consultation Report captures how IHPA reached its decisions for 2022–23 based on the submissions received during the consultation process.

IHPA will continue to work closely with all Australian governments, its advisory committees and working groups, and broader stakeholders to refine the national pricing model, review the national classification systems and further progress long-term health reform.


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