Pricing Framework for Australian Public Hospital Services 2022–23 open for public consultation

9 June 2021

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

The consultation is open to the public for 30 days, until Friday 9 July 2021.

The Consultation Paper is a key mechanism for providing input on the policy decisions adopted by the agency to inform the Pricing Framework for Australian Public Hospital Services 2022–23 (the Pricing Framework), which will underpin the determination of the national efficient price and national efficient cost for Australian public hospital services for 2022–23.

This year’s consultation seeks feedback on key changes arising from the Addendum to the National Health Reform Agreement 2020–25 (the Addendum), and in particular, IHPA’s role in supporting work in investigating and trialling innovative models of care using alternate funding models to activity based funding and exploring options for reducing avoidable and preventable hospitalisations.

Supporting long term health reform through future funding models

Shane Solomon, Chair of the Pricing Authority, invites interested parties to submit feedback on the future direction of health funding reforms and presents the opportunity to trial innovative models of care.

‘The Addendum is clear in its intention to improve efficiency in the health system, prioritise prevention, and shifting the focus from paying for volume of services to paying for value and patient outcomes,’ said Shane Solomon.

‘Through this agreement, IHPA (as it was then known) is committed to implementing reforms that will support the shared long-term vision of all Australian governments and, for 2022–23, this includes investigating the feasibility of developing bundled payments and capitation models.’

While IHPA considers that activity based funding will continue to be the best pricing and funding mechanism for many hospital services, IHPA is consulting on incorporating alternate funding models that have the potential to create better incentives for improved continuity of care.

As noted by Mr Solomon, ‘COVID-19 has resulted in potentially long lasting changes to health service delivery in Australian public hospitals, this consultation presents the landscape of pricing and funding approaches, not as we currently know them, but with consideration for how patients access services.’

Responding to the needs of the health system

IHPA is seeking feedback on variations in public hospital activity and costs as a result of the Coronavirus Disease 2019 (COVID-19) pandemic, to ensure that the national pricing model reflects current models of care.

The Consultation Paper also seeks feedback on the classification systems and data collection approaches used to ensure the IHPA’s pricing models respond to the evolving needs of the healthcare system in the short and long term.

Feedback gathered in this public consultation process will be used to inform IHPA’s final Pricing Framework for 2022–23, which will be released in December 2021.

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