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Australian Hospital Patient Costing Standards version 3.1

Date published: 1 July 2014

The Australian Hospital Patient Costing Standards (the Standards) have been developed in the context of significant health reform in Australia. A substantial body of work is underway to establish more transparent and equitable funding arrangements for public hospitals across Australia, that reflect the efficient cost of providing health services.

The National Health Reform Agreement (NHRA) signed by all jurisdictions at the Council of Australian Governments (COAG) in August 2011, sets out the intention of the Commonwealth Government and state and territory governments to work in partnership to improve health outcomes for all Australians. This includes Commonwealth and state and territory commitments in relation to public hospital funding including payments for services on an activity basis.

The Independent Hospital Pricing Authority (IHPA) is an independent government agency established under Commonwealth legislation on 15 December 2011 as part of the National Health Reform Agreement (NHRA). IHPA is charged with determining the National Efficient Price (NEP) for public hospital services, allowing for the national introduction of activity based funding (ABF). Each year IHPA receives cost data from jurisdictions via the National Hospital Cost Data Collection (NHCDC). This data underpins the NEP Determination.

This document sets out 37 standards based on the best available evidence and experience in hospital product costing. The generic term product costing is used throughout as it is considered best practice for hospitals to cost all products (patient and non-patient) simultaneously. The focus of the Standards is however on costing patient products (in the broad patient product categories of admitted, non-admitted and Emergency Department patients). It is expected that as product costing further evolves there will be more standards relating to costing non-patient products, particularly teaching, training and research (TTR).

It is recognised that compliance with the Standards represents a considerable challenge for those involved in hospital product costing. This document presents the standards and provides some assistance with interpretation; it is not intended to be a detailed set of implementation guidelines. The production of high quality reliable activity based costs data for hospitals by application of these standards is an essential component of the implementation of the national health reforms.

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