Jennifer Nobbs - Independent Hospital Pricing Authority - Looking to the Next 4 Years of ABF in...

Independent Hospital Pricing Authority

LOOKING TO THE NEXT

FOUR YEARS OF ABF

Jennifer Nobbs

Executive Director, Activity Based Funding

2 www.ihpa.gov.au

1 April 2016: COAG signed a

Heads of Agreement

Fourth NEC was established for

NEC16 at $5.020 M

Fifth NEP was established for NEP16

at $4,883

2008 2011 2012 20162013

ABF has been a requirement of

Commonwealth funding for hospitals

since 2008

National Health Reform Agreement was

signed by all First Ministers in 2011 –

outlines the establishment of IHPA

First National Efficient Price (NEP) was

established for NEP12 at $4,808

First National Efficient Cost (NEC) was

established for NEC13 at $4.738 M

3 www.ihpa.gov.au

Improved data and

activity collection leads

to improved costing

More accurate costing

leads to improvements

in classification

Improved data quality improves

ability to price and benchmark

hospital activity

Promote Efficiency and

Improve Health Outcomes for all

Australians

Data

Costing

Classification

Pricing

Improved transparency

leading to higher quality

data in future rounds

SIGNIFICANT SLOWDOWN IN COSTS

4 www.ihpa.gov.au

3664

3809

4023

4312

4400

4548 45494588

2006-7 2007-8 2008-9 2009-10 2010-11 2011-12 2012-13 2013-14

Cost per NWAU

Growth Rate: 4.2%

Growth Rate: 1.1%

SIGNIFICANT SLOWDOWN IN COSTS

5 www.ihpa.gov.au

5.10%4.70%

3.90%

3.00%

2.10%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

NEP12 NEP13 NEP14 NEP15 NEP16

Ind

ex

ati

on

Ra

te

NEP Indexation Rate

6 www.ihpa.gov.au

7 www.ihpa.gov.au

1 APRIL 2016

8 www.ihpa.gov.au

• Basis of time-limited (2017-2020)

addendum to NHRA – won’t be agreed

until early 2017

• Longer-term public hospital funding

agreement from 1 July 2020 –

considered by COAG before

September 2018

9 www.ihpa.gov.au

• Commonwealth to pay 45% of

efficient growth (i.e. growth in the

NEP and the volume of public

hospital services delivered by LHNs)

between 2017 and 2020

• But maximum Commonwealth growth

will be capped at 6.5% per annum

1 APRIL 2016

PRICING FOR SAFETY AND QUALITY

“A commitment to develop by 1 July 2017, and begin to implement,

reforms to improve Australians’ health outcomes and decrease

avoidable demand for public hospital services, through:

i. better coordinated care, particularly for patients with complex

and chronic disease;

ii. funding and pricing for quality and safety, to avoid

funding unnecessary or unsafe care;

iii. reducing avoidable readmissions to hospital; and

iv. the Commonwealth continuing to focus on reforms in primary

care that are designed to improve patient outcomes and

reduce avoidable hospital admissions.

10 www.ihpa.gov.au

Schedule 2:

jurisdictions +

IHPA + ACSQHC

CLASSIFICATION DEVELOPMENT

11 www.ihpa.gov.au

• Crucial part of IHPA’s functions

• Resource intensive, time consuming process

• Relies on data, which in some cases isn’t readily

available and requires one off studies

• Needs clinical input and review

CLASSIFICATION SYSTEMS

12 www.ihpa.gov.au

Current:

• Acute: AR-DRG v8.0 – v9 underway

• Sub/non-acute: AN-SNAP v4.0 – v5 next

• Emergency: URG v1.4 and UDG v1.3

• Non-admitted: Tier 2 v4.1

• Mental health: AMHCC v1.0 – v2 underway

In development:

• Teaching and training

• Non-admitted care

• Emergency care

IMPROVING HOSPITAL COSTING

• Costing standards update process currently

underway (version 4)

• Trialling a new approach for the Private

Hospital Cost Data Collection

13 www.ihpa.gov.au

NEW PRICING APPROACHES

• Bundled pricing for maternity care

• Pricing for safety and quality

• Pricing mental health care using the AMHCC

14 www.ihpa.gov.au

www.ihpa.gov.au

UPCOMING

• National Benchmarking Portal

• Consultation on the draft Pricing Framework – late September 2016

• Pricing Framework and 2017-18 Determinations – late February 2017

• Consultations on new classifications – 2017

16 www.ihpa.gov.au

www.ihpa.gov.au

jennifer.nobbs@ihpa.gov.au

02 8215 1152