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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
