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Hospital pricing work continues amid uncertainty

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The Independent Hospital Pricing Authority is pushing ahead with work on national standards for the cost of hospital services despite the Federal Government’s intention to walk away from agreed funding arrangements post-2017.

The IHPA has called for public comment on its proposed Pricing Framework for Australian Public Hospital Services 2015-16, which is being developed as part of its work to implement the National Health Reform Agreement struck between the Commonwealth and the States and Territories in 2011.

But the future shape of these relations is clouded with uncertainty because of major changes flagged in the conduct of Commonwealth-State relations.

In its May Budget, the Federal Government abrogated public hospital funding guarantees made by its Labor predecessor and announced it would change the basis of indexation of its hospital funding from mid-2017 to inflation plus population growth.

More fundamentally, the Government has unveiled a review of the Federation which could include a much smaller role for the Commonwealth in the provision of health services.

Regardless of this uncertainty, the IHPA is forging ahead with work which will shape the determination of the National Efficient Price and the National Efficient Cost of public hospital services – both considered fundamental to the national introduction of activity-based funding.

The AMA is considering a submission on the IHPA’s Pricing Framework.

Adrian Rollins