The Alliance provided a submission to the Independent Health and Aged Care Pricing Authority (IHACPA) Consultation on the Pricing Framework for Australian Public Hospital Services 2027–28.
Pricing framework to actively support equity
The Pricing Framework must actively support equity by accounting for factors such as service sustainability and scale, geographic location/tyranny of distance, health need and early death rates, thin markets or areas with no market, workforce shortages, digital and physical infrastructure constraints and inflexibility of policies and funding.
Pricing Guidelines and ‘value’ (Questions 1-3 and Questions 5-8)
Geographic equity must be explicitly embedded within the concept of value, as outcomes cannot be meaningfully interpreted without considering access constraints. Value should consider patient outcomes – adjusted for access, equity, population health need, earlier deaths and service delivery context, relative to the cost of delivery.
Pricing stability and mitigating unintended volatility (Questions 9-13)
Sample cost data must include representative rural and remote facilities and individuals to avoid under-representation of rural and remote hospitals and bias toward larger, metropolitan facilities.
Block funding and National Efficient Cost
The multi-year reviews must consider the full scope of additional costs associated with geography and thin markets that reflect the unavoidable cost of service delivery in sparse populations.
Adjustments to the National Efficient Price
‘Loadings’ or adjustments to the National Efficient Price must consider factors that affect cost of service delivery, such as hospital type and size, hospital location including remoteness, patient complexity, Indigenous status and smaller jurisdictions.
Conclusion
There must be recognition that equal prices do not produce equal outcomes in disparate contexts, and that adjustments, data and funding models must reflect real-world service delivery.