The implementation of a national Activity Based Funding (ABF) system is intended to improve public hospital efficiency and the transparency of funding contributions by the Commonwealth, state and territory governments for each Local Hospital Network (LHN) across Australia , and is a key component of the 2011 Council of Australian Governments’ National Health Reform Agreement (NHRA) .
Under the NHRA , IHPA is required to determine the Nationa l Efficient Price (NEP) which is used to calculate Commonwealth ABF contributions for in - scope public hospital services and the National Efficient Cost (NEC) which covers those services which are block funded.
In June 2015 , IHPA released a consultation pap er on key issues that IHPA w ould consider in the preparation of the Pricing Framework for Australian Public Hospital Services 2016 - 17 (Pricing Framework 2016 - 17 ) .
Feedback received from stakeholders has informed the development of the Pricing Framework 2016 - 17 which sets out IHPA’s key principles, scope and approach for the NEP16 and NEC16 Determinations.
Submissions for the Pricing Framework 2016-17 were received from 30 organisations, including from all state and territory governments and the Commonwealth . These submissions are available on the IHPA website , except where submissions have been provided in - confidence.
Stakeholder submissions have been carefully considered by the Pricing Authority and incorporated into the Pricing Framework where appropriate. Th e Pricing Framework 2016 - 17 builds on the Pricing Frameworks from previous years ( 2012 - 13 , 2013 - 14 , 2014 - 15 and 2015 - 16 ). For simplicity , where IHPA has reaffirmed a previ ous principle, the supporting argument has not been restated in this year’s paper.
IHPA has issued the Pricing Framework 2016-17 prior to releasing the NEP 16 and NEC 16 Determinations, which will be publicly available in February 2016 , with the intention of providing an additional layer of transparency and accountability.