I am pleased to present the Independent Hospital Pricing Authority’s Annual Report for 2018–19.

As Chair of the Pricing Authority, it was a pleasure to lead IHPA last year to deliver another full work program.

In the next pages, you will find some of the many results achieved by IHPA throughout 2018–19. They reinforce IHPA’s commitment to delivering sustainable, efficient and safe public hospital services for all Australians.

Delivering safe, high-quality and efficient health care

IHPA continues to incorporate safety and quality into the pricing and funding of public hospital services to improve health outcomes, discourage unnecessary or unsafe care, and decrease avoidable demand for public hospital services.

In partnership with the Australian Commission on Safety and Quality in Health Care and other stakeholders, IHPA undertook extensive work to identify options for incorporating safety and quality into the pricing and funding of public hospital services.

These funding and pricing approaches complement existing measures Australian governments have in place for improving safer care in public hospitals and provide a financial incentive for hospitals to reduce the rate of hospital acquired complications and sentinel events.

Stable and sustainable rate of growth

In addition to the work on safety and quality, IHPA published its eighth National Efficient Price Determination and seventh National Efficient Cost Determination for public hospital services. Supported by extensive consultation with jurisdictions and stakeholders, the Determinations have resulted in maintaining a stable and sustainable rate of growth in public hospital costs (see Cost per National Weighted Activity Unit (NWAU) and National Efficient Price 2012–2019).

Valuable stakeholder partnerships and collaboration

In delivering on these priorities, we engaged with and listened to our key stakeholders. IHPA continues to build on and foster its many strategic and trusted partnerships we share with all Australian governments, health peak bodies and associations.

I would also like to highlight the contributions made throughout the year by our Clinical Advisory Committee, whose advice is intrinsic to the decisions we make.

Managing risks

As part of its strategic direction, the Pricing Authority continues to offer oversight of the agency’s strategic risk management, governance and compliance frameworks.

In 2018, the Authority worked with IHPA’s senior executives to deepen its understanding of strategic risk management and developed a shared Strategic Risk Register with the National Health Funding Body to jointly manage risks related to the calculation of Commonwealth funding.

Commendation

This year the Pricing Authority said goodbye to Mr Jim Birch, Deputy Chair and one of the inaugural Authority members. I want to thank Jim for his valuable contributions over the last seven years, offering a wealth of expertise and knowledge to the Pricing Authority. I would also like to extend my thanks to all Pricing Authority members who provided expert vision and guidance throughout 2018–19.

On behalf of the Pricing Authority, I would like to commend James Downie, Chief Executive Officer for his transformational leadership. I also acknowledge the agency staff for their constant commitment to deliver a successful program of work in a timely manner.

Looking ahead

In an evolving environment, I am confident that we continue to build a solid foundation in how we undertake IHPA’s purpose and functions. We remain committed to the highest standards of transparency and accountability, grounded in an open and consultative approach in working with Australian governments and other stakeholders.

In the year ahead, the Pricing Authority looks forward to contributing further to deliver sustainable, efficient and quality public hospital services for all Australians.

Shane Solomon
Chair, Pricing Authority
12 September 2019