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IHPA has had another productive year, meeting its performance criteria and deliverables in IHPA’s corporate plan and work program for 2019–20, as well as meeting the requirements as part of the National Partnership on COVID-‍19 Response.

The IHPA Work Program 2019–20 provides a more detailed set of goals and deliverables than those included in the Portfolio Budget Statements and IHPA’s Corporate Plan. It is developed each year through a consultative process with government and health sector stakeholders, and is published on the IHPA website (see www.ihpa.gov.au/publications).

Work priorities identified through our stakeholder committees and working groups have been achieved, or significant progress has been demonstrated. A major focus last year has been the staged roll‑out of our new approach to pricing and funding for safety and quality.

IHPA’s work towards pricing and funding for safety and quality, as per the 2017 Addendum, continued in 2019–20.

As outlined in the Pricing Framework 2019–‍20, IHPA commenced a 24-month shadow period, on 1 July 2019, to analyse three funding options, based on an approved list of conditions from the Australian Commission on Safety and Quality in Health Care, to assist in reducing avoidable hospital readmissions.

IHPA worked closely with a team of clinicians on the three proposed funding options for reducing avoidable hospital readmissions, which contributes to improving hospital systems, rather than applying penalties related to certain patients or patient groups who fall into specific risk factor categories. IHPA will continue to develop a risk adjustment model for each readmission condition, such as pressure injuries, infections, and surgical complications, based on identified risk factors.

IHPA worked closely with the Administrator of the National Health Funding Pool to provide assistance in implementation of the National Partnership Agreement for COVID-19 response.

A key part of this has been the drafting of the national costing and pricing guidelines for COVID-19, to ensure that the costs of responding to the pandemic are consistently captured across the country.

IHPA updated classification systems for the Australian hospital system to ensure accurate data on the number of patients being treated in the hospital system, including the details of their diagnosis and treatments received.

IHPA also modified the national pricing model for activity based funding to ensure that the possible costs of treating patients diagnosed with COVID-19 were recognised.

The National Efficient Price and National Efficient Cost Determinations for 2019–20 continue to demonstrate the benefits of activity based funding in reducing costs. IHPA completed the independent fundamental review of the national efficient price in 2019, recommending that no significant changes were required to the national pricing model and that it was found to be fit-for-purpose.