AMA submission on Independent Hospital Pricing Authority (IHPA) Work Program 2013-14

The work program provides a useful overview of the activities and deliverables under the IHPA program objectives.  The AMA is pleased to see that many of the areas previously identified as concerns are being progressed in the 2013-14 work program.  
The AMA looks to continue its engagement in these areas, including in particular:

• Input to the Pricing Framework for Australian Public Hospital Services 2014-15; and
• ABF classification system development and revision, including: 
• admitted acute care
• mental health care 
• subacute and non-acute care
• emergency department care
• non-admitted care, and 
• teaching, training and research.

The AMA notes that the Australian Commission on Safety and Quality in Health Care (ACSQHC) and IHPA are developing a discussion paper for public consultation on Pricing for Quality and Safe Public Hospital Services for release by June 2014.  The AMA looks forward to this paper, while noting that the paper itself will be an intermediate step towards the objective of securing hospital funding arrangements that cover the costs of safety and quality in the provision of health care services.  

There is a risk that in the interim the overriding emphasis on efficiency in the new framework will impact on the quality of hospital care.  This impact is likely to increase the longer it takes to properly address quality as part of the pricing framework. 
In relation to teaching, training and research, the AMA notes the proposed work in 2013-14 on identifying the types of teaching, training and research that need to be funded in public hospitals, the cost drivers of this activity, and the methods for counting and costing these items.  The AMA is actively engaged in and supports this work through the TTR working group.

The Work Program will need to progress the TTR work expeditiously while also enabling the development of robust and sensible approaches to the issues involved.  We appreciate that this work is being undertaken with the close involvement of the AMA and other stakeholders and that this will continue for the duration of the program.

The AMA also notes the substantial work underway on a new classification of mental health services.  Feedback from AMA members suggests the successful implementation of this work may be more challenging for mental health services than for hospital services in general.  This relates to the variable quality of current data on mental health services, and that the managers of clinical mental health units in general are likely to have less experience in using eg DRGs for cost management.

To maximise the value of the good work being done on mental health classification development, the AMA suggests that IHPA’s work program include specific provision for ‘user testing’ of the new mental health services classification.  To be useful and realistic, this testing will need to be done directly with the relevant clinical unit managers using the actual cost data they are familiar with.  The objectives are to provide a ‘reality check’ of how the new classification will operate in practice and to engage clinical unit mangers in the new system.  It will not be possible to meet these objectives by a formal ‘jurisdiction-based’ process using cost data that has been standardised and aggregated for reporting purposes.      

While there are particular needs and timing pressures to address quality, TTR and classification development issues within ABF, development of the pricing framework and its application more broadly will continue to require a strong clinical and medical organisation perspective, including a direct perspective from the AMA.  
The AMA is also happy to consider and provide input from a clinical perspective on more specific issues relating to ABF as needed.  

Overall, the AMA finds the IHPA work programs to be informative and very useful in clearly setting out the work proposed to be undertaken in the year ahead.  This enables stakeholders such as the AMA to have a good understanding of the full range of work to be undertaken and to plan for our input to specific activities.  

This is a welcome contrast with the general lack of information on prospective work in other areas of Government activity. 

The AMA looks forward to continuing engagement with IHPA in this important work.
Yours sincerely

Prof Geoffrey Dobb
Vice President

15 July 2013