The Development of Costing and Pricing Advice in the Aged Care Sector by the Independent Hospital Pricing Authority

Thursday 13 October 2022

11:15am – 11:45am

Speaker Bio

Julia Conway is the Director of the Aged Care Policy team at the Independent Health and Aged Care Pricing Authority. She has experience in developing and refining pricing models for public hospitals, previously leading the development of pricing for mental health care services under the Australian Mental Health Care Classification Version 1.0 and IHACPA’s Costing and pricing study of the Nationally Funded Centres Program for high-cost, highly-specialised services. Julia has qualifications and experience in economics and finance, working at NSW Health and the Reserve Bank of Australia prior to joining IHPA. She enjoys developing pricing structures and policies that are responsive to the system context and designed to achieve desirable policy outcomes. Julia is keen to ensure that IHPA’s aged care costing and pricing advice is relevant and appropriate for the sector and can support ongoing improvements in safety, quality and experience for people receiving care, alongside financial sustainability and efficiency objectives.

Abstract 

In response to the Royal Commission into Aged Care Quality and Safety, the Commonwealth Government (the Government) announced a range of reforms across the aged care sector. The reforms include expansion of the Independent Health and Aged Care Pricing Authority (IHACPA) to take on the role of providing independent advice to the Government on costing and pricing for Government funded aged care services. This role will enable aged care funding, including the new classification and funding model system, the Australian National Aged Care Classification (AN-ACC), to be directly informed by the actual costs of delivering care and services. It is anticipated that Government residential aged care funding will be informed by IHACPA’s pricing advice from 1 July 2023.

IHACPA’s established role in public hospital pricing relies on a consultative, transparent and evidence-based approach. IHACPA is committed to the same principles in developing independent aged care costing and pricing advice. The aged care work program will involve annual public consultation and refinement of an aged care pricing framework based on stakeholder feedback. Feedback and cost and activity data (including from new costing studies as well as Aged Care Financial Report and Quarterly Financial Report data) will be translated into evidence-based classification, costing and pricing advice.

IHACPA is currently developing its first Pricing Framework for Australian Aged Care Services (the Framework), underpinning IHACPA’s approach to providing independent and transparent annual pricing advice. Based on public consultation, the Framework incorporates the pricing principles and the key challenges for aged care costing and pricing. The Framework will initially focus on the AN-ACC funding model in the context of residential aged care and respite. Future consultations will expand to incorporate principles and issues relevant to home and community aged care. The Framework will outline a long-term vision for the refinement of aged care classification, costing and pricing over time.