Steady-as-she-goes for smaller hospitals

Friday, 1 August 2014

The Alliance provided a brief submission to the Independent Hospitals Pricing Authority consultation paper on the Pricing Framework for Australian Public Hospital Services 2015-16.

The submission focused on the section of the paper on “Setting the National Efficient Cost (NEC).” This is the basis for the block funding of small rural hospitals to ensure that hospital services are still available in areas with smaller populations. In these areas there are not the efficiencies of scale to support the Activity Based Funding model that applies to larger hospitals, where funding is based on the numbers and mix of services provided.

The NRHA submission recommends a conservative approach to the pricing framework for block funding of small rural hospitals. Any changes to be made should be based on an evidence base that is still being developed - and undertaken in close consultation with the wide range of rural and remote interest groups concerned with wellbeing and sustainable communities.

Block funding arrangements are critical for access to healthcare close-to-home for people in many rural and remote areas. In addition, in many cases the continuing existence of a small rural hospital as a healthcare centre for the district is critical to the sustainability of a whole range of health services including primary care, specialist and allied health outreach and telehealth services, aged care and end-of-life care. The closure of a small rural hospital can result in substantial flow-on effects to these other health services, well beyond its direct impact on hospital care.

A better understanding of the role of Multi-Purpose Services and the contribution they make to healthcare in smaller rural and remote communities should form a part of this growing evidence base.

IHPA works in partnership with the National Health Performance Authority and the Australian Commission on Safety and Quality in Health Care to ensure that pricing, quality and performance measures for public hospitals are complementary and facilitate a strong national framework for the delivery of public hospital services.

IHPA is continuing to deliver its work program during 2014-15 while the Government consults with the States and Territories about the intention to create a new Health Productivity and Performance Commission. The proposed new Commission would merge the functions of the Australian Commission on Safety and Quality in Health Care, the Australian Institute of Health and Welfare, IHPA, the National Health Performance Authority, the National Health Funding Body and the Administrator of the National Health Funding Pool.

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