Project objectives

HPA was engaged by IHPA from early 2012 to assist with analysis and development of the national pricing model.

Independent Hospital Pricing Authority

Our approach

HPA’s work included:

  • Developing options for the efficient price of block funded hospitals (the work was done jointly with Health Policy Solutions). This involved identifying the ways in which an efficient cost for these hospitals could be determined and estimates of the efficient levels.
  • Detailed expenditure estimates by ABF product stream by hospital. This was done by merging data from the Public Hospital Establishments (PHE) collection, the National Hospital Cost Data Collection (NHCDC), additional data provided by the jurisdictions, admitted patient data, emergency department data, and non-admitted data to model expenditures and budgets for each of the ABF streams at the hospital level.
  • Estimates of the impact of ABF implementation on funding for individual hospitals and local hospital networks, under alternative pricing and policy options.

Documentation describing and specifying the cost weight assignment approach and all relevant parameters, including reference to SAS code and associated tables. This was subsequently incorporated into the National Efficient Price Determination 2012–13 and the technical documentation accompanying this.


These projects contributed to the development and refinement of costing and the determination of the national efficient price in the early years of IHPA’s establishment.

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