New agency releases first pricing advice

The IHACPA has released its inaugural report to government on the pricing of residential aged care.

The body tasked with determining the price of aged care services has released its aged care pricing advice for 2023-24.

David Tune

An autonomous government agency, the Independent Health and Aged Care Pricing Authority was established to provide the government with “impartial, timely and transparent advice” on the efficient price for health and residential aged care services based on the best available data and stakeholder consultation.

Formerly the Independent Hospital Pricing Authority, the body has been expanded to include the:

  • provision of advice on aged care pricing and costing matters
  • performance of certain functions conferred by the Aged Care Act.

The Residential Aged Care Pricing Advice 2023-24 informed the new starting price of the Australian National Aged Care Classification announced in the May budget – priced at $243.10 from 1 July.

“We welcome the expansion of IHACPA’s functions to contribute to national aged care reforms by providing evidence-based costing and pricing to government,” said IHACPA chair David Tune.

“IHACPA has a long history of providing the government with evidence-based pricing and costing for public services,” said Mr Tune. “While we recognise the significant differences between hospitals and aged care, our established expertise in activity-based funding and analytical rigour have provided a strong foundation for the development of aged care advice.”

The AN-ACC starting price of $243.10 has been apportioned between care, hotel and accommodation costs as:

  • 37 per cent – care
  • 33.6 per cent – hotel
  • 29.4 per cent – accommodation.

Th apportionment is based on StewartBrown’s September 2022 Aged Care Financial Performance Survey report.

As well as the pricing advice document – which was published in April but only made available last week – the IHACPA has also released the Pricing Framework for Australian Residential Aged Care Services 2023-24, the Towards an Aged Care Pricing Framework Consultation Report and the Technical Specifications that support the pricing advice.

The pricing framework is the key policy document for IHACPA relating to residential
aged care and residential respite care and underpins IHACPA’s approach to developing
residential aged care costing and pricing advice to the federal government.

The consultation paper focused on the AN-ACC assessment and funding model of residential aged care and residential respite care. It gave stakeholders the
opportunity to provide input into the development of the pricing framework.

IHACPA received 71 submissions in response to the consultation paper. Stakeholders – including Aged & Community Care Providers Association, Aged Care Workforce Industry Council, Catholic Health Australia, Council on the Ageing, Older Persons Advocacy Network and Dementia Australia – provided feedback regarding IHACPA’s proposed approach to providing aged care costing and pricing advice to the government. IHACPA considered the feedback in the development of the pricing framework.

In future, annual pricing advice will include more in-depth costing study data so as to ensure the government is provided with residential aged care pricing that reflects the changing cost of delivering care.

The pricing framework will be reviewed on a yearly basis to ensure it remains fit for purpose and achieves policy objectives.

“IHACPA is committed to working with stakeholders and its advisory committees to ensure pricing advice is robust, appropriate and responsive to changes in the aged care sector,” said Mr Tune.

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Tags: aged care pricing, aged care pricing advice, david tune, featured, IHACPA,

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