Low indexation of the National Efficient Price has functioned as a cost saving exercise rather than being an actual reflection of the public hospital needs
The Australian Medical Association's submission to the Independent Health and Aged Care Pricing Authority's (IHACPA) Pricing Framework for Australian Public Hospital Services 2024-25 says low indexation of the National Efficient Price (NEP) has resulted in less funding for public hospitals, which are in logjam.
The NEP is set each year by IHACPA and determines the amount of Commonwealth Government funding for public hospital services.
IHACPA's 2024-25 Pricing Framework also proposes the abolishment of the COVID-19 treatment adjustment in the 2024-25 NEP determination, which the AMA strongly opposes.
The AMA submission follows its recent analysis: What happens when we fund hospitals to perform, which showed a marked drop in hospital performance when performance-related funding was removed in 2014 and the National Health Performance Authority was abolished.
The AMA has a four-point plan to stem the public hospital crisis, which includes reintroducing performance-improvement funding; funding for extra beds and staff in hospitals and funding for out-of-hospital care with GPs to keep people out of hospitals; and for the Commonwealth's share of funding to be increased from 45 per cent to 50 per cent and getting rid of the arbitrary 6.5 per cent activity cap.
