FOI 5065 Document 7
s22
From:
s22
Sent:
Friday, 9 December 2022 1:48 PM
To:
JORDAN, Kayla
Cc:
s22
Subject:
Measuring Efficient Price Growth in the NHRA [SEC=OFFICIAL]
Hi s22
As discussed, when we are discussing the rise in the unit price of delivering public hospital services, the best
measure to use is the efficient annual growth in the National Efficient Price (NEP).
Each year, the IHACPA publishes a NEP Determination that sets the NEP for services to be delivered in that financial
year. However, strictly speaking, the NEP for 2021-22 is not directly comparable to the NEP for 2022-23. Instead, the
NEP for 2021-22 is the constructed average unit price for public hospital services as conceived of and classified in
2021-22. For 2022-23, public hospital services will be conceived of and classified in a different manner to they were
in the prior year.
To allow comparability between years, the IHACPA engages in a process known as “back-casting” – that is, they seek
to remove the changes in price caused by changed in classification, and instead have only the remaining real
increases in price remain. This is known as efficient growth in the context of the NHRA, and is the basis upon which
the Commonwealth’s funding is calculated: we measure the growth between this year’s “native” NEP, and last year’s
“back-cast” NEP.
ACT 1982
For example, here is the link to IHACPA’s 2022-23 NEP Determination:
https://www.ihacpa.gov.au/sites/default/files/2022-
08/National%20Efficient%20Price%20Determination%202022%E2%80%9323.pdf
HEALTH AND AGED CARE
Page 7 sets out the NEP for that year:
INFORMATION
FREEDOM OF
THIS DOCUMENTHAS BEEN RELEASED UNDER
Page 27 sets out the back-cast p
THE
rior year NEP for that year, and repeats the explanation I have just given as to why
this is done:
BY THE DEPARTMENT OF
1
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FOI 5065 Document 7
Hence, if we divide the ‘native’ 2022-23 NEP of $5,797 by the “back-cast” prior year NEP of 2021-22 of $5,567, we
get an increase of 4.13%.
Cheers,
s22
s22
Director – Hospital Systems
ACT 1982
Portfolio Strategies Division
National Health Reform Branch
Australian Government Department of Health and Aged Care
T: 02 6289 s22 | E: s22
@health.gov.au
HEALTH AND AGED CARE
Location: Sirius Building 10.S.140
GPO Box 9848, Canberra ACT 2601, Australia
INFORMATION
The Department of Health acknowledges the Traditional Custodians of Australia and their continued connection to land, sea and
community. We pay our respects to all Elders past and present.
FREEDOM OF
THIS DOCUMENTHAS BEEN RELEASED UNDER
THEBY THE DEPARTMENT OF
2
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FOI 5065 Document 15
Schedule 6A – Order Variation Template
Parties
A.
Commonwealth of Australia as represented by Department of Health and Aged
Care ABN 83 605 426 759 (Agency); and
B.
Deloitte Touche Tohmatsu ABN 74 490 121 060 (Service Provider)
Recitals
A.
The Agency and the Service Provider are party to an Order dated 12
September 2022 for the provision of Expert services for assessment of 2023
premium applications. Reference ID: E22-207410
B.
The parties wish to vary the Order as provided by this Deed of variation.
The parties agree as follows:
The Order is varied in accordance with the terms set out below. Unless specifically stated in
this Order Variation, all terms and conditions of the Order continue unaffected.
ACT 1982
1.
Order Variation number
1
2.
Raised by
Agency
HEALTH AND AGED CARE
3.
Details of change (use attachments if
Amend item ‘Order Expiry Date’
INFORMATION
required)
[order commencement date and
term] to 30 June 2023.
No further extension options remain
available for this contract.
FREEDOM OF
Amend ‘Detailed Statement of Work’
[Statement o
THIS DOCUMENTHAS BEEN RELEASED UNDER f Work] to include after
THE
existing text, the following:
BY THE DEPARTMENT OF The supplier will provide advice on
resubmissions to the 2023 premium
round process.
The supplier will provide advice on
amendments to the premium round
application form to improve information
gathered for assessment in future
premium round assessments and
potential changes to future premium
round processes.
The supplier will provide an update to
previous work on the assessment of
Page 1 of 3
FOI 5065 Document 15
comparability of PHI products for
consumers.
This assessment will include the
migration of policyholders to products
with a lower level of cover (i.e.
downgrading) or downgrading out of
Gold to manage affordability concerns.
Amend ‘Milestones’ [Statement of
Work] as follows:
Replace ’16 December 2022’ with ‘27
January 2023’
Amend ‘Milestones’ [Statement of
Work ] to add new text after existing
text:
‘February – March 2023
Provide written advice on proposed
amendments to the premium round
application form to improve information
gathered for
ACT 1982 assessment in future
premium round processes.
February - June 2023
HEALTH AND AGED CARE
Provide an assessment of
comparability of PHI products for
INFORMATION consumers, accompanied by written
report and analysis.’
4.
Implementation date of variation
23 December 2022
FREEDOM OF
5.
Effect on services
Continued service provision
THIS DOCUMENTHAS BEEN RELEASED UNDER
THE
6.
Plan for implementing the change [if
Meetings between the Agency and
BY THE DEPARTMENT OF
any]
the Supplier in December and
January to discuss changes.
7.
Effect on price [if any]
Nil – hourly rate
8.
Effect on service levels [if any]
Nil
9.
Other relevant matters (e.g. transitional
Nil
impacts)
Page 2 of 3
FOI 5065 Document 15
Variation to Order:
Expert services for assessment of 2023 premium applications Order Variation 1.
Agency
Department of Health and Aged Care
Name (print)
Brian Kelleher
Position
Assistant Secretary
Signature
Date
Service Provider Deloitte Touche Tohmatsu
Name (print)
s47F
Position
Partner
ACT 1982
Signature
Date
HEALTH AND AGED CARE
INFORMATION
FREEDOM OF
THIS DOCUMENTHAS BEEN RELEASED UNDER
THEBY THE DEPARTMENT OF
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Document Outline
