What is a Pricing Framework
The Pricing Framework for Australian Aged Care Services (the Framework) will be the key policy document for the Independent Health and Aged Care Pricing Authority (IHACPA) in aged care. It will underpin IHACPA’s approach to providing aged care costing and pricing advice to the Commonwealth Government. It will guide how IHACPA develops pricing advice. It will also outline how any required pricing adjustments are developed to account for unavoidable cost variations faced by providers in delivering services for some groups of people receiving care.
IHACPA will seek to support a range of policy objectives through the Framework, including enabling aged care providers to deliver the person-centred, quality care expected by the community and improving the safety, efficiency and sustainability of the aged care sector. Some objectives may be achievable in the short- to medium-term. For example, prices that sufficiently fund uplifts in the required daily care minutes for aged care residents. Other objectives, such as improved efficiency of the sector, are longer-term objectives.
IHACPA’s commitment to transparency, fairness and accountability in forming pricing advice is articulated by three types of pricing principles:
- overarching principles that express the overall policy intent of activity based funding (ABF)
- principles to guide ABF process
- principles to inform detailed system design choice.
IHACPA will need to balance a range of policy objectives, including promoting the resident-centred, quality care expected by the community, improving the sustainability of the aged care sector and optimising efficiency over time. The pricing principles signal IHACPA’s commitment to transparency and accountability as it undertakes its work. This is the overarching framework within which IHACPA will make its policy decisions.
The Pricing Framework, to be updated annually, will outline the principles, scope and methodology adopted by IHACPA and by which the price for Australian aged care services will be determined.