The determinations play a crucial role in the calculation of the Australian Government funding contribution to Australian public hospital services and offer a benchmark for the efficient cost of providing those services.
The annual NEP sets the Australian Government funding for in-scope public hospital services that are funded on an activity basis. The NEP for 2025–26 is $7,258 per national weighted activity unit (NWAU). For example:
- A tonsillectomy has a weight of 0.7421 NWAU which equates to $5,386.
- A coronary bypass (minor complexity) has a weight of 5.8610 NWAU which equates to $42,539.
- A hip replacement (minor complexity) has a weight 4.0251 NWAU which equates to $29,214.
The NEC is used to determine payments for services that are block funded, such as small rural hospitals. For 2025–26, the fixed cost is $2.637 million and the variable cost is $7,617.
The determinations are the result of extensive research, consultation and analysis into healthcare costs and changes, as summarised in the Pricing Framework for Australian Public Hospital Services 2025–26, published on 4 December 2024.
The pricing framework is informed by consultation with jurisdictions and broader health stakeholders, as well as analysis of 28 submissions to the consultation paper.
Transition to activity based funding for community mental health care
This year marks a significant milestone with the transition of community mental health care services to activity based funding (ABF) using the Australian Mental Health Care Classification (AMHCC) Version 1.1. This transition follows 4 years of shadow pricing using AMHCC Version 1.0 and represents the first patient service category to move from block funding to ABF since IHACPA’s inception.
IHACPA Chair, Mr David Tune AO PSM said:
