Methodology for Determining the Benchmark Price for Prostheses in Australian Public Hospitals

The Independent Hospital Pricing Authority’s (IHPA) primary function is to calculate and deliver an annual national efficient price (NEP). The NEP is a major determinant of the level of Australian Government funding for public hospital services and provides a price signal or benchmark for the efficient cost of providing public hospital services.

The 2021–22 Federal Budget, released in May 2021, included a measure to modernise and improve the private health insurance Prostheses List. This measure will better align the price set for medical devices on the Prostheses List for private providers with those paid for in competitive markets, such as the public hospital system.

IHPA has been requested to establish the benchmark price that is paid for prostheses in the public sector, in order that the gap between the public sector benchmark price and the prices (also referred to as Prostheses List benefits) currently mandated on the Prostheses List can be determined. 

IHPA released a Consultation Paper on a Methodology for Determining the Benchmark Price for Prostheses in Australian Public Hospitals (the Consultation Paper) on 6 September 2021. 

The Consultation Paper sought feedback on the key issues to assist IHPA in preparing the report to the Commonwealth Department of Health regarding the benchmark price for prostheses in the public sector.