BH:AG
20 February 2012
Independent Hospital Pricing Authority
Attention: Draft Pricing Framework Submissions
GPO Box 1414
Woden ACT 2606
Dear Sir/Madam
Activity based funding for Australian public hospitals:
Towards a Pricing Framework
The NSW Nurses’ Association welcomes the opportunity to provide our response to
the Activity based funding for Australian public hospitals: Towards a Pricing
Framework discussion paper.
The New South Wales Nurses' Association (NSWNA) is the registered union for all
nurses and midwives in New South Wales. The membership of the NSWNA
comprises all those who perform nursing and midwifery work. This includes
assistants in nursing (who are unregulated), enrolled nurses and registered nurses
and midwives at all levels including management and education.
The NSWNA has approximately 54,000 members and is affiliated to Unions NSW
and the Australian Council of Trade Unions (ACTU). Eligible members of the
NSWNA are also deemed to be members of the New South Wales Branch of the
Australian Nursing Federation.
Our role is to protect and advance the interests of nurses and midwives and the
nursing and midwifery professions. We are also committed to improving standards of
patient care and the quality of services health and aged care services.
In general terms we are concerned that the proposed process of setting the National
Efficient Price (NEP) as laid out in the document does not have the capacity to
accommodate existing agreed upon and legally enforceable nursing workforce ratios
that are due to be phased into the NSW system. Also, it is a matter of great concern
that the NSW 2009/2010 data set will not reflect recent and substantial increases in
mandated minimum staffing levels in NSW and it is clear that the method of
indexation proposed will not adequately reflect recent and near future NSW public
hospital costs.
Section 4 Principles
4.3 System design principles
‘Patient-based: Adjustments to the standard price should be, as far a practicable,
based on patient-related rather than provider –related characteristics.’
Page 25 of the document provides information about patient-based principle:
“If an ABF system is fair and equitable, then where hospitals provide
equivalent services, they should be paid the same. A corollary of this,
expressed in the patient-based principle, is that payment should be as far as
possible be based on characteristics of the patient or the service being
provided rather than the setting in which the service is being provided”.
In the explanation of the principle it would be useful to include examples of the inputs
to patient-based care cost. There are legal agreements in place in each state and
Territory that are enforceable to deliver prescribed levels of care from qualified staff.
For example, minimum nursing hours per patient day are now incorporated in the
various forms in most Industrial Awards and Agreements. This means that they are
legally enforceable and are required to provide patient-based care. NSWNA
believes that this is one of the components of a ‘characteristic of the service being
provided’.
Further, we believe that there must be a mechanism to allow future adjustments to
the efficient price to reflect future enhancements to mandated staffing levels. For
example, in NSW the phased introduction of nurse-patient ratios will require 1400
extra nurses in the public hospital system over the period 20?? – 2014. This is a
significant workforce commitment in NSW which will not be captured by the NEP on
2009/10 public hospital cost data.
Section 6
We agree that it is too early to adopt best practice pricing as the standard approach
to activity based funding, particularly in light of the failure at this stage to identify and
adopt a means to accommodate phasing arrangements (noted above) and
anticipated developments around safer staffing levels that should be incorporated
into best practice.
Section 7
We support the introduction of some pay for performance incentives with the
introduction of ABF. We support the general principle of the US approach discussed
in the document however we believe that it is important that work in conjunction with
the Australian Commission on Safety and Quality in Health Care occurs to ensure
that this process is suited to the Australian context.
If you require clarification of any of these points please contact Kate Adams,
Manager Professional Services, 02 8595 2179.
Yours sincerely
BRETT HOLMES
General Secretary