Through its establishment the CAC has provided essential support to IHPA’s work via the clinical expertise of its members who assist IHPA with resolving clinical matters as they arise. In 2014–15 members were involved with the development of the Pricing Framework for Australian Public Hospital Services 2015–16 which informed the National Efficient Price and National Efficient Cost Determinations for 2015–16. In addition to the CAC’s work on the revision and development of existing classification systems, this year the CAC played a key role in the work to establish national classification systems for mental health care and teaching and training. Other achievements highlighted in this chapter include the assessment of new technologies and their impact on the pricing model, continuing work on national costing standards and pricing for safety and quality. I like to thank my fellow CAC members for their contribution to the work outlined within this chapter. I would also like to recognise the members of IHPA’s Pricing Authority and its staff who have once again delivered a successful work program in 2014–15. I look forward to continuing IHPA’s work to drive transparency across the health system to help achieve better health outcomes for all Australians. Professor Ian Gough Clinical Advisory Committee Chair 2 October 2015 The Clinical Advisory Committee (CAC) is a statutory committee that was established under Part 4.10 of the National Health Reform Act 2011. The functions of the CAC as described in s. 177: to advise the Pricing Authority in relation to developing and specifying classification systems for health care and other services provided by public hospitals; to advise the Pricing Authority in relation to matters that: relate to the functions of the Pricing Authority; and are referred to the Clinical Advisory Committee by the Pricing Authority; to do anything incidental to or conducive to the performance of the above functions.
Determine the National Efficient (NEP) and National Efficient Cost (NEC) for public hospital services Indicator Target Result Reduce the number of Local Hospital Networks that record costs per National Weighted Activity Unit (NWAU) significantly above the NEP 2014–15 should provide a reduction in the range between the 50th and 90th percentile cost per NWAU when compared to 2012–13 data. In this was $4,096 Target met Develop national classifications for Activity Based Funding (ABF) Indicator Target Result Increased percentage of public hospital services funded by nationally consistent ABF 2014–15 will provide an increase in the proportion of public hospital funding using ABF as reported by the Administrator of the National Health Funding Pool. In 2012–13, 72 per cent of National Health Reform Agenda funding was provided on the basis of ABF Target met Resolve disputes on cost-shifting and cross-border issues Indicator 2014–15 Reference Point or Target Result Timely investigation and provision of recommendations to Health Ministers on cross-border and cost shifting disputes IHPA investigation of cross-border or cost shifting disputes and provision of recommendations or assessment within six months of receipt of request Reference point met IHPA has produced a number of publications and reference materials that provide the groundwork to deliver our objectives as required under the National Health Reform Act 2011. All of these documents are available on the IHPA website at (NEC) 2015–16 A National Efficient Cost for services that are not suitable for Activity Funding (ABF), such as small rural hospitals. This determines the Australian Government’s contribution to block funded hospitals.
Impairments recognised in net cost of services – (30) – (30) Depreciation and amortisation (189) (101) (87) (377) Disposal – (1) – (1) Net book value 30 June 2014 796 264 94 1,154 Net book value as of 30 June 2014 represented by: – Gross book value 796 264 193 1,253 Revaluation recognised in asset revaluation reserve – – – – Accumulated depreciation and impairment – – (99) (99) Net book value 30 June 2014 796 264 94 1,154 NOTE 6F: OTHER NON-FINANCIAL ASSETS 2015 $’000 2014 $’000 Prepayments 48 44 Total other non-financial assets 48 44 Other non-financial assets expected to be recovered No more than 12 months 48 44 Total other non-financial assets 48 44 No indicators of impairment were found for other non-financial assets. Note 7: Fair value measurements The following tables provide an analysis of assets and liabilities that are measured at fair value. The different levels of the fair value hierarchy are defined below. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. NOTE 7A: FAIR VALUE MEASUREMENTS, VALUATION TECHNIQUES AND INPUTS USED Fair value measurements at the end of the reporting period3 2015 $’000 2014 $’000 Category 1, 2 or 3)4 Non-financial assets Leasehold improvements 596 796 3 Property, plant and equipment 348 264 2 Total non-financial assets 944 1,060 Assets not measured at fair value in the statement of financial position: Non-financial assets1 – –
Note 15: Appropriations 15A GST Annual Appropriations for 2015 Appropriation Act Annual appropriation $’000 Appropriation Act AFM $’000 PGPA Act Section 74 $’000 PGPA Act Section 75 $’000 Total appropriation $’000 Appropriation applied in 2015 (current and prior years) $’000 Variance $’000 Section 51 determinations $’000 Departmental Ordinary annual services 25,726 – – – 25,726 23,641 2,085 – Total departmental 25,726 – – – 25,726 23,641 2,085 – 15A GST Annual Appropriations for 2014 Appropriation Act Annual appropriation $’000 Appropriation Act AFM $’000 PGPA Act Section 74 $’000 PGPA Act Section 75 $’000 Total appropriation $’000 Appropriation applied in 2014 (current and prior years) $’000 Variance $’000 Section 51 determinations $’000 Departmental Ordinary annual services 13,609 – 58 – 13,667 (11,716) 1,951 – Other services – – – – – – – – Equity – – – – – – – – Total departmental 13,609 – 58 – 13,667 (11,716) 1,951 Administered Ordinary annual services Administered items 12,090 (1,934) – – 10,156 (8,924) 1,232 – administered 12,090 (1,934) – – 10,156 (8,924) 1,232 –
15B GST Annual capital appropriations for 2015 2015 capital budget appropriation Capital budget appropriations applied in 2015 (current and prior years) Variance $’000 Appropriation Act Annual capital budget $’000 PGPA Act Section 75 $’000 Total capital budget appropriations $’000 Payments for non-financial assets $’000 Payments for other purposes $’000 payments $’000 Departmental Ordinary annual services – Departmental Budget – – – – – – – 15B GST Annual capital appropriations for 2014 2014 capital budget appropriation Capital budget appropriations applied in 2014 (current and prior years) Variance $’000 Appropriation Act Annual capital budget $’000 PGPA Act Section 75 $’000 Total capital budget appropriations $’000 Payments for non-financial assets $’000 Payments for other purposes $’000 Total payments $’000 Departmental Ordinary annual services – Departmental Budget 200 – 200 200 – 200 – Administered Ordinary annual services – Administered Budget – – – – – – –
Statement of changes in equity for the year ended 30 June 2015 Retained earnings Asset revaluation surplus Contributed equity/capital Total equity Actual 2015 $’000 Budget estimate Original 2015 $’000 Budget estimate Variance 2015 $’000 Actual 2015 $’000 Budget estimate Original 2015 $’000 Budget estimate Variance 2015 $’000 Actual 2015 $’000 Budget estimate Original 2015 $’000 Budget estimate Variance 2015 $’000 Actual 2015 $’000 Budget estimate Original 2015 $’000 Budget estimate Variance 2015 $’000 Opening balance Balance carried forward from previous period 19,102 17,325 1,777 16 – 16 400 400 – 19,518 17,725 1,793 Adjusted opening balance 19,102 17,325 1,777 16 – 16 400 400 – 19,518 17,725 1,793 Comprehensive income Surplus for the period 3,746 – 3,746 – – – – – – 3,746 – 3,746 comprehensive income – – – – – – – – – – – – Total comprehensive income 3,746 – 3,746 – – – – – – 3,746 – 3,746 Transactions with owners Extinguishment of Appropriations (3,651) – (3,651) – – – – – – (3,651) – (3,651) Contribution to settle prior period administrative accruals 514 – 514 – – – – – – 514 – 514 Contributions by owners – – Departmental capital budget – – – – – – – 198 (198) – 198 (198) Restructuring – – – – – – – – – – – – Total transactions with owners (3,137) – (3,137) – – – – 198 (198) (3,137) 198 (3,335) Closing balance as at 30 June 19,711 17,325 2,386 16 – 16 400 598 (198) 20,127 17,923 2,204
B IHPA Resource Statement 2014-15 Actual available appropriation for 2014–15 $’000 Payments made for 2014–15 $’000 Balance remaining 2014–15 $’000 Ordinary annual services Departmental Appropriation1 45,987 22,829 23,158 Total net resourcing for IHPA 45,987 22,829 23,158 Notes 1. Appropriation Act (No. 1) 2014–15 All figures are GST exclusive. Expenses by Outcome Budget 2014–15 $’000 Actual expenses 2014–15 $’000 Variation 2014–15 $’000 Program 1.1: Public hospital price determinations Departmental Expenses Departmental Appropriation1 13,251 25,726 (12,475) Revenue from own sources 314 2,436 (2,122) Expenses not requiring appropriation in the budget year 380 58 322 Operating deficit (Surplus) (380) (3,746) 3,366 Total expenses for Outcome 1 13,565 24,474 (10,909) 2013–14 2014–15 Average staffing level2 53 53
Agency resource statement and summary resource tables by outcomes Mandatory 109 Corporate Governance Agency are required to certify that their agency complies with the Commonwealth Fraud Control Guidelines Mandatory 47, 49- 56 Statement of the main corporate governance practices in place Mandatory 47-56 Names of the senior executive and their responsibilities Suggested 17 Senior management committees and roles Suggested 17 - 28 Corporate and operational plans and associated performance reporting and review Suggested 47 - 56 Internal audit arrangements including approach adopted to identifying areas of significant financial or operational risk and arrangements to manage those risks Suggested 47 - 56 Policy and practices on the establishment and maintenance of appropriate ethical standards Suggested 61 How nature and amount of remuneration for SES officers is determined Suggested 59 External Scrutiny Significant developments in external scrutiny Mandatory 61 Judicial decisions and decisions of administrative tribunals and by the Australian Information Commissioner Mandatory 61 Reports by the Auditor-General, a Parliamentary Committee or Commonwealth Ombudsman or an agency capability review Mandatory 66-67 Management of Human Resources Assessment of effectiveness in managing and developing resources to achieve departmental objectives Mandatory 56-57 Workforce planning, staff turnover and retention Suggested 56-57 Impact and features of enterprise or collective agreements, individual flexibility arrangements (IFAs), determinations, common law contracts and Australian Workplace Agreements (AWAs) Suggested 61 Training and development undertaken and its impact Suggested 56-57 Work health and safety performance Suggested 56-57 Productivity Suggested N/A Statistics on staffing Mandatory 56-57 Enterprise or collective agreements, IFAs, determinations, common law contracts and AWAs Mandatory 61