South Australian report, November 2012

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This report is issued by the Administrator of the National Health Funding Pool under section 240 of the National Health Reform Act 2011.

This report shows monthly and year-to-date (YTD) National Health Reform (NHR) funding and payments for South Australia for November 2012 as part of the National Health Reform Agreement.

Participation in the National Health Funding Pool

In signing the National Health Reform Agreement (the Agreement), it was the intention of all states and territories that they would have the necessary legislation in place to enable them to participate in the National Health Funding Pool from 1 July 2012.

However, not all states and territories had their legislation in place by that date. As part of the transition to National Health Reform funding, arrangements were put in place whereby those states and territories received equivalent funding directly from the Commonwealth Treasury, and made payments directly from departmental bank accounts to local hospital networks (LHNs). Although these transactions were not made through state pool accounts and state managed funds, they have been included in this report (and designated as ‘notional payments’ into and out of state pool accounts and state managed funds) to enable national comparibility for month and year-to-date reporting periods.

South Australia has participated in the National Health Funding Pool since 1 October 2012.

Local hospital networks and National Health Reform

Under the Agreement, local hospital networks receive funding for the following public hospital services:

  • All admitted and non-admitted services
  • All emergency department services provided by a recognised emergency department
  • Other outpatient, mental health, sub-acute services and other services that could reasonably be considered a public hospital service.

Note: Local hospital networks also receive funding from other sources, including the Commonwealth, states and territories, and third parties for the provision of other specific functions and services outside the scope of the Agreement, for example dental services, primary care, home and community care, residential aged care and pharmaceuticals. For further information on total funding to a particular local hospital network, contact the South Australian Department of Health to view the service agreement for that local hospital network.

Basis for National Health Reform payments

For the basis of the Commonwealth contribution to NHR funding, see Basis of Commonwealth funding 2012-13.

The basis used to determine NHR payments to local hospital networks (LHNs) in South Australia for November 2012 was advised by South Australia to be as follows:

In determining the annual funding allocation for all local hospital networks, the budget has been built up predominantly on an activity basis applying an internally developed allocation methodology that is designed to equitably distribute funding to each local hospital network relative to all local hospital networks in South Australia. This occurs within the confines of a limited funding pool that includes adjustments to recognise cost improvements and the attainment of service efficiencies that are also equitably allocated on an activity basis. Supplementation is provided as block funding where an activity based approach is not appropriate. This captures the provision of services including sub-acute, teaching, training and research, some mental health services and the delivery of out of hospital strategies incorporating primary health.

Monthly allocations to local hospital networks will vary for a variety of reasons, but they are predominantly cash flow financed based on need which includes the activity demand on hospital services.

Reference information

The financial information outlined in the following report is categorised as:

  • NHR funding – when the Commonwealth or state or territory government pays NHR funding into a state pool account or state managed fund.
  • NHR payments – when NHR funding deposited into a state pool account or state managed fund is paid out of the state pool account by the Administrator, or is paid out of state managed fund by the state or territory.
  • Notional NHR payments – funds paid into and out of departmental bank accounts to local hospital networks that would have been transacted through the state pool account and/or state managed fund had the NHR funding arrangements been in place. Notional payments are included in 2012-13 reporting to enable national comparability for month and year-to-date reporting periods.

Transactions on the state pool account

This table shows funding paid into the South Australian state pool account by the Commonwealth and South Australia, and payments out of the state pool account to local hospital networks, the state managed fund, and the state health department for November 2012.

Table 1a – State pool account transactions – South Australia, November 2012

NHR funding by source Paid into state pool account Paid out of state pool account
To local hospital networks To state
managed
fund
To state
health department
Total paid out
($) ($) ($) ($) ($)
Commonwealth
ABF funding
68,478,460 68,478,460 68,478,460
Commonwealth
Block funding
16,072,645 16,072,645 16,072,645
Commonwealth
Other funding
1,991,713 1,991,713 1,991,713
Total Commonwealth
funding
86,542,818 68,478,460 16,072,645 1,991,713 86,542,818
Total state/territory
funding
135,218,580 100,500,000 0 100,500,000
Grand Total 221,761,398 168,978,460 16,072,645 1,991,713 187,042,818

See definitions and explanatory notes following table 1b.

Following on from table 1a, this table shows the year-to-date (YTD) funding paid into the South Australian state pool account by the Commonwealth and South Australia, and payments out of the state pool account to local hospital networks, the state managed fund, and the state health department as at November 2012. These amounts include notional payments for July, August and September 2012.

Table 1b – State pool account transactions YTD – South Australia, November 2012

NHR funding by source Paid into state pool account YTD Paid out of state pool account YTD
To local hospital networks To state managed
fund
To state health department Total paid out
YTD
($) ($) ($) ($) ($)
Commonwealth
ABF funding
342,392,300 342,392,300 342,392,300
Commonwealth
Block funding
80,363,223 80,363,223 80,363,223
Commonwealth
Other funding
9,958,567 9,958,567 9,958,567
Total Commonwealth
funding
432,714,090 342,392,300 80,363,223 9,958,567 432,714,090
Total state/territory
funding
604,207,906 544,831,643 0 544,831,643
Grand Total 1,036,921,995 887,223,943 80,363,223 9,958,567 977,545,733

Note: Of the total year-to-date amount of $1,036,921,995 shown in Table 1b as paid into the South Australian state pool account, $578,617,779 was notional year-to-date payments.

Note: Of the total year-to-date amount of $977,545,733 shown in Table 1b as paid out of the South Australian state pool account, $578,617,779 was notional year-to-date payments.

No payments were made from the South Australian state pool account in July, August and September 2012, with payments made directly from departmental bank accounts to local hospital networks.

Commonwealth ABF funding represents Acute admitted public, Acute admitted private, Non-admitted, and Emergency department service categories, which are funded by the Commonwealth through the state pool account and subsequently paid to local hospital networks.

Commonwealth Block funding represents Mental health, Small rural and metropolitan hospitals, Sub-acute, Teaching, training and research, and Other categories, which are funded by the Commonwealth and paid to the state managed fund.

Commonwealth Other funding represents other amounts funded by the Commonwealth, transacted through the state pool account and subsequently paid to state or territory health departments. This currently represents the Commonwealth contribution to public health.

State/territory funding represents funding contributions paid in by South Australia into its own state pool account, and subsequently paid to local hospital networks within the state or territory and/or to state or territory health departments.

Note: The grey shaded areas in these tables reflect that these amounts are not applicable for a particular 'paid out' column. For example, Commonwealth block funding is only paid to state managed funds and is not applicable for local hospital networks or state or territory health departments.

NHR funding and payments shown in these tables include GST where applicable.

For more information on NHR funding and payments, see National Health Reform funding and payments.

Transactions on the state managed fund

This table shows funding paid into the South Australian state managed fund by the Commonwealth and South Australia and payments out of the state managed fund for November 2012.

Table 2a – State managed fund transactions – South Australia, November 2012

NHR funding by source Paid into state managed fund Paid out of state managed fund
To local hospital networks To Other Total paid out
($) ($) ($) ($)
Commonwealth Block funding 16,072,645 16,072,645
State/territory Block funding 22,800,000 22,800,000
Total 38,872,645 38,872,645 0 38,872,645

See explanatory notes following table 2b.

Following on from table 2a, this table shows the year-to-date (YTD) funding paid into the South Australian state managed fund by the Commonwealth and South Australia and payments out of the state managed fund as at November 2012. These amounts include notional payments for July, August and September 2012.

Table 2b – State managed fund transactions YTD – South Australia, November 2012

NHR funding by source Paid into state managed fund YTD Paid out of state managed fund YTD
To local hospital networks To Other Total paid out
YTD
($) ($) ($) ($)
Commonwealth Block funding 80,363,223 80,363,223
State/territory Block funding 120,566,980 120,566,980
Total 200,930,202 200,930,203 0 200,930,203

Block funding represents Mental health, Small rural and metropolitan hospitals, Sub-acute, Teaching, training and research, and Other categories.

Commonwealth Block funding represents Commonwealth block funding contributions paid into the state managed fund from the state pool account, and block payments out of the state managed fund to local hospital networks and other provider organisations.

State/territory Block funding represents South Australian block funding contributions into the state managed fund, and block payments out of the state managed fund to local hospital networks and other provider organisations.

Note: The grey shaded areas in these tables reflect that these block payments cannot at this stage be identified by source of funding (state, territory or Commonwealth contribution).

NHR funding and payments shown in these tables include GST where applicable. For more information on NHR funding and payments, see National Health Reform funding and payments.

NHR funding and payments by service category

This table shows the NHR funding and payments by service category on both a monthly and year-to-date (YTD) basis for South Australia for November 2012.

NHR funding and payments are separated into an activity based funding (ABF) component, block component, and other components.

Table 3 – NHR funding and payments by service category – South Australia, November 2012

Service category NHR funding NHR payments NHR funding
YTD
NHR payments
YTD
($) ($) ($) ($)
ABF
Acute admitted - public 146,138,378 121,346,526 680,299,092 637,727,466
Acute admitted - private 8,620,531 7,132,602 40,428,198 37,774,727
Non-admitted 25,908,586 21,517,996 119,915,267 112,494,915
Emergency department 22,810,966 18,981,336 105,739,069 99,226,835
Total ABF (Pool) 203,478,460 168,978,460 946,381,626 887,223,943
Block
Mental health 14,723,975 14,723,975 75,969,266 75,969,266
Small rural & metro hospitals 8,571,320 8,571,320 45,325,330 45,325,329
Sub-acute 6,534,134 6,534,134 33,255,200 33,255,200
Teaching, training & research 5,436,833 5,436,833 27,778,958 27,778,959
Other 3,606,382 3,606,382 18,601,449 18,601,449
Total Block (SMF) 38,872,645 38,872,645 200,930,202 200,930,203
Other
Public health funding 1,991,713 1,991,713 9,958,567 9,958,567
Overdeposit 0 0 0 0
Cross border 0 0 0 0
Interest 218,580 0 218,580 0
Total Other (Pool) 2,210,293 1,991,713 10,177,147 9,958,567
Grand Total 244,561,398 209,842,818 1,157,488,975 1,098,112,713

Total ABF (Pool) is an aggregate of both Commonwealth and state or territory NHR funding and payments for activity based funding (ABF) which is transacted through the state pool account.

Total Block (SMF) is an aggregate of both Commonwealth and state or territory NHR funding and payments for block funding which is transacted through the state managed fund (SMF).

Total Other (Pool) represents other funding and payments, which are transacted through the state pool account, including public health funding, overdeposits, cross border funding and payments, and interest.

State and territory cross border payments can either be:

  • Paid to the relevant state or territory's local hospital networks - included within ABF and/or block payments in the above table, or
  • Reimbursed to the relevant state or territory where the state or territory's local hospital networks are already being funded for the cost of treating cross-border patients - shown in the Cross border payment row under Other in the above table.

Cross border funding arrangements between states and territories are yet to be put in place for state and territory contributions.

NHR funding and payments shown in these tables include GST where applicable.

For more information on NHR funding and payments, see National Health Reform funding and payments.

NHR payment distribution by LHN

This table shows NHR payments (from state, territory and Commonwealth sources) made to each local hospital network (LHN) in South Australia during November 2012.

NHR payments are separated into an activity based funding (ABF) component and a block component.

Table 4 – NHR payment distribution by LHN – South Australia, November 2012

Local hospital network (LHN) ABF component
(ex GST)
Block component
(ex GST)
Total NHR payments
(ex GST)
($) ($) ($)
Central Adelaide Local Health Network 61,079,890 14,175,810 75,255,700
Country Health SA Local Health Network 24,380,682 11,917,917 36,298,599
Northern Adelaide Local Health Network 21,966,878 4,141,518 26,108,396
Southern Adelaide Local Health Network 43,930,232 6,368,465 50,298,697
Women's and Children's Health Network 17,620,777 2,268,935 19,889,713
Total 168,978,460 38,872,645 207,851,105

A local hospital network (LHN) is an organisation that provides public hospital services in accordance with the National Health Reform Agreement. A local hospital network can contain one or more hospitals, and is usually defined as a business group, geographical area or community. Every Australian public hospital is part of a local hospital network.

NHR payments in this table are GST exclusive to enable comparability of NHR payments to each local hospital network within the jurisdiction and allow for reconciliation against the Table 1a for each local hospital network report.

Note: The majority of government funding to local hospital networks is not subject to GST. However in some cases hospital funding to non-government entities does attract GST, for example, denominational hospitals, privately and commercially owned health facilities, or any other non-government third party provider of health services or related supplies.

For more information on NHR funding and payments, see National Health Reform funding and payments.

Estimated monthly, YTD and annual NWAU by LHN

This table shows estimated state or territory hospital activity for activity based funding services expressed as National Weighted Activity Units (NWAU) for November 2012, the associated cumulative year-to-date (YTD) and total annual estimated NWAU for each local hospital network in South Australia.

NHR funding amounts and service volumes are provided by states and territories as service estimates at the start of each financial year, and may continue to be refined during the course of the year. These estimates form the basis of monthly reporting of service volumes until actual service numbers become available.

The estimated annual NWAU for each local hospital network (LHN) was provided to the Administrator as a basis for determining the Commonwealth NHR activity based funding. Current month NWAU estimates accumulate through the year-to-date NWAU to equal the annual NWAU at the end of the financial year.

Table 5 – Estimated monthly, YTD and annual NWAU by LHN – South Australia, November 2012

Local hospital network (LHN) Estimated NWAU delivered in current month Estimated NWAU delivered YTD Estimated annual NWAU 2012-13
Central Adelaide Local Health Network 12,206 67,535 162,612
Country Health SA Local Health Network 4,872 24,845 70,935
Northern Adelaide Local Health Network 4,390 23,875 81,497
Southern Adelaide Local Health Network 8,779 41,770 120,327
Women's and Children's Health Network 3,521 16,905 51,320
Total 33,769 177,547 486,690

An NWAU is a measure of health service activity expressed as a common unit. It provides a way of comparing and valuing each public hospital service, whether they are admissions, emergency department presentations or outpatient episodes, by weighting them for their clinical complexity. The average hospital service is worth one NWAU - the most intensive and expensive activities are worth multiple NWAU, the simplest and least expensive are worth fractions of an NWAU.

Monthly NHR payments relate to the cash needs of public hospitals and do not necessarily reflect the volume of services to be delivered in the month.

For more information on NHR funding and payments, see National Health Reform funding and payments.

For more information on the NWAU calculation, see Calculation of NWAU.