Western Australian report, May 2014

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In this report

This report includes the following tables:

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 is prepared on a cash basis. It shows monthly and year-to-date (YTD) National Health Reform (NHR) funding and payments for Western Australia for May 2014 as part of the National Health Reform Agreement.

Local hospital networks and National Health Reform

A local hospital network (LHN) is an organisation that provides public hospital services in accordance with the Agreement. An LHN 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 an LHN.

Note: The term ‘local hospital network’ is a national term. Some states and territories use their own terminology to describe these networks, such as local health districts, health organisations, and hospital and health services.

Under the Agreement, LHNs 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: LHNs 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 LHN, contact the WA Department of Health to view the service agreement for that LHN.

Basis for National Health Reform payments – Western Australia, May 2014

For the basis of the Commonwealth contribution to NHR funding, see Basis of Commonwealth NHR funding, 2013-14.

The basis used to determine NHR payments to LHNs in Western Australia for May 2014 was advised by the WA Department of Health to be as follows:

The 2013-14 annual funding allocations have been developed using the Western Australian Activity Based Funding program methodology. Activity profiles have been developed consistent with the WA Health clinical services framework. The funding allocations include activity based services, block funded services and specified programs.

The national ABF classifications and associated price weights including all of the adjustments (Specialised Paediatric, Rural/remote, Indigenous, ICU and private patient) have been used to define activity based funding profiles.

The State Transitioning Price, calculated using a methodology more closely aligned to the National ABF framework, provide a more transparent basis for comparing the cost of delivering hospital services in Western Australia against the national cost benchmark (Projected Average Cost (PAC)). The gap between the total price of all hospital activity funded at the State Transition Price and the total cost of all hospital activity funded at the PAC, is called the Community Service Subsidy (CSS) payment.

Block funding is based on budget to budget build from the previous year using State Government funding parameters consistent with the State budget.

In March 2014, the Commonwealth provided Western Australia with additional public hospital funding of $3,370,619.86 under the 2013-14 Mid-Year Economic and Fiscal Outlook (MYEFO) funding measure: Public Hospital System - additional funding. This funding was provided to offset the downward adjustment to 2013-14 NHR funding applied at the MYEFO due to the application of updated NHR funding indexation parameters. A requirement of the provision of this funding was that the funding be provided to LHNs through the National Health Funding Pool and / or State Managed Fund.

The Administrator has been advised by Western Australia that due to its legislative constraints an amount equivalent to the additional funding received from the Commonwealth will be paid to the LHNs outside the Pool between March and June 2014.

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 that has been 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 the state managed fund by the state or territory.

State pool account transactions

Table 1a – State pool account transactions – Western Australia, May 2014

This table shows funding paid into the Western Australian state pool account by the Commonwealth, Western Australia or other states/territories, and payments out of the state pool account to LHNs, the state managed fund, the WA Department of Health or the state pool accounts of other states/territories for May 2014.

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
To state pool (other State) Total paid out
($) ($) ($) ($) ($) ($)
Commonwealth
ABF funding
102,998,894 102,998,894 102,998,894
Commonwealth
Block funding
21,367,603 21,367,603 21,367,603
Commonwealth
Other funding
2,964,928 2,964,928 2,964,928
Total C'wealth
funding
127,331,424 102,998,894 21,367,603 2,964,928 127,331,424
WA
funding
165,817,243 165,817,243 0 0 165,817,243
Other state/territory funding 0 0 0 0
Total 293,148,667 268,816,136 21,367,603 2,964,928 0 293,148,667

See definitions and explanatory notes following table 1b.

Table 1b – State pool account transactions YTD – Western Australia, May 2014

Following on from table 1a, this table shows year-to-date (YTD) funding paid into the Western Australian state pool account by the Commonwealth, Western Australia or other states/territories, and payments out of the state pool account to LHNs, the state managed fund, the WA Department of Health or the state pool accounts of other states/territories as at May 2014.

NHR funding by source Paid Into state
pool account
Paid Out of state pool account
To Local hospital
networks
YTD
To State
Managed Fund
YTD
To state health
department
YTD
To state pool (other State)
YTD
Total paid out
YTD
($) ($) ($) ($) ($) ($)
Commonwealth
ABF funding
1,134,384,144 1,134,384,144 1,134,384,144
Commonwealth
Block funding
237,167,979 237,167,979 237,167,979
Commonwealth
Other funding
32,643,300 32,643,300 32,643,300
Total C'wealth
funding
1,404,195,423 1,134,384,144 237,167,979 32,643,300 1,404,195,423
WA
funding
2,010,235,775 2,010,234,998 777 0 2,010,235,775
Other state/territory funding 0 0 0 0
Total 3,414,431,199 3,144,619,142 237,167,979 32,644,077 0 3,414,431,198

Commonwealth ABF funding represents Acute admitted public, Acute admitted private, Non-admitted, and Emergency department, Sub-acute, and Admitted mental health service categories, which are funded by the Commonwealth through the state pool account and subsequently paid to LHNs.

Commonwealth Block funding represents Non-admitted mental health, Small rural hospitals, Teaching, training & research, and Other non-admitted 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.

WA funding represents funding contributions paid by Western Australia into its own state pool account, and subsequently paid to LHNs within the state, to the Western Australian health department and/or to other state pool accounts.

Other state/territory funding represents contributions paid to Western Australia by other states and territories for cross-border activity.

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, see National Health Reform funding and payments.

State managed fund transactions

Table 2a – State managed fund transactions – Western Australia, May 2014

This table shows funding paid into the Western Australia state managed fund by the Commonwealth and Western Australia, and payments out of the state managed fund to LHNs and other provider organisations for May 2014.

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 21,367,603 21,367,603
State/territory Block funding 9,854,620 9,854,620
Total 31,222,222 31,222,222 0 31,222,222

See explanatory notes following table 2b.

Table 2b – State managed fund transactions YTD – Western Australia, May 2014

Following on from table 2a, this table shows year-to-date (YTD) funding paid into the Western Australian state managed fund by the Commonwealth and Western Australia, and YTD payments out of the state managed fund to LHNs and other provider organisations as at May 2014.

NHR funding by source Paid into state
managed fund
YTD
Paid out of state managed fund YTD
To local hospital
networks
YTD
To Other
YTD
Total paid out
YTD
($) ($) ($) ($)
Commonwealth Block funding 237,167,979 237,167,979
State/territory Block funding 558,282,248 556,142,381
Total 795,450,227 793,310,360 0 793,310,360

Block funding represents Non-admitted mental health, Small rural hospitals, Teaching, training & research, and Other non-admitted 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 LHNs and other provider organisations.

State/territory Block funding represents Western Australian block funding contributions into the state managed fund, and block payments out of the state managed fund to LHNs 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, see National Health Reform funding and payments.

NHR funding and payments by service category

Table 3 – NHR funding and payments by service category – Western Australia, May 2014

This table shows NHR funding and payments by service category on both a monthly and year-to-date (YTD) basis for Western Australia for May 2014. NHR funding and payments are separated into the following service categories – activity-based funding (ABF), block funding, and other funding.

Service category NHR funding NHR payments YTD NHR
funding
YTD NHR
payments
($) ($) ($) ($)
ABF
Acute admitted - public 161,995,872 161,995,872 * *
Acute admitted - private 10,181,949 10,181,949 * *
Non-admitted 27,073,244 27,073,244 * *
Emergency department 34,684,148 34,684,148 * *
Admitted mental health 19,252,825 19,252,825 * *
Sub-acute 15,628,099 15,628,099 * *
Total ABF (Pool) 268,816,136 268,816,136 3,144,619,143 3,144,619,143
Block
Non-admitted mental health 13,773,869 13,897,287 146,873,410 147,911,844
Small rural hospitals 10,112,036 10,201,890 148,238,340 148,160,745
Teaching, training & research 6,899,939 6,577,070 134,780,899 130,548,059
Other non-admitted services 436,378 545,976 365,557,578 366,689,712
Total Block (SMF) 31,222,222 31,222,222 795,450,227 793,310,360
Other
Public health funding 2,964,928 2,964,928 32,643,300 32,643,300
Overdeposit 0 0 0 0
Cross-border 0 0 0 0
Interest 0 0 777 777
Total Other (Pool) 2,964,928 2,964,928 32,644,078 32,644,077
Grand Total 303,003,286 303,003,286 3,972,713,447 3,970,573,580

* Due to a revision by Western Australia in the expected NWAU to be delivered in 2013-14 and the timing of the consequent adjustment by the Administrator to Commonwealth contributions, the distribution of payments by LHNs and by service categories shown in this month's report may differ to that reported by Western Australia. These differences will disappear in the coming months.

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 LHNs - 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 LHNs are already being funded for the cost of treating cross-border patients - shown in the Cross-border row under Other in the above table.

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

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

NHR contributions by local hospital network

Table 4a – NHR contributions by local hospital network – Western Australia, May 2014

This table shows NHR contributions (from state, territory and Commonwealth sources) made to each LHN in Western Australia during May 2014.

NHR contributions to LHNs are separated into an activity-based funding (ABF) component and a block component.

Local hospital network (LHN) ABF component
(ex GST)
Block component
(ex GST)
Total NHR payment
(ex GST)
($) ($) ($)
Child and Adolescent Health Service 7,461,347 2,739,666 10,201,013
North Metropolitan Health Service 102,511,937 7,479,982 109,991,919
South Metropolitan Health Service 144,079,148 7,497,333 151,576,481
WA Country Health Service 14,763,705 13,505,241 28,268,946
Total 268,816,136 31,222,222 300,038,359

See explanatory notes below table 4b.

Table 4b – NHR contributions by local hospital network YTD – Western Australia, May 2014

This table shows YTD NHR contributions (from state, territory and Commonwealth sources) made to each LHN in Western Australia as at May 2014.

NHR contributions to LHNs are separated into an activity-based funding (ABF) component and a block component.

Local hospital network ABF component YTD
(ex GST)
Block component YTD
(ex GST)
Total NHR payment YTD
(ex GST)
($) ($) ($)
Child and Adolescent Health Service 227,859,859 83,521,173 311,381,031
North Metropolitan Health Service 1,113,744,550 210,997,222 1,324,741,772
South Metropolitan Health Service 1,356,573,107 200,335,190 1,556,908,298
WA Country Health Service 446,441,626 298,456,775 744,898,401
Total 3,144,619,142 793,310,360 3,937,929,502

NHR contributions in this table are GST exclusive to enable comparability of NHR payments in each LHN report.

Note: This table excludes GST.
The majority of government funding to LHNs 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, see National Health Reform funding and payments.

Estimated monthly, YTD and annual activity

States and territories provide service volume estimates at the start of each financial year, and if required, can continue to refine these estimates during the course of the year. These estimates form the basis of monthly reporting of service volumes until actual service numbers become available. These estimates are expressed as National Weighted Activity Units (NWAU).

States and territories provide estimated annual NWAU to the Administrator as a basis for determining the Commonwealth activity-based funding. Current month NWAU estimates accumulate through the year-to-date (YTD) NWAU, to be equal to the annual NWAU at the end of the financial year.

States and territories may also provide activity information relating to the delivery of other public hospital functions funded.

Table 5 – Estimated monthly, YTD and annual NWAU by local hospital network – Western Australia, May 2014

This table shows estimated state or territory hospital activity for activity-based funding services expressed as NWAU for May 2014, the associated cumulative year-to-date (YTD), and total estimated annual NWAU for each LHN in Western Australia.

Local hospital network (LHN) Estimated NWAU delivered in current month Estimated NWAU delivered YTD Estimated annual NWAU 2013-14
Child and Adolescent Health Service 4,581 46,417 50,740
North Metropolitan Health Service 21,371 224,060 244,892
South Metropolitan Health Service 26,378 272,776 298,631
WA Country Health Service 7,586 80,240 87,805
Total 59,915 623,493 682,068

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 the NWAU calculation, see Calculation of NWAU.