The Future Agreement

In February 2018, the COAG Health Council drafted the Heads of Agreement between the Commonwealth and the States and Territories on public hospital funding and health reform (the HoA). The HoA sets out the public hospital funding arrangements for the period 2020-21 to 2024-25.

The HoA maintains a commitment to Activity Based Funding (ABF) and extends reforms under the Addendum to focus on improved safety and quality, health innovation and coordinated care to reduce avoidable hospital admissions.

These arrangements agreed to by jurisdictions include the:

  • National Funding Cap, which limits growth in Commonwealth NHR funding at 6.5 per cent a year;
  • Safety and Quality Adjustment, a reduction in funding for poor safety and quality outcomes; and
  • Data Conditional Payment, a temporary funding reduction due to delayed submission of data.

The HoA also reaffirms the role of the Administrator and the National Health Funding Body (NHFB) in the transparent and efficient administration of public hospital funding, providing certainty for the future operations of the NHFB.