The basis used to determine NHR payments to LHNs in Tasmania was advised by the Tasmanian Department of Health and Human Services to be as follows:

In determining the annual allocation for Tasmanian Local Hospital Networks (also known as Tasmanian Health Organisations (THOs)), budgets have been developed using State based historical funding amounts for both Activity-Based Funding (ABF) and block service streams, supplemented by indexation at a flat rate of 2.5% which approximates the level of indexation which would have been provided to the Local Hospital Networks in previous years based on:

  • Indexation on new wage agreements at 2.0% per annum
  • Indexation of general operating expenses at 2.5% per annum, and
  • Indexation on medical, surgical and pharmaceutical supplies at 4.0% per annum.

On a monthly basis, from October 2012, State Activity-Based Funding is based on 1/12 of the total funding provided to each Local Hospital Network and block payments are currently based on the timing of expenditure in accordance with budget cash flows, for example, three pays in October/May and payment of an annual insurance premium in November.