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:

Tasmania has developed a funding model (2014-15 Tasmanian Funding Model) which will take a prospective orientation (i.e. it will produce the forward allocation based on the volumes of services to be funded that are determined in accordance with State planning processes). The ABF Model was used to develop an activity profile and block funded services allocation for each THO for 2014-15.

The funding arrangements and associated pricing focused on the four ABF work streams of:

  • acute admitted,
  • other admitted (include sub-acute admitted and mental health),
  • non-admitted (include sub-acute non-admitted and mental health), and
  • emergency department

Tasmanian pricing applied in 2014-15 with THOs has not used the NEP. In this regard, Tasmania has used the national average cost per work stream based on Round 16 National Health Cost Data Collection (NHCDC) data for 2011-12 indexed to 2014-15. The National Average Cost was considered the most appropriate (where available) as it provides a National benchmark without the complication of NWAUs and the NEP.

Therefore the 2014-15 Tasmanian ABF Model pricing is based on the following:

  • Overnight Acute Admitted Patients and Same day Admitted Patients- price per weighted separation (National Average Cost indexed),
  • Length of Stay Outliers - a per diem rate will be paid (based on the National Average Cost indexed),
  • ICU Cases - the proposed pricing model will be based on (State Average Cost indexed):
    • price per ICU hour, and
    • price per hour of mechanical ventilation.
  • Non Admitted Patients - price per service event (State Average Cost indexed).
  • Emergency Department Patients - price per UDG (Urgency Disposition Group) (National Average Cost indexed).

The Tasmanian ABF Model also allocates block grants to THOs covering services provided and activities undertaken that are not within the ABF work streams. This includes teaching, training and research, non ABF hospitals and other operational grants costs which are deemed out of scope for Commonwealth funding.