The National Health Funding Pool (the Pool)
The Pool was established to receive all Commonwealth (ABF and Block) and State and Territory (ABF only) public hospital funding. The Pool comprises of a Reserve Bank of Australia (RBA) account for each State and Territory, with each State and Territory also having established a State Managed Fund (SMF) to manage Block funding. The Pool and SMF provide a line–of–sight mechanism to trace each jurisdiction’s contribution to LHNs and third parties. The balance is paid to State and Territories (including public health, cross border, interest and over deposits). The below figure highlights the source, types and amount of funding and payments that flowed through the Pool and SMFs in 2020-21.The NHR Agreement also allows for additional streams of funding to be paid through the Pool if agreed by Government, as was done in response to COVID-19.
NHR funding and payments
NHR funding occurs when the Commonwealth or State and Territories pay into a State Pool account or SMF. NHR payments occur when the funding is paid out of the State Pool account by the Administrator or is paid out of the SMF by the State or Territory.
Commonwealth payments into the Pool are made as equal monthly instalments of an estimated annual payment, while States and Territories can determine how much and when they deposit funds into the Pool and State Managed Funds.
The Commonwealth’s contributions to LHNs are adjusted in arrears at the end of each 6 and 12 months for each financial year once actual volumes have been validated.
To ensure that payments from the Pool are correct, no payment will be made until the respective State or Territory has validated and instructed the Administrator to make payment on its behalf.
The Pool accounts are audited each year, have transparent accounting and reporting, and meet all other COAG and legislative requirements.
2020-21 Public Hospital Funding Payment Flows
Reporting on funding payments
Section 240 of the NHR Act requires the Administrator to provide monthly reports to the Commonwealth and each State and Territory. These reports are made publicly available to improve the transparency of public hospital funding.
Monthly reports provide details of funding and payments into and out of the Pool and State Managed Funds. This information is provided at a national, State and Territory and LHN level, and details both the Commonwealth and State and Territory contributions.
The NHFB produces approximately 154 reports each month on behalf of the Administrator, comprising of:
- A national report
- A report for each State and Territory
- A report for each LHN.
These reports are prepared on a cash basis and align to the reporting of funding and payments provided at Funding Reports.