To meet the reporting requirements of section 240 of the National Health Reform Act 2011, the Administrator is to include the basis of each State and Territory’s National Health Reform (NHR) funding and payments.
The State contribution to the funding of public hospital services and functions is calculated on an activity basis or provided as block funding in accordance with the National Health Reform Agreement – Addendum 2020-25. The State determines the amount they pay for public hospital services and functions and the mix of those services and functions and will meet the balance of the cost of delivering public hospital services and functions over and above the Commonwealth contribution.
State funding paid on an activity basis for each service category is based on the price set by that State (which is reported in the Service Agreement and Deeds of Amendment) and the volume of weighted services as set out in the Service Agreement and Deeds of Amendment.
To provide consistency in the methodology and with the Addendum to the National Health Reform Agreement 2020-25 (NHRA), the 2024-25 Western Australia (WA) Activity Funding Model has implemented the 2024-25 National Pricing Framework, with some modifications to meet specific local costs, for Activity Based Funding (ABF) facilities. The State also provides an overlay of supplementary grants at the ABF stream level, if necessary, in recognition that the LHN has reported average costs greater than the current allocation price.
The National Efficient Cost (NEC24) Block funded model is used to support the information for the calculation of funding for the small rural, remote, and very remote hospitals. The NEC24 includes WA’s estimated costs for standalone hospitals providing specialist mental health services (admitted and non-admitted), eligible community mental health services (for child and adolescents, adults, and older persons), non-admitted home ventilation services, Highly Specialised Therapies and clinical teaching, training and research provided in the major hospitals. The State also provides operational and Block grants to the LHN covering services provided and activities undertaken that are not within the scope for ABF, for example, dental services, primary care, home, and community care.
The State determines when payments are made into the Pool and State Managed Funds. Payments are made from the Pool account to the LHNs and State managed fund in accordance with the Service Agreement agreed between the LHN and the Chief Executive Officer, Western Australia Department of Health.
The Department of Health and the LHN can agree to amendments to the Service Agreements to adjust service volumes or pricing to take account of such matters as changing health needs, variations in actual service delivery and hospital performance.
The Service Agreements and Deeds of Amendment are available at https://www.health.wa.gov.au/About-us/Service-agreements/Service-Agreem…(Opens in a new tab/window);
Further information regarding the Basis for National Health Reform payments in both 2024-25 and previous financial years is included at www.publichopitalfunding.gov.au.