In August 2011, the then Council of Australian Governments (now National Cabinet) agreed to major changes in how public hospitals were to be funded by Commonwealth, State and Territory governments, including the move from block grants to an ‘activity-based’ funding system (ABF).
These changes included establishing the Administrator of the National Health Funding Pool (the Administrator) and the National Health Funding Body (NHFB) to improve transparency of public hospital funding arrangements.
The National Health Reform Agreement 2011 (NHR Agreement) outlines the shared responsibility of the Commonwealth, State and Territory governments to work in partnership to improve health outcomes for all Australians and ensure the sustainability of the Australian health system.
This document sets out the approach and processes used by the Administrator to calculate Commonwealth NHR funding paid to States and Territories (hereafter, the States).
The calculation policy includes funding for ABF, Block and Public Health funding categories as well as the approach to reconciliation activities.
The policy has been updated to reflect Schedule K – Addendum to the National Health Reform Agreement: Revised Public Hospital Funding and Health Reform Arrangements.
Relevant changes include:
- Rollover of the existing calculation parameters for 2025-26 calculations.
- Adjusted approach to calculation of Northern Territory entitlement for 2025-26 calculations.