National Health Reform
Public hospital funding
South Australian report
May 2014
Issued by the Administrator of the National Health Funding Pool
under section 240 of the National Health Reform Act 2011
Available from the Public Hospital Funding website
South Australian report, May 2014
In this report
This report includes the following tables:
- State pool account transactions
- State managed fund transactions
- NHR funding and payments by service category
- NHR contributions by local hospital network
- Estimated monthly, YTD and annual activity
This report is issued by the Administrator of the National Health Funding Pool under section 240 of the National Health Reform Act 2011.
This report is prepared on a cash basis. It shows monthly and year-to-date (YTD) National Health Reform (NHR) funding and payments for South Australia for May 2014 as part of the National Health Reform Agreement.
Local hospital networks and National Health Reform
A local hospital network (LHN) is an organisation that provides public hospital services in accordance with the Agreement. An LHN can contain one or more hospitals, and is usually defined as a business group, geographical area or community. Every Australian public hospital is part of an LHN.
Note: The term ‘local hospital network’ is a national term. Some states and territories use their own terminology to describe these networks, such as local health districts, health organisations, and hospital and health services.
Under the Agreement, LHNs receive funding for the following public hospital services:
- All admitted and non-admitted services
- All emergency department services provided by a recognised emergency department
- Other outpatient, mental health, sub-acute services and other services that could reasonably be considered a public hospital service.
Note: LHNs also receive funding from other sources, including the Commonwealth, states and territories, and third parties for the provision of other specific functions and services outside the scope of the Agreement, for example dental services, primary care, home and community care, residential aged care and pharmaceuticals. For further information on total funding to a particular LHN, contact the SA Department of Health to view the service agreement for that LHN.
Basis for National Health Reform payments – South Australia, May 2014
For the basis of the Commonwealth contribution to NHR funding, see Basis of Commonwealth NHR funding, 2013-14.
The basis used to determine NHR payments to LHNs in South Australia for May 2014 was advised by the SA Department of Health to be as follows:
In determining the annual funding allocation for all LHNs, the budget has been built up predominantly on an activity basis applying an internally developed allocation methodology that is designed to equitably distribute funding to each local hospital network relative to all LHNs in South Australia. This occurs within the confines of a limited funding pool that includes adjustments to recognise cost improvements and the attainment of service efficiencies that are also equitably allocated on an activity basis. Supplementation is provided as block funding where an activity-based approach is not appropriate. This captures the provision of services including teaching, training and research, some mental health services and the delivery of out of hospital strategies incorporating primary health.
Monthly allocations to LHNs will vary for a variety of reasons, but they are predominantly cash flow financed based on need which includes the activity demand on hospital services.
In March 2014, the Commonwealth provided South Australia with additional public hospital funding of $8,186,383.03 under the 2013-14 Mid-Year Economic and Fiscal Outlook (MYEFO) funding measure: Public Hospital System - additional funding. This funding was provided to offset the downward adjustment to 2013-14 NHR funding applied at the MYEFO due to the application of updated NHR funding indexation parameters. A requirement of the provision of this funding was that the funding be provided to LHNs through the National Health Funding Pool and / or State Managed Fund.
The Administrator has been advised by South Australia that as a result of the additional funding from the Commonwealth, the South Australian contributions to LHNs through the Pool will not be reduced and remain as otherwise expected to meet their funding requirements.
Reference information
The financial information outlined in the following report is categorised as:
- NHR funding – when the Commonwealth or state or territory government pays NHR funding into a state pool account or state managed fund.
- NHR payments – when NHR funding that has been deposited into a state pool account or state managed fund is paid out of the state pool account by the Administrator, or is paid out of the state managed fund by the state or territory.
State pool account transactions
Table 1a – State pool account transactions – South Australia, May 2014
This table shows funding paid into the South Australian state pool account by the Commonwealth, South Australia or other states/territories, and payments out of the state pool account to LHNs, the state managed fund, the SA Department of Health or the state pool accounts of other states/territories for May 2014.
| NHR funding by source | Paid Into state pool account | Paid Out of state pool account | ||||
|---|---|---|---|---|---|---|
| To Local hospital networks | To State Managed Fund |
To state health department |
To state pool (other State) | Total paid out | ||
| ($) | ($) | ($) | ($) | ($) | ($) | |
| Commonwealth ABF funding |
70,131,110 | 70,131,110 | 70,131,110 | |||
| Commonwealth Block funding |
11,937,377 | 11,937,377 | 11,937,377 | |||
| Commonwealth Other funding |
1,929,278 | 1,929,278 | 1,929,278 | |||
| Total C'wealth funding |
83,997,766 | 70,131,110 | 11,937,377 | 1,929,278 | 83,997,766 | |
| SA funding |
80,466,289 | 137,999,145 | 0 | 0 | 137,999,145 | |
| Other state/territory funding | 0 | 0 | 0 | 0 | ||
| Total | 164,464,055 | 208,130,255 | 11,937,377 | 1,929,278 | 0 | 221,996,911 |
See definitions and explanatory notes following table 1b.
Table 1b – State pool account transactions YTD – South Australia, May 2014
Following on from table 1a, this table shows year-to-date (YTD) funding paid into the South Australian state pool account by the Commonwealth, South Australia or other states/territories, and payments out of the state pool account to LHNs, the state managed fund, the SA Department of Health or the state pool accounts of other states/territories as at May 2014.
| NHR funding by source | Paid Into state pool account |
Paid Out of state pool account | ||||
|---|---|---|---|---|---|---|
| To Local hospital networks YTD |
To State Managed Fund YTD |
To state health department YTD |
To state pool (other State) YTD |
Total paid out YTD |
||
| ($) | ($) | ($) | ($) | ($) | ($) | |
| Commonwealth ABF funding |
779,619,616 | 779,619,616 | 779,619,616 | |||
| Commonwealth Block funding |
132,478,789 | 132,478,789 | 132,478,789 | |||
| Commonwealth Other funding |
21,452,928 | 21,452,928 | 21,452,928 | |||
| Total C'wealth funding |
933,551,333 | 779,619,616 | 132,478,789 | 21,452,928 | 933,551,333 | |
| SA funding |
1,833,228,594 | 1,700,454,773 | 0 | 0 | 1,700,454,773 | |
| Other state/territory funding | 0 | 0 | 0 | 0 | ||
| Total | 2,766,779,926 | 2,480,074,389 | 132,478,789 | 21,452,928 | 0 | 2,634,006,106 |
Commonwealth ABF funding represents Acute admitted public, Acute admitted private, Non-admitted, and Emergency department, Sub-acute, and Admitted mental health service categories, which are funded by the Commonwealth through the state pool account and subsequently paid to LHNs.
Commonwealth Block funding represents Non-admitted mental health, Small rural hospitals, Teaching, training & research, and Other non-admitted categories, which are funded by the Commonwealth and paid to the state managed fund.
Commonwealth Other funding represents other amounts funded by the Commonwealth, transacted through the state pool account and subsequently paid to state or territory health departments. This currently represents the Commonwealth contribution to public health.
SA funding represents funding contributions paid by South Australia into its own state pool account, and subsequently paid to LHNs within the state, to the South Australian health department and/or to other state pool accounts.
Other state/territory funding represents contributions paid to South Australia by other states and territories for cross-border activity.
Note: The grey shaded areas in these tables reflect that these amounts are not applicable for a particular 'paid out' column. For example, Commonwealth block funding is only paid to state managed funds and is not applicable for local hospital networks or state or territory health departments.
NHR funding and payments shown in these tables include GST where applicable.
For more information, see National Health Reform funding and payments.
State managed fund transactions
Table 2a – State managed fund transactions – South Australia, May 2014
This table shows funding paid into the South Australia state managed fund by the Commonwealth and South Australia, and payments out of the state managed fund to LHNs and other provider organisations for May 2014.
| NHR funding by source | Paid into state managed fund | Paid out of state managed fund | ||
|---|---|---|---|---|
| To local hospital networks | To Other | Total paid out | ||
| ($) | ($) | ($) | ($) | |
| Commonwealth Block funding | 11,937,377 | 11,937,377 | ||
| State/territory Block funding | 25,632,367 | 25,632,367 | ||
| Total | 37,569,745 | 37,569,745 | 0 | 37,569,745 |
See explanatory notes following table 2b.
Table 2b – State managed fund transactions YTD – South Australia, May 2014
Following on from table 2a, this table shows year-to-date (YTD) funding paid into the South Australian state managed fund by the Commonwealth and South Australia, and YTD payments out of the state managed fund as at May 2014. These amounts include notional payments for July, August and September 2012.
| NHR funding by source | Paid into state managed fund YTD |
Paid out of state managed fund YTD | ||
|---|---|---|---|---|
| To local hospital networks YTD |
To Other YTD |
Total paid out YTD |
||
| ($) | ($) | ($) | ($) | |
| Commonwealth Block funding | 132,478,789 | 132,478,789 | ||
| State/territory Block funding | 188,345,075 | 188,345,075 | ||
| Total | 320,823,863 | 320,823,863 | 0 | 320,823,863 |
Block funding represents Non-admitted mental health, Small rural hospitals, Teaching, training & research, and Other non-admitted categories.
Commonwealth Block funding represents Commonwealth block funding contributions paid into the state managed fund from the state pool account, and block payments out of the state managed fund to LHNs and other provider organisations.
State/territory Block funding represents South Australian block funding contributions into the state managed fund, and block payments out of the state managed fund to LHNs and other provider organisations.
Note: The grey shaded areas in these tables reflect that these block payments cannot at this stage be identified by source of funding (state, territory or Commonwealth contribution).
NHR funding and payments shown in these tables include GST where applicable.
For more, see National Health Reform funding and payments.
NHR funding and payments by service category
Table 3 – NHR funding and payments by service category – South Australia, May 2014
This table shows NHR funding and payments by service category on both a monthly and year-to-date (YTD) basis for South Australia for May 2014. NHR funding and payments are separated into the following service categories – activity-based funding (ABF), block funding, and other funding.
| Service category | NHR funding | NHR payments | YTD NHR funding |
YTD NHR payments |
|---|---|---|---|---|
| ($) | ($) | ($) | ($) | |
| ABF | ||||
| Acute admitted - public | 90,145,690 | 125,579,150 | 1,573,117,423 | 1,494,315,591 |
| Acute admitted - private | 6,314,881 | 8,731,196 | 107,863,731 | 102,349,100 |
| Non-admitted | 20,593,952 | 28,402,228 | 352,852,821 | 342,669,984 |
| Emergency department | 15,379,904 | 21,862,943 | 281,049,649 | 260,194,809 |
| Admitted mental health | 5,948,616 | 7,882,784 | 99,915,671 | 95,359,723 |
| Sub-acute | 11,748,067 | 15,671,955 | 194,820,322 | 185,185,182 |
| Total ABF (Pool) | 150,131,110 | 208,130,255 | 2,609,619,616 | 2,480,074,389 |
| Block | ||||
| Non-admitted mental health | 9,790,432 | 9,790,432 | 89,940,369 | 89,940,415 |
| Small rural hospitals | 15,158,203 | 15,158,203 | 126,880,624 | 126,880,608 |
| Teaching, training & research | 8,966,369 | 8,966,369 | 74,636,454 | 74,636,450 |
| Other non-admitted services | 3,654,741 | 3,654,741 | 29,366,416 | 29,366,390 |
| Total Block (SMF) | 37,569,745 | 37,569,745 | 320,823,863 | 320,823,863 |
| Other | ||||
| Public health funding | 1,929,278 | 1,929,278 | 21,452,928 | 21,452,928 |
| Overdeposit | 0 | 0 | 0 | 0 |
| Cross-border | 0 | 0 | 0 | 0 |
| Interest | 466,289 | 0 | 3,228,594 | 0 |
| Total Other (Pool) | 2,395,567 | 1,929,278 | 24,681,522 | 21,452,928 |
| Grand Total | 190,096,422 | 247,629,278 | 2,955,125,001 | 2,822,351,181 |
Total ABF (Pool) is an aggregate of both Commonwealth and state or territory NHR funding and payments for activity-based funding (ABF) which is transacted through the state pool account.
Total Block (SMF) is an aggregate of both Commonwealth and state or territory NHR funding and payments for block funding which is transacted through the state managed fund (SMF).
Total Other (Pool) represents other funding and payments, which are transacted through the state pool account, including public health funding, overdeposits, cross-border funding and payments, and interest.
State and territory cross-border payments can either be:
- Paid to the relevant state or territory's LHNs - included within ABF and/or block payments in the above table, or
- Reimbursed to the relevant state or territory where the state or territory's LHNs are already being funded for the cost of treating cross-border patients - shown in the Cross-border row under Other in the above table.
NHR funding and payments shown in these tables include GST where applicable.
For more information, see National Health Reform funding and payments.
NHR contributions by local hospital network
Table 4a – NHR contributions by local hospital network – South Australia, May 2014
This table shows NHR contributions (from state, territory and Commonwealth sources) made to each LHN in South Australia during May 2014.
NHR contributions to LHNs are separated into an activity-based funding (ABF) component and a block component.
| Local hospital network (LHN) | ABF component (ex GST) |
Block component (ex GST) |
Total NHR payment (ex GST) |
|---|---|---|---|
| ($) | ($) | ($) | |
| Central Adelaide Local Health Network | 80,925,494 | 2,074,506 | 83,000,000 |
| Country Health SA Local Health Network | 25,000,000 | 20,200,000 | 45,200,000 |
| Northern Adelaide Local Health Network | 34,489,464 | 4,010,536 | 38,500,000 |
| Southern Adelaide Local Health Network | 47,757,956 | 8,742,044 | 56,500,000 |
| Women's and Children's Health Network | 19,957,341 | 2,542,659 | 22,500,000 |
| Total | 208,130,255 | 37,569,745 | 245,700,000 |
See explanatory notes below table 4b.
Table 4b – NHR contributions by local hospital network YTD – South Australia, May 2014
This table shows YTD NHR contributions (from state, territory and Commonwealth sources) made to each LHN in South Australia as at May 2014.
NHR contributions to LHNs are separated into an activity-based funding (ABF) component and a block component.
| Local hospital network | ABF component YTD (ex GST) |
Block component YTD (ex GST) |
Total NHR payment YTD (ex GST) |
|---|---|---|---|
| ($) | ($) | ($) | |
| Central Adelaide Local Health Network | 903,812,321 | 60,511,623 | 964,323,944 |
| Country Health SA Local Health Network | 264,721,256 | 167,714,619 | 432,435,875 |
| Northern Adelaide Local Health Network | 429,208,210 | 31,619,353 | 460,827,563 |
| Southern Adelaide Local Health Network | 628,727,453 | 47,704,786 | 676,432,240 |
| Women's and Children's Health Network | 253,605,149 | 13,273,482 | 266,878,631 |
| Total | 2,480,074,389 | 320,823,863 | 2,800,898,253 |
NHR contributions in this table are GST exclusive to enable comparability of NHR payments in each LHN report.
Note: This table excludes GST.
The majority of government funding to LHNs is not subject to GST. However in some cases hospital funding to non-government entities does attract GST, for example, denominational hospitals, privately and commercially owned health facilities, or any other non-government third party provider of health services or related supplies.
For more information, see National Health Reform funding and payments.
Estimated monthly, YTD and annual activity
States and territories provide service volume estimates at the start of each financial year, and if required, can continue to refine these estimates during the course of the year. These estimates form the basis of monthly reporting of service volumes until actual service numbers become available. These estimates are expressed as National Weighted Activity Units (NWAU).
States and territories provide estimated annual NWAU to the Administrator as a basis for determining the Commonwealth activity-based funding. Current month NWAU estimates accumulate through the year-to-date (YTD) NWAU, to be equal to the annual NWAU at the end of the financial year.
States and territories may also provide activity information relating to the delivery of other public hospital functions funded.
Table 5 – Estimated monthly, YTD and annual NWAU by local hospital network – South Australia, May 2014
This table shows estimated state or territory hospital activity for activity-based funding services expressed as NWAU for May 2014, the associated cumulative year-to-date (YTD), and total estimated annual NWAU for each LHN in South Australia.
| Local hospital network (LHN) | Estimated NWAU delivered in current month | Estimated NWAU delivered YTD | Estimated annual NWAU 2013-14 |
|---|---|---|---|
| Central Adelaide Local Health Network | 16,114 | 179,971 | 195,793 |
| Country Health SA Local Health Network | 4,978 | 52,712 | 57,384 |
| Northern Adelaide Local Health Network | 6,868 | 85,466 | 92,925 |
| Southern Adelaide Local Health Network | 9,510 | 125,195 | 137,147 |
| Women's and Children's Health Network | 3,974 | 50,499 | 54,916 |
| Total | 41,444 | 493,842 | 538,164 |
An NWAU is a measure of health service activity expressed as a common unit. It provides a way of comparing and valuing each public hospital service, whether they are admissions, emergency department presentations or outpatient episodes, by weighting them for their clinical complexity. The average hospital service is worth one NWAU - the most intensive and expensive activities are worth multiple NWAU, the simplest and least expensive are worth fractions of an NWAU.
Monthly NHR payments relate to the cash needs of public hospitals and do not necessarily reflect the volume of services to be delivered in the month.
For more information on the NWAU calculation, see Calculation of NWAU.