Skip to content

Part 2: Report on performance (continued)

Program 1.5: Assistance to the States for healthcare services

Program objective

The objective of program 1.5 is:

  • The Government provides financial support for the States and Territories to be spent in the delivery of healthcare services.

This program also has links to the Health and Ageing portfolio.

Program deliverables

The program deliverable is:

  • Payments to the States and Territories are made according to the payment arrangements specified in the Intergovernmental Agreement and the National Health Reform Agreement.

Key performance indicators

The key performance indicators are:

  • From 1 July 2012, the National Healthcare SPP will be replaced by National Health Reform funding and be paid into a National Health Funding Pool. The national efficient price of public hospital services will be determined by the Independent Hospital Pricing Authority, to allow the introduction of activity-based funding for public hospital services from 1 July 2012. This will ensure public hospital funding is more transparent and drive efficiency, as public hospitals will be funded according to the number and kind of services they provide. In addition, the National Health Performance Authority will report on the performance of every Local Hospital Network, hospital and Medicare Local, through Hospital Performance Reports and Healthy Communities Reports.
  • To reflect the changed payment arrangements for public hospital and health services under the National Health Reform Agreement, amendments have been made to the Intergovernmental Agreement on Federal Financial Relations and are underway for the Federal Financial Relations Act 2009. An Administrator, which will be jointly established by the Commonwealth and the States, will be responsible for calculating the Commonwealth funding amount for public hospitals, and advising the Treasurer of the level of Commonwealth funding.
  • The Administrator will be responsible for making payments from the National Health Funding Pool of Commonwealth and State funding to Local Hospital Networks on an activity basis. The Administrator will transparently report each month on the amounts paid through the National Health Funding Pool to Local Hospital Networks, the basis on which payments were made and the number of services provided.

Analysis of performance

The Treasury facilitated the Government’s 2012-13 financial support for the States and Territories in the delivery of healthcare services.

  • From 1 July 2012, National Health Reform funding replaced the National Healthcare SPP. Payments totalling $13.3 billion were paid into the National Health Funding Pool.
  • The national efficient price of public hospital services was determined by the Independent Hospital Pricing Authority on 30 May 2012, which allowed the introduction of activity-based funding for public hospital services from 1 July 2012. In addition, the National Health Performance Authority has published several reports on Hospital Performance and Healthy Communities.
  • Amendments were made to the Federal Financial Relations Act 2009 to reflect the changed payment arrangements. An Administrator of the National Health Funding Pool has been jointly established by the Commonwealth and the States, with responsibility for calculating the Commonwealth funding amount for public hospitals, and advising the Treasurer of the level of Commonwealth funding.
  • The Administrator is responsible for making payments from the National Health Funding Pool of Commonwealth and State funding to Local Hospital Networks on an activity basis. The Administrator has published monthly reports on the amounts paid through the National Health Funding Pool to Local Hospital Networks, the basis on which payments were made and the number of services provided.