- National Health Funding Body
- Our History, Our Future
- Who We Are
- About Finance and Reporting
- About Integrity, Assurance and Resourcing
- About Data Modelling, Analysis and Policy
NATIONAL HEALTH FUNDING BODY
The NHFB is part of the Commonwealth health portfolio. It is a non–corporate entity under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).
The NHFB staff are employed under the Public Service Act 1999.
The NHFB was established under the National Health Reform Amendment (Administrator and National Health Body) Act 2012. This Act amended the National Health Reform Act 2011 (the Act). The Act mandates that the NHFB is independent of both Commonwealth and state and territory governments when assisting the Administrator in the exercise or performance of his functions.
WHAT WE DO
The principal function of the NHFB is to support the Administrator in the performance of his functions. Those functions are set out in the Act and the Agreement.
The Administrator is required to:
- calculate and advise the Commonwealth Treasurer of the Commonwealth contribution to hospital funding in each state and territory (s.238 of the Act)
- oversee the payment of Commonwealth hospital funding into State Pool Accounts (s.238 of the Act)
- make payments from each State Pool Account in accordance with the directions of the State concerned (common provisions of the National Health Funding Pool legislation in each state and territory)4
- monitor state payments into each State Pool Account (common provisions of National Health Funding Pool legislation in each state and territory)5
- reconcile estimated and actual hospital services and adjust Commonwealth payments to hospitals (s.238 of the Act)
- report publicly on the national health reform funding and payments (s.240 of the Act)
- develop and provide to the Commonwealth, states and territories rolling three–year data plans (Clause B85 of the Agreement)
- undertake a funding integrity analysis to identify and report on public hospital services that received both Commonwealth national health reform funding and funding through other Commonwealth programs (Clause A6 of the Agreement).
The Commonwealth legislation is supported by common provisions in statutes in each state and territory that create the position of the Administrator and set out his functions:
TABLE 1: STATE AND TERRITORY LEGISLATION THAT SUPPORTS THE NATIONAL HEALTH REFORM ACT 2011
NEW SOUTH WALES
Health Services Act 1997
Health (Commonwealth State Funding Arrangements) Act 2012
Hospital and Health Boards Act 2011
National Health Funding Pool Act 2012
National Health Funding Pool Administration (South Australia) Act 2012
National Health Funding Administration Act 2012
AUSTRALIAN CAPITAL TERRITORY
Health (National Health Funding Pool and Administration) Act 2013
National Health Funding Pool and Administration (National Uniform Legislation) Act 2012
OUR HISTORY, OUR FUTURE
On 1 July 2011, the Act and the Agreement set out the basis for strategic reform of Australia’s health system. In 2012, the Parliament of Australia gave assent to the National Health Reform Amendment (Administrator and National Health Funding Body) Act 2012, which established the Administrator and the NHFB.
The Agreement and introduction of activity based funding fundamentally changed the landscape of public hospital funding in Australia. By bringing a common language and national consistency in the way Commonwealth and state and territory funding is measured and calculated, and how local hospital networks are paid, the Agreement informed the perspective of jurisdictions.These components made collaboration between stakeholders simpler and the complex system of public hospital funding more transparent. The independence of the Administrator and NHFB from any Commonwealth or state and territory Minister was vital to ensuring trust in the veracity of the funding and payments process.
From 2012, the NHFB developed the key strategic framework documents relating to the Administrator’s functions, and the documents required of a Commonwealth agency. The processes surrounding the Administrator’s functions were refined, including the Commonwealth contribution calculation model and reconciliation, to ensure that all local hospital networks received Commonwealth funding based on the actual hospital activity delivered. Strong governance and reporting frameworks were put in place to ensure the independence and integrity of the funding and payments.
The 2014–15 Commonwealth Budget flagged the government’s intention to create a Health Productivity and Performance Commission by merging several existing bodies including the NHFB and the Administrator, and return to a model of block funding to states and territories, rather than activity based funding. The 2015–16 Mid–Year Economic and Fiscal Outlook (MYEFO) announced the intention to close the NHFB in March 2018.
During this period the NHFB continued to deliver on its legislated mandate and met its regulatory and compliance responsibilities.
The NHFB undertook data analysis work with the Commonwealth, states and territories as part of the Administrator’s funding integrity responsibilities to bring new insights and understanding into health utilisation and cost from a whole of system perspective. The Administrator and NHFB maintained an active role in intergovernmental committees, contributing to strategic national work on health data standards, collection, access and usage.
On 1 April 2016, COAG met and agreed to the Heads of Agreement between the Commonwealth and the States and Territories on Public Hospital Funding. This Heads of Agreement sets out a series of high–level goals for all Australian governments to achieve in the interests of creating a high–performing and sustainable health system.
Schedule 1 of the Heads of Agreement continues the role of the Administrator and NHFB with ongoing funding from the 2016–17 Commonwealth Budget. This acknowledged the value contribution of the NHFB’s work to date, and provides an opportunity for further improvement.
The Heads of Agreement reaffirms the objectives of the 2011 Agreement and a commitment to national health reform. Through the continuation of the Administrator, the NHFB and activity based funding, the Commonwealth and state and territory governments will continue to work towards a transparent and sustainable health system that will improve health outcomes for all Australians.
This brings significant opportunities and challenges for 2016–17 and the coming years. The new Agreement will allow the Administrator and NHFB to consolidate the excellent work that has been achieved to date, and fulfil new responsibilities and obligations. The development of the addendum to the Agreement will be undertaken by the Commonwealth and state and territory governments.
The implementation of the national health reform funding calculation model and integrity framework that incorporates a funding cap is a new challenge for the NHFB. However, it is an opportunity to drive the sustainabililty of public hospital funding through the strong foundation that has been established by the Administrator and the NHFB.
PUBLIC HOSPITAL FUNDING
Under the Agreement, the Commonwealth, state and territory governments are jointly responsible for funding public hospital services, using either activity based or block funding.
Commonwealth national health reform funding for public hospitals is paid monthly into the National Health Funding Pool, which consists of eight state and territory bank accounts with the Reserve Bank of Australia.
The national health funding and payment flows are outlined in Figure 1. Further details of the funding and payment flows and the National Health Reform funding types can be found in the ‘Overview’ section of the Administrator of the National Health Funding Pool Annual Report 2015–16.6
FIGURE 1: AUSTRALIAN PUBLIC HOSPITAL SYSTEM FUNDING AND PAYMENT FRAMEWORK
A feature of the NHFB’s overall governance is its accountabilities to the:
- Administrator (an officer accountable to the Commonwealth, states and territories), in respect of the requirements for the NHFB to assist the Administrator in the performance of his duties
- Commonwealth Minister for Health, in respect of the NHFB’s existence as a non corporate Commonwealth entity.
To facilitate the work of the Administrator and that of the NHFB, the NHFB has various external governance arrangements in place. These include:
- managing the Administrator’s Jurisdictional Advisory Committee (JAC), including secretariat functions (see page 24)
- facilitating the Chief Finance Officers and Reconciliation Advisory Group Committee (CFO/RAG), including secretariat functions (see page 24)
- appointing an Audit Committee that is responsible for providing independent advice and assurance on the appropriateness of the NHFB’s accountability and control framework, including independently verifying and safeguarding the integrity of financial and performance reporting (see page 24)
- assisting the Administrator in reporting to COAG Health Council on the operations of the National Health Funding Pool
- supporting representation on the Australian Health Ministers’ Advisory Committee (AHMAC) where appropriate. The NHFB is a member of the National Health Information Performance Principal Committee (NHIPPC), and the National Health Information Standards and Statistics Committee (NHISSC)
- working in collaboration with a number of external national health committees. The Administrator and the NHFB provide representation on the Independent Hospital Pricing Authority JAC, Technical Advisory Committee (TAC), and Non–admitted Care Advisory Working Group (NACAWG).
A summary of the NHFB’s external governance arrangements and organisational structure can be found in Figure 2.
FIGURE 2: NHFB GOVERNANCE ARRANGEMENTS and ORGANISATIONAL STRUCTURE
WHO WE ARE
(From Left to Right) First row: Svetlana Angelkoska, Karin van Leeuwen, Lynton Norris, Val Price–Beck. Standing: Andrew Hai, Rachel Ren, Georgia James, Gitanjali Kaura, Jeremy Rhind, Sheila Holcombe, Purva Koparkar (SAS Institute), Bek Hyland, Peta Hunt, Vincent Lorimer, Karim Ehtisham, James Malizani.
The NHFB, led by the CEO Lynton Norris, supports the Administrator in his legislated functions by three core business units:
- Finance and Reporting
- Integrity, Assurance and Resourcing
- Data Modelling, Analysis and Policy.
Figure 2 is an overview of the NHFB organisational structure including governance arrangements.
PETER ACHTERSTRAAT AM
The Administrator is an independent statutory office holder, appointed to the position under legislation of the Commonwealth and each state and territory. The Administrator’s functions are set out in the Agreement and the Act (see page 8). The current Administrator is Mr Peter Achterstraat AM, who was appointed on 23 February 2016.
Peter is the former Auditor–General of NSW and a former Deputy Commissioner of Taxation with over 30 years’ experience in finance and governance. Peter is the President of the Australian Institute of Company Directors (NSW Div.). In 2005, he was inducted into the Australian National University College of Business and Economics’ Hall of Fame.
Peter is a Fellow of the Institute of Chartered Accountants in Australia, a Fellow of CPA Australia, and a Fellow of Governance Institute of Australia. Peter is an Adjunct Professor at the University of Sydney’s Graduate School of Government and was awarded an Order of Australia in 2014 for his Financial Management and Governance roles.
Further details of the Administrator’s functions can be found in the Administrator’s Annual Report 2015–16.7
CHIEF EXECUTIVE OFFICER,
As Chief Executive, an independent statutory office holder of the Commonwealth of Australia, Lynton supports the Administrator to fulfil his functions, and is responsible for effective delivery of the outputs of the NHFB.
Lynton is a respected leader in health funding and policy design, and is leading significant change and reform in hospital and health funding arrangements. He provides a strategic vision and operational excellence in a dynamic environment.
Prior to his appointment as the NHFB CEO, Lynton was a senior executive in the Victorian State Government and has over 20 years’ experience in government and the private sector.
Lynton has significant experience in public sector finance and policy development and implementation. He is a chair and member of a number of national and jurisdictional committees in health administration and service delivery.
Lynton holds degrees in International Trade and Accounting, and is a Fellow of CPA Australia.
ABOUT FINANCE AND REPORTING
The Finance and Reporting unit provides support and financial services to the Administrator and the National Health Funding Pool to ensure the continued transparency and efficiency of public hospital funding. This includes managing the National Health Funding Administrator Payments System (Payments System), and processing Commonwealth, state and territory deposits and payments into and out of the National Health Funding Pool, as required under the Act.
The unit also develops, maintains and monitors compliance with the National Health Reform Public Hospital Funding Procedures Manual and the States and Territories Procedures Manual for the Payments System.
The unit produces the eight State Pool Account financial statements for auditing by each state and territory’s Auditor–General.
The unit is responsible for the preparation and publication of the Administrator’s monthly reports that record the Commonwealth and state and territory public hospital funding and payments for the month and year to date, for the following:
- 1 national monthly report (12 annually)
- 8 state and territory monthly reports (96 annually)
- approximately 140 LHN monthly reports (1,672 annually).
These reports are available from: publichospitalfunding.gov.au.
Other responsibilities include the strategic budget and financial management of the departmental appropriation for the NHFB, and the preparation of NHFB financial statements under the PGPA Act which is audited by the Australian National Audit Office.
UNQUALIFIED AUDIT OPINIONS OF FINANCIAL STATEMENTS FOR EIGHT NATIONAL HEALTH FUNDING POOL ACCOUNTS AND THE NHFB FOR 2015–16.
IMPROVED PUBLIC REPORTING BY PUBLICATION OF 1,780 MONTHLY REPORTS FOR 2015–16 ON PUBLICSHOPITALFUNDING.GOV.AU.
COORDINATED ACCURATELY 5,279 PAYMENT TRANSACTIONS FOR PUBLIC HOSPITAL SERVICES THROUGH THE NATIONAL HEALTH FUNDING ADMINISTRATOR PAYMENT SYSTEM.
KARIN VAN LEEUWEN
Karin has over 25 years’ experience in Accounting for both government and the private sector. She held several Company Secretary positions over a period of 10 years for private sector international companies. Karin joined the NHFB in November 2015.
Prior to her appointment with the NHFB, Karin worked for General Practice Education and Training for four years. She was responsible for the financial operations of the company and subsequently played a significant role in the successful wind–up of the company in 2014. In particular, Karin had responsibility for ensuring all operational and financial matters were finalised, including Taxation, Payment Summaries, Financial Statements, and final Audit by the Australian National Audit Office.
Karin has a Bachelor degree in Accounting, a Master degree in Business Administration, and is a Certified Practising Accountant.
ASSURANCE AND RESOURCING
The Integrity, Assurance and Resourcing unit provides the NHFB with essential business support services including human resources, internal audit, organisational compliance, governance, business continuity, internal control and assurance, risk management, fraud control, security, facilities management, and records management.
The unit is responsible for implementing and assuring adherence with Part 2 of the Public Governance, Performance and Accountability framework for good governance practices which has been embraced by the NHFB. The unit also develops and maintains the Strategic Plan and Corporate Plan.
In support of the functions of the Administrator, the unit conducts assurance reviews on the integrity of the advice provided to the Commonwealth Treasurer by the Administrator on the Commonwealth funding contribution for public hospital services.
In 2015–16, there were 15 internal and 12 external audits or assurances, including of the Payments System, business continuity policies and procedures, fraud control processes, and the Commonwealth Contribution Model.
The unit provides secretariat support to the NHFB Audit Committee (further information on page 24) and a number of other committees including NHFB Executive Committee; Risk Compliance and Business Continuity Committee; Workplace Consultative Committee and Digital 2020 Committee.
PROVIDED INTEGRITY ANALYSIS AND ASSURANCE OF THE ADVICE TO THE COMMONWEALTH TREASURER ON $17.2 BILLION8 OF COMMONWEALTH FUNDING FOR PUBLIC HOSPITALS.
CONDUCTED A COMPLETE RISK REVIEW OVER ALL ASPECTS OF THE NHFB’S OPERATIONS CAPTURING SYSTEMATIC, STRATEGIC, ENTERPRISE, FRAUD AND SECURITY RISKS, INCLUDING CONDUCTING 15 INTERNAL AUDITS AND COORDINATING 12 EXTERNAL AUDITS.
DEVELOPED THE NHFB ANNUAL PERFORMANCE STATEMENT FOR 2015–16 ANNUAL REPORT.
Val Price–Beck has over 20 years’ public service experience, and has worked for the NHFB since 2012. Val has experience in corporate services and related functions.
Prior to joining the NHFB, Val worked for a number of years in Indigenous economic development. In addition to providing corporate support services to the NHFB, Val and her team were instrumental in developing an integrity framework that provided certainty over the accuracy of the Administrator’s advice to the Commonwealth Treasurer on the Commonwealth funding contribution for public hospital services. This integrity framework continued to be applied in 2015–16.
Val also oversaw the establishment of the NHFB as a Commonwealth agency and the implementation of the PGPA Act and associated Rules into the NHFB.
ABOUT DATA MODELLING,
ANALYSIS AND POLICY
The Data Modelling, Analysis and Policy unit is responsible for providing strategic policy advice to the NHFB and Administrator. Responsibilities include researching, developing, monitoring and reviewing current and proposed policy decisions that relate to the functions of the NHFB and the Administrator.
The unit develops financial models that enable the Administrator to accurately calculate the Commonwealth funding contribution to local hospital networks. This includes a six–month and annual reconciliation of the estimated and actual public hospital service delivery activity, to adjust the Commonwealth funding contribution. This unit also develops programs and models to determine services eligible for Commonwealth funding. The unit collects and processes the data required to support this modelling.
Other responsibilities include development of the Administrator’s rolling Three Year Data Plan and determining the Administrator’s minimum data requirements, the associated funding reconciliation framework and policy statements, and other organisational and strategic documents.
The unit is reponsible for preparing parliamentary reporting material and provides briefing and secretariat support to the Administrator’s and NHFB’s interjurisdicational committees.
In undertaking this work, the Data Modelling, Analysis and Policy unit works collaboratively with the Administrator and all jurisdictions to ensure that modelling, analytics and policy decisions are accurate and well understood by stakeholders.
CALCULATED $17.2 BILLION9 OF COMMONWEALTH FUNDING TO LOCAL HOSPITAL NETWORKS INCLUDING RECONCILIATION ADJUSTMENT OF $328 MILLION10 FOR SERVICES PROVIDED IN 2014–15.
ENGAGED WITH STAKEHOLDERS ON DATA MATCHING FOR FUNDING INTEGRITY AND POSSIBLE USES OF THE ADMINISTRATOR’S DATA SET.
PRODUCED THE 2013–14 DATA MATCHING OUTCOMES AND DATA PREPARATION STEPS REPORTS TO ASSIST IN THE IDENTIFICATION AND REPORTING OF DUPLICATE PAYMENTS FOR THE SAME PUBLIC HOSPITAL SERVICE.
Svetlana Angelkoska is an expert analyst and strategic leader, specialising in complex data. She has extensive experience in analysing, modelling and reporting hospital and health related data.
Prior to joining the NHFB, Svetlana worked for the Commonwealth Department of Health. Svetlana holds a Bachelor of Science and a Graduate Certificate of Actuarial Techniques.
Svetlana played a pivotal role in the development of the growth calculation models that enable the Administrator to accurately calculate the Commonwealth funding contribution to local hospital networks. During 2015–16, the model calculated $17.2 billion in Commonwealth funding distributed to local hospital networks and other providers.
Svetlana led the ‘data matching’ work by developing business rules to deterministically link hospital activity data with MBS/PBS to identify and report duplicate payments for the same public hospital service. This work also provided new and unique insights in health service cost and resource utilisation from a whole system perspective.
ADMINISTRATOR’S JURISDICTIONAL ADVISORY COMMITTEE
CHAIR ADMINISTRATOR OF THE NATIONAL HEALTH FUNDING POOL
The Administrator’s JAC is a strategic advisory committee of senior representatives of states and territories, and relevant Commonwealth departments and agencies.
The JAC enables collaboration between the Administrator (and the NHFB) and the Commonwealth, state and territory Health Departments on operational arrangements and priorities under the Agreement and the Act. The Committee provides jurisdictional confidence in the independence and accountability that the Administrator and NHFB provide.
The JAC met four times during 2015–16, in July 2015, November 2015, March 2016 and June 2016.
CHIEF FINANCE OFFICERS/RECONCILIATION ADVISORY GROUP
CHIEF EXECUTIVE OFFICER
The CFO/RAG Committee is a technical group established by the NHFB on behalf of the Administrator.
The CFO/RAG Committee enables collaboration between Commonwealth, states and territories on issues impacting the operational management of the National Health Funding Pool.
The CFO/RAG Committee also supports and informs the hospital service reconciliation and funding integrity analysis requirements outlined in the Agreement, and enables technical collaboration between stakeholders.
The collaborative setting of the Committee serves to increase the transparency of the Commonwealth national health reform funding calculation and operation of the National Health Funding Pool.
The CFO/RAG met four times during 2015–16, in August 2015, November 2015, March 2016 and May 2016.
The NHFB Audit Committee is an assurance body formed in 2013 that comprises four independent members: Carol Holley (Chair), Mark Ridley, Ken Barker, Diane Fielding (until October 2015) and Jeremy Chandler (from February 2016). All current members have tenures until March 2018.
The functions of the Audit Committee include reviewing the appropriateness of the NHFB’s financial reports, performance reporting, systems of risk oversight and management, and systems of internal controls.
Additionally, the Audit Committee supports the process of auditing the financial statements of both the NHFB and the National Health Funding Pool.
The Audit Committee met five times during 2015–16, in August 2015, September 2015, November 2015, March 2016 and May 2016.
AUDIT COMMITTEE MEMBERS
Carol Holley was appointed as Chair of the NHFB Audit Committee on 1 March 2013.
Ms Holley is a Non–Executive Director and Chair of the Audit Committee of Australian Pharmaceutical Industries Limited, a Non–Executive Director of the Australian Nuclear Science and Technology Organisation, and a member of its Audit and Risk Committee. She is also the Independent Chair of the Risk Management and Audit Committees of NSW Land and Housing Corporation Services, the Parliament and Legislature of NSW, NSW Department of Finance, Services and Innovation and the Property and Housing Group and a member of the Risk and Audit Committee of the NSW Mental Health Commission.
Ms Holley is a Chartered Accountant, and a Fellow of the Australian Institute of Company Directors.
Mark Ridley is a former senior partner with PricewaterhouseCoopers, where he held a number of leadership roles focused on assurance and risk management.
Mr Ridley is currently Chair of the Audit Committee for the Department of Immigration and Border Protection, and Chair of the Audit Committee for the Clean Energy Regulator and the Royal Australian Mint. Mr Ridley is also an independent member of the Audit and Risk Committee of the Australian National University, and the Audit Committee for the Australian Financial Security Authority. He was Chair of the Audit Committee for the Department of Human Services from July 2011 to September 2016.
Mr Ridley is a Chartered Accountant (FCA), a graduate member of the Australian Institute of Company Directors, and a long–standing member of the Information Systems Audit and Control Association.
Ken Barker has over 40 years of experience in public sector management and finance, previously working across four large NSW Government agencies (NSW Police, the former Public Works, Corrective Services, and NSW Health).
Mr Barker has a number of board and committee appointments, including Chair of National Blood Authority Audit Committee and Chair of Mid North Coast Local Health District Audit and Risk Committee. Mr Barker is also appointed as Deputy Chair of the NSW Justice Health and Forensic Mental Health Network, and also as a board member of the NSW Clinical Excellence Commission and Agency for Clinical Innovation.
Prior to his retirement in 2009, he had been Chief Financial Officer of NSW Health for over 20 years.
Mr Barker was awarded the Public Service Medal in 2002 for Outstanding Public Service in public sector financial management. Mr Barker is a Fellow of the Institute of Public Accountants, and a graduate member of the Australian Institute of Company Directors.
Mr Chandler was appointed as a member of the Audit Committee in February 2016. He is the Director of Business Wide Consulting Support Pty Ltd (Business WIDE) which he established in 2008 to provide management consulting and executive coaching services to a range of public sector and private sector organisations. He is also a Senior Adviser to Nous Group, which specialises in management consulting, and an Associate with both Executive Intelligence Group and Tempo Strategies.
Until late 2007, Mr Chandler was Chief Operating Officer for the Department of Infrastructure, Transport, Regional Development and Local Government. He has been Chief Financial Officer for three Australian Government agencies and had many years of experience in areas of accounting and budgetary policy, and program review within the Department of Finance, including as Finance Adviser to the Joint Parliamentary Committee of Public Accounts.
Mr Chandler is a Member of the Australian National University Audit and Risk Management Committee and Deputy Chair for the ACT Health Directorate’s Audit and Risk Management Committee. He was formerly a member of the Australian Maritime Safety Authority Board Audit Committee.
Diane Fielding joined the Australian Public Service in 1982, and retired in 2006 as First Assistant Secretary (Finance) for the Department of Defence. Diane had previously been the Chief Financial Officer of the Departments of Veterans’ Affairs, Social Security, and Centrelink.
Ms Fielding was a member of the CPA Australia Public Sector Committee for 14 years, and was a member of the Australian Institute of Management ACT Advisory Council from 2008 to 2013. She was the Chair of the Downer Community Association until 2015.
Ms Fielding was a Fellow of CPA Australia and the Australian Institute of Management, and a member of the Australian Institute of Company Directors.
Ms Fielding joined the NHFB Audit Committee in 2013 as a founding member, and resigned in October 2015 due to ill health.
4 A list of relevant state and territory legislation containing the common provisions can be found in Table 1.
5 See footnote 4.
6 Available from publichospitalfunding.gov.au/publications/annual-reports
8 Administrator National Health Funding Pool 2015–16 Annual Report, page 42–43.
9 Administrator National Health Funding Pool 2015–16 Annual Report, page 42–43.
10 Administrator National Health Funding Pool 2015–16 Annual Report, page 42–43.