VISION

Improved health outcomes for all Australians, sustainability of a nationally unified and locally controlled Australian health system, and increased transparency in public hospital funding.

MISSION

To support the obligations and responsibilities of the Administrator of the National Health Funding Pool (the Administrator), by providing transparent and efficient administration of Commonwealth, state and territory funding of the Australian public hospital system.

STRATEGIC OBJECTIVES

Achieve best practice and accountability

To achieve best practice and accountability through assisting the Administrator in implementing and overseeing nationally consistent public hospital funding arrangements, through the National Health Funding Pool (the Funding Pool).

Provide increased transparency and effective reporting

To provide increased transparency and effective reporting on the local hospital networks that are funded for the services they deliver to the community.

Enable accurate Commonwealth contribution calculations

To enable accurate Commonwealth contribution calculations by using nationally consistent pricing and costing standards.

Develop productive and effective partnerships

To develop productive and effective partnerships with relevant stakeholders, enabling the objectives of the Agreement to be achieved.

Operate as a fully functional and compliant agency

To operate as a fully functional and compliant agency, meeting statutory and legislative obligations.

The National Health Funding Body (NHFB) Strategic Plan for the period 2013–16 is available from: nhfb.gov.au/publications.

2016–17 HIGHLIGHTS AND WHAT’S AHEAD

APRIL 2016 Council of Australian Governments (COAG) agrees to the Heads of Agreement between the Commonwealth and the States and Territories on Public Hospital Funding. This decision confirmed the role of the Administrator, NHFB and Activity Based Funding until 2020.
AUGUST 2016 The Administrator and NHFB convened a national workshop to discuss the feasibility and implementation issues of a Funding Cap for public hospital funding, to inform governments in their negotiation of the Addendum requirements.
FEBRUARY 2017 The Administrator and NHFB convened a national workshop to discuss the operational aspects of the policy intent arising from the Addendum, bringing transparency to the Administrator’s calculation of Commonwealth national health reform funding.
MAY 2017 The 2017–18 Commonwealth Budget provides an additional $4.1 million, over three years from 2017–18, to the NHFB to implement the Addendum.
JUNE 2017 The Addendum signed by all jurisdictions, formalising the public hospital funding arrangements to commence on 1 July 2017.

The Addendum supersedes the Heads of Agreement agreed by COAG in 2016.

JULY 2017 Implementation of the Addendum requirements into the Administrator’s calculations of Commonwealth national health reform funding including Funding Cap, Data Conditional Payment and pricing for Sentinel Events.
FROM JULY 2018 Implementation of Safety and Quality Adjustments for Hospital Acquired Complications (HACs) and Avoidable Hospital Readmissions into the Administrator’s calculations of Commonwealth national health reform funding.
BY SEP 2018 COAG to agree to a longer–term public hospital funding agreement.
JULY 2020 New public hospital funding agreement to commence 1 July 2020.

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 Funding 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 Funding Pool legislation in each state and territory).1
  • Monitor state payments into each State Pool Account (common provisions of the Funding Pool legislation in each state and territory).
  • 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).

1 A list of relevant state and territory legislation containing the common provisions can be found in
Table 1.

LEGISLATION

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

JURISDICTION LEGISLATION
NEW SOUTH WALES Health Services Act 1997
VICTORIA Health (Commonwealth State Funding Arrangements) Act 2012
QUEENSLAND Hospital and Health Boards Act 2011
WESTERN AUSTRALIA National Health Funding Pool Act 2012
SOUTH AUSTRALIA National Health Funding Pool Administration (South Australia) Act 2012
TASMANIA National Health Funding Administration Act 2012
AUSTRALIAN CAPITAL TERRITORY Health (National Health Funding Pool and Administration) Act 2013
NORTHERN TERRITORY National Health Funding Pool and Administration (National Uniform Legislation) Act 2012

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 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 2016–17.2

2 Available from: publichospitalfunding.gov.au/publications/annual-reports

FIGURE 1: AUSTRALIAN PUBLIC HOSPITAL SYSTEM FUNDING AND PAYMENT FRAMEWORK

FIGURE 1: AUSTRALIAN PUBLIC HOSPITAL SYSTEM FUNDING AND PAYMENT FRAMEWORK