National Health Reform
Public hospital funding
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
Victorian report, June 2013
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 payment distribution by local hospital network
- Estimated monthly, YTD and annual NWAU by local hospital network
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 Victoria for June 2013 as part of the National Health Reform Agreement.
Participation in the National Health Funding Pool – Victoria, June 2013
In signing the National Health Reform Agreement (the Agreement), it was the intention of all states and territories that they would have the necessary legislation in place to enable them to participate in the National Health Funding Pool from 1 July 2012.
However, not all states and territories had their legislation in place by that date. As part of the transition to National Health Reform funding, arrangements were put in place whereby those states and territories received equivalent funding directly from the Commonwealth Treasury, and made payments directly from departmental bank accounts to local hospital networks (LHNs). Although these transactions were not made through state pool accounts and state managed funds, they have been included in this report (and designated as ‘notional payments’ into and out of state pool accounts and state managed funds) to enable national comparibility for month and year-to-date reporting periods.
Victoria has participated in the National Health Funding Pool since 1 October 2012.
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. A local hospital network 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 a local hospital network.
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, local hospital networks 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: Local hospital networks 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 local hospital network, contact the Victorian Department of Health and Human Services to view the service agreement for that local hospital network.
Note: Amounts shown in the monthly reports do not include the New South Wales contributions to Victoria for Albury Wodonga Health.
Basis for National Health Reform payments – Victoria, June 2013
The basis used to determine NHR payments to local hospital networks (LHNs) in Victoria for June 2013 was advised by the Victorian Department of Health to be as follows:
Payments in Victoria are based upon "Statement of priorities" agreements between Victorian public health services (LHNs) and the Minister for Health (or Secretary). These annual agreements detail the service profile, strategic priorities and deliverables the local hospital network will achieve in the year ahead; list the key financial, access and service performance priorities and agreed targets; and list funding estimates and associated service activity. Once agreed, Statements of priorities are published at www.health.vic.gov.au/hospitals/sops.htm (external link, opens in a new window).
Funding details are aggregated into ABF funded services (including NWAU equivalent service volume), Block funded services and Other funding for the purpose of determining payments to and from the state pool account and the state managed fund.
Payments are made twice monthly on the basis of one-twelfth of the agreed funding budget, adjusted for cash flow requirements of individual Victorian public health services.
While the basis of NHR payments are reported on a cash basis by the Administrator, LHNs generally report revenue and expenditure on an accrual basis.
Victorian local hospital networks receive activity-based funding, block funding and other payments for different services and purposes. Adjustments are made for cash flow needs and costs administered by the Victorian Department of Health on behalf of local hospital networks.
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 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.
- Notional NHR payments – funds paid into and out of departmental bank accounts to local hospital networks that would have been transacted through the state pool account and/or state managed fund had NHR funding arrangements been in place. Notional payments are included in 2012-13 reporting to enable national comparability for month and year-to-date reporting periods.
State pool account transactions
Table 1a – State pool account transactions – Victoria, June 2013
This table shows funding paid into the Victorian state pool account by the Commonwealth and Victoria, and payments out of the state pool account to local hospital networks, the state managed fund, and the Victorian Department of Health and Human Services for June 2013.
|NHR funding by source||Paid into state pool account||Paid out of state pool account|
|To local hospital networks||To state
|Total paid out|
See definitions and explanatory notes following table 1b.
Table 1b – State pool account transactions YTD – Victoria, June 2013
Following on from table 1a, this table shows year-to-date (YTD) funding paid into the Victorian state pool account by the Commonwealth and Victoria, and YTD payments out of the state pool account to local hospital networks, the state managed fund, and the Victorian Department of Health and Human Services as at June 2013. These amounts include notional payments for July, August and September 2012.
|NHR funding by source||Paid into state
|Paid out of state pool account YTD|
|To local hospital
|To state health
|Total paid out
* Information for July, August and September 2012 not provided by Victoria.
Note: Of the total year-to-date amount of $6,374,062,317 shown in Table 1b as paid into and out of the Victorian state pool account, $1,800,223,993 was notional year-to-date payments.
No payments were made from the Victorian state pool account in July, August and September 2012, with payments made directly from departmental bank accounts to local hospital networks.
Note: The amounts shown as State/Territory funding paid into the state pool account in tables 1a and 1b include cross-border receipts of $53,062,700 from New South Wales and $10,223,206 from Tasmania.
The amounts shown as State/Territory funding paid out of state pool account in tables 1a and 1b include a cross-border payment of $24,126,792 to New South Wales.
Commonwealth ABF funding represents Acute admitted public, Acute admitted private, Non-admitted, and Emergency department service categories, which are funded by the Commonwealth through the state pool account and subsequently paid to local hospital networks.
Commonwealth Block funding represents Mental health, Small rural and metropolitan hospitals, Sub-acute, Teaching, training and research, and Other 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.
State/territory funding represents funding contributions paid by Victoria into its own state pool account, and subsequently paid to local hospital networks within the state and/or to state or territory health departments.
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 health departments.
NHR funding and payments shown in these tables include GST where applicable.
State managed fund transactions
Table 2a – State managed fund transactions – Victoria, June 2013
This table shows funding paid into the Victorian state managed fund by the Commonwealth and Victoria, and payments out of the state managed fund to local hospital networks and other provider organisations for June 2013.
|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||72,093,390||72,093,390|
|State/territory Block funding||93,333,142||93,333,142|
See explanatory notes following table 2b.
Table 2b – State managed fund transactions YTD – Victoria, June 2013
Following on from table 2a, this table shows year-to-date (YTD) funding paid into the Victorian state managed fund by the Commonwealth and Victoria, and YTD payments out of the state managed fund to local hospital networks and other provider organisations as at June 2013. These amounts include notional payments for July, August and September 2012.
|NHR funding by source||Paid into state
|Paid out of state managed fund YTD|
|To local hospital
|Total paid out
|Commonwealth Block funding||880,647,141||880,647,141|
|State/territory Block funding||1,185,848,080||1,185,848,080|
Block funding represents Mental health, Small rural and metropolitan hospitals, Sub-acute, Teaching, training and research, and Other 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 local hospital networks and other provider organisations.
State/territory Block funding represents Victorian block funding contributions into the state managed fund, and block payments out of the state managed fund to local hospital networks 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.
NHR funding and payments by service category
Table 3 – NHR funding and payments by service category – Victoria, June 2013
This table shows NHR funding and payments by service category on both a monthly and year-to-date (YTD) basis for Victoria for June 2013. 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||NHR funding
|Acute admitted - public||*||*||*||*|
|Acute admitted - private||*||*||*||*|
|Total ABF (Pool)||340,619,301||291,280,220||5,352,587,052||5,278,488,882|
|Small rural and metro hospitals||*||*||*||*|
|Teaching, training and research||*||*||*||*|
|Total Block (SMF)||165,426,532||165,426,532||2,066,495,221||2,066,495,221|
|Public health funding||6,253,357||6,253,357||75,688,744||75,688,744|
|Total Other (Pool)||69,792,657||119,131,737||140,828,123||214,926,295|
* Victoria has advised it is unable to provide payment information by service category as its 2012-13 service agreements with local hospital networks do not set separate budgets at that level.
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 local hospital networks - 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 local hospital networks are already being funded for the cost of treating cross-border patients - shown in the Cross-border row under Other in the above table.
Cross-border funding arrangements between states and territories are yet to be put in place for state and territory contributions.
NHR funding and payments shown in these tables include GST where applicable.
NHR payment distribution by local hospital network
Table 4 – NHR payment distribution by local hospital network – Victoria, June 2013
This table shows NHR payments (from state, territory and Commonwealth sources) made to each local hospital network (LHN) in Victoria during June 2013.
NHR payments distributed to local hospital networks (LHNs) are separated into an activity-based funding (ABF) component and a block component.
|Local hospital network (LHN)||ABF component
|Total NHR payments
|Albury Wodonga Health||4,361,178||2,211,233||6,572,411|
|Alexandra District Hospital||0||383,739||383,739|
|Bairnsdale Regional Health Service||3,108,837||518,339||3,627,176|
|Ballarat Health Services||10,652,907||4,008,801||14,661,708|
|Bass Coast Regional Health||271,723||257,116||528,839|
|Beaufort & Skipton Health Service||0||227,642||227,642|
|Beechworth Health Service||0||200,043||200,043|
|Bendigo Health Care Group||9,066,508||5,908,659||14,975,167|
|Boort District Health||0||111,715||111,715|
|Calvary Health Care Bethlehem||0||1,780,533||1,780,533|
|Casterton Memorial Hospital||0||210,001||210,001|
|Central Gippsland Health Service||2,647,185||385,455||3,032,640|
|Cobram District Health||0||398,144||398,144|
|Cohuna District Hospital||0||312,857||312,857|
|Colac Area Health||1,199,333||200,278||1,399,611|
|Djerriwarrh Health Services||3,037,036||201,799||3,238,835|
|Dunmunkle Health Services||0||0||0|
|East Grampians Health Service||934,933||118,576||1,053,509|
|East Wimmera Health Service||0||180,599||180,599|
|Echuca Regional Health||1,501,258||266,216||1,767,474|
|Edenhope and District Memorial Hospital||0||238,112||238,112|
|Gippsland Southern Health Service||873,930||109,784||983,714|
|Goulburn Valley Health||4,613,568||2,904,429||7,517,997|
|Hepburn Health Service||0||532,823||532,823|
|Hesse Rural Health Service||0||130,191||130,191|
|Heywood Rural Health||0||117,975||117,975|
|Inglewood & Districts Health Service||0||113,165||113,165|
|Kerang District Health||0||383,798||383,798|
|Kilmore & District Hospital||0||509,677||509,677|
|Kooweerup Regional Health Services||0||260,921||260,921|
|Kyabram & District Health Services||713,881||16,013||729,894|
|Kyneton District Health Service||0||274,258||274,258|
|Latrobe Regional Hospital||6,835,336||4,507,854||11,343,190|
|Lorne Community Hospital||0||135,073||135,073|
|Mallee Track Health and Community Service||0||252,674||252,674|
|Mansfield District Hospital||0||376,548||376,548|
|Maryborough District Health Service||842,805||109,660||952,465|
|Mercy Public Hospitals Inc.||8,718,951||2,993,671||11,712,622|
|Moyne Health Services||0||181,341||181,341|
|Nathalia District Hospital||0||88,629||88,629|
|Northeast Health Wangaratta||3,555,234||700,041||4,255,275|
|Numurkah District Health Service||0||1,201,347||1,201,347|
|Omeo District Health||0||98,282||98,282|
|Orbost Regional Health||0||380,267||380,267|
|Otway Health & Community Services||0||144,999||144,999|
|Peter MacCallum Cancer Institute||5,062,838||1,226,618||6,289,456|
|Portland District Health||967,260||173,310||1,140,570|
|Ramsay Health Care Limited (Mildura Base Hospital)||3,223,083||1,235,702||4,458,785|
|Robinvale District Health Services||0||348,476||348,476|
|Rochester & Elmore District Health Service||0||315,504||315,504|
|Rural Northwest Health||0||571,584||571,584|
|Seymour District Memorial Hospital||0||805,135||805,135|
|South Gippsland Hospital||0||300,428||300,428|
|South West Healthcare||4,765,278||2,208,537||6,973,815|
|St Vincent's Hospital (Melbourne)||19,317,420||8,703,988||28,021,408|
|Stawell Regional Health||750,215||133,145||883,360|
|Swan Hill District Health||1,842,309||205,660||2,047,969|
|Tallangatta Health Service||0||151,494||151,494|
|Terang & Mortlake Health Service||0||320,608||320,608|
|The Royal Children's Hospital||18,507,341||9,450,768||27,958,109|
|The Royal Victorian Eye & Ear Hospital||4,570,663||175,138||4,745,801|
|The Royal Women's Hospital||10,439,707||-20,930||10,418,777|
|Timboon & District Healthcare Service||0||243,704||243,704|
|Upper Murray Health & Community Services||0||260,432||260,432|
|Victorian Institute of Forensic Mental Health||0||3,436,696||3,436,696|
|West Gippsland Healthcare Group||2,513,399||395,634||2,909,033|
|West Wimmera Health Service||0||734,692||734,692|
|Western District Health Service||1,751,245||494,518||2,245,763|
|Wimmera Health Care Group||1,796,945||351,802||2,148,747|
|Yarram & District Health Service||0||297,309||297,309|
|Yea & District Memorial Hospital||0||157,783||157,783|
A local hospital network (LHN) is an organisation that provides public hospital services in accordance with the National Health Reform Agreement. A local hospital network 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 a local hospital network.
NHR payments in this table are GST exclusive to enable comparability of NHR payments in each local hospital network report.
Note: This table excludes GST and payments to other provider organisations (non-local hospital networks).
The majority of government funding to local hospital networks 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.
Estimated monthly, YTD and annual NWAU by local hospital network
States and territories provide NHR funding amounts and service volumes as service 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.
Table 5 – Estimated monthly, YTD and annual NWAU by local hospital network – Victoria, June 2013
This table shows estimated state or territory hospital activity for activity-based funding services expressed as NWAU for June 2013, the associated cumulative year-to-date (YTD), and total estimated annual NWAU for each local hospital network in Victoria.
|Local hospital network (LHN)||Estimated NWAU funded in current month||Estimated NWAU funded YTD||Estimated annual NWAU 2012-13|
|Albury Wodonga Health||1,257||15,084||15,082|
|Bairnsdale Regional Health Service||778||9,336||9,332|
|Ballarat Health Services||2,791||33,492||33,491|
|Bass Coast Regional Health||455||5,460||5,463|
|Bendigo Health Care Group||2,621||31,452||31,450|
|Central Gippsland Health Service||790||9,480||9,483|
|Colac Area Health||315||3,780||3,784|
|Djerriwarrh Health Services||498||5,976||5,980|
|East Grampians Health Service||225||2,700||2,703|
|Echuca Regional Health||528||6,336||6,335|
|Gippsland Southern Health Service||232||2,784||2,779|
|Goulburn Valley Health||1,867||22,404||22,405|
|Kyabram & District Health Services||205||2,460||2,454|
|Latrobe Regional Hospital||1,935||23,220||23,225|
|Maryborough District Health Service||225||2,700||2,699|
|Mercy Public Hospitals Inc.||3,509||42,108||42,111|
|Northeast Health Wangaratta||1,148||13,776||13,770|
|Peter MacCallum Cancer Institute||1,671||20,052||20,051|
|Portland District Health||322||3,864||3,868|
|Ramsay Health Care Limited (Mildura Base Hospital)||1,282||15,384||15,385|
|South West Healthcare||1,446||17,352||17,357|
|St Vincent's Hospital (Melbourne)||4,983||59,796||59,790|
|Stawell Regional Health||203||2,436||2,437|
|Swan Hill District Health||487||5,844||5,844|
|The Royal Children's Hospital||4,425||53,100||53,099|
|The Royal Victorian Eye & Ear Hospital||1,353||16,236||16,233|
|The Royal Women's Hospital||2,801||33,612||33,611|
|West Gippsland Healthcare Group||843||10,116||10,121|
|Western District Health Service||470||5,640||5,635|
|Wimmera Health Care Group||765||9,180||9,179|
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.