2013-14 Administrator National Health Funding Pool Annual Report

FURTHER INFORMATION

If you require further information or have any queries in relation to this Annual Report, please contact:

The Administrator, National Health Funding Pool
GPO Box 1252, Canberra ACT 2601
Phone: 1300 930 522
Media: 02 6289 7425
Email: nhfa.administrator@nhfa.gov.au

An accessible copy of this Annual Report is available online at:
www.publichospitalfunding.gov.au/publications/annual-reports

LETTER OF TRANSMITTAL

NHFB logo

Office of the Administrator

GPO Box 1252 Canberra ACT 2601

Telephone: 1300 930 522

Email: nhfa.administrator@nhfa.gov.au

28 October 2014

The Hon Peter Dutton MP
Minister for Health
Commonwealth of Australia

The Hon David Davis MP
Minister for Health
Victoria

The Hon Kim Hames MLA
Minister for Health
Western Australia

The Hon Michael Ferguson MP
Minister for Health
Tasmania

The Hon Robyn Lambley MLA
Minister for Health
Northern Territory

The Hon Jillian Skinner MP
Minister for Health
Neww South Wales

The Hon Lawrence Springborg MP
Minister for Health
Queensland

The Hon Jack Snelling MP
Minister for Health
South Australia

Ms Katy Gallagher MLA
Minister for Health
Australian Capital Territory

Dear Ministers,

Administrator of the National Health Funding Pool Annual Report 2013-14

I am pleased to submit to you, for tabling in your respective Parliaments, my Annual Report for the year ended 30 June 2014.

This report has been prepared in accordance with the requirements of sections 241 to 243 of the Commonwealth National Health Reform Act 2011 (the Act) and corresponding state and territory national health reform legislation.

The report includes a combined Financial Statement for the National Health Funding Pool accounts, and a Financial Statement for each state and territory State Pool Account audited by the respective Auditor-General. The report also includes the reporting required under section 241(2) of the Act on national health reform funding and payments, on a national level and for each state and teritory.

Yours sincerely,

Administrator's signature

RJ Sendt
Administrator
National Health Funding Pool

NATIONAL HEALTH REFORM FUNDING 2013-14

National Health Reform Funding 2013-14 Infographic: funding per state, by contribution source (state or Commonwealth); total number of hospital services funded

National Health Reform Funding 2013-14 Infographic: components of Commonwealth funding (activity-based, block, and public health funding); total funding by type (activity based, state and territory, Commonwealth, block); total funding to local hospital networks

MESSAGE FROM THE ADMINISTRATOR

I am pleased to present my Annual Report for the year ended 30 June 2014, the second year of operation of the National Health Funding Pool (the Pool) and the role of Administrator.

In 2013–14 I have again worked closely with the National Health Funding Body (NHFB) to deliver independence and transparency in the calculation, payment and reporting of public hospital funding in Australia.

During 2013–14 one of my key responsibilities was to calculate the Commonwealth Government’s funding contribution into the Pool — comprising activity based, block and public health funding — totalling nearly $14 billion. 2013–14 was the second year of a two–year transition period in which the Commonwealth provided funding to states and territories equivalent to the amount that would otherwise have been paid under the former National Healthcare Specific Purpose Payment.

The 2013–14 calculations differed from 2012–13 as the scope of activity based funding services was broadened to include sub–acute and admitted mental health. This was in line with the intention of the National Health Reform Agreement (the Agreement) to move more health services to an activity basis of funding. In addition, in 2013–14 I was also required to calculate the Commonwealth block funding component of national health reform funding.

In 2013–14 nearly $74 billion in funding and payment transactions was processed through the National Health Funding Pool and state managed funds, and I directly oversaw the payment of over $33 billion in funding from the Pool to local hospital networks, state managed funds and other parties.

As required by section 241(3) of the National Health Reform Act 2011 (the Act), this Annual Report includes a financial statement for each state and territory State Pool Account (audited by the respective Auditor–General) and a financial statement for the combined State Pool Accounts. Also included for each state and territory is a set of tables satisfying the reporting requirements of section 241(2) of the Act. These tables provide detail on funding and payments for each state and territory Pool Account and state managed fund.

FORWARD OUTLOOK

GROWTH AND FUNDING GUARANTEES

From July 2014 to June 2017, my calculation of Commonwealth funding will be linked to the level of services delivered by public hospitals in each state and territory. This funding will be calculated on a 2013–14 base plus 45% of the efficient growth in volume and activity each financial year, as outlined in the Agreement.

My calculation (and subsequent advice to jurisdictions and the Commonwealth Treasurer) will also include the calculation of funding guarantees as set out in the Agreement.

DATA PROVISION

With the move to growth funding from 2014–15, there will be an increasing imperative for the supply of patient and aggregate level data to support the accurate calculation of the Commonwealth contribution. My data requirements were detailed in my Three Year Data Plan released on 14 March 2014.

The continued timely supply of data to support my monthly public reporting of funding and payments is integral to the transparency of contribution and payment flows. These reports are available from my Public Hospital Funding website:
www.publichospitalfunding.gov.au.

DATA MATCHING

Clause A6 of the Agreement states that the Commonwealth will not fund patient services through the Agreement if the same service is funded through the Medical Benefits Schedule (MBS) or the Pharmaceuticals Benefits Scheme (PBS).

Together with the NHFB I have undertaken significant data preparation and analysis in order to progress this data matching requirement across 2012–13 and 2013–14. My intention over the next year is to work towards implementing this clause of the Agreement.

STRUCTURAL CHANGE

In its 2014–15 Budget, the Commonwealth flagged its intention to create a new health productivity and performance commission by merging several existing bodies including the Administrator and the NHFB. I will work with the NHFB, the Commonwealth, and states and territories to ensure that effective stakeholder relationships are maintained during this process.

ACKNOWLEDGEMENTS

My role necessitates working in collaboration with a wide range of stakeholders across the Commonwealth, states, territories and other national health agencies. The success of the operations of the Pool depends on the engagement and support of stakeholders and I extend my thanks to those who have contributed their time and expertise in 2013–14.

The NHFB is integral in assisting me to discharge my functions. The enthusiasm and commitment of this small but hardworking team of professionals is to be commended.

Image of Bob Sendt, the Administrator of the NHFB

Administrator's signature

RJ Sendt
Administrator
National Health Funding Pool

ANNUAL REPORTING: LEGISLATIVE REQUIREMENTS

The Administrator of the National Health Funding Pool is required to prepare an annual report of operations and present it to Commonwealth and State/Territory Health Ministers.

The information included in this Annual Report includes mandatory reporting of:

  1. An individual financial statement for each state and territory's State Pool Account and a combined financial statement.
  2. National health reform funding and payments.

This reporting is on both a national level and for each state and territory, reflecting all national health reform amounts transacted in 2013–14.

State and territory financial statements are audited and certified by the relevant Auditor–General.

Both of these financial reporting components have been compiled on a cash basis and are in Australian dollars. All amounts are rounded to the nearest thousand dollars unless otherwise specified.

This reporting is pursuant to the following jurisdictional national health reform legislation:

Table 1 Jurisdictional national health reform legislation

JURISDICTION FINANCIAL STATEMENTS NATIONAL HEALTH REFORM
FUNDING AND PAYMENTS
REPORTING
COMMONWEALTH s.241(3), s.242 and s.243 of the National Health Reform Act 2011 s.241(2) of the National Health Reform Act 2011
NEW
SOUTH
WALES
schedule 6A clauses 16(3), 17 and 18 of the Health Services Act 1997 schedule 6A clause 16(2) of the Health Services Act 1997
VICTORIA1 s.17(3), s.18 and s.19 of the Health (Commonwealth State Funding Arrangements) Act 2012 s.17(2) of the Health (Commonwealth State Funding Arrangements) Act 2012
QUEENSLAND s.53S(3), s.53T and s.53U of the Hospital and Health Boards Act 2011 s.53S(2) of the Hospital and Health Boards Act 2011
SOUTH
AUSTRALIA
s.22(3), s.23 and s.24 of the National Health Funding Pool Administration (South Australia) Act 2012 s.22(2) of the National Health Funding Pool Administration (South Australia) Act 2012
WESTERN
AUSTRALIA
s.19(3), s.20 and s.21 of the National Health Funding Pool Act 2012 s.9(2) of the National Health Funding Pool Act 2012
TASMANIA s.18(3), s.19 and s.20 of the National Health Funding Administration Act 2012 s.18(2) of the National Health Funding Administration Act 2012
AUSTRALIAN
CAPITAL
TERRITORY
s.18(2) of the National Health Funding Pool and Administration (National Uniform Legislation) Act 2012 s.5(2) of the Health (National Health Funding Pool and Administration) Act 2013
NORTHERN
TERRITORY
s.18(3), s.19 and s.20 of the National Health Funding Pool and Administration (National Uniform Legislation) Act 2012 s.18(2) of the National Health Funding Pool and Administration (National Uniform Legislation) Act 2012

1 Note that although this Act requires the Administrator to prepare an a report, as at 30 June 2014 Victoria had not appointed an Administrator.