National Health Reform funding flows

Under the National Health Reform Agreement, National Health Reform (NHR) funding from Commonwealth and state and territory governments is provided to each local hospital network as nationally consistent activity based funding (ABF) for most services provided by public hospitals to acute admitted patients, non-admitted patients, and those presenting to emergency departments.

As part of this, Commonwealth NHR funding for public hospitals is paid monthly into a National Health Funding Pool which consists of eight state and territory bank accounts with the Reserve Bank of Australia, known as state pool accounts.

Each state and territory also has a separate fund (known as its state managed fund) for receiving Commonwealth NHR block funding via the National Health Funding Pool, receiving block funding directly from the state or territory itself, and for making payments of block funding by the state or territory to local hospital networks.

NHR funding happens when the Commonwealth or state or territory government pays National Health Reform funding into a state pool account or state managed fund.

NHR payments occur when the 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.

The following diagram illustrates how this funding flows.

Image illustrating how national health reform funding flows work. Please see text below for further information.