Basis for National Health Reform payments – South Australia 2020-21

To meet the reporting requirements of Section 240 of the National Health Reform Act 2011, the Administrator is to include the basis of each State and Territory's National Health Reform (NHR) funding and payments.

To provide consistency in methodology and with the Addendum to the National Health Reform Agreement 2020–21 to 2024–25, the 2020-21 South Australia Funding Model has implemented the National Efficient Price (NEP20) and National Weighted Activity Unit (NWAU20) as the currency for Activity Based Funding (ABF) facilities. The National Efficient Cost (NEC20) Block funded model is used for the small regional and remote hospitals, stand alone hospitals providing specialist Mental Health services (admitted and non admitted), Child and adolescent mental health services, Non-admitted Home Ventilation and Clinical Teaching, Training, and Research provided in the major hospitals.

NHR payments in South Australia are based upon the activity outlined in the Service Plan between the Minister for Health and the Chief Executive of the Department for Health and Wellbeing.

The service plan outlines:

• The schedule of services to be delivered by or on behalf of the LHN and the funding to be provided in relation to the provision of those services.
• The block funding to be provided to:
  • Small rural hospitals, standalone hospitals providing specialist mental health services and eligible community mental health services
  • Major hospitals for:
    • Non-admitted Home Ventilation
    • Clinical Teaching, Training, and Research
• Operational and block grants to the LHN covering services provided and activities undertaken that are not within scope for ABF, for example, Alcohol and Drug Services, dental services, Child Health and Parenting Services, primary care, home and community care.
• Supplementation Grants at the ABF stream level in recognition that the LHN has reported average costs greater than the NEP.
• Standards of patient care and service delivery.
• Performance standards, performance targets and performance measures for the LHN.
• Requirements for the LHN to report on its performance, as required or otherwise.
• A performance management process that is to be in continuous operation in respect of the LHN.

The ABF funded facilities’ service profiles are developed in negotiation with the LHN as follows:

• Acute admitted and Sub-acute and Non-acute service activity volumes are modelled based on historical activity data and agreed growth rates and adjusted for known service capacity and profile changes.
• Emergency Department and Outpatient service volumes are modelled based on agreed growth rates and other known factors.
• Clinical Teaching Training and Research, Home Ventilation services are modelled based on historical expenditure profiles and adjusted for known changes.
• Small regional and remote hospitals are modelled based on the small hospital NEC result.
• Stand-alone hospitals providing specialist Mental Health services (admitted and non-admitted) and modelled based on historical activity volumes and expenditure profiles and adjusted for known changes in service delivery and capacity.
• Non-NHRA and non-hospital services are block-funded and modelled based on historical expenditure profiles and other known growth factors.
• The Supplementation Grant at the ABF stream level are based on the prior year National Hospital Cost Data collections ABF stream Cost Ratio.

Further information regarding the Basis for National Health Reform payments in both 2020-21 and previous financial years is included at www.publichospitalfunding.gov.au