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.

State funding paid on an activity basis to Local Hospital Networks is based on the price set by the State (which is reported in Service Agreements) and the volume of weighted services as set out in Service Agreement for each service category.

Queensland utilises the National Efficient Price (NEP23) and Price Weights as determined by the Independent Health and Aged Care Pricing Authority as the underlying funding model for Activity Based Funding (ABF) in the State.

The National Efficient Cost (NEC23) Block funding model is used for small rural hospitals, standalone hospitals providing specialist mental health services (admitted and non-admitted), child and adolescent mental health services, non-admitted home ventilation and teaching, training and research provided.   

Where funding is paid on an activity basis and the Hospital and Health Service (HHS) reports higher average costs than the NEP, a supplementation grant is incorporated into the funding model for 2023-24 in recognition of those costs and is paid by the State.

NHR payments in Queensland are based upon the activity outlined in the Budget Statements as agreed between the Minister for Health, Queensland Treasury and the Director-General, Queensland Health. 

The funding and purchased activity are outlined in each of the HHS Service Agreements and includes:

  • the schedule of services to be delivered by or on behalf of the HHS 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
      • Highly Specialised Therapies
      • Clinical teaching, training and research
  • operational and block grants to the HHS covering services provided and activities undertaken that are not within scope for ABF, for example, community dental services, primary care, home and community care
  • supplementation grants at the ABF stream level in recognition that the HHS is to deliver services or models of care that are new to the case mix classification and these costs are greater than average costs in the NEP
  • standards of patient care and service delivery
  • performance standards, performance targets and performance measures for the HHS
  • requirements for the HHS to report on its performance, as required or otherwise
  • a performance management process that is to be in continuous operation in respect of the HHS. 

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

  • Acute admitted, sub-acute and non-acute service activity volumes are modelled based on historical activity data, agreed growth rates and adjusted for known service capacity and profile changes
  • Emergency department and outpatient service volumes are purchased based on historical data, agreed growth and other known factors
  • teaching and training is based on methodologies applied to salaried employees in clinical training positions, under-graduate and post-graduate student scholarship and clinical placements
  • Home ventilation services are based on the historical expenditure profiles and adjusted for known patient volume changes
  • Small regional and remote hospitals are modelled based on the expenditure reported and the small hospital NEC results
  • standalone hospitals providing specialist mental health services (admitted and non-admitted) are modelled based on historical expenditure profiles and adjusted for known changes in service delivery and new system investment through the Mental Health Connecting Care to Recovery
  • non-NHRA services that are activity driven, for example in the case of a Department of Veterans' Affairs hospital admissions, are included in the activity target calculations within the State model, noting that these are funded by that program
  • other non-NHRA and non-hospital services are Block funded and based on historical funding and other known growth factors.

Further information regarding the Basis for National Health Reform payments in both 2023-24 and previous financial years is included at www.publichospitalfunding.gov.au