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.

To provide consistency in methodology and with the Addendum to National Health Reform Agreement 2020-25, the 2023-24 South Australia Funding Model has implemented the National Efficient Price (NEP23) and National Weighted Activity Unit (NWAU23) as the currency for Activity Based Funding (ABF) facilities.

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

NHR payments in South Australia are based upon the activity outlined in the service plan between the Minister for Health and Wellbeing and the Chief Executive of the South Australia 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
    • hospitals for: 
      • Non-admitted home ventilation
      • Other services deemed in-scope
      • Teaching, training and research
  • operational and block grants to the LHN covering services provided and activities undertaken that are not within scope of the NHR, for example, alcohol and drug services, dental services, child health and parenting services, primary care, home and community care
  • supplementation grants and other site specific grants as deemed appropriate by the department
  • capital investment such as in land and buildings, equipment and information and communication technology
  • 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
  • teaching, training and research, home ventilation services are modelled based on historical expenditure profiles and adjusted for known changes
  • small rural hospitals are modelled based on the small hospital NEC result
  • specialist mental health services (admitted and non-admitted) are modelled based on historical 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 grants and site specifics are determined by the State as relevant to ensure financial stability and sustainability of services

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.