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 with the 2020-25 Addendum to the National Health Reform Agreement the 2021-22 Tasmanian Funding Model has implemented the National Efficient Price (NEP21) and National Weighted Activity Unit (NWAU21) as the currency for Activity Based Funding (ABF) facilities. However, in recognition that the Tasmanian Health Service (THS) ABF facilities reports higher average cost than the NEP, a Supplementation Grant at the Hospital and ABF stream level has been incorporated into the Funding Model for 2021-22. The National Efficient Cost (NEC21) Block funded model is used as the currency for small regional and remote public hospitals, standalone 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 Tasmania are based upon the service plan between the Minister for Health and the Secretary of the Tasmanian Department of Health.

The service plan outlines:

  • the schedule and volume of ABF services across streams to be delivered by or on behalf of the LHN and the ABF funding to be provided in relation to the provision of those services
  • the NEC block funding for service provided through:
    • 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
  • schedule of Supplementation Grants at the hospital and ABF stream level
  • 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 fixed cost component and the variable cost component result
  • standalone hospitals providing specialist mental health services (admitted and non-admitted) child and adolescent mental health services, teaching, training, and research and Non-admitted home ventilation are 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 hospital and ABF stream level are based on the prior year National Hospital Cost Data Collections ABF Service category cost ratio.

Further information regarding the Basis for National Health Reform payments in both 2021-22 and previous financial years is included at www.publichospitalfunding.gov.au