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Increased payments lock in record Commonwealth funding for hospitals

09 April, 2018

The Australian Government will make an increased payment of $547 million to the states and territories for public hospital activity in 2015-16, following the final reports by independent hospital pricing and funding agencies.

The Turnbull Government will make an increased payment of $547 million to the states and territories for public hospital activity in 2015-16, following the final reports by independent hospital pricing and funding agencies. 

Commonwealth payments will now total $17.4 billion in 2015-16 and reflect the actual public hospital services delivered, after errors were found in the pricing and calculation of some services in this period. 

These payments are based on final reports by the Independent Hospital Pricing Authority (IHPA) and the Administrator of the National Health Funding Pool (the Administrator), both independent agencies reporting jointly to all State, Territory and Commonwealth Governments. 

We welcome the reports from these independent agencies and payments will now be made by the Commonwealth. 

Between 2014-15 and 2015-16 Commonwealth funding for public hospitals will increase by $1.9 billion from $15.5 billion to $17.4 billion – the single largest ever increase in Commonwealth funding for public hospitals. 

The final determination continues the Turnbull Government’s record funding support for public hospitals and increases Commonwealth funding for: 

    • Queensland hospitals by $309.2 million to $3.71 billion in 2015-16
    • Western Australia hospitals by $97.8 million to $1.95 billion in 2015-16
    • Victorian hospitals by $89.8 million to $4.24 billion in 2015-16
    • South Australian hospitals by $36.4 million to $1.24 billion in 2015-16
    • Northern Territory hospitals by $15.2 million to $204 million in 2015-16
    • Australian Capital Territory hospitals by $13.6 million to $341 million in 2015-16
    • Tasmanian hospitals by $4.5 million to $366 million in 2015-16.

This final determination reduces funding for New South Wales public hospitals by $19.2 million to $5.3 billion in 2015-16 to reflect actual activity delivered, following the final submission of activity data by the New South Wales Government.

The final report follows extensive analysis conducted by the Administrator and the IHPA into the drivers of the unexpected growth in a number of non-admitted services, in particular home delivered ventilation, dialysis and obstetric services. 

The independent agencies identified $122.7 million in errors in the pricing and calculation of funding in 2015-16. Further information is available on the IHPA’s website and the Administrator’s website.

Based on this independent advice, the Treasurer has made a final determination of National Health Reform funding entitlement for the 2015-16 financial year. 

The examination of National Health Reform funding for 2015-16 has ensured transparency of funding arrangements, and that payments more accurately reflect actual hospital services delivered.

The Turnbull Government is committed to increasing funding to Australia’s public hospitals through a new National Health Agreement. 

The Government looks forward to working with states and territories to finalise the next agreement which will build on record funding and delivers an additional $30 billion in new funding to states and territories over the period 2020-21 to 2024-25.

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