Part 2: Payments for Specific Purposes (Continued)
In 2011‑12, the Commonwealth will provide funding of $15.4 billion to support state health services.
Under the National Health Reform arrangements, the National Healthcare SPP will be replaced by National Health Reform funding from 1 July 2012.
Table 2.3 provides information on payments to support state health services, including additional investments and reforms under the National Health Reform arrangements.
Table 2.3: Payments to support state health services
National Healthcare Agreement
The National Healthcare Agreement affirms the commitment of the Commonwealth and the States to:
- ensuring that there is a focus on health policy and the prevention of disease and injury and the maintenance of health, not simply the treatment of illness;
- meeting the primary health care needs of all Australians efficiently through timely and quality care;
- ensuring that people with complex care‑needs can access comprehensive, integrated and coordinated services;
- providing timely and appropriate high‑quality hospital and hospital‑related care to all Australians;
- meeting the needs of older Australians through high‑quality, affordable, health and aged care services that are appropriate to their needs, as well as enabling choice and seamless, timely transition within and across the different sectors;
- ensuring all Australians experience best‑practice care that is suited to their needs and circumstances;
- achieving health outcomes for Indigenous Australians (and those living in rural and remote areas) that are comparable to the broader population; and
- a sustainable health system that can respond and adapt to future needs.
Heads of Agreement on National Health Reform
On 13 February 2011, COAG reached a Heads of Agreement on National Health Reform which will form the basis of negotiations for a new National Health Reform Agreement to be signed by July 2011.
The Heads of Agreement on National Health Reform combines reforms to the financing of the Australian health and hospital system with major changes to the governance arrangements between the Commonwealth and the States. The reforms will deliver better health and hospital services for all Australians and provide a secure funding base for health and hospitals in the future.
Under the National Health Reform arrangements, the Commonwealth will increase its funding contribution to 50 per cent of the growth in public hospital costs. This will be done in two stages: increasing to 45 per cent in 2014‑15, and 50 per cent in 2017‑18.
National Healthcare SPP and National Health Reform funding
The Commonwealth is currently providing National Healthcare SPP funding, and will provide National Health Reform funding totalling $69.2 billion over five years from 2010‑11. National Health Reform funding will be provided under the National Health Reform arrangements and will commence on 1 July 2012. National Health Reform funding will have two elements: base funding to be provided from 1 July 2012 sourced from the existing National Healthcare SPP; and efficient growth funding to be provided from 1 July 2014. National Health Reform funding will be paid into a national funding pool to support public hospital services.
National Healthcare SPP and National Health Reform funding
- The efficient growth funding component of National Health Reform funding in 2014‑15 is distributed on a per capita basis for illustrative purposes only. The distribution of efficient growth funding will be determined by efficient growth in each State.
The Intergovernmental Agreement defines the growth factor for the National Healthcare SPP as the product of:
- a health‑specific cost index (a five year average of the Australian Institute of Health and Welfare health price index);
- the growth in population estimates weighted for hospital utilisation; and
- a technology factor (the Productivity Commission derived index of technology growth).
The growth factor for the National Healthcare SPP is currently estimated to be 6.82 per cent in 2011‑12.
In 2012‑13 and 2013‑14 National Health Reform funding will be equivalent to the National Healthcare SPP indexed by the growth factor defined in the Intergovernmental Agreement.
From 2014‑15, the Commonwealth will begin to increase its funding contribution to 50 per cent of the growth in hospital costs. This will be done in two stages: increasing to 45 per cent in 2014‑15, and 50 per cent in 2017‑18.
Efficient growth funding will comprise:
- for services funded on the basis of activity — the increase in the efficient price of delivering public hospital services, and the increase in service provision; and
- for services funded on the basis of block grants — the increase in the efficient price of delivering those services.
The efficient price will be determined annually by the Independent Hospital Pricing Authority.
The Commonwealth has guaranteed that its increased contribution will be at least $16.4 billion greater than States would have received from the National Healthcare SPP between 2014‑15 and 2019‑20. If the amount required to fund the Commonwealth's public hospital growth commitment over this period is less than $16.4 billion, the residual amount will be paid to fund health services that will ameliorate the growth in demand for hospital services.
Additional information on the National Health Reform arrangements is provided in Part 1 of this Budget Paper.
National Partnership payments for health
In addition to National Health Reform funding, the Commonwealth will provide funding through National Partnerships to alleviate key pressure points to help meet the growing demand for hospital services. Further detail on these National Partnerships and their components is provided below.
National Health Reform
National Partnership Agreement on Improving Public Hospital Services
Flexible funding for emergency departments, elective surgery and subacute
The Commonwealth is providing funding to increase hospital capacity and improve services to patients through a funding pool. The funding pool gives the States additional capacity to respond to capital and recurrent cost needs in the public hospital system in relation to emergency departments, elective surgery and subacute care.
Four hour national access target for emergency departments — capital
The Commonwealth is providing funding to expand capacity in the public hospital system for emergency department treatment.
The expansion of emergency departments and associated facilities will help achieve the Commonwealth's new four hour national access target. This measure allows for the upgrade of public hospital emergency departments in order to meet these new targets and will be distributed based on population and need.
Four hour national access target for emergency departments — facilitation
and reward funding component
The Commonwealth is providing funding to reduce the time taken to treat patients in public hospital emergency departments as part of a reform to introduce a four hour national access target.
The four hour national access target for emergency departments requires hospitals to admit, refer for follow‑up treatment, or discharge at least 95 per cent of patients within four hours of presenting at a hospital emergency department, where it is clinically appropriate to do so.
In the 2011‑12 Budget, the Commonwealth will bring forward $25.0 million from 2012‑13 to 2010‑11, reclassifying this amount from reward payments to facilitation payments. This funding will assist in reducing emergency department waiting times.
This measure is discussed in further detail in Budget Paper No. 2: Budget Measures 2011‑12.
Improving access to elective surgery — capital funding component
The Commonwealth is providing funding to boost elective surgery capacity in public hospitals.
Expanding the capacity to perform elective surgery will help to achieve the Commonwealth's new national target for elective surgery and the National Access Guarantee for Elective Surgery. This target seeks to ensure that, by the end of 2015, 95 per cent of elective surgery patients in all urgency categories are treated within the clinically recommended time.
Improving access to elective surgery — facilitation and reward funding
The Commonwealth is providing funding to implement access targets for elective surgery and for implementation of the National Access Guarantee for Elective Surgery. The target seeks to ensure that 95 per cent of elective surgery patients in all urgency categories are treated within the clinically recommended time by the end of 2015.
In the 2011‑12 Budget, the Commonwealth will bring forward $95.0 million from 2012‑13 with $55.0 million brought into 2010‑11 and $40.0 million brought into 2011‑12; these amounts will be reclassified from reward payments to facilitation payments. This funding will help to ensure elective surgery patients are treated within clinically recommended times.
This measure is discussed in further detail in Budget Paper No. 2: Budget Measures 2011‑12.
New subacute beds guarantee funding component
The Commonwealth is providing funding for over 1,300 additional beds for subacute services.
Under this component of the National Partnership Agreement on Improving Public Hospital Services, States will need to commit to, and establish, an agreed number of new subacute beds or bed‑equivalents each year to receive a payment from the Commonwealth. These beds could be provided in public hospitals or in community settings. Funding will provide beds for palliative, rehabilitative and geriatric care, as well as subacute mental health treatment.
National Partnership on expanding the Early Psychosis Prevention and
Intervention Centre model(a)
- Yearly profiles and State splits are indicative distributions only and have been allocated on an equal per capita basis to all States except Victoria. This distribution may change subject to negotiation with States on a National Partnership agreement and State participation in a competitive tendering process (where applicable). This indicative distribution does not entitle a State to the funds allocated against it.
The Commonwealth will provide funding for the expansion of the Early Psychosis Prevention and Intervention Centre (EPPIC) model initiative to explore how the model could be used to reform early psychosis management within the Australian mental health system. EPPICs provide an integrated and comprehensive psychiatric service to help address the needs of people aged 15‑24 with emerging psychotic disorders. Services provided include early intervention and clinical treatment.
In the 2011‑12 Budget, the Commonwealth will provide an additional $219.8 million over five years (including $80.8 million in 2015‑16) to establish up to 16 new centres.
This measure forms part of the National Reform of Mental Health package and is discussed in Budget Paper No. 2: Budget Measures 2011‑12. Other payments made as part of the National Reform of Mental Health package are discussed in the Improving mental health section of this Part.
National Partnership on the expansion of subacute care in multi‑purpose
The Commonwealth will provide capital funding to expand access to subacute care for people in rural and remote areas through the establishment of an additional 286 new subacute beds and bed‑equivalents in multi‑purpose services nationally. Multi‑purpose services provide a combination of services including acute‑care, residential aged care, community health, home and community care, and other health‑related services. These services ensure that small communities supporting a range of independently‑run services have access to more coordinated and cost‑effective services.
National Partnership on financial assistance for long stay older patients
The Commonwealth will redirect a portion of funding from high care residential aged care places to assist with the costs of caring for long stay older patients (LSOP) in public hospitals. Other health reform measures such as increasing access to care through multi‑purpose services in rural and remote areas are expected to assist in reducing the number of LSOP places required during the life of the measure. The funding reduces over time to take this into account.
Closing the Gap in the Northern Territory
National Partnership on Closing the Gap in the Northern Territory
Indigenous health and related services component
The Commonwealth is providing funding to improve access to effective primary health care services in the Northern Territory in partnership with the Northern Territory Government, Aboriginal Medical Services Alliance Northern Territory, and through consultation with other key stakeholders. This National Partnership is delivering health improvements through a system‑wide approach to enhancing quality and access to services across the Northern Territory. It is also complemented by related initiatives in the areas of law and order, community safety, education, food security, and provision of interpreters.
Other payments made as part of the National Partnership on Closing the Gap in the Northern Territory are discussed in the Education and Community Services sections of this Part.
Hospital and health workforce reform
National Partnership on hospital and health workforce reform
The Commonwealth will provide funding to improve the efficiency of public hospital services, enhance health workforce capability and supply, increase the volume and quality of subacute care services, and improve the operations of emergency departments. This National Partnership will support an efficient and effective public hospital system that delivers high‑quality and safe services to patients.
Activity‑based funding component
The Commonwealth will provide funding to continue the development of a national approach to activity‑based funding for public hospital services.
As agreed by COAG, the Commonwealth's contribution to public hospital services will be based on activity. Block funding will be provided for those public hospital services that are better funded in that way, including relevant services in regional and rural communities.
National Partnership for Health infrastructure
Several payments have been combined under the National Partnership for Health infrastructure.
Health and Hospitals Fund
A number of projects are funded from the Health and Hospitals Fund through Implementation Plans or as Project Agreements.
Hospital infrastructure and other projects of national significance component
The Commonwealth is providing funding from the Health and Hospitals Fund to support the development of health infrastructure projects of national significance. The Commonwealth will collaborate with the States to expand and modernise key public hospitals across Australia to improve hospital care.
National cancer system component
The Commonwealth is providing funding from the Health and Hospitals Fund to support infrastructure to deliver a world‑class cancer care system in Australia. This funding will help modernise cancer services and improve detection, survival and treatment outcomes, particularly for patients in regional and rural Australia.
Regional Priority Round
The Commonwealth will provide funding for the Regional Priority Round from the Health and Hospital Fund totalling $1.33 billion over five years comprising $96.0 million for the Port Macquarie Base Hospital Expansion, $240.0 million for the Royal Hobart Hospital Redevelopment and $993.5 million for the remaining allocation of the 63 projects. There will be a further $475.0 million Regional Priority Round to commence later this year.
Regional priority round — Port Macquarie Base Hospital Expansion component
The Commonwealth will provide funding from the Health and Hospitals Fund to construct an appropriately configured, contemporary healthcare facility to provide high quality medical services to the people of Port Macquarie and the surrounding district.
In the 2011‑12 Budget, the Commonwealth will provide $20.8 million in additional funding in 2014‑15. This measure is discussed in Budget Paper No. 2: Budget Measures 2011‑12.
Regional priority round — Royal Hobart Hospital Redevelopment component
The Commonwealth will provide funding from the Health and Hospitals Fund to deliver an enhanced acute care facility in Hobart with a significantly increased service capacity to meet the health needs of people in regional areas. The total funding allocated in the 2010‑11 MYEFO to this project from the Health and Hospitals Fund is $240.0 million with $81.4 million allocated in 2015-16.
Regional priority round — Additional component
The Commonwealth will provide funding of $863.8 million over five years ($264.8 million in 2015‑16) from the Health and Hospitals Fund to deliver additional regional priority services. A further $129.7 million will be administered by the Department of Health and Ageing.
The Commonwealth will work in partnership with the States to expand and modernise key health infrastructure, including hospitals, across Australia to improve health care. Funding will be provided for a range of health services including enhanced elective surgery capacity, enhanced sub‑acute care services and emergency department facilities, improved access to dental services, renal dialysis units, mental health care facilities, cancer care services, primary care infrastructure, Indigenous health care infrastructure and tele‑health facilities.
Funding for the Regional priority round — Additional component is a new spending measure in the 2011‑12 Budget. This measure is discussed in Budget Paper No. 2: Budget Measures 2011‑12.
Translational research and workforce training component
The Commonwealth will provide funding from the Health and Hospitals Fund to support translational medical research infrastructure. This translational research investment will provide new medical research infrastructure in the areas of mental health and neurological disorders, child health, Indigenous health and medical bionics. The funding has been targeted at projects that will focus on translating research into clinical practice to deliver better health outcomes for all Australians.
Other Health infrastructure payments
Cairns integrated cancer centre component
The Commonwealth is providing funding towards the establishment of an integrated cancer centre at the Cairns Base Hospital. The integrated cancer centre will be a purpose‑built facility offering a range of cancer treatments including a radiation oncology service.
Children's cancer centre, Adelaide component
The Commonwealth is providing funding to South Australia for the construction of a purpose‑built children's cancer centre at the Women's and Children's Hospital in Adelaide.
Contribution towards the new Women's and Children's Hospital in Hobart
The Commonwealth is providing funding towards the construction of the new Women's and Children's Hospital as part of the redevelopment of the Royal Hobart Hospital.
Funding for Grafton Hospital component
The Commonwealth is providing funding for the Grafton Hospital initiative. The measure has been established to enable faster and safer treatment for elderly patients and patients with chronic conditions, improve the timely diagnosis of patients and improve the operating theatre infrastructure for surgical procedures.
Health infrastructure projects in Tasmania component
The Commonwealth will provide funding to upgrade chemotherapy and cancer facilities in North‑West Tasmania, with a focus on the North‑West Regional hospital at Burnie.
PET scanner for the Westmead hospital, Sydney component
The Commonwealth is providing funding to New South Wales for the provision of a positron emission tomography (PET) scanner and for PET services and research at Westmead hospital.
Tasmanian health package
The Commonwealth is providing funding to improve health services in Tasmania. The Tasmanian package includes increased patient transport and accommodation services through the Tasmanian patient transport initiative, expanded radiation oncology services in North/North‑West Tasmania, and upgraded patient accommodation in the Launceston hospital.
Patient transport and accommodation services component
Radiation oncology services in North/North West Tasmania component
Upgrading patient accommodation for Launceston component
National Partnership on Health services
Several payments have been combined under a National Partnership on Health services.
Extension of the COAG Long Stay Older Patients Initiative component
The Commonwealth is providing funding to improve care outcomes for older patients in public hospitals who no longer require acute or subacute care and who are waiting for residential aged care. The funding enables the States to provide a range of services relevant to their own service systems, to enhance the care of older people in public hospitals and reduce the risk of hospitalisation.
Health care grants for the Torres Strait component
The Commonwealth is providing funding towards the costs associated with the provision of health care to Papua New Guinean nationals by Queensland health services. Treatment of Papua New Guinean nationals in the Torres Strait reduces the risk of the spread of communicable diseases.
Healthy kids health checks component
The Commonwealth is providing funding to promote the provision of health assessment services to children who are about to enter school. The program will promote early detection of lifestyle risk factors, delayed development and illness, and introduce guidance for healthy lifestyles and early intervention strategies.
National antimicrobial utilisation surveillance program component
The Commonwealth has provided funding for the national antimicrobial utilisation surveillance program. The program collected, analysed and reported on inpatient antimicrobial usage data in Australian hospitals to support the development of strategies to minimise antimicrobial resistance.
National bowel cancer screening component
The Commonwealth has provided funding to support follow‑up for national bowel cancer screening program participants who returned a positive test result. The second phase of the program commenced on 1 July 2008, and offered testing to people who have turned 50, 55 or 65 years of age between January 2008 and December 2010.
National perinatal depression initiative component
The Commonwealth is providing funding for the National perinatal depression initiative. The initiative aims to improve prevention and early detection of antenatal and postnatal depression and provide better support and treatment for expectant and new mothers experiencing depression.
National public health — human quarantine services component
The Commonwealth is providing funding for human quarantine services to support the implementation of health measures at our international borders. The aim of these health measures is to protect the Australian public from serious communicable diseases, particularly exotic, new and re‑emerging infectious diseases, through human quarantine activities.
Northern Territory medical school — funding contribution component
The Commonwealth is providing a contribution to the recurrent costs of the Northern Territory Medical Program (NTMP). The NTMP is delivered by Flinders University, with recurrent funding provided by the Northern Territory Government. The Commonwealth contribution is in addition to the capital grant it provided in 2009‑10 and 2010‑11 from the Health and Hospitals Fund for the establishment of the teaching facilities for the NTMP.
The Commonwealth is providing funding for OzFoodNet. OzFoodNet is a collaborative initiative with state health authorities for enhanced food‑borne disease surveillance. This initiative aims to provide a better understanding of the causes and incidence of food‑borne disease in the community and to provide an evidence base for policy formulation.
OzFoodNet collaborates nationally to coordinate investigations into food‑borne disease outbreaks, particularly those that cross state and country borders.
Satellite renal dialysis facilities in remote Northern Territory communities
The Commonwealth is providing funding to improve access to renal dialysis services for remote communities in the Northern Territory.
Sexual assault counselling in remote Northern Territory areas component
The Commonwealth is providing funding to assist Indigenous communities affected by sexual assault‑related trauma through culturally safe counselling and other services to children, families and communities in remote areas of the Northern Territory. This service is delivered through the NT Mobile Outreach Service Plus.
Torres Strait health protection strategy component
The Commonwealth is providing funding to assist in mosquito detection and eradication and to support the Torres Strait communication officer position to improve communication and coordination between Australia and Papua New Guinea to reduce the spread of communicable diseases in the Torres Strait.
Reducing acute rheumatic heart fever among Indigenous children component
The Commonwealth is providing funding to support register and control programs for acute rheumatic fever and rheumatic heart disease, particularly for Indigenous children.
Royal Darwin hospital — equipped, prepared and ready component
The Commonwealth is providing funding to maintain the National Critical Care and Trauma Response Centre at Royal Darwin Hospital in a state of readiness to respond to major health incidents in the region.
Vaccine‑preventable diseases surveillance component
The Commonwealth is providing funding for the vaccine‑preventable diseases surveillance program. The program will improve surveillance reporting of nationally notifiable vaccine‑preventable diseases and allow national monitoring, analysis and timely reporting of data to provide an evidence base for policy formulation.
Victorian cytology service component
The Commonwealth is providing funding for the Victorian cytology service. The service is a joint‑government pathology laboratory, responsible for reporting cervical cytology tests.
National Partnership on improving mental health(a)
(a) Yearly profiles and State splits are indicative distributions only and have been allocated on an equal per capita basis to all States. This distribution may change subject to negotiation with States on a National Partnership agreement and State participation in a competitive tendering process (where applicable). This indicative distribution does not entitle a State to the funds allocated against it.
As part of the Commonwealth's National Reform of Mental Health package, the Commonwealth will negotiate a National Partnership agreement with the States to address major service gaps in their mental health services including accommodation, emergency departments and community‑based crisis support. The National Partnership will improve access and quality of services for people with mental illness.
This is a new spending measure taken in the 2011‑12 Budget. This measure is discussed in further detail in Budget Paper No. 2: Budget Measures 2011‑12. Other payments made as part of the National Reform of Mental Health package are discussed in the National Health Reform section of this Part.
National Partnership on preventive health
The Commonwealth is providing funding for the National Partnership on preventive health. This National Partnership has been established to address the rising prevalence of lifestyle‑related chronic diseases by laying the foundations for healthy behaviours in the daily lives of Australians. The objectives of this National Partnership are being achieved through settings such as communities, early childhood education and care environments, and schools and workplaces, and are being supported by national social marketing campaigns. A key feature of this National Partnership is the establishment of infrastructure required to monitor and evaluate the progress of interventions, including the Australian National Preventive Health Agency.
Enabling infrastructure component
The Commonwealth is providing funding for additional state‑based surveillance activities covering nutrition and physical activity measures consistent with national protocols and to enable reporting on National Partnership performance benchmarks.
The Commonwealth has established the Australian National Preventive Health Agency, and has provided additional funding to create the Australian Health Survey. The Survey will collect representative data on the prevalence of chronic diseases and lifestyle related risk factors amongst Indigenous and non‑Indigenous Australians, including nutrition, physical activity and biomedical measures.
Healthy children component
The Commonwealth will provide funding to deliver a range of preventive health programs covering physical activity and healthy eating in settings such as child care centres, pre‑schools and schools.
Healthy communities component
The Commonwealth is providing funding for a targeted, progressive roll out of community‑based healthy lifestyle programs that facilitate increased access to physical activity, healthy eating and healthy weight activities for disadvantaged adults who are predominantly not in the paid workforce.
Healthy workers component
The Commonwealth will provide funding to facilitate the delivery of healthy living programs in workplaces, covering topics such as physical activity, healthy eating, harmful consumption of alcohol and smoking cessation.
This is in addition to developing a national healthy workplace charter with peak employer and employee representatives, supporting resources, national standards/benchmarks and a best‑practice award scheme.
Social marketing component
The Commonwealth is providing funding to develop social marketing campaigns that extend and complement the Australian Better Health Initiative and reinforce local activities on preventive health.
Other Health National Partnership payments
National Partnership on Commonwealth Dental Health Program
The Commonwealth Dental Health Program will provide funding to reduce public dental waiting lists.
The Commonwealth has signalled its intention to close the previous Government's Medicare Chronic Disease Dental Scheme, in order to make funding available for the introduction of the Commonwealth Dental Health Program and the Medicare Teen Dental Plan. Without the support of the Senate, the Commonwealth has been unable to put in place the necessary subordinate legislation to close the Medicare Chronic Disease Dental Scheme. The commencement of the program has therefore been delayed.
National Partnership on the East Kimberley development package —
The Commonwealth is providing funding for health infrastructure projects from the East Kimberley development package. Investment priorities under the package include primary and preventive health care, drug and alcohol services, short‑term patient accommodation, housing for health service providers, improvements to remote clinics, aged care facilities and environmental health measures. Improving primary and preventive health care services in these areas will reduce the incidence of chronic and acute illness in the community as well as reduce the pressure on acute health services in Kununurra and Wyndham.
A description of the East Kimberley development package as a whole is provided in the Infrastructure services section of this Part.
National Partnership on the Elective surgery waiting list reduction plan
The Commonwealth is providing funding for the National Partnership on the Elective surgery waiting list reduction plan. Facilitation funding has been provided for systemic improvements such as the construction of additional operating theatres and the purchase of new surgical equipment to improve long‑term elective surgery performance. Reward funding will be provided to those States that reduce elective surgery waiting times and increase surgery throughput.
National Partnership on Essential vaccines
The Commonwealth is providing funding for the National Partnership on Essential vaccines. This National Partnership provides for transitional arrangements to allow time for the Commonwealth to enter into centralised purchasing arrangements for individual vaccines and for the program to transition to a Commonwealth Own Purpose Expense arrangement. This National Partnership will continue to support the provision of immunisation services to the Australian community, maintain a high level of immunisation coverage and ensure protection against major vaccine preventable diseases in the community.
In the 2011‑12 Budget, the Commonwealth will save $2.9 million in payments to the States over four years by listing Prevenar 13® on the National Immunisation Program (NIP).
In addition, the Commonwealth will provide an extra $40.0 million over three years to fund a catch‑up program for children aged 12‑35 months. This program will provide free access to the Prevenar 13® vaccine through the NIP.
These measures are discussed in Budget Paper No. 2: Budget Measures 2011‑12.
National Partnership on Indigenous early childhood development — antenatal
and reproductive health
The Commonwealth is providing funding to all jurisdictions to improve antenatal care, teenage sexual and reproductive health, and pre‑pregnancy care, as well as building linkages with existing child and maternal health programs to increase uptake of these services.
The Education section in this Part outlines further payments made under the National Partnership on Indigenous early childhood development.
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