Public Hospitals

While States and Territories are system managers of their public hospitals, the Commonwealth provides a significant contribution to the delivery of public hospital services.

Page last updated: 03 November 2017

  • As part of the 2017-18 Budget, the Government delivered an additional $2.8 billion to public hospitals.
  • Since signing of the Council of Australian Governments (COAG) Heads of Agreement in 2016, the Commonwealth has provided an extra $7.7 billion to support States and Territories to deliver public hospital services.

Funding for Hospital Services

Commonwealth and State and Territory funding under the National Health Reform Agreement (NHRA) for hospital services is administered through the National Health Funding Pool.

In 2016-17, some $44.1 billion flowed through the National Health Funding Pool to Local Hospital Networks across all states and territories. For further information relating to 2016-17 funding and information, refer to Administrator of the National Health Funding Pool 2016-17 Annual Report.

The following table provides an overview of Commonwealth and State and Territory contributions under the NHRA from 2013-14 to 2016-17.

National Health Reform Funding
  2013-14
2014-15
2015-16
2016-17
Growth
(2013-14 to 2016-17)
Total (National) Funding Contribution ($m) 36,875.7 38,855.9 42,017.7 44,140.8 7,265.1
Growth (%)   5.4% 8.1% 5.1% 19.7%
State/Territory Contribution ($m) 23,034.4 23,389.9 24,832.2 25,504.7 2,470.3
Growth (%)   1.5% 6.2% 2.7% 10.7%
Commonwealth Contribution ($m) 13,841.3 15,466.0 17,185.5 18,636.1 4,794.8
Growth (%)   11.7% 11.1% 8.4% 34.6%
New South Wales
Total Funding Contribution to NSW ($m) 10,804.0 11,156.5 11,848.1 12,598.1 1,794.1
Growth (%)   3.3% 6.2% 6.3% 16.6%
State Contribution ($m) 6,451.5 6,278.9 6,338.7 6,868.0 416.5
Growth (%)   -2.7% 1.0% 8.4% 6.5%
Commonwealth Contribution ($m) 4,352.5 4,877.6 5,509.4 5,730.1 1,377.6
Growth (%)   12.1% 13.0% 4.0% 31.7%
Victoria
Total Funding Contribution to VIC ($m) 7,945.0 8,437.3 8,989.7 9,826.7 1,881.7
Growth (%)   6.2% 6.5% 9.3% 23.7%
State Contribution ($m) 4,482.5 4,586.3 4,809.4 5,104.5 622.0
Growth (%)   2.3% 4.9% 6.1% 13.9%
Commonwealth Contribution ($m) 3,462.5 3,851.0 4,180.3 4,722.1 1,259.6
Growth (%)   11.2% 8.6% 13.0% 36.4%
Queensland
Total Funding Contribution to QLD ($m) 8,195.2 9,175.8 9,879.8 10,334.9 2,139.7
Growth (%)   12.0% 7.7% 4.6% 26.1%
State Contribution ($m) 5,395.4 6,114.7 6,349.1 6,484.0 1,088.6
Growth (%)   13.3% 3.8% 2.1% 20.2%
Commonwealth Contribution ($m) 2,799.8 3,061.1 3,530.7 3,851.0 1,051.2
Growth (%)   9.3% 15.3% 9.1% 37.5%
Western Australia
Total Funding Contribution to WA ($m) 4,283.4 4,069.6 5,024.7 4,740.9 457.5
Growth (%)   -5.0% 23.5% -5.6% 10.7%
State Contribution ($m) 2,768.8 2,314.3 3,182.1 2,651.8 -117.0
Growth (%)   -16.4% 37.5% -16.7% -4.2%
Commonwealth Contribution ($m) 1,514.6 1,755.3 1,842.6 2,089.1 574.5
Growth (%)   15.9% 5.0% 13.4% 37.9%
South Australia
Total Funding Contribution to SA ($m) 3,092.9 3,283.1 3,362.8 3,481.3 388.4
Growth (%)   6.1% 2.4% 3.5% 12.6%
State Contribution ($m) 2,086.7 2,158.4 2,138.8 2,215.6 128.9
Growth (%)   3.4% -0.9% 3.6% 6.2%
Commonwealth Contribution ($m) 1,006.2 1,124.7 1,224.0 1,265.7 259.5
Growth (%)   11.8% 8.8% 3.4% 25.8%
Tasmania
Total Funding Contribution to TAS ($m) 934.7 969.1 1,032.5 1,085.2 150.5
Growth (%)   3.7% 6.5% 5.1% 16.1%
State Contribution ($m) 635.7 635.4 657.5 697.5 61.8
Growth (%)   0.0% 3.5% 6.1% 9.7%
Commonwealth Contribution ($m) 299.0 333.7 375.0 387.7 88.7
Growth (%)   11.6% 12.4% 3.4% 29.7%
Australian Capital Territory
Total Funding Contribution to ACT ($m) 824.1 871.9 926.5 974.5 150.4
Growth (%)   5.8% 6.3% 5.2% 18.2%
Territory Contribution ($m) 552.4 567.3 601.8 630.0 77.6
Growth (%)   2.7% 6.1% 4.7% 14.0%
Commonwealth Contribution ($m) 271.7 304.6 324.7 344.5 72.8
Growth (%)   12.1% 6.6% 6.1% 26.8%
Northern Territory
Total Funding Contribution to NT ($m) 796.4 892.6 953.6 1,099.2 302.8
Growth (%)   12.1% 6.8% 15.3% 38.0%
Territory Contribution ($m) 661.4 734.6 754.8 853.4 192.0
Growth (%)   11.1% 2.7% 13.1% 29.0%
Commonwealth Contribution ($m) 135.0 158.0 198.8 245.9 110.9
Growth (%)   17.0% 25.8% 23.7% 82.1%

The following graph provides an overview of relative funding growth between the Commonwealth and the States and Territories over this period.

The following graph provides an overview of relative funding growth between the Commonwealth and the States and Territories over this period. These figures can be found in the table

Pricing of hospital services

Under the National Health Reform Agreement (NHRA), the Australian Government contributes to the cost of state managed public hospitals under a system of Activity Based Funding (ABF).

Approximately 85% of Commonwealth NHR funding is paid to the States and Territories under ABF, with the remainder being paid as block funding grants
(i.e. for small rural hospitals, teaching, training and research, non-admitted mental health and other public health activities).

Under the ABF model, funding for hospital services is calculated and funded on the basis of the Price and the Volume of services delivered. Where:

  • Price is represented by the National Efficient Price (NEP) as determined by the Independent Hospital Pricing Authority (IHPA); and
  • Volume of hospital services delivered (represented by the volume of National Weighted Activity Units) as counted and reported by public hospitals (providers).

Performance of hospitals

The Australian Institute of Health and Welfare (AIHW) publish performance reports and statistics of Australian public and private hospitals including:

  • Emergency Department Waiting Times
  • Elective Surgery Waiting Times
  • Hospital Resources
  • Admitted Patient Care
  • Non-Admitted Patient Care

A copy of the latest publications can be found on the Australian Institute of Health and Welfare website.

AIHW is also sponsor to the My Hospitals website which compares the performance information of public and private hospitals across Australia.

The website allows users to compare different hospitals against indicators such as waiting times in emergency departments or for some types of surgery, rates of bloodstream infections acquired in hospital, the length of time patients spend in hospital after being admitted for various conditions or procedures, as well as a number of other indicators.

Safety and Quality of Hospital Services

The Australian Commission on Safety and Quality in Health Care (the Commission) leads and coordinates national improvements in safety and quality in health care across Australia.

The Commission publish the Australian Atlas of Healthcare Variation which uses data from a range of national data sources to explore variation across different healthcare settings. The latest Atlas released in June 2017, examines four clinical themes:

  • chronic disease and infection – potentially preventable hospitalisations;
  • cardiovascular;
  • women’s health and maternity; and
  • surgical interventions.

The Commission have also developed, and are responsible for maintaining a series of key indicators of Safety and Quality in Australian hospitals. This includes:

  • the Australian Sentinel events list; and
  • Hospital Acquired Complications.

These indicators of Safety and Quality have been incorporated as part of the reforms introduced in the Addendum to the NHRA which is available from the Council on Federal Financial Relations website which commenced 1 July 2017. These reforms are aimed at improving overall health outcomes and reducing instances of poor quality or unsafe care.