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Photo of Michael Lambert, the Administrator

I would like to thank the NHFB CEO, Shannon White, and the excellent NHFB staff for their dedicated work in supporting me to fulfil our mutual obligations and responsibilities.


The year was challenging with the COVID-19 pandemic requiring new funding arrangements to be quickly put in place in response to the outbreak, at the same time the Commonwealth, States and Territories were negotiating a new National Health Reform Agreement.

Throughout 2019-20, there was regular engagement with all jurisdictions, both through the Jurisdictional Advisory Committee and through one on one meetings with each jurisdiction to review the consistency and transparency of public hospital funding. In addition, there were regular meetings with the national bodies. This will continue in 2020-21.

Funding and Reconciliation

In 2019-20, $53 billion in payments were made to LHNs from a total of $55 billion in Commonwealth, State and Territory funding contributions. The balance was paid to State and Territory Health Departments. The 2018-19 Annual Reconciliation of Commonwealth NHR funding was completed in March 2019 based on actual public hospital services delivered in 2018-19, resulting in a total funding adjustment of $233 million. Therefore the total Commonwealth NHR funding paid in 2019-20 was $22.561 billion, including the $233 million funding adjustment for prior year services

COVID-19 Payments

The COVID-19 pandemic, in addition to placing enormous pressure on Australian governments, the community, the economy and the health system, required a funding system be put in place dedicated to funding public and private hospitals and public health in response to COVID-19. On 13 March 2020, the Australian governments established a National Partnership on COVID-19 Response (NPCR) under which the Commonwealth committed to provide 50 per cent of the cost of treating COVID-19 patients and associated public health activity. In addition, following the cancellation of elective surgery, the Commonwealth agreed to provide 100 per cent of the payments to private hospitals that entered into contracts with States and Territories in order to retain and integrate infrastructure, equipment and workforce capacity to fight COVID-19 and until the pandemic is over. The National Health Funding Pool Payments System (Payments System) was upgraded to deliver timely NPCR funding. For the period to 30 June 2020, a total of $2.955 billion in Commonwealth COVID-19 funding was paid to States and Territories.

The Year Ahead

During the coming year Shannon White and I will actively engage with all jurisdictional stakeholders, industry partners, and with allied organisations such as the Independent Hospital Pricing Authority (IHPA), the Australian Institute of Australian Health and Welfare (AIHW), and the Australian Commission on Safety and Quality in Health Care (ACSQHC). Building on our achievements over the last two years, our future priorities include the following:
Working with all jurisdictions to ensure the successful implementation and operation of the 2020-2025 Addendum to the National Health Reform Agreement (the Addendum);

  • Working with the AIHW and all jurisdictions to improve the transparency, consistency and timeliness of public hospital funding information;
  • Undertaking data matching, in full consultation with all jurisdictions, to improve financial integrity while at the same time avoiding creating obstacles to coordinated health care;
  • Exploring with the ACSQHC and the IHPA ways to encourage and facilitate improved quality and safety in health care and avoiding unnecessary hospitalisations; and
  • Working with the IHPA to ensure financial neutrality between private and public patients in public hospitals.

Michael Lambert
National Health Funding Pool

“... delivering best practice financial administration of more than $55 billion in public hospital funding."