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Photo of Shannon White, CEO

I am pleased to present this year’s Annual Report for what has been another outstanding year of achievement for the National Health Funding Body, and my third since commencing as Chief Executive Officer on 3 April 2018.

Challenging and changing environment

Australia faces unprecedented challenges in relation to COVID-19 and this pandemic presents an increasingly complex and uncertain environment in the short to medium term. I am proud of my team’s professionalism and resilience in the way they have responded to this crisis including supporting all Governments through the National Partnership on COVID-19 Response. The objective of this agreement is to provide Commonwealth financial assistance for the additional costs incurred by State and Territory health services in responding to the COVID-19 outbreak. In 2019-20, a total of $2.955 billion was paid under this agreement through the Pool to States and Territories.

The Prime Minister, Premiers and Chief Ministers recently agreed to a new five year Addendum to the National Health Reform Agreement (NHR Agreement) which will shape the future of health reform and public hospital funding in Australia.

Improving the transparency of public hospital funding

Our agency performs a unique role in Australia’s health system, delivering best practice financial administration of more than $55 billion in public hospital funding (excluding the additional $3 billion for COVID-19). We perform the calculations, payments and reporting on public hospital funding across 145 Local Hospital Networks (LHNs) comprising of 692 public hospitals delivering in excess of 39 million hospital services.

Following the reconciliation of prior year services in March 2020, the final Commonwealth National Health Reform (NHR) funding entitlement for 2018-19 was $21.169 billion, resulting in a funding adjustment of $233 million. In 2019-20, the Commonwealth NHR funding paid was $22.561 billion, including $233 million for public hospital services delivered in the year prior. Together with the Administrator, we have now finalised all annual reconciliations for the period 2015-16 to 2018-19. This has provided States and Territories with an additional $2 billion in Commonwealth reconciliation payments through the National Health Funding Pool (the Pool).

Successful digital transformation

In 2017-18 the NHFB received additional funding of $4.1 million over three years to complete key projects as part of our modernisation and digital transformation agenda.

As at 30 June 2020, we have delivered an improved Commonwealth Contribution Model (CCM) to support calculating the Commonwealth’s NHR funding contribution, a new Payments System to support payments into and out of the Pool, as well as an enhanced reporting capability and website (publichospitalfunding.gov.au). We also made significant progress on enhancing our funding integrity capabilities with a focus on over-lapping hospital visits and potential duplicate payments.

Launched on 1 October 2019, our new Payments System has delivered a more integrated financial system with improved efficiency and effectiveness of processes between Commonwealth Treasury, the Reserve Bank of Australia, the NHFB and States and Territories.

In 2019-20, our comprehensive digital transformation has delivered significant productivity improvements, ensures we are well placed to support all Australian Governments respond to COVID-19, and positions us strongly to implement the new five year Addendum to the NHR Agreement.

“... our comprehensive digital transformation has delivered significant productivity improvements"

Improving stakeholder relationships

Following stakeholder feedback in 2018-19, we significantly increased our focus on productive working relationships. This included a tiered approach to State and Territory engagement where we provided additional support to smaller jurisdictions with less resources and expertise. We also hosted a series of Payments System co-design and system testing workshops as well as conducting on-site training ahead of the launch of the new Payments System in October 2019.

Together with the Administrator, we held a number of bilateral and multilateral discussions with all stakeholders in addition to the more formal Jurisdictional Advisory Committee (JAC) meetings. We also held monthly discussions with the Commonwealth including participants from Prime Minister and Cabinet, Treasury, Finance and Health, as well as regular roundtables with our partner agencies such as the IHPA and the AIHW. In 2019-20 we surveyed our stakeholders, achieving very high stakeholder satisfaction levels of 4.25 out of 5.

“...achieving very high stakeholder satisfaction levels of 4.25 out of 5"

Positive agency culture contributing to high performance

It is a testament to the dedication and resilience of our team, and the valuable contribution of our industry partners, that we delivered so many successful initiatives in an increasingly complex and uncertain environment. Underpinning these initiatives is an ongoing focus on workforce diversity, capability and, learning and development.

Our persistence with creating a positive workplace culture, and our emphasis on our united leadership behaviours, has been fundamental to our success both internally and externally. Our recent staff pulse survey showed high levels of job satisfaction and flexible working arrangements, including 89 per cent of staff indicating their job gives them a feeling of personal accomplishment.

Appreciation and recognition

I would like to acknowledge and thank Michael Lambert, the Administrator of the National Health Funding Pool, for his strong leadership, integrity and collaboration over the past two years. I am proud of our collective achievements, in particular the high performing and innovative team at the NHFB who continue to excel. I am also grateful for the contributions made by all of our stakeholders and partners towards our shared success in 2019-20.

Preparing for the future

As highlighted previously, one of the key challenges of the next planning period is the implementation of the 2020-2025 Addendum to the NHR Agreement. The new Addendum outlines clear direction in several key areas including, but not limited to, public hospital funding integrity and duplicate payments, funding neutrality for private patients in public hospitals, the progression of safety and quality measures including low value care, and measures to reduce demand for potentially preventable hospitalisations.

Communication and engagement is vital to our success. Our ability to collaborate openly and constructively with our Commonwealth, State and Territory stakeholders as well as our portfolio agency and industry partners will go a long way towards achieving our vision.

We remain committed to operating as a high performing organisation that is professional, capable and flexible, and technology enabled.

In 2020-21, we will continue to:

  • Capitalise on our digital transformation investment;
  • Build on our strong stakeholder and industry partnerships;
  • Strengthen our leadership, culture and organisational capabilities;
  • Invest in our people through learning and development; and
  • Review our business operations for productivity improvements and cost efficiencies.

This will ensure we direct our limited resources to our highest priorities.

I look forward to working closely with Michael Lambert, our stakeholders and partners, and my professional team in further improving transparency of public hospital funding in Australia.

Shannon White
Chief Executive Officer
National Health Funding Body