National Health and Hospitals Network Good for Rural Health

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PDF printable version of National Health and Hospitals Network Good for Rural Health (PDF 23 KB)

5 March 2010

Rural and regional health services stand to benefit from the National Health and Hospitals Network announced by the Prime Minister, Treasurer and Health Minister.

The National Health and Hospitals Network will be funded nationally, but run locally.

“Local control over the day to day operations of hospitals will rest with local health, management and financial professionals making the key decisions, not central bureaucrats hundreds of kilometres away” said Warren Snowdon, Minister for Rural and Regional Health.

At the same time, hospitals and health services in rural areas will have the certainty of knowing that their services will have a secure funding base into the future, because the Commonwealth will permanently pay a majority share of hospital costs, including planned capital costs.

Under the reforms to hospital funding announced by the Government this week, Local Hospital Networks in rural areas will be paid directly for the services they provide.

An independent pricing umpire, at arm’s length from Governments, will determine the efficient price for the delivery of hospital services.

There has been some misinformation over the past few days regarding the effect the Government’s new funding arrangements will have on small rural hospitals.

The independent umpire will be required to make sure that the efficient price for hospital services takes into account local circumstances, in particular the circumstances and health care needs of people living in rural Australia.

“We know it costs more to provide a hip operation in Broken Hill compared to metropolitan Sydney – the loadings and payments under the new funding model will reflect this” said Mr Snowdon.

The Rudd Government has been working with States and Territories on moving towards a nationally consistent approach to activity-based funding since 2008.

The 2008 COAG agreement – signed by all Australian Governments - included a recognition that activity-based funding needs to reflect the Community Service Obligations required for the maintenance of small and regional hospital services.

Consistent with this commitment, we will ensure that the new hospital funding arrangements provide appropriate resourcing for small rural hospitals with low admission rates.

This commitment underpins the important reforms outlined by the Prime Minister and Minister for Health this week.

Contact: Nick Cox 0439 475 885