Improving maternity services in Australia: the report of the Maternity Services Review

6. Financing Arrangements

Page last updated: February 2009

As with other areas of health care, maternity services in Australia are services that represent a mix of Commonwealth, state and territory and private funding and delivery. The Commonwealth funds maternity services through four major channels: the MBS and PBS; state governments, through the national healthcare agreement for public hospitals; Private Health Insurance (PHI) through the 30 per cent rebate; and through a range of specific targeted programs.

The AIHW reports that $1,672 million was spent on maternity services in Australia in 2004–05. Of this, over $1,539 million (92 per cent) was spent on hospital-admitted services associated with deliveries taking place in hospital, with 70 per cent of this expenditure being for public hospital patients.110 In addition, $456 million was spent on neonatal care.

These financing arrangements, combined with the traditional case mix approach to public hospital funding, have tended to direct maternity care in Australia towards an acute care setting that uses specialist care and, particularly in the private sector, limits the role of midwives.

State, territory and local governments provide or fund a range of community health services in a variety of settings. Community health services include antenatal and postnatal parenting support services and early childhood nursing programs as well as health promotion programs for women across a range of health-related areas. A comprehensive national picture of community health services is not available; collection of statistical information on these services is not as highly developed as that on other services (such as hospitals) and there is no nationally agreed basis for describing the nature of the services or for measuring the amounts of service provided.111

The primary focus of the following discussion is on Commonwealth funding arrangements, particularly those funded through the MBS, and the impact of these arrangements on the models of subsidised care available to mothers and their babies.