Record Hospital Investment – increasing funding for public hospitals

Page last updated: 08 May 2018

Record Hospital Investment – increasing funding for public hospitals (PDF 135 KB)

The Government will increase the Commonwealth’s funding for the current National Health Reform Agreement by $3.2 billion from 2017–18 to 2021–22, to a total of more than $91.7 billion over the next four years from 2018–19.

Why is this important?

It is important that our public hospitals have funding stability and certainty so that patients receive ongoing safe, quality and cost-effective care. Commonwealth public hospital funding continues to grow over the next four years from $21.2 billion in 2018–19 to $24.7 billion in 2021–22 – an increase of $3.5 billion, or 16.5 per cent. Altogether, the Commonwealth will invest more than $91.7 billion over this period.

Commonwealth public hospital funding is based on hospital service activity and the efficient price of hospital services, capped at 6.5 per cent annual funding growth.

Adjustments made between the 2017–18 MYEFO and the 2018–19 Budget reflect:
  • the final National Health Reform Funding Determination for activity delivered in 2015–16;
  • the final pricing information (Supplementary National Efficient Cost Determination 2017–18, National Efficient Cost Determination 2018–19 and the National Efficient Price Determination 2018–19) provided by the Independent Hospital Pricing Authority; and
  • updated 2016–17, 2017–18 and 2018–19 activity estimates provided by the states and territories through the National Health Funding Body.
On 9 February 2018, the Commonwealth put forward a funding offer through the Heads of Agreement between the Commonwealth and the states and territories on public hospital funding and health reform that provides stability and certainty of public hospital funding from 1 July 2020, which is an increase of $30.2 billion to $130.2 billion from 2020–21 to 2024–25. The $3.2 billion is in addition to the funding offered to states and territories under the 9 February 2018 Heads of Agreement (refer to National Health Agreement 2020–21 to 2024–25 fact sheet).

Who will benefit?

Patients will receive the best hospital care when they need it, delivered efficiently, safely and cost-effectively, now and into the future.

All Australians will benefit from improved health outcomes through greater sustainability of the Australian health system.

How much will this cost?

This will cost $3.2 billion from 2017–18 to 2021–22.

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