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Queensland public hospital services purchasing and funding models

Service agreements between the Department of Health and each Hospital and Health Service (HHS) are based on the department's funding and purchasing models. In broad terms, the funding models determine the price at which the department purchases services from HHSs, and the purchasing model determines the volume of services that are purchased.

In terms of the funding models:

  • 36 public hospitals are funded through the Queensland Activity Based Funding (ABF) model, which sets prices at a disaggregated level for each type of public hospital service. The Queensland ABF model is based largely on the national ABF model, but includes a number of modifications to reflect Queensland priorities or pricing models that are more suitable.
  • 87 public hospitals are funded through block funding arrangements; consisting of 83 predominantly small regional and rural hospitals and 4 specialist mental health hospitals. Given the high fixed costs facing smaller hospitals and economies of scale, these facilities would not be financially viable in an ABF model.
  • Most non-hospital-based services, e.g. mental health, alcohol and other drugs, preventative health, primary and community health, are funded based on historical funding levels.

The Health Funding Principles and Guidelines provides more information on the funding model.

The purchasing model determines the volume of services that the Department agrees to purchase from each HHS through the service agreement. The level of purchasing is informed by identified priorities for investment and known/expected service developments in negotiation with the HHSs.

Details about the funding agreements for each HHS and what they cover are available in individual HHS service agreements.

Last updated: 18 August 2016