25 Tasmanian Health Service

Authority Outline

The Tasmanian Health Service (THS) will commence operation from 1 July 2015. The THS will be a separate legal entity under the Tasmanian Health Organisation Act 2011 and is a key component of the One State, One Health System, Better Outcomes (One Health System) reforms.

The three existing Tasmanian Health Organisations ‑ THO ‑ North, THO ‑ South and THO ‑ North West ‑ will be merged to establish the THS. This single entity will provide healthcare through the public hospital system and primary and community health services (including mental health and oral health services).

The change from the existing 'Organisation' structure to a unified single 'Service' reflects the Government's focus on reducing bureaucracy and providing safer, sustainable and more equitable health services to Tasmanians.

The THS is designed to improve the coordination of services and reduce duplication in both administrative overheads and clinical support services. The THS features a single Governing Council, comprising a chairperson and skills‑based members, with a spread of regional representation, and a single CEO supported by local managers to coordinate statewide services at the local level. Importantly, the THS will be able to deliver on the Tasmanian Clinical Services Profile and drive decisions about services that are in the best interests of Tasmania as a whole rather than individual facilities or individual clinicians.

The THS will be governed by the Tasmanian Health Organisations Act 2011 and will be responsible for delivering integrated services aimed at maintaining and improving the health and wellbeing of Tasmanians. Under the Act, the responsible Ministers are the Minister for Health, Hon Michael Ferguson MP and the Treasurer, Hon Peter Gutwein MP. The functions of the THS include:

       improving, promoting, protecting and maintaining the health of Tasmanians as required by its Service Agreement;

       managing public hospitals, health institutions, health services and health support services;

       achieving and maintaining standards of patient care and delivery of services;

       providing training and education relevant to the provision of health services;

       undertaking research and development relevant to the provision of health services; and

       collecting and providing health data for reporting and research purposes.


 

Funding for the THS will be provided by both the State and Australian Governments. From 1 July 2012, all Australian Government and State Activity Based Funding flowed through the National Health Funding Pool, overseen by an independent statutory office holder known as the Administrator. Block funding for some activities is paid to the THS via a State‑managed Fund. In addition to State and Australian Government funding, the THS will also generate its own revenue to fund some of its activities.

This chapter provides financial information for 2015‑16 and over the Forward Estimates period (2016‑17 to 2018‑19) for the THS.

Further details of the Tasmanian Health Service reforms are provided at www.dhhs.tas.gov.au/onehealthsystem.

Information on the One State, One Health System, Better Outcomes (One Health System) reforms is provided in chapter 4 of Government Services Budget Paper No 2.

Key Deliverables

Detailed information on all Key Deliverables for the THS is also provided in chapter 4 of Government Services Budget Paper No 2.

Table 25.1: Key Deliverables Statement

 

2015-16

 

Budget

2016-17

Forward

Estimate

2017-18

Forward

Estimate

2018-19

Forward

Estimate

 

$'000

$'000

$'000

$'000

Minister for Health

 

 

 

 

 

 

 

 

 

Additional Funding to Frontline Health

25 000

25 000

25 000

25 000

Hospital Alternative Program1

750

750

1 000

.

North West Regional Cancer Centre

2 500

3 000

4 500

4 500

Nurse Graduates ‑ Additional Transition to Practice Placements1

1 246

1 260

2 610

.

Patient Transport to Support One Health

2 000

4 000

4 000

4 000

Rebuilding Health Services ‑ Elective Surgery Program1

20 000

20 000

20 000

.

 

 

 

 

 

Note:

1.   Previously included as Major Initiatives for the Department of Health and Human Services in the 2014-15 Budget.

Additional Funding to Frontline Health

Additional funding of $100 million will be provided over four years to meet the cost of existing frontline health services provided by the THS, which will be established on 1 July 2015 through the merger of the three existing THOs.

The establishment of the THS is a key component of the One State, One Health System, Better Outcomes reforms and is designed to improve the coordination of services and reduce duplication and inefficiencies within the health system.

The THS is required to manage its funding to ensure the efficient operation of the facilities and services under its control, and the efficient use of its resources and delivery of services purchased by the Government.

Hospital Alternative Program

This 2014 election commitment provided funding of $3 million over four years to help keep people with chronic illness out of hospital, by providing them with quality care in the home or community, including restoring the Hospital in the Home program. Initiatives under this program will be implemented as part of the One State, One Health System, Better Outcomes reforms.

North West Regional Cancer Centre

The North West Regional Cancer Centre is currently under construction as part of the Statewide Cancer Project. Construction is due to be completed at the end of 2015. Additional funding of $2.5 million in 2015‑16, $3 million in 2016‑17, and $4.5 million per annum from 2017‑18 has been allocated for the operating costs associated with the North West component of the Northern Integrated Cancer Service.

Under the Northern Integrated Cancer Service, the North West Regional Cancer Centre in Burnie and Holman Clinic in Launceston will work closely together to provide better services across the North and North West of the State. Through the development of a critical mass of specialists, the new linear accelerator will be opened and operated at the North West Regional Hospital to provide vital radiation oncology treatment to cancer sufferers.

Nurse Graduates ‑ Additional Transition to Practice Placements

This 2014 election commitment provided $5.4 million over four years for additional Transition to Practice Placement for nursing graduates. This will enable the employment of up to 85 additional graduate nurses across the State over four years.

Patient Transport to Support One Health

The Government is investing $24 million over the next four years, including $10 million for capital upgrades (refer to chapter 4 of Government Services Budget Paper No 2, Key Deliverable - Health Transport and Coordination Infrastructure), to provide improved patient transport and coordination under the Government's One State, One Health System, Better Outcomes reforms.

Under the reforms, the Tasmanian health system will operate as a single statewide system, with each hospital having an important but different role to play. Hospitals will specialise in the procedures they are best suited to provide and patients will be treated at the hospital best suited to the patient's needs.

Funding will be used to improve emergency patient transport by streamlining patient transport between facilities, providing transport for people to access non-urgent medical appointments as well as financial support for private travel and accommodation where required.

Priorities for investment in improved patient transport services will be identified as part of the implementation planning to be undertaken during and post the finalisation of the One Health System White Paper.

Rebuilding Health Services ‑ Elective Surgery Program

This 2014 election commitment provided $76 million over four years for additional elective surgery with a focus on the reduction of waiting lists. This commitment will deliver up to 15 000 extra elective surgeries, addressing backlogs and improving the quality of life for thousands of Tasmanians by ensuring patients get their operations sooner.

Output Information

Outputs of the THS are provided under:

       Output Group 1 ‑ Tasmanian Health Service.

Table 25.2 provides an Output Group Expense Summary for the THS.

Table 25.2: Output Group Expense Summary

 

2014-15)

 

Budget1

2015-16)

 

Budget)

2016-17)

Forward)

Estimate)

2017-18)

Forward)

Estimate)

2018-19)

Forward)

Estimate)

 

$'000)

$'000)

$'000)

$'000)

$'000)

 

 

 

 

 

 

Minister for Health

 

 

 

 

 

 

 

 

 

 

 

Output Group 1 - Tasmanian Health Service

 

 

 

 

 

1.1 Admitted Services2

650 396)

760 331)

710 345)

725 285)

721 693)

1.2 Non-admitted Services3

143 886)

154 239)

157 971)

161 915)

164 286)

1.3 Emergency Department Services4

118 093)

122 114)

115 001)

117 605)

120 082)

1.4 Community and Aged Care Services5

204 905)

200 907)

197 162)

197 949)

198 788)

1.5 Statewide and Mental Health Services6

110 970)

116 803)

116 864)

118 739)

119 979)

1.6 Forensic Medicine Service

1 540)

1 242)

1 277)

1 343)

1 467)

 

1 229 790)

1 355 636)

1 298 620)

1 322 836)

1 326 295)

 

 

 

 

 

 

TOTAL

1 229 790)

1 355 636)

1 298 620)

1 322 836)

1 326 295)

 

 

 

 

 

 

Notes:

1.   The THS will commence operations on 1 July 2015. Accordingly, the 2014‑15 Budget information is provided for illustrative purposes only and represents the summation of the three THO 2014‑15 Budget estimates.

2.   The increase in Admitted Services primarily reflects: funding for the Additional Funding to Frontline Health and Patient Transport to Support One Health Budget initiatives; payment of cross border obligations relating to 2013‑14 and 2014‑15 ($32.5 million in 2015‑16 only); transfers of election commitment funding for the Rebuilding Health Services Elective Surgery Program; and time limited funding under the Tasmanian Health Assistance Package through the NPA on Improving Health Services in Tasmania ‑ Schedule A - Reforming Elective Surgery in Tasmania in 2015‑16.

3.   The increase in Non-admitted Services in 2015‑16 primarily reflects: funding for the Additional Funding to Frontline Health, North West Regional Cancer Centre operating costs and Patient Transport to Support One Health Budget initiatives; and the transfer of Cancer Screening Services from the Department to the THS from 1 July 2015.

4.   The increase in Emergency Department Services in 2015‑16 primarily reflects the Additional Funding to Frontline Health Budget initiative. The decrease in 2016‑17 primarily reflects the finalisation of funding under the Tasmanian Health Assistance Package through the NPA on Improving Health Services in Tasmania ‑ Schedule E Improving Patient Pathways through Clinical and System Redesign ‑ Innovating Care in Emergency Departments.

 

5.   The decreases in Community and Aged Care Services primarily reflect the expiry of NPA and Commonwealth Own Purpose Expenditure (COPE) agreements in 2015‑16 and 2016‑17, including Better Access to Palliative Care and Aged Care Assessment Program; and cessation of external funding for the Children's Dental Benefit Scheme in 2015‑16. This is partly offset by funding for the Additional Funding to Frontline Health and Patient Transport to Support One Health Budget initiatives.

6.   The increase in Statewide and Mental Health Services in 2015‑16 reflects funding for the Additional Funding to Frontline Health, Children and Adolescent Mental Health Services and Patient Transport to Support One Health Budget initiatives.

Output Group 1: Tasmanian Health Service

1.1 Admitted Services

This Output provides admitted acute, sub‑acute and non‑acute inpatient services (elective and non‑elective) provided by Tasmania's major public hospitals to patients either admitted to a ward or in an out‑of‑hospital setting. It excludes designated mental health wards in major public hospitals.

1.2 Non‑admitted Services

This Output provides non‑admitted services, including ambulatory acute and sub‑acute services provided by Tasmania's major public hospitals either on site or in an out‑of‑hospital setting. This includes the provision of Cancer Screening Services.

1.3 Emergency Department Services

This Output provides services relating to emergency presentations at Tasmania's major public hospital emergency departments.

1.4 Community and Aged Care Services

This Output comprises rural hospitals, residential aged care and community health based services including:

       rehabilitation, allied health assessments and case management; and

       community nursing, continence, orthotics and prosthetics services and equipment schemes.

In addition, community palliative care services provide interdisciplinary care, support and counselling to people living with life limiting illnesses and their families. These services are provided in a community health centre or home based environment.

Emergency and general oral care and dentures to eligible adults (holders of Health Care or Pensioner Concession cards) and all children under the age of 18 years as well as a range of health promotion and prevention activities is also provided through this Output.

1.5 Statewide and Mental Health Services

This Output provides services to clients and their families to treat, support and manage mental health disorders. The service also provides:

       crisis assessment and treatment, intensive support, community care and rehabilitation services;

       Correctional Primary Health, which provides primary health care services to correctional facilities;

       Forensic Mental Health services that provide care and treatment for people with mental illnesses who have come into contact with the criminal justice system; and

       Alcohol and Drug Services, which provides a range of specialist alcohol and other drug interventions and treatments at both the individual and population levels.

1.6 Forensic Medicine Services

This Output provides forensic and medical services, forensic pathology and clinical forensic medicine.

Table 25.3: Performance Information1,2

 

Performance Measure

Unit of Measure

2012‑13

Actual

2013‑14 Actual

2014‑15 Target

2015‑16 Target

 

 

 

 

 

 

Admitted Services

 

 

 

 

 

Admitted patients ‑ Acute Admitted Weighted Inlier Units3,4

Number

na

na

na

 

92 857

Elective surgery patients seen on time5

 

 

 

 

 

Category 1

%

73.2

74.3

100.0

100.0

Category 26

%

57.0

49.3

92.0

na

Category 36

%

72.7

75.0

95.0

na

Elective surgery patients ‑ average overdue wait time for those waiting beyond the recommended time5

 

 

 

 

 

Category 1

Days

88.8

33.8

0.0

0.0

Category 26

Days

279.7

191.3

71.0

na

Category 36

Days

448.2

490.7

88.0

na

Elective surgery baseline admissions3

Number

14 625

14 670

14 126

14 126

Hand hygiene compliance7

%

na

na

na

70.0

Healthcare associated staphylococcus aureus (including MRSA) bacteraemia (rate per 10 000 patient days of healthcare associated staphylococcus aureus bacteraemia)8

Rate

na

na

na

 

 

 

2.0

Cost per weighted separation9

$

5 274

5 400

5 530

5 244

 

 

 

 

 

 

Non-admitted Services

 

 

 

 

 

Outpatient attendances3

Number

420 260

482 870

430 286

430 286

 

 

 

 

 

 

Emergency Department Services

 

 

 

 

 

Department of Emergency Medicine presentations6

Number

147 065

148 405

115 084

na

Emergency Department (ED) patients who are admitted, referred for treatment or discharged within four hours10

%

na

na

na

 

 

90.0

Percentage of all ED patients seen within the recommended triage time11

%

na

na

na

 

80.0

 

 

 

 

 

 


 

Table 25.3: Performance Information1,2 (continued)

 

Performance Measure

Unit of Measure

2012‑13 Actual

2013‑14 Actual

2014‑15 Target

2015‑16 Target

 

 

 

 

 

 

Community and Aged Care

 

 

 

 

 

Rural hospitals ‑ separations

Number

4 560

4 570

4 660

4 700

Rural hospitals ‑ occupancy rate

%

na

na

na

55.0

Community nursing ‑ occasions of service

Number

209 570

208 300

209 000

209 000

Residential aged care ‑ occupancy rate

%

na

na

na

84.0

Aged Care Assessment Program ‑ completed assessments

Number

5 020

5 090

5 000

 

5 000

 

 

 

 

 

 

Oral Health Services12

 

 

 

 

 

Adults ‑ occasions of service ‑ general

Number

7 840

8 810

8 800

5 600

Adults ‑ occasions of service ‑ episodic

Number

27 690

32 230

32 200

27 050

Adults ‑ occasions of service ‑ dentures

Number

13 450

15 145

15 100

10 700

Children ‑ occasions of service

Number

67 755

64 485

64 450

67 000

General (adults) waiting list

Number

14 080

14 615

15 000

9 780

Dentures waiting list

Number

1 620

1 455

1 050

1 370

 

 

 

 

 

 

Mental Health and Alcohol and Drug Services

 

 

 

 

 

Inpatient Separations

Number

1 885

2 020

1 905

1 905

Community and Residential ‑ active clients

Number

3 565

7 665

7 665

7 665

28 day readmission rate

%

na

na

na

14.7

Proportion of persons with a mental illness whose needs are met by the Tasmanian Mental Health Service

%

na

na

na

 

 

50.4

Average length of acute inpatient stay

Days

13.0

12.6

11.0

11.0

Alcohol and Drug Services

 

 

 

 

 

Alcohol and Drug Services ‑ closed episodes of treatment

Number

1 485

1 780

1 400

 

1 400

Pharmacotherapy Program ‑ total active participants

Number

800

840

800

800

Withdrawal Unit ‑ bed occupancy

%

41.5

49.7

50.0

50.0

Withdrawal Unit ‑ average length of stay

Days

7

7

7

7

 

 

 

 

 

 

Cancer Screening

 

 

 

 

 

Eligible women screened for breast cancer

Number

28 074

29 236

29 738

30 990

BreastScreen ‑ percentage of clients assessed within 28 days of screening

%

92.9

94.2

90

90

 

 

 

 

 

 

Notes:

1.   The THS will commence operation on 1 July 2015. Performance measures for years prior to 2015-16 are provided for illustrative purposes only, and are either weighted aggregates of actual performance achieved by THOs or are aggregates of previously reported performance information. Refer to prior year Budget Papers for information on individual THO performance. The performance measures included in the table will be reviewed following the release of the final One Health System White Paper.

2.   Some of the performance measures in the table may also be included in the 2015‑16 THS Service Agreement, which at the time of Budget Paper preparation had not been finalised. Where this is the case, the final targets presented in the Service Agreement may differ to those presented in this table.

3.   As per Note 2, at the time of Budget Paper preparation, 2015‑16 Service Agreement negotiations had not been completed. Activity and volume targets for 2015‑16 have therefore been maintained at 2014‑15 levels (after aggregating data for the three former THOs). The elective surgery admissions target excludes any additional activity funded under separate arrangements relating to the election commitment Rebuilding Health Services ‑ Elective Surgery and NPA Improving Health Services in Tasmania (NPAIHST) Schedule A ‑ Reforming Elective Surgery in Tasmania initiatives.

4.   Comparison with prior financial years is not possible as actuals and targets in those years were classified as Weighted Separations. In 2015‑16, the target is set using Inlier Weighted Units and these are not comparable to Weighted Separations. Inlier Weighted Units are a cost weight that is adjusted for time spent in hospital and represents a relative measure of resource use for each episode of care in an Australian Refined Diagnosis Related Group (DRG) and excludes depreciation, intensive care unit (ICU) and ventilation costs.

5.   The 2015‑16 targets reflect the statewide National Elective Surgery Target (NEST) as established in the NPAIHST to which Tasmania is a signatory. The targets in the NPA are established on a calendar year basis. The targets are 2016 calendar year targets. It should be noted that the NPA ceases on 1 July 2015, two years ahead of its original expiry date. The Australian Government announced this early cessation in the 2014‑15 Australian Government Budget.

6.   These targets have not yet been negotiated with the THS. The final agreed targets will be reflected in the Service Agreement with the THS and tabled in Parliament.

7.   The 2015‑16 target represents the national benchmark as recommended by the Australian Commission on Safety and Quality in Healthcare.

8.   The 2015‑16 target represents the national benchmark as agreed by the Council of Australian Governments in the National Healthcare Agreement.

9.   The 2015‑16 target is based on the Round 18 National Hospital Cost Data Collection (NHCDC) result which relates to the 2013‑14 financial year (the most recently completed data collection). This is a statewide average cost. The NHCDC is a mandatory annual collection of Australian hospital patient costing data. The Independent Hospital Pricing Authority (IHPA) collates this data to derive the national efficient price (NEP), and also to produce benchmark data for use by hospitals in comparing their costs to other similar hospitals.

10. The 2015‑16 target reflects the statewide National Emergency Access Target (NEAT) as established in the NPAIHST to which Tasmania is a signatory. The target is for the 2016 calendar year. It should be noted that the NPA ceases on 1 July 2015, two years ahead of its original expiry date. The Australian Government announced this early cessation in the 2014‑15 Australian Government Budget.

11. The 2015‑16 target reflects the benchmark set by the National Partnership Agreement on Hospital and Health Workforce Reform to which Tasmania is a signatory.

12. From 2013 to 2015 Oral Health has received Australian Government Funds under the National Partnership Agreement on Treating More Public Dental Patients, and funding from the Child Dental Benefits Scheme (CDBS) since January 2014. At the time of Budget Paper preparation, the Australian Government had not announced if funding under either scheme would continue beyond 2014‑15. 2015‑16 targets are therefore based on the assumption that there will be no extension to the NPA or CDBS. Accordingly, it is anticipated that activity will be similar to amounts achieved in 2011‑12.

Performance Information Comments

On 1 July 2015, the THS will commence operation and be governed in accordance with the provisions of the Tasmanian Health Organisations Act 2011.

Sections 44 and 45 of the Act set out the provisions for Service Agreements, the key mechanism of accountability between the Minister for Health and the THS. Service Agreements facilitate financial viability and access to services and set safety and quality standards for services.

Service Agreements include a schedule of contracted volumes of services to be provided by the THS and associated activity based funding, a list of services for which block funding is provided, service quality standards, targets and measures and requirements for the THS to report on its performance. The THS will be responsible for determining how it will deliver the requirements of the Service Agreement within the funding allocation.


 

The 2015‑16 Service Agreement will be finalised following passage of the State Budget. Some of the 2015‑16 targets included in Table 25.3 may change through the development of this Agreement. Progress towards the targets established in the Service Agreement will be monitored by the Department of Health and Human Services throughout 2015‑16.

Cancer Screening Services were provided by the Department prior to 2015-16. This service will continue to be operated on a statewide basis following its incorporation into the THS. The Performance Measures with regard to the Cancer Screening are consistent with national measures and remain the same as those previously published in the Department's Budget Paper No 2 chapter.

It is well documented that the Tasmanian population is ageing and more women are entering the target age range for breast cancer screening. The target population is all women aged between 50 and 74 years, however, all women aged over 40 years are eligible to participate. Although the number of eligible women screened for breast cancer has increased each year, the State participation rate within the target age group is currently within the 57‑59 per cent range, below the National Accreditation Standard target of 70 per cent.

BreastScreen National Accreditation Standards require that a minimum of 90 per cent of women who are recalled for investigation of a screen detected abnormality, attend an assessment at BreastScreen Tasmania within 28 days of their screening visit. In both 2012‑13 and 2013‑14, this standard was exceeded.


Detailed Budget Statements

Table 25.4: Statement of Comprehensive Income

 

2014-15)

 

Budget1

2015-16)

 

Budget)

2016-17)

Forward)

Estimate)

2017-18)

Forward)

Estimate)

2018-19)

Forward)

Estimate)

 

$'000)

$'000)

$'000)

$'000)

$'000)

 

 

 

 

 

 

Revenue and other income from transactions

 

 

 

 

 

Grants2

1 219 141)

1 459 909)

1 125 961)

1 128 171)

1 566 108)

Sales of goods and services3

123 311)

138 458)

135 263)

137 056)

138 822)

Other revenue4

27 655)

29 276)

25 208)

23 048)

24 083)

Total revenue and other income from transactions

1 370 107)

1 627 643)

1 286 432)

1 288 275)

1 729 013)

 

 

 

 

 

 

Expenses from transactions

 

 

 

 

 

Employee benefits5

842 062)

922 096)

888 789)

903 615)

922 687)

Depreciation and amortisation6

38 927)

37 536)

45 900)

41 786)

35 050)

Supplies and consumables5

331 517)

345 162)

345 472)

358 726)

349 093)

Grants and subsidies7

6 603)

40 495)

8 167)

8 318)

8 982)

Borrowing costs8

....)

192)

91)

32)

....)

Other expenses

10 681)

10 155)

10 201)

10 359)

10 483)

Total expenses from transactions

1 229 790)

1 355 636)

1 298 620)

1 322 836)

1 326 295)

 

 

 

 

 

 

Net result from transactions (net operating balance)

140 317)

272 007)

(12 188)

(34 561)

402 718)

 

 

 

 

 

 

Other economic flows included in net result

 

 

 

 

 

Net gain/(loss) on non-financial assets

37)

....)

....)

....)

....)

Total other economic flows included in net result

37)

....)

....)

....)

....)

 

 

 

 

 

 

Net result

140 354)

272 007)

(12 188)

(34 561)

402 718)

 

 

 

 

 

 

Other economic flows - other non-owner changes in equity

 

 

 

 

 

Changes in physical asset revaluation reserve

35 442)

45 889)

47 320)

48 833)

50 433)

Total other economic flows - other non-owner changes in equity

35 442)

45 889)

47 320)

48 833)

50 433)

 

 

 

 

 

 

Comprehensive result

175 796)

317 896)

35 132)

14 272)

453 151)

 

 

 

 

 

 

 


 

Notes:

1.   The THS will commence operations on 1 July 2015. Accordingly, the 2014‑15 Budget information is provided for illustrative purposes only and represents the summation of the three THO 2014‑15 Budget estimates.

2.   The increase in Grants in 2015‑16 and 2018‑19 primarily reflects the transfer of completed assets from the Department of Health and Human Services to the THS. The Department undertakes capital works on behalf of the THS and transfers these to the THS once completed. The increase in Grants also represents additional funding provided in the 2015‑16 Budget and transfers of funding from the Department relating to election commitments and Cancer Screening Services.

3.   The increase in Sales of goods and services reflects adjustments made by the THOs to the Private Patient Scheme, Oral Health, and inpatient and outpatient fees to more accurately reflect estimates based on prior year actuals.

4.   The movements in Other revenue in 2016‑17 primarily reflect the cessation of Training More Specialist Doctors funding after 2015‑16.

5.   The increase in Employee benefits and Supplies and consumables primarily reflects: funding for the Additional Funding to Frontline Health, North West Cancer Centre operating costs, and Children and Adolescent Mental Health Services Budget initiatives; funding for the Rebuilding Health Services Elective Surgery Program election commitment, which was previously held by the Department; transfer of Cancer Screening Services from the Department to the THS upon its commencement; and time limited funding under the Tasmanian Health Assistance Package through the NPA on Improving Health Services in Tasmania Schedule A ‑ Reforming Elective Surgery in Tasmania and Schedule E ‑ Improving Patient Pathways through Clinical and System Redesign ‑ Innovating Care in Emergency Departments in 2015‑16.

6.   The movement in Depreciation and amortisation primarily reflects additional depreciation associated with the transfer of assets from the Department and a more accurate estimate based on the 30 June 2014 outcome for the THOs.

7.   The increase in Grants and subsidies in 2015‑16 reflects the expenditure of funds carried forward from 2014‑15 of $32.5 million for THO cross border obligations to other jurisdictions for 2013‑14 and 2014‑15. At the time of publication, Tasmania had not received data from other jurisdictions to enable the payment of this obligation.

8.   Borrowing costs reflect interest payable on the borrowings to fund the cost of staff separations in the THOs during 2014‑15.

 


 

Table 25.5: Sources of Revenue

2014-15

 

Budget1

2015-16

 

Budget

2016-17

Forward

Estimate

2017-18

Forward

Estimate

2018-19

Forward

Estimate

 

$'000

$'000

$'000

$'000

$'000

 

 

Revenue from the Tasmanian Government

 

Activity based funding2

357 443

345 877

353 318

365 041

351 023

 

Block funding2

232 667

304 059

311 981

320 150

328 117

 

590 110

649 936

665 299

685 191

679 140

 

 

Revenue from the Australian Government

 

Activity based funding2

260 222

261 709

268 249

274 958

281 832

 

Block funding2

48 015

58 548

60 012

61 514

63 051

 

Mersey Community Hospital Funding3

73 610

72 274

74 447

76 681

78 891

 

National Partnership funding4

39 877

47 118

824

210

....

 

Commonwealth Own Purpose Expenditure

32 992

34 124

29 630

26 617

26 294

 

454 716

473 773

433 162

439 980

450 068

 

 

Transfers of Infrastructure from the Department of Health and Human Services5

174 315

336 200

27 500

3 000

436 900

 

Other Sources of Revenue6

150 966

167 734

160 471

160 104

162 905

 

 

 

 

 

 

 

TOTAL

1 370 107

1 627 643

1 286 432

1 288 275

1 729 013

 

 

 

 

 

 

 

 

Notes:

1.   The THS will commence operations on 1 July 2015. Accordingly, the 2014‑15 Budget information is provided for comparative purposes only and represents the summation of the three THO 2014‑15 Budget estimates.

2.   The movement in Activity based funding and Block funding reflects the classification of actual payments and activity purchased in the 2014‑15 Service Agreements and additional funding provided in the 2015-16 Budget.

3.   The decrease in Mersey Community Hospital Funding in 2015‑16 reflects one-off funding included in the Australian Government 2014‑15 Budget of $3.1 million for capital works in 2014‑15. This funding profile assumes the continuation of current funding arrangements by the Australian Government.

4.   The movements in National Partnership funding reflect the level of funding to be expended for current National Partnership Agreements with the Australian Government.

5.   The movement in Transfers of Infrastructure from the Department of Health and Human Services since the 2014‑15 Budget reflects revisions in the estimated completion dates for major capital projects, particularly the RHH Redevelopment Project.

6.   The increase in Other Sources of Revenue in 2015‑16 reflects revised estimates based on actual outcomes achieved by the THOs during 2014‑15 and time limited funding from non-government entities including various professional medical colleges for programs such as Specialist Training Program: Training more Specialist Doctors in Tasmania.


 

National Health Reform Agreement

The National Health Reform Agreement (NHRA) sets out the financial arrangements for the THS. Under the NHRA, Australian Government National Health Reform funding replaced the National Healthcare Specific Purpose Payment (SPP) from 1 July 2012. Funding is provided on the basis of activity through Activity Based Funding (ABF) wherever practicable. Funding for smaller regional or rural hospitals is provided on a block funding basis. Funds for teaching, training and research are also provided on a block funding basis. Pricing under the NHRA is determined by the Independent Hospitals Pricing Authority (IHPA).

Revenue from the Tasmanian Government

Activity Based Funding (ABF) and Block Funding

The THS Service Agreement, which will be in place from 1 July 2015, will include a negotiated price and activity level for each activity. This price may differ from the efficient price determined by the IHPA. The State-based component of ABF is determined as the difference between this price and the Australian Government's contribution towards the price.

Revenue from the Australian Government

Activity Based Funding and Block Funding

Under the NHRA, funding from the Australian Government is split between Activity Based Funding and Block Funding. From 1 July 2014 to 30 June 2017, National Health Reform funding will be linked to the level of services delivered by public hospitals as provided under the NHRA. During this period, each State's entitlement will be directly linked to the growth in public hospital activity provided in that jurisdiction. The Australian Government has announced that, from 2014‑15, the funding guarantees under the Agreement will cease.

Under the NHRA, from 1 July 2014, the Australian Government will provide growth funding equivalent to 45 per cent of the growth in the efficient price of block grants. The IHPA will determine the efficient cost of block grants.

As announced in the 2014‑15 Australian Government Budget, from 1 July 2017, the Australian Government will index its contribution for public hospitals funding by the Consumer Price Index and population growth, a level of indexation significantly less than that applied under the current arrangements.

National Partnership Funding

National Partnership Agreements (NPAs) are time limited agreements to support the delivery of specific outcomes or projects. The decrease in NPA funding over the Budget and Forward Estimates period reflects the expiry of agreements. NPA funding to be expended by the THS in 2015‑16 includes:

       Treating More Public Dental Patients ($1 million);

       Improving Health Services in Tasmania ‑ Emergency Department ($9.9 million);

       Improving Health Services in Tasmania ‑ Elective Surgery ($29.9 million); and

       Improving Health Services in Tasmania ‑ Better Access to Palliative Care ($2.5 million).


 

Commonwealth Own Purpose Expenditure

Commonwealth Own Purpose Expenditure (COPE) payments are paid from the responsible Australian Government agency to the THS. COPE agreements in 2015‑16 include:

       Home and Community Care ($15.3 million);

       Transitional Care Program ($4.6 million);

       Medicare ‑ aged care positions ($2.6 million);

       Multi Purpose Services at Beaconsfield and Campbell Town ($2.5 million);

       Aged Care Assessment Program ($2.4 million);

       Initiative for Organ Donation ($1.5 million);

       Radiation Oncology - Holman Clinic Capital Works ($1.5 million);

       Midlands Multi Purpose Centre ($926 000);

       Dementia Behaviour Management Advisory Service ($920 000); and

       Community Aged Care Packages ($850 000).

Other Sources of Revenue

Other Sources of Revenue represents THS generated own source revenue which in 2015‑16 primarily includes:

       Patient Fees, including DVA revenue ($89.4 million); and

       Pharmacy, Prosthesis and PBS Revenue ($37.9 million).


 

Table 25.6: Statement of Financial Position as at 30 June

 

2015)

 

Budget1)

2016)

 

Budget)

2017)

Forward)

Estimate)

2018)

Forward)

Estimate)

2019)

Forward)

Estimate)

 

$'000)

$'000)

$'000)

$'000)

$'000)

 

 

 

 

 

 

Assets

 

 

 

 

 

Financial assets

 

 

 

 

 

Cash and deposits

50 220)

43 955)

46 722)

49 839)

52 719)

Receivables2

13 944)

19 521)

19 341)

19 437)

20 115)

Other financial assets2

9 686)

20 233)

20 034)

20 137)

20 870)

 

73 850)

83 709)

86 097)

89 413)

93 704)

Non-financial assets

 

 

 

 

 

Inventories

8 620)

7 997)

8 082)

8 256)

8 976)

Property, plant and equipment3

1 012 330)

1 405 612)

1 438 390)

1 452 681)

1 909 606)

Heritage and cultural assets

289)

576)

638)

706)

778)

Intangibles

2 864)

3 463)

3 376)

3 289)

3 202)

Other assets

3 635)

3 901)

3 947)

4 168)

4 092)

 

1 027 738)

1 421 549)

1 454 433)

1 469 100)

1 926 654)

 

 

 

 

 

 

Total assets

1 101 588)

1 505 258)

1 540 530)

1 558 513)

2 020 358)

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Payables2

27 023)

44 390)

44 564)

46 047)

45 975)

Interest bearing liabilities4

....)

3 333)

1 666)

....)

....)

Employee benefits2

168 909)

196 754)

198 400)

202 243)

210 987)

Other liabilities

8 894)

12 023)

12 010)

12 061)

12 083)

Total liabilities

204 826)

256 500)

256 640)

260 351)

269 045)

 

 

 

 

 

 

Net assets (liabilities)

896 762)

1 248 758)

1 283 890)

1 298 162)

1 751 313)

 

 

 

 

 

 

Equity

 

 

 

 

 

Contributed capital5

462 589)

....)

....)

....)

....)

Reserves

205 404)

267 946)

315 266)

364 099)

414 532)

Accumulated funds6

228 769)

518 937)

506 749)

472 188)

874 906)

Other equity

....)

461 875)

461 875)

461 875)

461 875)

Total equity

896 762)

1 248 758)

1 283 890)

1 298 162)

1 751 313)

 

 

 

 

 

 

Notes:

1.   The THS will commence operations on 1 July 2015. Accordingly, the 2014‑15 Budget information is provided for comparative purposes only and represents the summation of the three THO 2014‑15 Budget estimates.

2.   The increase in Receivables, Other financial assets, Payables, and Employee benefits in 2016 reflects a more accurate estimate based on the 30 June 2014 outcomes for the THOs.

3.   The increase in Property, plant and equipment primarily relates to the transfer of assets from the Department of Health and Human Services to the THS. The Department undertakes capital works on behalf of the THS and transfers these assets to the THS once completed. Transfers include components of the Royal Hobart Hospital Redevelopment and North West Regional Cancer Centre in 2016 and the remaining balance of the Royal Hobart Hospital Redevelopment in 2019.

4.   The movement in Interest bearing liabilities reflects borrowings of $5 million to fund the cost of staff separations in the THOs in 2014‑15. It is anticipated that the loan of $5 million will be repaid over a three year period.

5.   The movement of equity from Contributed capital in the 2014-15 Budget to Other equity in the 2015‑16 Budget and Forward Estimates reflects a more accurate classification, as per the THO Financial Statements for 2013‑14.

6.   The increase in Accumulated funds in 2016 reflects a more accurate estimate based on the 30 June 2014 outcome for the THOs and equity transferred associated with assets transferred from the Department.


 

Table 25.7: Statement of Cash Flows

 

2014-15)

 

Budget1)

2015-16)

 

Budget)

2016-17)

Forward)

Estimate)

2017-18)

Forward)

Estimate)

2018-19)

Forward)

Estimate)

 

$'000)

$'000)

$'000)

$'000)

$'000)

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

Cash inflows

 

 

 

 

 

Grants2

1 044 826)

1 123 709)

1 098 461)

1 125 171)

1 129 208)

Sales of goods and services3

123 864)

137 038)

135 614)

136 871)

137 406)

GST receipts

28 653)

29 369)

30 111)

30 858)

31 620)

Other cash receipts4

27 736)

29 276)

25 208)

23 048)

24 083)

Total cash inflows

1 225 079)

1 319 392)

1 289 394)

1 315 948)

1 322 317)

 

 

 

 

 

 

Cash outflows

 

 

 

 

 

Employee benefits5

(752 424)

(828 126)

(800 230)

(811 872)

(825 410)

Superannuation6

(90 381)

(90 534)

(86 911)

(87 902)

(88 520)

Borrowing costs7

....)

(192)

(91)

(32)

....)

GST payments

(28 653)

(29 369)

(30 111)

(30 858)

(31 620)

Grants and subsidies8

(6 602)

(40 495)

(8 167)

(8 318)

(8 982)

Supplies and consumables5

(331 116)

(347 330)

(345 430)

(357 640)

(349 818)

Other cash payments

(10 676)

(10 157)

(10 186)

(10 317)

(10 458)

Total cash outflows

(1 219 852)

(1 346 203)

(1 281 126)

(1 306 939)

(1 314 808)

 

 

 

 

 

 

Net cash from (used by) operating activities

5 227)

(26 811)

8 268)

9 009)

7 509)

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Payments for acquisition of non-financial assets9

(15 566)

(3 552)

(3 834)

(4 226)

(4 629)

Proceeds from the disposal of non-financial assets

37)

....)

....)

....)

....)

Net cash from (used by) investing activities

(15 529)

(3 552)

(3 834)

(4 226)

(4 629)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Net borrowings10

....)

(1 667)

(1 667)

(1 666)

....)

Net cash from (used by) financing activities

....)

(1 667)

(1 667)

(1 666)

....)

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents held

(10 302)

(32 030)

2 767)

3 117)

2 880)

 

 

 

 

 

 

Cash and deposits at the beginning of the reporting period

60 522)

75 985)

43 955)

46 722)

49 839)

Cash and deposits at the end of the reporting period

50 220)

43 955)

46 722)

49 839)

52 719)

 

 

 

 

 

 

 


 

Notes:

1.   The THS will commence operations on 1 July 2015. Accordingly, the 2014-15 Budget information is provided for illustrative purposes only and represents the summation of the three THO 2014-15 Budget estimates.

2.   The increase in Grants primarily reflects: additional funding provided in the 2015‑16 Budget for Additional Funding to Frontline Health, North West Cancer Centre operating costs, and Children and Adolescent Mental Health Services; the transfer of funding for Rebuilding Health Services Elective Surgery Program election commitment; transfer of Cancer Screening Services from the Department to the THS upon its commencement; and time limited funding under the Tasmanian Health Assistance Package through the NPA on Improving Health Services in Tasmania Schedule A ‑ Reforming Elective Surgery in Tasmania and Schedule E ‑ Improving Patient Pathways through Clinical and System Redesign ‑ Innovating Care in Emergency Departments in 2015‑16.

3.   The increase in Sales of goods and services in 2015‑16 reflects adjustments made by the THOs during 2014‑15 to inpatient and outpatient fees, Private Patient Scheme revenue, and dental fees.

4.   The movements in Other cash receipts primarily reflect the cessation of Training More Specialist Doctors funding after 2015‑16.

5.   The increase in Employee benefits and Supplies and consumables expenditure primarily reflects: additional funding provided in the 2015‑16 Budget for the Additional Funding to Frontline Health, North West Regional Cancer Centre operating costs, and Children and Adolescent Mental Health Services Budget initiatives; funding for Rebuilding Health Services Elective Surgery Program election commitment which was previously held by the Department; transfer of Cancer Screening Services from the Department to the THS upon its commencement; and time limited funding under the Tasmanian Health Assistance Package through the NPA on Improving Health Services in Tasmania Schedule A ‑ Reforming Elective Surgery in Tasmania and Schedule E ‑ Improving Patient Pathways through Clinical and System Redesign ‑ Innovating Care in Emergency Departments in 2015‑16.

6.   The decrease in Superannuation in 2016‑17 reflects the cessation of time limited funding under the Tasmanian Health Assistance Package through the NPA on Improving Health Services in Tasmania Schedule A ‑ Reforming Elective Surgery in Tasmania and Schedule E ‑ Improving Patient Pathways through Clinical and System Redesign ‑ Innovating Care in Emergency Departments in 2015‑16.

7.   Borrowing costs reflects interest payable under the borrowings to fund the cost of staff separations in the THOs in 2014‑15. It is anticipated that the loan of $5 million will be repaid over a three year period.

8.   The increase in Grants and subsidies in 2015‑16 reflects the expenditure of funds carried forward from 2014‑15 of $32.5 million for THO cross border obligations to other jurisdictions for 2013‑14 and 2014‑15. At the time of publication, Tasmania had not received data from other jurisdictions to enable the payment of this obligation.

9.   The decrease in the Payments for the acquisition of non-financial assets reflects the completion of one-off capital works funded by THO North and Australian Government funded Mersey capital upgrades completed in 2014‑15.

10. The movement in Net borrowings reflects the repayment of borrowings to fund the cost of staff separations in the THOs during 2014‑15.