Authority Outline

The Tasmanian Health Service (THS) commenced operation on 1 July 2015. The THS is a separate legal entity under the Tasmanian Health Organisation Act 2011 (the Act) and is governed by the requirements of this Act.

The THS has a Governing Council, comprising a chairperson and skills based members with a spread of regional representation and a CEO supported by an executive that coordinates statewide services across Tasmania.

The THS is 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.

In addition to these functions, the THS is responsible for the implementation of the Tasmanian Clinical Services Profile, which is produced by the Department of Health and Human Services (DHHS) to inform decisions about services that represent the best clinical value to Tasmania as a whole.

Funding for the THS is provided by both the State and Australian Governments. Australian Government Activity Based Funding (ABF) and Block Funding, and State ABF, flows through the National Health Funding Pool, which is 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 also generates its own revenue to fund some of its activities.

This chapter provides financial information for 2017‑18 and over the Forward Estimates period (2018‑19 to 2020‑21) for the THS. Further information about the THS is provided at www.ths.tas.gov.au.

 

 

Key Deliverables

Table 25.1 provides a summary of the Budget and Forward Estimates allocations for key deliverables within the THS.

Table 25.1:     Key Deliverables Statement

	2017‑18	2018‑19	2019‑20	2020-21
		Forward	Forward	Forward
	Budget	Estimate	Estimate	Estimate
	$'000	$'000	$'000	$'000
Frontline Staffing Costs - Supplementation	3 600	3 600	3 600	3 600
John L Grove Rehabilitation Centre1	5 000	5 000	5 000	5 000
Launceston General Hospital - Ward 4D Boost1	2 140	2 140	2 140	2 140
Medical Cannabis Controlled Access Scheme - Paediatric Epilepsy	990	920	920	920
Mersey Community Hospital	78 140	80 880	83 710	86 640
Nurses Graduates ‑ Additional Transition to Practice Placements	2 610	1 135	....	....
One Health System ‑ Additional Investment	7 500	7 000	7 000	7 000
One Health System - New Services1	….	….	8 450	8 450
Patients First	1 000	1 000	1 000	1 000
Patients First - Stage 2 - New Hospital Beds and Staff
North	6 800	6 800	6 800	6 800
North‑West	3 000	3 000	3 000	3 000
South	8 300	6 600	6 600	6 600
Royal Hobart and Repatriation Hospital Support Package1	11 360	11 360	12 910	12 910
Statewide Operations and Command Centre1	1 500	1 500	1 500	1 500

Note:

1.   Funding for this initiative is allocated within Finance‑General.

Frontline Staffing Costs ‑ Supplementation

Additional funding of $3.6 million per annum is provided to meet nursing and midwifery staff costs in the THS. This funding is provided to support the implementation of a better career structure and allowances for nurses.

John L Grove Rehabilitation Centre

Additional funding of $5.0 million per annum is provided for four years for the continued operation of the John L Grove Rehabilitation Centre in Launceston.

Launceston General Hospital ‑ Ward 4D Boost

Additional funding of $2.1 million per annum is provided for four years to open a further four permanent beds on Ward 4D, bringing the total number of beds opened to 19.

Medical Cannabis Controlled Access Scheme - Paediatric Epilepsy

This initiative will provide funding of $3.8 million over four years to fund a screening and assessment program for children with severe refractory epilepsy. The program will include a controlled access scheme for medical cannabis as a treatment where it is deemed clinically suitable.

Mersey Community Hospital

Funding of $329.4 million is provided over the 2017‑18 Budget and Forward Estimates period for the continued operation of the Mersey Community Hospital, following transfer of ownership from the Australian Government to Tasmania, which is expected to occur by 30 June 2017.

The Tasmanian Government is continuing to implement new services at the Mersey, Tasmania's Dedicated Elective Surgery Centre, to deliver better health outcomes on the North West Coast and across the State as part of the One Health System Reforms.

In 2017‑18, the Tasmanian Government will deliver increased access to subacute services at the Mersey, including rehabilitation, pain management services, palliative and geriatric care. The Government will also increase access to specialist and subspecialist care through the provision of an increased range of outpatient clinics. 

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. Funding has been profiled in the 2017‑18 Budget to align with anticipated intake dates in 2017 and 2018.

One Health System ‑ Additional Investment

The 2016‑17 Budget provided ongoing funding to support One Health System reforms. The 2017‑18 Budget allocation of $7.5 million in 2017‑18 will support high priority service reconfiguration as identified in the White Paper and Clinical Services Profile (CSP) Implementation Plan.

Actions funded under this investment include:

·       consolidation of clinical services into sites that are equipped and capable of delivering services safely and efficiently;

·       consolidation of all birthing and inpatient maternity services for the North West region into a single site;

·       refocusing of the Mersey Community Hospital (MCH) towards sub‑acute services and establishing the MCH as an elective surgery centre; and

·       improving and growing hospital services to deliver optimal benefits to patients and improve efficiency.

One Health System ‑ New Services

Additional funding of $16.9 million is provided over two years in 2019‑20 and 2020‑21, to support high priority service reconfiguration as identified in the White Paper and CSP Implementation Plan.

This is in addition to funding allocated for this purpose in the 2016‑17 Budget as part of the One Health System ‑ Additional Investment initiative.

Patients First

Additional funding of $1 million per annum is provided for the Patients First initiative to support the implementation of actions to ensure patients receive more timely care in EDs at the Royal Hobart Hospital (RHH) and the Launceston General Hospital (LGH). This additional funding allocation supports the Patients First actions, including:

·       the employment of Clinical Initiative Nurses (CINs) to actively monitor and provide advice to patients and their families whilst they are in an ED waiting room, including developing plans of care for patients in consultation with ED doctors; and

·       the continuation of Psychiatric Emergency Nurses (PEN) at the RHH, following the cessation of Australian Government funded PEN positions.

Patients First ‑ Stage 2 ‑ New Hospital Beds and Staff

Additional funding of $67.3 million is provided over four years to deliver the second stage of the Patients First initiative. Funding for Patients First ‑ Stage 2 is focused on increasing hospital bed capacity across all regions as a direct response to increasing demand. Actions delivered under this initiative will include:

·       permanently opening 12 beds in Ward 4D and constructing three new single rooms, for three additional beds, for vulnerable patients at the Launceston General Hospital;

·       opening eight new beds at the North West Regional Hospital, including four Emergency Department short stay beds and four surgical beds for elective surgery patients who need overnight stays; and

·       supporting the RHH in delivering 27 additional beds, including beds in the Intensive Care Unit and beds at other facilities across the Southern Region.

Royal Hobart and Repatriation Hospital Support Package

Additional funding of $48.5 million is provided to support measures to improve patient flow and access to the RHH including: providing more bed space; better use of the transit lounge; additional allied health staff; extended pharmacy opening hours; and recruitment of additional staff at the Tolosa Street Mental Health facility.

Funding allocated will also support the opening of an additional ward at the Repatriation Hospital in 2018‑19.

Statewide Operations and Command Centre

Additional funding of $6.0 million is provided for four years to implement a Statewide Operations and Command Centre in the THS. This Centre will have regional hubs that are systems driven, to ensure effective communication and allows for safe, efficient and effective management of public hospitals.

The Centre will support clinicians to deliver better care, with improved patient flow within and between Tasmania's major public hospitals, providing improve patient outcomes and more anticipatory, patient‑centred care delivery.

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

	2016-17)   Budget)	2017-18)   Budget)	2018-19) Forward) Estimate)	2019-20) Forward) Estimate)	2020-21) Forward) Estimate)
	$'000)	$'000)	$'000)	$'000)	$'000)
Minister for Health
Output Group 1 - Tasmanian Health Service
1.1  Admitted Services1	772 698)	819 545)	815 717)	844 651)	870 853)
1.2  Non-admitted Services2	167 534)	197 398)	200 131)	203 079)	203 231)
1.3  Emergency Department Services3	115 194)	119 583)	121 498)	123 239)	126 467)
1.4  Community and Aged Care Services4	194 407)	208 225)	208 461)	209 929)	212 367)
1.5  Statewide and Mental Health Services5	116 813)	113 860)	116 446)	118 748)	120 436)
1.6  Forensic Medicine Service	1 435)	1 479)	1 521)	1 559)	1 599)
	1 368 081)	1 460 090)	1 463 774)	1 501 205)	1 534 953)
TOTAL	1 368 081)	1 460 090)	1 463 774)	1 501 205)	1 534 953)

Notes:

1.   The increase in Admitted Services in 2017‑18 primarily reflects reclassification of expenditure to align with activity and additional funding for 2017‑18 Budget initiatives. The decrease in 2018‑19 primarily reflects the completion of the Rebuilding Health Services ‑ Elective Surgery Program. The increase in 2019‑20 and 2020‑21 primarily reflect an increase to the estimated depreciation in relation to the completion of the Royal Hobart Hospital Redevelopment and a reallocation of depreciation between the outputs.

2.   The increase in Non‑admitted Services in 2017‑18 is primarily due to increased expenditure in relation to the listing of Hepatitis C medications on the Pharmaceutical Benefits Scheme (PBS); reclassification of expenditure to align with activity; and additional funding for 2017‑18 Budget initiatives.

3.   The increase in Emergency Department Services in 2017‑18 primarily reflects reclassification of expenditure to align with activity and additional funding for 2017‑18 Budget initiatives.

4.   The increase in Community and Aged Care Services in 2017‑18 primarily reflects the transfer of the Child Health and Parenting Service from the Department to the THS on 1 January 2017.

5.   The decrease in Statewide and Mental Health Services in 2017‑18 primarily reflects reallocation of costs across outputs.

 

Output Group 1: Tasmanian Health Service

1.1 Admitted Services

This Output provides admitted acute and sub‑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;

·       community nursing, continence, orthotics and prosthetics services, and equipment schemes; and

·       the Child Health and Parenting Service.

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.

This Output provides 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.

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;

·       primary health care services in correctional facilities;

·       forensic mental health services to people with mental illnesses who have come into contact with the criminal justice system; and

·       alcohol and drug services at the individual and population level.

1.6 Forensic Medicine Services

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

 

Table 25.3:     Performance Information1

Performance Measure	Unit of Measure	2014‑15 Actual	2015‑16 Actual	2016‑17 Target	2017-18 Target
Admitted Services
Admitted patients ‑ Acute Admitted Weighted Inlier Units2	Number	na	93 814	95 889	na
National Weighted Activity Unit (NWAU) 3	Number	na	na	na	92 840
Elective surgery patients seen on time4
Category 14	%	74.6	77.1	90.0	100.0
Category 24	%	49.4	43.4	70.0	98.0
Category 34	%	72.0	63.0	80.0	98.0
Elective surgery patients ‑ average overdue wait time for those waiting beyond the recommended time5
Category 1	Days	21.5	26.2	21.5	11
Category 2	Days	146.5	157.7	150	40
Category 3	Days	181.3	135.8	130	28
Elective surgery baseline admissions6	Number	14 325	14 126	14 126	14 126
Hand hygiene compliance7	%	76.6	79.3	80.0	80.0
Healthcare associated staphylococcus aureus (including MRSA) bacteraemia (rate per 10 000 patient days)7	Rate	0.8	1.0	<2.0	<2.0
Cost per weighted separation8	$	5 419	5 198	5 390	5 589
Non-admitted Services
Outpatient attendances9	Number	487 136	523 404	523 404	523 404
Emergency Department Services
Department of Emergency Medicine presentations9	Number	150 350	153 524	154 122	156 174
Emergency Department (ED) patients who are admitted, referred for treatment or discharged within four hours4	%	66.4	66.3	80.0	80.0
Percentage of all ED patients seen within the recommended triage time4	%	70.0	66.5	80.0	80.0

 

 

Table 25.3:     Performance Information1 (continued)

Performance Measure	Unit of Measure	2014‑15 Actual	2015‑16 Actual	2016‑17 Target	2017-18 Target
Community and Aged Care10
Rural hospitals ‑ separations	Number	4 660	4 479	4 700	4 700
Rural hospitals ‑ occupancy rate11	%	55.0	59.0	55.0	55.0
Community nursing ‑ occasions of service12	Number	173 027	173 588	173 588	173 588
Residential aged care ‑ occupancy rate	%	78.0	92.8	78.0	78.0
Aged Care Assessment Program ‑ completed assessments13	Number	4 950	4 080	4 500	4 000
Mothers attending the eight week Child Health Assessment	%	86.9	86.8	88.0	88.0
Oral Health Services14
Adults ‑ occasions of service ‑ general	Number	15 551	15 114	14 526	14 963
Adults ‑ occasions of service ‑ episodic	Number	32 670	32 402	31 767	32 078
Adults ‑ occasions of service ‑ dentures	Number	18 933	19 953	19 765	19 753
Children ‑ occasions of service	Number	66 239	65 675	62 420	63 051
General (adults) waiting list	Number	9 246	7 162	7 858	7 762
Dentures waiting list	Number	819	694	377	376
Mental Health and Alcohol and Drug Services15
Inpatient Separations	Number	2 090	2 067	2 136	2 100
Community and Residential ‑ active clients	Number	7 845	7 873	7 800	7 800
28 day readmission rate4	%	16.4	14.5	13.9	<14.0
Proportion of persons with a mental illness whose needs are met by the Tasmanian Mental Health Service16	%	na	62.7	58.2	63.0
Average length of acute inpatient stay Alcohol and Drug Services	Days	10.2	10.5	11.0	11.0
Alcohol and Drug Services ‑ closed episodes of treatment17	Number	3 241	3 840	1 821	4 000
Pharmacotherapy Program ‑ total active participants	Number	931	924	931	930
Withdrawal Unit ‑ bed occupancy	%	48.8	45.5	50.0	75.0
Withdrawal Unit ‑ average length of stay	Days	6.3	6.0	7.0	7.0
Cancer Screening
Eligible women screened for breast cancer18	Number	30 482	31 696	32 010	33 597
BreastScreen ‑ percentage of clients assessed within 28 days of screening	%	90.4	80.5	90.0	90.0

 

 

Notes:

1.   The 2017‑18 Service Agreement was not finalised at the time of this Table's preparation. Negotiations with the THS had commenced but were not completed. Accordingly, where there is a direct alignment between performance measures in this Table and KPIs included in the 2017‑18 Service Agreement, targets in the final 2017‑18 Service Agreement may differ from those reported in this Table.

2.   Reporting of weighted inlier units as a measure of activity began in 2015‑16 and will cease in 2016‑17. In 2017‑18, activity will be measured as a National Weighted Activity Unit (NWAU) to align the Tasmanian Funding Model with the National model (see note 3 below).

3.   In 2017‑18, activity will be measured as a National Weighted Activity Unit (NWAU). The 2017‑18 target is derived from the activity schedule contained within the draft 2017‑18 Service Agreement which was under negotiation at the time of this Table's preparation. The target in the final 2017‑18 Service Agreement may therefore differ from that reported in this Table.

4.   The 2017‑18 target is derived from the draft 2017‑18 Service Agreement which was under negotiation at the time of this Table's preparation. The target in the final 2017‑18 Service Agreement may therefore differ from that reported in this Table.

5.   The 2017‑18 targets break down the overall target for average overdue days, as contained in the draft 2017‑18 Service Agreement, by elective surgery urgency category, which provides a sequence of progressively improving quarterly targets, and expresses this as an annual average.

6.   This indicator excludes additional activity funded under the National Partnership Agreement (NPA) Improving Health Services in Tasmania ‑ Schedule A ‑ Reforming Elective Surgery and Rebuilding Health Services ‑ Elective Surgery Program. The 2017‑18 target is derived from the draft 2017‑18 Service Agreement which was under negotiation at the time of this Table's preparation. The target in the final 2017‑18 Service Agreement may therefore differ from that reported in this Table.

7.   These indicators have been updated in the 2017-18 Budget to include data from the four major hospitals only. The targets are consistent with those included in the draft 2017‑18 Service Agreement, under negotiation at the time of this Table's preparation.

8.   The 2015‑16 result is based on the Round 20, National Hospital Cost Data Collection results (2015‑16). The 2016‑17 and 2017‑18 targets are based on Round 20, National Hospital Cost Data Collection results (2015‑16) indexed at the current Health CPI of 3.7 per cent.

9.   The 2016‑17 target has been revised to reflect projected activity based on year to date actuals. The 2017‑18 target is derived from the activity schedule contained within the draft 2017‑18 Service Agreement which was under negotiation at the time of this Table's preparation.

10. Targets are based on historical trends.

11. Occupancy is an average for all facilities and calculated from 'beds occupied daily average'.

12. The 2016‑17 and 2017‑18 targets have been adjusted to reflect 2015‑16 actuals, due to smaller than expected increases in activity over 2014‑15 and 2015‑16. Work is currently underway to reform the community nursing service delivery model.

13. Targets are based on previous year's data and year to date projected figures. They indicate a decrease in assessments which is occurring nationally. There have been significant reforms in the aged care system over the past five years which may be contributing to this.

14. Australian Government funding has been provided under the NPA Treating More Public Dental Patients and the Child Dental Benefits Scheme (CDBS). The Australian Government has announced a commitment to the continued funding of dental services to 30 June 2019. The 2016‑17 target has been revised to reflect this, comprising completed activity as at 28 February 2017 plus that projected to 30 June 2017. The 2017‑18 target is a projection of expected activity under the continued Australian Government funding.

15. Targets are based on historical trends.

16. This indicator is based on the estimated 3 per cent of the Tasmanian population with severe mental illness. Australian Bureau of Statistics estimation of the Tasmanian population at the end of 2015‑16 was 519 063, giving an estimated 15 572 people with a severe and persistent mental illness. The 2016‑17 target is based on actual data to 30 April 2017 extrapolated to 30 June 2017.

17. The count for closed episodes of treatment now includes treatment services provided by non-government organisations funded by the Tasmanian Government and an update of the Tasmanian Public Alcohol and Drug Services.

18. The 2017‑18 target is for 6 per cent growth on the 2015‑16 attendance figure, reflecting growth in the demographic and an increase in participation. This target is contingent on continued Australian Government funding of screening in the 70‑74 age cohort, which currently represents 11.5 per cent of women screened by BreastScreen Tasmania. The existing agreement expires in June 2017.

 

Performance Information Comments

Sections 44 and 45 of the Act detail the provisions for the Service Agreement, the key mechanism of accountability between the Minister for Health and the THS.

The Service Agreement includes:

·       a schedule of services to be provided by or on behalf of the THS and the funding to be provided in relation to the provision of those services;

·       performance standards, targets and measures;

·       standards of patient care and service delivery;

·       reporting requirements; and

·       a performance management process.

The 2017‑18 Service Agreement will be finalised following the delivery of the State Budget.

THS performance in relation to the Service Agreement targets will be monitored by the Department of Health and Human Services throughout 2017‑18.

Performance monitoring through the Service Agreement process focuses on improving the efficiency and effectiveness of service delivery, and the safety and quality of care.

 

Detailed Budget Statements

Table 25.4:     Statement of Comprehensive Income

	2016-17)   Budget)	2017-18)   Budget)	2018-19) Forward) Estimate)	2019-20) Forward) Estimate)	2020-21) Forward) Estimate)
	$'000)	$'000)	$'000)	$'000)	$'000)
Revenue and other income from transactions
Grants1	1 160 953)	1 253 406)	1 220 534)	1 872 176)	1 272 953)
Sales of goods and services2	140 275)	187 564)	195 779)	201 363)	199 674)
Interest	302)	317)	325)	334)	343)
Other revenue3	30 642)	22 396)	22 403)	21 662)	21 745)
Total revenue and other income from transactions	1 332 172)	1 463 683)	1 439 041)	2 095 535)	1 494 715)
Expenses from transactions
Employee benefits4	933 086)	959 452)	968 609)	985 941)	1 014 639)
Depreciation and amortisation5	39 536)	40 615)	36 533)	44 871)	40 102)
Supplies and consumables6	368 281)	429 613)	427 789)	438 962)	447 710)
Grants and subsidies7	7 494)	7 070)	7 246)	7 449)	7 633)
Other expenses8	19 684)	23 340)	23 597)	23 982)	24 869)
Total expenses from transactions	1 368 081)	1 460 090)	1 463 774)	1 501 205)	1 534 953)
Net result from transactions (net operating balance)	(35 909)	3 593)	(24 733)	594 330)	(40 238)
Other economic flows included in net result
Net gain/(loss) on non-financial assets	....)	2)	2)	1)	1)
Total other economic flows included in net result	....)	2)	2)	1)	1)
Net result	(35 909)	3 595)	(24 731)	594 331)	(40 237)
Other economic flows - other non-owner changes in equity
Changes in physical asset revaluation reserve	48 058)	22 002)	22 638)	36 727)	37 552)
Total other economic flows - other non-owner changes in equity	48 058)	22 002)	22 638)	36 727)	37 552)
Comprehensive result	12 149)	25 597)	(2 093)	631 058)	(2 685)

 

 

Notes:

1.   The increase in Grants in 2017‑18 primarily reflects the timing in updates to estimated hospital activity in 2016‑17 and anticipated activity in 2017‑18; the transfer of the Child Health and Parenting Service from the Department to the THS on 1 January 2017; and additional funding provided for 2017‑18 Budget initiatives. The profile across the Budget and Forward Estimates period primarily reflects the transfer of completed assets from the Department to the THS including the transfer of the RHH Redevelopment in 2019‑20. The Department undertakes capital works on behalf of the THS and transfers these assets to the THS once completed. The decrease in 2018‑19 also reflects National Partnership Agreements (NPAs) ceasing from 2018‑19 including the Better Access to Palliative Care and Emergency Department components of the Improving Health Services in Tasmania NPA; and the Expansion of BreastScreen Australia Program NPA.

2.   The increase in Sales of goods and services in 2017‑18 primarily reflects increased revenues in relation to the listing of Hepatitis C medications on the PBS.

3.   The decrease in Other revenue in 2017‑18 is primarily due to the completion of the Training More Specialist Doctors initiative, which was funded by the Australian Government through the medical professional colleges.

4.   The increase to Employee benefits primarily reflects the transfer of the Child Health and Parenting Service from the Department to the THS on 1 January 2017, and activity delivered through 2017‑18 Budget initiatives.

5.   The movements in Depreciation and amortisation reflect anticipated depreciation schedules for existing and budgeted purchases of non‑financial assets over the Budget and Forward Estimates period, including an increase in 2019‑20 as a result of additional depreciation associated with the completed Royal Hobart Hospital Redevelopment project. The decrease in 2020‑21 relates to the depreciation schedule for plant and equipment.

6.   The increase in Supplies and consumables in 2017‑18 primarily reflects increased expenditure in relation to the listing of Hepatitis C medications on the PBS, and expenditure related to timing in updates to estimated hospital activity and anticipated activity in 2017‑18 including activity delivered through 2017‑18 Budget initiatives.

7.   The decrease in Grants and subsidies in 2017‑18 primarily reflects reclassification of own source expenditure to more accurately align with anticipated costs.

8.   The increase in Other expenses primarily reflects the anticipated increased cost in workers' compensation and the Tasmanian Risk Management Fund premiums.

 

Table 25.5:     Sources of Revenue

	2016-17 Budget	2017-18 Budget	2018-19 Forward Estimate	2019-20 Forward Estimate	2020-21 Forward Estimate
	$'000	$'000	$'000	$'000	$'000
Revenue from the Tasmanian Government
Activity based funding1	363 118	414 848	400 651	408 577	418 425
Block funding2	309 829	311 572	319 034	352 994	334 999
Mersey Community Hospital Funding3	....	78 140	80 880	83 710	86 640
	672 947	804 560	800 565	845 281	840 064
Revenue from the Australian Government
Activity based funding4	293 755	310 375	318 135	326 088	334 240
Block funding4	57 378	61 123	62 717	64 259	65 865
Mersey Community Hospital Funding3	75 500	....	....	....	....
National Partnership funding5	25 404	4 223	105	105	105
Commonwealth Own Purpose Expenditure6	30 917	33 785	32 512	32 532	32 679
	482 954	409 506	413 469	422 984	432 889
Transfers of Infrastructure from the Department of Health and Human Services7	5 052	39 340	6 500	603 911	....
Other Sources of Revenue8	171 219	210 277	218 507	223 359	221 762
Total	1 332 172	1 463 683	1 439 041	2 095 535	1 494 715

Notes:

1.   The increase in Activity based funding from the Tasmanian Government in 2017‑18 is primarily due to revisions to the classification of purchased activity between Block funding and ABF, and additional funding provided for 2017‑18 Budget initiatives. The decrease in 2018‑19 reflects the cessation of fixed term funding for 2014 election commitments.

2.   The increase in Block funding from the Tasmanian Government in 2019‑20 primarily reflects additional funding for the one‑off cost of the 27th pay in 2019‑20.

3.   The increase in Mersey Community Hospital Funding from the Tasmanian Government in 2017‑18 reflects the revised funding arrangements following the Australian Government's announcement that ownership of the facility would return to the Tasmanian Government (expected to occur by 30 June 2017). From 1 July 2017, funding will be provided through the Department of Health and Human Services.

4.   The increase in Activity based funding and Block funding from the Australian Government in 2017‑18 primarily reflects updates to anticipated activity estimated over the Budget and Forward Estimates period.

5.   The decrease in National Partnership funding reflects the level of funding for current NPAs with the Australian Government. NPAs ceasing with respect to the THS from 2017‑18 include the John L Grove and Elective Surgery components of the Improving Health Services in Tasmania NPA. NPAs ceasing from 2018‑19 include: the Better Access to Palliative Care and Emergency Department components of the Improving Health Services in Tasmania NPA; the Adult Public Dental Services NPA; and the Expansion of BreastScreen Australia Program NPA.

6.   The increase in Commonwealth Own Purpose Expenditure in 2017‑18 reflects the continuation of the Aged Care Assessment Program and the inclusion of the Australian Government Initiative for Organ Donation.

7.   The profile of Transfers of Infrastructure from the Department of Health and Human Services reflects the estimated completion dates for major capital projects, and includes the transfer of the Royal Hobart Hospital Redevelopment to the THS.

8.   The increase in Other Sources of Revenue in 2017‑18 primarily reflects increased revenues in relation to the listing of Hepatitis C medications on the PBS.

 

National Health Reform Agreement

The National Health Reform Agreement (NHRA) sets out arrangements for the Tasmanian and Australian Government contributions to the provision of health services in Tasmania as delivered by the THS. Under the NHRA, State and Australian Government funding is provided on the basis of activity through ABF wherever practicable. Where it is not practical, funding is provided on a Block basis.

Block funded services include smaller regional or rural hospitals and teaching, training and research, and non‑admitted mental health services. Pricing under the NHRA is determined by the Independent Hospitals Pricing Authority (IHPA).

Under the NHRA, funding from the Australian Government is split between ABF and Block Funding. From 1 July 2014 to 30 June 2017, National Health Reform funding is linked to the level of services delivered by public hospitals, as provided under the NHRA. During this period, each state's entitlement is directly linked to the growth in public hospital activity. From 2014‑15 the NHRA funding guarantees ceased.

From 1 July 2014, the Australian Government has provided growth funding equivalent to 45 per cent of the efficient growth in activity under the NHRA. The IHPA determines the efficient price of ABF and the efficient cost of block grants.

At the Council of Australian Government (COAG) meeting of 1 April 2016, all jurisdictions agreed to extend the current NHRA activity based and block funding arrangements under a Heads of Agreement that will form the basis of negotiation of an addendum to the NHRA for the period from 1 July 2017 to 30 June 2020. This agreement preserves the current arrangement of the Australian Government contributing 45 per cent of the efficient growth in activity based funded services and block grants. It was also agreed that growth in Australian Government funding will have a national cap of 6.5 per cent per annum.

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 2017‑18 includes:

·       Adult Public Dental Services ($2.4 million);

·       Expansion of BreastScreen Australia Program ($780 000);

·       National Bowel Cancer Screening Program - Cancer Screening and Control Services Recruitment and Community Engagement Unit ($342 000); and

·       Improving Health Services in Tasmania - Better Access to Palliative Care ($337 000).

Commonwealth Own Purpose Expenditure

Commonwealth Own Purpose Expenditure (COPE) is paid from the responsible Australian Government agency to the THS. COPE agreements in 2017‑18 include:

·       Commonwealth Home Support Program ($15.3 million);

·       Transition Care Program ($5.9 million);

·       Multi‑Purpose Services at Beaconsfield and Campbell Town ($3.4 million);

·       Aged Care Assessment Program ($2.9 million);

·       Medicare - Aged Care Places ($2.9 million); and

·       Radiation Oncology Capital Equipment ($660 000).

Other Sources of Revenue

Other Sources of Revenue represents THS generated own source revenue which in 2017‑18 primarily includes:

·       Patient Fees, including DVA revenue ($85.4 million);

·       Revenue related to the listing of Hepatitis C medications on the Pharmaceutical Benefits Scheme ($44.5 million); and

·       Pharmacy, Prosthesis and Other Pharmaceutical Benefits Scheme Revenue excluding Hepatitis C medication related revenue ($37 million).

 

Table 25.6:     Statement of Financial Position as at 30 June

	2017)   Budget)	2018)   Budget)	2019) Forward) Estimate)	2020) Forward) Estimate)	2021) Forward) Estimate)
	$'000)	$'000)	$'000)	$'000)	$'000)
Assets
Financial assets
Cash and deposits1	67 819)	54 139)	56 180)	61 182)	62 704)
Receivables2	20 718)	24 374)	24 775)	25 262)	25 328)
Other financial assets	18 824)	18 551)	18 932)	19 284)	19 237)
	107 361)	97 064)	99 887)	105 728)	107 269)
Non-financial assets
Inventories2	8 713)	14 160)	14 405)	14 773)	15 169)
Property, plant and equipment3	999 391)	1 019 847)	1 017 644)	1 617 482)	1 619 029)
Heritage and cultural assets	949)	944)	944)	944)	944)
Intangibles	610)	520)	430)	340)	250)
Other assets	4 249)	4 505)	4 506)	4 618)	4 812)
	1 013 912)	1 039 976)	1 037 929)	1 638 157)	1 640 204)
Total assets	1 121 273)	1 137 040)	1 137 816)	1 743 885)	1 747 473)
Liabilities
Payables2	61 791)	65 570)	65 959)	67 341)	69 465)
Employee benefits4	213 591)	233 693)	237 607)	212 702)	218 341)
Other liabilities	9 121)	7 612)	6 178)	4 712)	3 222)
Total liabilities	284 503)	306 875)	309 744)	284 755)	291 028)
Net assets (liabilities)	836 770)	830 165)	828 072)	1 459 130)	1 456 445)
Equity
Reserves5	286 270)	249 195)	271 833)	308 560)	346 112)
Accumulated funds6	81 041)	(2 826)	(27 557)	566 774)	526 537)
Other equity	469 459)	583 796)	583 796)	583 796)	583 796)
Total equity	836 770)	830 165)	828 072)	1 459 130)	1 456 445)

Notes:

1.   The decrease in Cash and deposits in 2018 primarily reflects a more accurate estimate based on the 2016 actuals, along with movements related to own source revenue. The own source revenue changes include a revised estimate of the timing of revenue and expenses related to the Child Dental Benefit Schedule and the implementation of TrakCare. The decrease also reflects the utilisation of cash in 2017 to manage ongoing operational expenditure.

2.   The increase in Receivables, Inventories and Payables in 2018 primarily reflects a more accurate estimate based on the 2016 actuals and changes to the accruals for 2018.

3.   The increase in Property, plant and equipment in 2020 anticipates the transfer of assets from the Department to the THS as a result of the completion of the Royal Hobart Hospital Redevelopment.

4.   The decrease in Employee benefits in 2020 reflects the impact of the 27th pay that will occur in that year.

5.   The decrease in Reserves in 2018 primarily reflects a more accurate estimate of the balance based on 2016 actuals, as a result of a change in the Property Valuation Adjustment Factor as determined by the Valuer‑General.

6.   The movement in Accumulated funds primarily reflects variations in the timing of completed asset transfers from the Department to the THS, including the Royal Hobart Hospital Redevelopment in 2020.

 

Table 25.7:     Statement of Cash Flows

	2016-17)   Budget)	2017-18)   Budget)	2018-19) Forward) Estimate)	2019-20) Forward) Estimate)	2020-21) Forward) Estimate)
	$'000)	$'000)	$'000)	$'000)	$'000)
Cash flows from operating activities
Cash inflows
Grants1	1 155 901)	1 214 066)	1 214 034)	1 268 265)	1 272 953)
Sales of goods and services2	141 289)	189 002)	194 947)	200 602)	199 773)
GST receipts	30 552)	32 873)	31 895)	32 450)	33 836)
Interest received	302)	317)	325)	334)	343)
Other cash receipts3	30 642)	22 396)	22 403)	21 662)	21 745)
Total cash inflows	1 358 686)	1 458 654)	1 463 604)	1 523 313)	1 528 650)
Cash outflows
Employee benefits4	(835 679)	(858 988)	(864 195)	(905 446)	(905 170)
Superannuation4	(95 944)	(99 385)	(100 500)	(105 399)	(103 828)
GST payments	(30 538)	(32 772)	(31 820)	(32 502)	(33 956)
Grants and subsidies5	(7 494)	(7 070)	(7 246)	(7 449)	(7 633)
Supplies and consumables6	(368 752)	(431 610)	(429 104)	(439 551)	(447 665)
Other cash payments7	(20 006)	(23 301)	(23 597)	(23 982)	(24 869)
Total cash outflows	(1 358 413)	(1 453 126)	(1 456 462)	(1 514 329)	(1 523 121)
Net cash from (used by) operating activities	273)	5 528)	7 142)	8 984)	5 529)
Cash flows from investing activities
Payments for acquisition of non-financial assets	(5 039)	(11 035)	(5 103)	(3 983)	(4 008)
Proceeds from the disposal of non-financial assets	....)	2)	2)	1)	1)
Net cash from (used by) investing activities	(5 039)	(11 033)	(5 101)	(3 982)	(4 007)
Net increase (decrease) in cash and cash equivalents held	(4 766)	(5 505)	2 041)	5 002)	1 522)
Cash and deposits at the beginning of the reporting period	72 585)	59 644)	54 139)	56 180)	61 182)
Cash and deposits at the end of the reporting period	67 819)	54 139)	56 180)	61 182)	62 704)

Notes:

1.   The increase in Grants in 2017‑18 primarily reflects updates to estimated hospital activity in 2016‑17 and anticipated activity in 2017‑18; the transfer of the Child Health and Parenting Service from the Department to the THS; and additional funding provided for 2017‑18 Budget initiatives. The decrease in 2018‑19 primarily reflects NPAs ceasing from 2018‑19 including the Better Access to Palliative Care and Emergency Department components of the Improving Health Services in Tasmania NPA; the Adult Public Dental Services NPA; and the Expansion of BreastScreen Australia Program NPA. The increase in 2019‑20 primarily reflects additional funding for the one‑off cost of the 27th pay in 2019‑20.

2.   The increase in Sales of goods and services in 2017‑18 primarily reflects increased revenues in relation to the listing of Hepatitis C medications on the PBS.

3.   The decrease in Other cash receipts in 2017‑18 is primarily due to the completion of the Training More Specialist Doctors initiative which was funded by the Australian Government through the medical professional colleges.

4.   The increase in Employee benefits and Superannuation in 2019‑20 primarily reflects additional expenditure for the one‑off cost of the 27th pay in 2019‑20.

5.   The decrease in Grants and subsidies in 2017-18 primarily reflects reclassification of own source expenditure to more accurately align with anticipated costs.

6.   The increase in Supplies and consumables primarily reflects increased expenditure in relation to the listing of Hepatitis C medications on the PBS, and expenditure related to the timing in updates to estimated hospital activity in 2016‑17 and anticipated activity in 2017‑18 including activity delivered through 2017‑18 Budget initiatives.

7.   The increase in Other cash payments primarily reflects the anticipated increased cost in workers' compensation and the Tasmanian Risk Management Fund premiums.