Key messages

Transition to the national funding model will:

  • Better align Victoria with the rest of the Commonwealth.
  • Enable health services increased flexibility to allocate resources across services types.
  • Enable Victoria to more fully engage with and influence the development of the national model, including future funding reform.

Transition to the National Funding Model will be phased, commencing from 1 July 2021:

  • Admitted acute, sub-acute and non-acute care; non-admitted activity and emergency department funded services will transition to the national approach from 1 July 2021.
  • Mental health services in Victoria will not transition to the National Funding Model in 2021-22.
  • Small Rural Health Services block funding approach will continue at this time. However, as the WIES / SWIES model will not continue in 2021-22, the Department will be reporting this activity using the NWAU model.

The 2010 National Health Reform Agreement commits jurisdictions to implement a nationally consistent Activity Based funding system.

In September 2020 the Minister for Health approved Victoria’s adoption of the national funding model as a basis to determine hospital funding for Victorian public health services going forward.

The Department of Health is finalising the approach to transition to the national funding model (National Weighted Activity Unit) as the mechanism by which hospital services will be funded in Victoria.

Transitioning to the national funding approach will:

  • Better align Victoria with the rest of the Commonwealth.
  • Enable health services increased flexibility to allocate resources across services types.
  • Enable Victoria to more fully engage with and influence the development of the national model, including influencing future funding reform.

Transition to the National Funding Model will be phased, commencing from 1 July 2021:

  • Admitted acute, sub-acute and non-acute care; non-admitted activity and emergency department funded services will transition to the national approach from 1 July 2021.
  • Non-admitted activity will have the NWAU price weights and equivalent Victorian efficient price rather than the WASE cost weights in 2020-21. The shadow funding approach will continue for 2020-21.
  • Mental health services in Victoria will not transition to the National Funding Model in 2021-22.
  • Small Rural Health Services funding model will not change in 2021-22. The block funding approach will continue at this time. However, as the WIES / SWIES model will not continue in 2021-22, the department will be reporting this activity using the NWAU model.

Health services will be consulted throughout and will help inform the implementation of the national approach.

Information will be made available through this website, and queries can be addressed to the National Funding Model team.