Key messages

  • Health services are funded for interpreter and language services as part of the regular funding approach
  • Health services with high levels of interpreter and language services expenditure as a component of total revenue receive additional funding.  High levels of expenditure occur because of the population profile of health services’ catchment areas.  This particularly occurs for health services in metropolitan Melbourne
  • The threshold for receiving additional funding is 0.2 per cent of total recurrent funding
  • Additional funding is calculated as 75 per cent of expenditure above the threshold
  • The funding provided in any year is calculated annually using the previous year’s reported expenditure on interpreter and language services and the current year’s total recurrent funding.

Summary of funding policy

Funding to health services for interpreter and language services is provided as part of the regular funding provided for the patient receiving care.  Some health services due to the population profile of their catchment areas have higher costs associated with providing interpreter and language services.  Higher costs are particularly the case for health services in parts of Melbourne.

The department provides additional funding to health services that report outlier levels of expenditure for interpreter and language services.  The department sets a threshold percentage of total funding that a health service must have exceeded in order to receive additional funding.  The department has set the threshold at 0.2 per cent of total recurrent funding.  Total recurrent funding is published as the laminates each year.

The department calculates the additional funding to be provided to a health service as 75 per cent of the expenditure that has been incurred above the threshold. The department uses the total expenditure reported in the Chart of Accounts monthly submission from the previous year (to the year in which funding is received) and the total recurrent funding from the previous year (to the year in which funding is received) to make its assessment of whether the threshold has been reached to receive additional funding.  The department annually re-assesses each health service’s eligibility to receive additional funding. 

Justification for the funding policy approach

The funding policy for interpreter and language services is based on:

  • Expenditure levels
  • Outlier reimbursement threshold
  • 75 per cent cost recovery

Expenditure levels

The figure below shows that different health services have sizeable differences in the relative proportion of their total recurrent funding that is used to pay for interpreter and language services.

  Diagram showing the health services expenditure levels on interpreter and language services

Outlier reimbursement threshold

While the department accepts there are many differences between health services in the relative proportion of where expenses are incurred, interpreter and language services is one area where the health service managers cannot significantly influence the costs.   

This occurs because interpreter and language service costs are incurred in close correlation with the demographic profile of the health service’s catchment, with some health services having materially higher expenditure.  Effective communication is a core element of high quality and safe services due to its role in decision making for both health care professionals and patients.  

The department uses a block grant to offset outlier levels of additional costs.  The department has set the threshold to be eligible for the block grant at 0.2 per cent of total recurrent funding.  This threshold results delivers funding to health services that have outlier levels of expenditure.

75 per cent cost recovery

The department provides partial cost recovery for expenditure above the threshold in order to maintain an incentive for the efficient use of interpreter and language services.  

Further information

Assistant Director, Service and Funding Projects
Phone: 61 3 9096 8372
Email: Denise.Ferrier@dhhs.vic.gov.au.