Activity Based Funding What are they & do they affect me?
David Perabo—ABF Manager
Activity Based Funding aims to:
• Encourage Efficiency by supporting health services to be efficient and reduce unnecessary costs while maintaining quality. • Transparency: allows health services to see where funds are going, with the funding being tied directly to the services provided, allowing for better accountability. • Fairness: Funding is distributed more equitably across the system. Health services that serve more complex or sicker populations receive more funding to cover their higher costs. • Focus on consumer needs: Resources are directed towards the most needed services and treatments.
How does ABM (ABF) affect me? ABM can provide clinicians with information where potential service improvements are possible within their service. What is the basis of funding? The basis of funding is the National Weighted Activity Unit (NWAU). A National Weighted Activity Unit (NWAU) is a standard unit used in Australia's Activity Based Funding (ABF) system to measure the volume and complexity of public hospital services, comparing different activities by weighting their resource intensity. An average, or "basic" hospital service, is equivalent to one (1) NWAU, with more complex services receiving multiple NWAUs and simpler services receiving fractions of an NWAU.
For Mental Health, the NWAU varies according to the setting. i.e. admitted or non-admitted (ambulatory).
For an admitted episode of care the NWAU can range from (0.8840 – 8.7667) depending on the complexity and age of the consumer. Additional adjustments to the NWAU are made to account for the length of stay, Indigenous status, and remoteness of the consumer. An adult consumer who has an Acute Phase of Care, moderate HoNOS complexity and a typical length of stay would receive an NWAU = 2.3709. For a non-admitted (ambulatory) contact the NWAU can range from (0.0259 – 0.1004) depending on the complexity, age of the consumer and whether the consumer is present or not present. An adult consumer with an Acute Phase of Care, moderate HoNOS complexity and was present during the contact would receive an NWAU = 0.0467.
Page 34| NSLHD Mental Health Drug and Alcohol News | September 2025
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