The Australian Healthcare Funding Models

Running head: THE AUSTRALIAN HEALTHCARE FUNDING MODELS 1
The Australian Healthcare Funding Models
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THE AUSTRALIAN HEALTHCARE FUNDING MODELS 2
Australian healthcare funding models
The Australian healthcare system has four funding structures that enhance the
incorporation of the quality and safety of its services. These models involve the best practice
pricing (BPP), the normative theory, the quality structure theories and safety and quality pricing
(Eagar, 2013). Some of these models are already implemented while others are proposals for
implementation.
The BPP entails evidence-based decisions on the best practice for the therapy of a
specific medical event and then its cost is attached to the delivery of this best practice’s course.
The characteristic feature of this model is that the best practice is exclusively elaborated and then
pricing is compared to the adoption of the treatment course as opposed to a variety of safety and
quality parameters. The model is distinct from other models such as the safety and quality
pricing since it focuses on the course of treatment. Therefore, this funding model only makes
payment to a facility that has been ascertained that its services or care meet the pathway’s
criterion. A good example is the National Health Services (NHS) in the United Kingdom (UK)
where the theory has been implemented for case-mix pricing for a variety of health conditions
(Hovenga & Grain, 2013). The NHS devised best practice tariffs that were based on the high
effect, for example, the significant impact of the results. Also, the taxes were influenced by the
substantial evidence base and generally accepted clinical best practice. So payment of services
such as cholecystectomy is funded on excellent care. This model reduces waiting time, enhance
fiscal responsibility and transparency in the NHS organization (Appleby et al., 2012). This model
was to be adopted by the Western Australian Health Department in 2012-2013 for some clinical
situations such as fragility hip fracture (Eager, 2013).

THE AUSTRALIAN HEALTHCARE FUNDING MODELS 3
The normative theory determines the patterns of delivering healthcare services such as
introducing incentives for more home care. This model was to be adopted by Queensland Health
in 2012-2013 with the objective of minimizing hospital readmission by providing home-based
care for some diseases in their initial stages. For instance the US in 2011 implemented strategies
for financing programs that enhance the continuation of care between the facility and the
community. Notably, the Community care transition project was hatched to minimize hospital
readmissions through continuation of care partnering between the hospitals and community-
based organizations (Ahmad et al., 2013).
The quality structures pricing strategy connects the payment system to quality as well as
safety in service delivery. A good example is connecting pricing to accreditation whereby the
accredited ratio is more than the non-accredited facilities. Essentially the model is described as
the pricing for participation, and this is what was introduced into Victoria whereby the
Australian Council of healthcare standards provided annual funding to accredited facilities that
participated in the accreditation process. The principal aim is to enhance the establishment of
safety and quality strategies that advance the quality of services. National uniform set standards
for safety and quality are provided to various health care services throughout the country. The
basis for these standards is the evidence-based quality improvement approaches. So this funding
enables the clinical services to participate in the clinical quality assessments which are associated
with clinical benchmarking (Share et al., 2011).
The safety and quality funding, also known as the payment for performance is a model of
pricing that links quality, safety and pricing. Incentives are provided for financing incentives for
a high level of performance concerning safety and quality parameters. A good example is the
clinical practice improvement payment system (CPIP) that was introduced in Queensland in