FOI 25-0301 LD - Document 4
NATIONAL HEALTH REFORM AGREEMENT FIRST NATIONS SCHEDULE
QUESTIONS AND ANSWERS (Q&A)
National Health Reform Agreement (NHRA) – scene setting and scope
Q1: How does the NHRA operate and what services does it fund?
• The NHRA is an Intergovernmental Agreement between the Commonwealth and al states
and territories signed by First Ministers in 2011. It has been amended twice, in 2017 and
2020.
• The NHRA funds services done by public hospitals, or commissioned by public hospitals.
• The NHRA provides funding for public hospital services through several mechanisms
including:
o Activity Based funding – the predominant method for funding hospital services,
including acute admitted care, emergency care, non-admitted care;
o Block funding – for services including small rural hospitals, mental health, teaching
and research; and
o Public health funding.
• In 2022-23, 38 mil ion public hospital services and $64 bil ion captured by the NHRA
(Combined Cth and state/territory funding contributions). under the
Q2: What did the MTR recommend?
• Rosemary Huxtable AO PSM conducted a mid-term review of the NHRA in 2023 for Health
Ministers.
• The Review found the introduction of Activity Based Funding for public hospitals generated
eﬃciencies, as well as accountability and transparency, but in other ways the NHRA had
mixed success and the level of enduring reform that was anticipated has not been achieved.
• The Review recommended the next NHRA addendum include an additional schedule
focussed on improving the health of First Nations people through the Closing the Gap
commitments (Rec 38).
• The Review recommended the First Nations Schedule should include at a minimum:
o A shared commitment to Closing the Gap, working in partnership with First Nations
people.
o Speciﬁc actions to close the health gap with accountabilities assigned and
performance assessed against agreed milestones, including cross-cutting targets.
o A shared commitment and requirement to work with ACCHOs and local
communities in the design and commissioning of se
This document has been released rvices and transitioning of
services to community-control.
Freedom of Information Act 1982
o A shared commitment to Cultural Safety in health service delivery with agreed
by the Department of Health and Aged Care
measurement and reporting, including patient experience indicators.
o A shared commitment to embed appropriate governance of Indigenous data
holdings held by all levels of government.
Timing and process questions
Q3: What is the timeframe for developing the First Nations Schedule for the NHRA?
• National Cabinet tasked the negotiation of the next NHRA Addendum to Health Ministers with
the aim to ﬁnalise the 2025-2030 Addendum agreement by mid-2024.
• However it is apparent that some Schedules of the NHRA may need to ﬁnalised over a longer
period. This is certainly the case with the First Nations schedule – the priority is that it is done
right, ie through codesign with First Nations stakeholders.
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FOI 25-0301 LD - Document 4
NATIONAL HEALTH REFORM AGREEMENT FIRST NATIONS SCHEDULE
QUESTIONS AND ANSWERS (Q&A)

•  This Roundtable [22 March 2024] is our ﬁrst opportunity to talk about the Agreement and hear
from the First Nations health sector what the key priorities should be for the schedule.

Q4: How wil  First Nations people be consulted?
•  The discussion at this Roundtable is the ﬁrst step in the consultation processes that wil  lead to
the development of the new First Nations schedule
•  We know we can’t develop a draft First Nations schedule without First Nations people. As
announced by Minister Butler, we are committed to co-designing the schedule with First Nations
people.
•  We already have some structures in place which could be used to lead this co-design process,
including the National Aboriginal and Torres Strait Islander Collaboration which has members
from all state and territory government health departments as well as one First Nations
stakeholder from each jurisdiction.
the
•  We are open to ideas about the best ways to work with First Nations people to make sure we get
this right.

under  Care
If pushed on exact models
Preferred models for the Commonwealth are:
Aged
•  Use a group with First Nations stakeholders and some NNG
released  m
1982 embers (equal representation).
The Collaboration may ﬁt this.
Act  and
•  Al ow some First Nations stakeholders to sit on NNG in a special meeting/s focussed only on
been
the Schedule
•  Have one or more First Nations stakeholders on NNG for the whole process (less preferred
has
Health
given the large amount of negotiation related to other matters)
of
Note that ultimately the NHRA, including the First Nations schedule, wil  be an agreement signed
by the Prime Minister, Premiers and Chief Ministers
Information .
of

document
Funding questions
Department
Q5: What does the cur
This rent NHRA include in relation to First Nations people?
Freedom
the
•  The current NHRA acknowledges the shared commitment of the Commonwealth and States to
work in partnership with
by   Aboriginal and Torres Strait Islander communities in closing the gap
through the [COAG]-agreed agenda. However there is little else in the current agreement to
advance this agenda.
•  The Activity Based Funding formula that underlies NHRA funding includes a range of “loadings”
which increase the funding for certain services, including those in remote areas and those for
First Nations patients.
•  6.9% of Activity Based Funding in 2021-22 went to services delivered to Indigenous patients. The
proportion for block funding and COVID funding is not known, though block funding may be
even higher.

Background:
•  The ABF loading for First Nations patients is 4%. This sounds low, and may be brought up.
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FOI 25-0301 LD - Document 4
NATIONAL HEALTH REFORM AGREEMENT FIRST NATIONS SCHEDULE
QUESTIONS AND ANSWERS (Q&A)

•  The 4% ﬁgure is calculated from the hospital cost data, and reﬂects the additional costs for First
Nations patients that are not explained by other factors in the calculation, such as remoteness.
The 4% loading would be higher if these adjustments had not already been applied in the
calculations.
•  It would be possible to modify the order in which loadings are applied, leading to diﬀerent
loading factors for services to First Nations patients. This would have impacts on state and
territory funding under the NHRA.

Q6: Why can’t a proportion of NHRA funding (e.g. 3% nationally) be quarantined, or set aside, to
be provided for services for First Nations people?
•  The NHRA recognises state and territory governments as system managers for public hospitals,
which includes responsibility for making decisions around the purchasing, or commissioning, of
public hospital services.
the
•  Within this framework the Commonwealth makes a funding contribution to each of the public
hospital services purchased, or commissioned, by the states.
•  The majority of funding disbursed under the NHRA is paid as Activity Bas
under ed Funding (ABF).
Care
•  The existing pricing framework incorporates an Indigenous adjustment for episodes where the
patient’s Indigenous status is identiﬁed. This is intended to account for legitimate and
unavoidable costs in the care of First Nations patients.
Aged
•  In 2021-22, 6.9% of NHRA Activity Based Funding went to services delivered to Indigenous
released
patients.
1982 and
•  The mid-term review:
Act
o  Reﬂected feedback that this pricing framework and the Indigenous does not adequately
been
reﬂect the cost of care that objectively should have been sought or provided.
o  Noted here is a place for the national funding model to
Health   better resource the services
has
required to address the gap between Indigenous and non-Indigenous health outcomes.
of
o  Recommended the next NHRA Addendum detail minimum requirements for how the
Commonwealth and State and Territory health departments, PHNs, LHNs and ACCHOs
Information
will work together on joint planning and commissioning.

document
of
Q7: How much extra funding wil  be made available to action the First Nations Schedule?
Department
•  There is not curren
This  tly a budget amount set aside for the First Nations Schedule.
•  It is important that the First N
Freedom
the ations Schedule is codesigned in partnership with First Nations
stakeholders so it includes the right actions and reforms to improve health outcomes for
by
Aboriginal and Torres Strait Islander people.
•  The Commonwealth has committed to provide signiﬁcant new funding as part of the NHRA
Addendum.
•  On 6 December 2023, National Cabinet agreed changes to the Commonwealth’s NHRA funding
parameters that will increase Commonwealth funding (an increase to Cth Contribution Rate to
45% over 10-year glide path and increased funding cap).
•  The scale of the additional investment by the Commonwealth is estimated to see many extra
bil ions of funding distributed through the NHRA over 5 years.
•  National Cabinet instructed Health Ministers to negotiate the NHRA Addendum to embed long-
term, system-wide structural health reforms, including considering the NHRA Mid-Term Review
ﬁndings.
•  The reforms wil  focus on the entire health system and move towards a more integrated,
equitable, eﬃcient and sustainable system.
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FOI 25-0301 LD - Document 4
NATIONAL HEALTH REFORM AGREEMENT FIRST NATIONS SCHEDULE
QUESTIONS AND ANSWERS (Q&A)

Strategic questions
Q8: Why is a dedicated First Nations schedule within the NHRA Addendum important? What is its
purpose and what wil  it achieve
Embedding a First Nations Schedule in the NHRA recognises that all health services have a
responsibility to deliver culturally safe care to Indigenous people.
•  The new First Nations schedule will ensure the NHRA’s whole of system initiatives include a
focus on achieving the priorities and targets expressed in the:
o  National Agreement on Closing the Gap
o  National Aboriginal and Torres Strait Islander Health Plan 2021 – 2031 (Health Plan)
o  National Aboriginal and Torres Strait Islander Health Workforce Strategic Framework
and Implementation Plan 2021 – 2031
the
•  First Nations people wil  beneﬁt from all of the NHRA reforms eg more ﬂexible funding and
workforce arrangements and stronger governance wil  enable better connections between
primary care, hospitals, aged and disability care, and better access to inte
under  grated services in rural
Care
and remote areas.
•  Integration within the NHRA will provide a pathway to ongoing funding arrangements for
successful First Nations innovations and pilot programs.
Aged

released
1982
Q9: How wil  the NHRA relate to other key First Nations agreements?
Act  and
•  The NHRA is being reframed as an overarching he
been  alth system Agreement supported by a new
whole of health system performance framework. The NHRA wil  cross reference other major
Health
agreements and reﬂect the priorities and
has   targets of:
o  National Agreement on Closing the Gap of
o  National Aboriginal and Torres Strait Islander Health Plan 2021 – 2031 (Health Plan)
o  National Aboriginal and Torres Strait Islande
Information  r Health Workforce Strategic Framework
and Implementation Plan 2021 – 2031
of

document
Delivery / Implementation
This
Department
Q10: How wil  governments ensure ACCHOs are engaged as key participants in the delivery of
Freedom
the
services under the NHRA?
by
•  The Mid-Term Review recommended the next NHRA Addendum should detail minimum
requirements for how the Commonwealth and State and Territory health departments, PHNs,
LHNs and ACCHOs wil  work together on joint planning and commissioning (Rec 7).
•  This recommendation is an important consideration in our thinking, but we also need to hear
from the ACCHO sector on the views for how this can, or should be operationalised.

Q11: Wil  there be a requirement for Health Departments, Local Hospital Networks and Primary
Health Networks to engage with ACCHOs on joint planning and commissioning?
•  The Mid-term Review makes strong recommendations regarding codifying governance
arrangements between LHNs, PHNs and ACCHOs to strengthen relationships between service
planners at the local level and support joined up care delivery.
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FOI 25-0301 LD - Document 4
NATIONAL HEALTH REFORM AGREEMENT FIRST NATIONS SCHEDULE
QUESTIONS AND ANSWERS (Q&A)

•  Deﬁning the roles and responsibilities of ACCHOs in the NHRA wil  support greater engagement
with LHNs and PHNs, including co-design of services.
•  Policy options to support more collaboration and ﬂexibility especial y in thin markets are being
considered in the NHRA negotiations.

Q12: Wil  local communities be bound to national programs or wil  we be able to maintain/get
support for our own approaches that are working?
•  The NHRA has a core principle of ‘incentivising local diversity and innovation in the health
system as a crucial mechanism to achieve better outcomes’ (NHRA Clause 19b);
•  NHRA negotiations are discussing the need for ﬂexibility around local priority setting in all
reform areas.

the
Q13: How wil  the NHRA Addendum ensure cultural safety in health service delivery?
•  The Mid-term Review recommends developing new First Nations speciﬁc performance
indicators, such as cultural safety and healthcare access, to support Closin
under  g the Gap reporting.
Care
•  The Review acknowledges cultural y appropriate models of health tracking may be required.
•  Performance reporting metrics, including in relation to cultural safety, will be developed as part
of the NHRA work program.
Aged

released
1982 and
Indicators and Data questions
Act
Q14: What can the NHRA do to reduce racism in hea
been lth services?
•  The NHRA has potential to create and maintain culturally safe
Health environments for First Nations
has
workforce and patients by building ‘cultural awaren
of ess and competence through governance,
equitable funding arrangements, service delivery and workforce development, across al  health
care settings’ MTR p112)
Information

of
Q15: What are the speciﬁc indicators
document that wil be included in the NHRA aimed at improving First
Nations health outcomes?
This
Department
•  The Mid-term review recommends a future health system performance framework include
the
outcome measures, including m
Freedom  ore consistent colection of patient reported outcomes and
experiences, Closing the G
by  ap indicators, access measures and indicators for cultural safety in
hospitals. The need for engaging with communities on new indicator development is recognised.

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Document Outline

FOI 25-0301 LD - Document 4