Queensland Health Funding

Queensland Health is funded through a combination of models designed to ensure resources are allocated fairly and efficiently. These include:

  • Block Funding, which supports essential services that may not be covered by other models; and

  • Activity-Based Funding (ABF), which provides funding based on the volume and type of services delivered.

  • Own-source revenue, which is generating revenue from non-budget sources.

Together, these approaches aim to balance equity, sustainability, and responsiveness to healthcare demand.

  • Block Funding
  • Activity-Based Funding
  • Own Source Revenue

Block Funding

Block Funding is typically applied for small regional and rural public hospitals where the technical requirements for applying ABF are not able to be satisfied and there is an absence of economies of scale that mean some services would not be financially viable under ABF.

Activity-Based Funding (ABF)

  • Activity-Based Funding is a funding framework used to manage how we deliver public health care services across Queensland.

  • The ABF framework allocates health funding to Queensland Health hospitals based on the cost of health care services (referred to as ‘activities’) delivered.

  • The framework promotes smarter health care choices and better care by placing greater focus on the value of the health care we deliver for the amount of money expended.

  • For further information about ABF, refer to the State Funding Model (Queensland Health Intranet).

Queensland Health public hospital services purchasing and funding models

Own-source revenue

Own-source revenue is funding generated by an HHS from sources other than Queensland Health funding allocations. Examples include private patient billing, compensable patient claims, Medicare-funded services, grants, and other locally receipted funds. Accurate documentation and patient classification help ensure revenue is correctly captured and services are appropriately funded.

Queensland Weighted Activity Unit (QWAU)

A QWAU is a way of measuring hospital activity under Activity-Based Funding. Different types of care are weighted differently depending on their complexity and cost. Accurate documentation, classification and coding help ensure the activity delivered by a service is counted correctly.

Operational expenditure vs Capital expenditure

Not all funding can be spent in the same way. Understanding the difference between Operational expenditure (OPEX) and Capital expenditure (CAPEX) expenditure helps managers make compliant decisions and avoid funding issues later.

Operational expenditure (OPEX)

OPEX covers the day-to-day costs of running a service.

Typical examples:

  • Salaries and overtime

  • Backfill and agency staffing

  • Consumables and clinical supplies

  • Maintenance and minor repairs

  • Short-term programs or pilots

Key things to know:

  • Used within the same financial year

  • Cannot usually be rolled over without approval

  • Most Activity-Based Funding (ABF) is OPEX

  • Linked to service delivery and operational activity

Capital expenditure (CAPEX)

CAPEX relates to items that provide a future benefit to the organisation.

Typical examples:

  • Medical equipment and assets over $5,000

  • Assets with a useful life greater than one year

  • IT systems and major infrastructure upgrades

  • Construction and refurbishments

  • Major facility upgrades or new clinical spaces

Key things to know:

  • Requires early discussion with Finance

  • Subject to approvals and planning cycles

  • Capital projects may sit in Capital Work in Progress until completed

  • CAPEX is not interchangeable with OPEX funding

Note

  • If it supports today's service delivery, it's usually OPEX.

  • If it creates value over several years, it's usually CAPEX.