Queensland Health Funding

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

  • Population-Based Funding (PBF), which distributes funding according to the size and health needs of a community;

  • 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.

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

  • Population-Based Funding
  • Block Funding
  • Activity-Based Funding

Population-Based Funding (PBF)

  • In addition to hospital services, HHSs also provide a wide range of primary and community health and other services that are outside the scope of the national funding model and, as such, are state-funded services.

  • The Population-Based Funding model takes into account the resident population of each HHS which is adjusted for age, gender, socio-economic indexes for areas (SEIFA) and remoteness.

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

Operational funding vs Capital funding

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

Operational funding (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 funding (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.